Whitbread share price: Costa Coffee owner reiterates full-year expectations
Whitbread (LON:WTB) has updated investors on its third-quarter performance this morning.
**Highlights from the company statement:**
Alison Brittain, Chief Executive of Whitbread, comments:
“We continue to make good progress against our three point strategic plan: to grow and innovate in our core UK businesses; to focus on our strengths to grow internationally; and to build the capability and platform to support future growth. We remain on track to open c.3,700 new UK Premier Inn rooms and our committed pipeline stands at around 14,000 UK hotel rooms. We have also recently signed two additional sites in Germany (Freiburg and Essen) taking our committed German pipeline to five hotels. We expect to open 230-250 net new Costa coffee shops worldwide and to install at least 1,500 new Costa Express machines, having already surpassed our previous guidance of 1,250 in the current financial year.
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In the quarter our brands continued to win market share growing total sales by 8.6% and like for like sales by 1.7%. Trading since the end of the quarter is such that we expect to deliver full year results in line with expectations.
Premier Inn grew total sales in the quarter by 9.2%. We have opened 15 hotels in the UK since the start of the year, increasing the number of rooms available by 9.7%, whilst maintaining occupancy at a high level of 84.5%. Like for like sales grew by 1.8% benefitting from our hotel extension programme which, as expected, diluted our like for like revpar, which was down 1.3%.
In the quarter, Costa delivered total sales growth of 12.5% and good like for like sales growth of 4.3%. This performance was supported by its new advertising and promotional campaigns and benefitted from the timing of the quarter end, which included a strong start to the Christmas period. For the comparable period, to 26 November, excluding this timing benefit, Costa’s like for like sales growth was 2.9%*3.
Our property strategy is to carry out a modest number of sale and lease back transactions in order to recycle capital into strong returning new growth opportunities and we successfully completed two such transactions in December. We now expect total sale proceeds for the year to be in the region of £200 million. These transactions highlight the strong asset backing to our balance sheet and are evidence of how we optimise our significant property portfolio.”
· Premier Inn has grown total sales for the 39 weeks by 9.0%, by continuing to win UK market share, growing like for like sales by 2.2% and total room nights sold by 8.5% to 14.7 million. As anticipated total revpar was down 0.7%, compared to the total market growth of 0.9%, due to the impact of our hotel extensions programme. Total occupancy remained high at 83.2%, whilst the number of rooms available increased by 9.5%. In the quarter, revpar for the total market was down 0.3%, with the non-budget sector supported by a weaker sterling and higher inbound tourism to London.
· Restaurants delivered total sales growth for the 39 weeks of 0.5% with like for like sales down 0.2%, slightly ahead of a soft pub restaurant market outside the M25.
· Costa had another good sales performance, growing total system sales for the 39 weeks by 13.0% to £1,317 million (10.4% at constant currency). Within this, franchise system sales grew by 13.6% to £503 million (9.1% at constant currency). Costa UK Retail grew system sales by 11.6% to £708 million.
· Costa Enterprises grew system sales for the 39 weeks by 9.3% to £322 million respectively, while International system sales increased by 21.4% to £287 million (9.2% at constant currency). We remain committed to the long-term growth opportunities for Costa in China, despite a tougher near-term trading environment.
· Year to date we opened 186 net new stores worldwide and installed 1,266 Costa Express machines. This exceeds our target for 1,250 installations this year and takes the total number of Costa Express machines to 6,482, of which 696 are in international markets. We now expect to install at least 1,500 new Costa Express machines this financial year.
As of 07:04 GMT, Thursday, 26 January, Whitbread plc share price is 4,004.16p.