Whitbread sets out Premier Inn expansion plans as profit tops forecasts

Source: Stock Market Digital

Date :28/04/2008 09:36:28

Pubs and leisure group Whitbread Plc reported a 26.3 percent rise in full year earnings and said it plans to increase the size of its Premier Inn budget hotel chain by 50 percent in the next five years.

Pretax profit from continuing operations before exceptional items increased to £210.3 million in the year to February 28, from £166.5 million the previous year.

Market expectations had ranged between £204-207 million.

Premier Inn

Total revenue from continuing operations grew by 11.3 percent to £1.19 billion, compared with £1.07 billion the year before. That incorporated like-for-like growth of 5.7 percent.

Chief executive Alan Parker said the Premier Inn budget hotel chain enjoyed a record year, ahead of plans to grow the business by 50 percent to 55,000 rooms in the next five years.

The budget hotel chain, which held talks over a potential £3 billion merger with rival Travelodge earlier this year, accounts for almost half of Whitbread's revenues and has announced joint venture plans to expand into India.

Growing business

Mr. Parker said: "Although a more challenging consumer environment is widely anticipated, we are confident that the actions we have taken, combined with our investment programme, our resilient brands and our strong balance sheet, put us in a good position to continue the growth of the business."

He also announced plans to further expand The Costa Coffee chain.

The chain, which has 695 outlets in the UK, opened its 1,000th store in Moscow last month. This will pave the way for further expansion in Russia with Whitbread also planning to grow the chain to 2,000 stores in five years' time, Whitbread said.

Shares in Whitbread rose more than four percent in early trading, up 50p at £12.40.

April 28, 2008