Whitbread PLC: announces Q1-2019 financial results

Dunstable / UK. (wbp) Group total sales growth of 3.2 percent and good progress with efficiency savings British Whitbread PLC announced in its trading update for the first quarter 2019 (Q1/2019). Summary:

  • Expect to deliver full year results in-line with expectations
  • Premier Inn UK total accommodation sales growth of 4.3 percent driven by investment in new hotels
  • Costa UK total sales growth of 5.2 percent through new store growth and Costa Express expansion
  • Good progress in preparing Costa to be demerged from Whitbread
UK like-for-like Sales Growth UK Total Sales Growth UK + International Total Sales Growth
Accommodation (0.3)% 4.3% 3.7%
Food + beverage (1.9)% (0.4)% (0.4)%
Premier Inn (0.9)% 2.5% 2.2%
Costa (Stores + Express) (2.0)% 5.2% 4.9%
Whitbread (1.3)% 3.5% 3.2%

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Alison Brittain, Whitbread PLC Chief Executive, said: «Whitbread has started the year growing total Group sales by 3.2 percent. We expect to deliver in-line with expectations for the full year and we continue to make strong progress on our efficiency programme.

«Premier Inn UK delivered total accommodation sales growth of 4.3 percent driven by additional capacity. The hotel market was weaker in the first quarter due to strong comparable data this time last year and increased supply, including significant room openings from Premier Inn. Our new capacity has a short-term impact on like-for-likes but delivers good long-term sales growth. Forward bookings have improved recently, supported by the robust business to business market and comparatives ease later in the year. Our F+B sales declined slightly due to lower footfall from adverse weather.

«Costa UK grew total sales by 5.2 percent in the quarter through the strong contribution from new stores and Express machines. We continue to actively rebalance our network to high-footfall and convenient locations and have made good progress with our product innovation and operational initiatives. Our stores remain highly profitable and deliver an excellent return on capital. Costa Express continues to perform well and like-for-like sales in China are growing.

«Both the budget hotel market and the coffee market present long-term structural growth opportunities, and whilst we are cautious of shorter-term trading conditions in the UK, due to well-publicised consumer trends, we are confident that we have the right strategies in place to enhance our UK and international market positions and ensure each business is well-positioned to thrive as a separate entity.»

Update on Costa demerger

In April 2018, Whitbread committed to demerge Costa from Whitbread as fast as practical and appropriate to optimise value for shareholders. Constructive early steps have been taken in preparation for the demerger and good progress continues to be made on the core infrastructure and efficiency work that was already underway. A further update on the demerger will be provided alongside the interim results in October 2018.

Costa Coffee’s performance in Q1/2019

  • UK sales growth of 5.2 percent in the first quarter driven by new stores and Express machines
  • UK like-for-like sales declined by 2.0 percent, reflecting the general retail market conditions
  • UK Costa Express continued to perform well with Q1 total sales growth of 9.6 percent
  • China started the year well with positive like-for-like sales

Costa network size

  • Number of UK equity stores: 1,397
  • Number of UK franchise stores: 1,070
  • Number of Express machines (UK + International): 8,228
  • Number of China stores: 459

Costa UK

In the first quarter, Costa UK grew total sales by 5.2 percent through the addition of new stores and Express machines in attractive convenience-based locations. The UK like-for-like sales decline resulted principally from footfall weakness in traditional shopping locations, whereas travel locations continued to show good growth. New products included an expanded selection of savoury snacks and the new ‘Flat Black’ and ‘Flat Mocha’ coffees to sit alongside the popular Flat White. The upgrade of point-of-sale terminals across the UK was completed in April, which has already enabled a lunch-time value bundle to be introduced across the country. The technology upgrade has also enabled the trial of mobile ordering of coffee in 16 stores in London.

Costa Express

Total UK sales growth in Costa Express was 9.6 percent for the first quarter, driven by machine additions over the last year and positive like-for-like sales growth, demonstrating the strong customer demand for the convenience and quality of coffee provided by this unique proposition. Despite the number of global machines remaining broadly flat in the quarter, after the exit of trials in Canada, plans are on track to install 1,300 machines worldwide this financial year, with international trials underway in European markets.

Costa China and International

Positive momentum continues in China, with encouraging results from new and refurbished stores and good like-for-like sales growth. Plans to open approximately 100 gross new stores this year and continue to launch new products are on track, with recent introductions of Cold Brew and Character Roast already performing well.

bakenet:eu
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