Whitbread PLC: announces Q4/2015 and FY Trading Update

Dunstable / UK. (wbp) British Whitbread PLC in March reported its trading performance for the 50 weeks to 11 February 2016, which forms part of the 53 week year ending on 03 March 2016.

Sales update ( percent change versus prior year)

	Sales for the 11 weeks to 2016/02/11		Sales for the 50 weeks to 2016/02/11
	Like for like sales	Total sales	Like for like sales	Total sales
Premier Inn	2.2%	7.3%	4.4%	11.1%
Restaurants	2.3%	3.1%	1.0%	2.2%
Hotels and Restaurants	2.2%	5.8%	3.3%	8.2%
Costa	0.5%	10.5%	3.0%	14.2%
Total	1.7%	7.7%	3.2%	10.4%

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Alison Brittain, Chief Executive of Whitbread, comments: «Whitbread has had another good trading period, delivering year to date total sales growth of 10.4 percent and like for like sales growth of 3.2 percent. We expect to report full year profit in line with expectations».

«In the quarter, Premier Inn had a good performance growing total sales by 7.3 percent with occupancy rising by 0.3 percent pts to 71.4 percent and rooms available increasing by 6.9 percent. Like for like sales grew by 2.2 percent, which is ahead of our like for like revpar growth at 0.4 percent, as we benefited from our substantial, higher returning, hotel extensions programme. Costa had good total sales growth of 10.5 percent and like for like sales growth of 0.5 percent reflecting lower footfall on the high street and an unusually warm winter».

«In the year ahead, as we build towards our growth milestones, we will continue to invest in improving our customer propositions, our digital and IT capabilities and in our winning teams to ensure we maintain our market leading positions. This will deliver long term profitable growth and sustainable returns for our shareholders». Trading highlights:

Hotels and Restaurants

• Premier Inn has continued to win UK market share, growing total sales*2 for the 50 weeks by 11.1 percent, like for like sales by 4.4 percent, total revpar by 3.6 percent and the number of rooms available by 7.6 percent. Total occupancy remained high, in line with last year, at 81.1 percent and total room nights sold increased by 7.4 percent to 17.0 million.
• In the quarter, Premier Inn grew total sales by 7.3 percent, driven by a 6.9 percent increase in the number of rooms available, and occupancy increased by 0.3 percent pts to 71.4 percent. Like for like sales grew by 2.2 percent, ahead of our like for like revpar growth of 0.4 percent, due to our substantial extensions programme.
• Following the trend we highlighted in December, the market has continued to show a divergence in performance in the quarter between the regional and London hotel markets. In the regions Premier Inn grew total sales by 8.3 percent, with a 6.8 percent increase in rooms available, including approximately 2 percent from extensions. Total and like for like revpar grew by 1.5 percent and 1.4 percent respectively. Our regional occupancy remained high compared to the market at 70.6 percent, up 0.5 percent pts year on year. Total regional market revpar grew by 3.4 percent and the Midscale and Economy*3 sector grew total revpar by 4.5 percent.
• In London, despite a softer hotel market, Premier Inn grew total sales by 3.6 percent in the quarter, with an 8.0 percent increase in rooms available. Our total London revpar and occupancy declined, broadly in line with the market, by 3.6 percent and 1.5 percent pts respectively albeit our occupancy remained high at 76.1 percent. Total London market revpar declined by 3.3 percent and revpar for the Midscale and Economy sector was down 2.2 percent.
• Restaurants delivered total sales growth of 2.2 percent and like for like sales growth of 1.0 percent for the 50 weeks, ahead of our competitor set*4.

Costa Coffee

• Costa Coffee grew its worldwide total sales by 14.2 percent and like for like UK sales by 3.0 percent for the 50 weeks.
• Year to date Costa grew worldwide system sales by 13.1 percent to 1’516 million GBP (13.4 percent at constant currency). Within this, franchise system sales grew by 10.6 percent to 572 million GBP.
• UK Retail system sales, grew by 14.1 percent to 833 million GBP with equity stores growing like for like sales by 3.0 percent. We opened 103 net new UK stores.
• Costa Enterprises (including Costa Express UK and International) delivered system sales of 374 million GBP, up 12.6 percent. Costa Express maintained its success with the installation of a further 921 Costa Express machines*5 taking the total to 5’213.
• International system sales grew by 11.0 percent to 309 million GBP (12.4 percent at constant currency). 79 net new stores were opened in the period with 41 in EMEI and 38 in Asia.

Group

This year we shall open around 5’500 new UK Premier Inn rooms, including approximately 1’500 rooms from extensions, and plan to open a further approximately 5’000 new UK rooms next year, including approximately 1’700 rooms from our hotel extensions programme, which will have an approximately 1 percent impact on our like for like revpar. For Costa this year we expect to open approximately 200 net new stores worldwide and install around 950 Costa Express machines and we plan to open a further approximately 230 net new stores worldwide and install around 1’000 Costa Express machines next year.

Over the next year, as previously advised, we are planning an additional P+L investment, which we estimate to be approximately 15 million GBP. Our capital investment of approximately 700 million GBP will remain broadly the same as we continue to drive our organic growth and further improve the quality and consistency of our customer offer. Our strong freehold backing provides us the opportunity to recycle capital and we expect to carry out a sale and lease back transaction during next year. We remain on track to deliver on our growth milestones, which will enable us to create sustainable shareholder value.

The strong financial position remains unchanged.

Notes

Site detail	2015/02/26	Opened	Closed	Transfers	2016/02/11
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Premier Inn UK	59’138	3’145	0	0	62’283
Premier Inn International	1’703	461	0	0	2’164
Total Premier Inn (rooms)	60’841	3’606	0	0	64’447
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Restaurants (sites)	405	4	-2	0	407
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Costa Retail Equity	1’114	115	-37	0	1’192
Franchise	461	78	-1	0	538
Costa Enterprises	356	22	-74	0	304
Total Costa UK Stores (Retail + Enterprises)	1’931	215	-112	0	2’034
Costa EMEI	785	100	-59	0	826
Costa Asia	364	63	-25	0	402
Total Costa (stores)	3’080	378	-196	0	3’262
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Costa Express Machines	4’292	921			5’213
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Total Equity	1’242	128	-43	9	1’336
Total JV	344	57	-21	0	380
Total Franchise	1’494	193	-132	-9	1’546