Whitbread has reported its results for the financial year to 27 February 2014, showing double digit growth, sales up 13%, underlying profit up 16.5%, and earnings per share up 20.1%. 2014 has started well, and the growth targets for both Premier Inn and Costa are on track.
Andy Harrison, Chief Executive, commented:
“Whitbread has delivered another year of strong double digit growth, with total sales up 13.0%, underlying pre tax profits up 16.5% and EPS up 20.1%. This, combined with our good cash flow, has led the Board to recommend a full year dividend increase of 19.9%. This extends our track record of double digit growth, with sales growing by 11.4% over the last five years and EPS and dividends per share growing by 14.7% and 13.5% respectively. This success is built on our two strong brands Premier Inn, the UK’s favourite hotel chain and Costa, the UK’s favourite coffee shop and our 43,000 team members who work so hard to deliver a consistently good customer experience.
We continue to invest in improving our customer propositions and international expansion. This includes the rollout of our “best ever bed” in Premier Inn, the launch of “hub by Premier Inn” and rejuvenating our restaurant brands. In Costa we are focussed on international growth in China and France and our rebranding in Poland, together with the continuing growth of Costa Express.
We had a strong finish to last year, with all our brands performing well, boosted by good Christmas and New Year campaigns and helpful weather comparatives. The first two months of the new financial year have started positively, with good trading again helped by relatively soft comparatives which will become tougher as we move into the second half of this year.
We remain on track to deliver our 2016 and 2018 growth milestones for both Premier Inn and Costa which, combined with our clear focus on returns, will create substantial shareholder value.”
Financial Highlights
• Total revenue up 13.0% to £2,294.3 million (2012/13: £2,030.0 million)
• Group like for like sales up 4.2%
• Underlying profit before tax up 16.5% to £411.8 million (2012/13: £353.4 million)
• Underlying basic EPS up 20.1% to 179.02p (2012/13: 149.10p)
• Full year dividend up 19.9% to 68.80p (2012/13: 57.40p)
• Whitbread Hotels and Restaurants profits up 11.2% to £348.1 million, Costa profits up 21.9% to £109.8 million
• Premier Inn total sales up 13.4% and like for like sales up 5.0%
• Costa total sales up 20.1% and like for like sales up 5.7%
• Group return on capital up 1.4% pts to 15.3%
• Strong cash flow from operations of £601.3 million funded capital investment of £306.2 million and 19.9% dividend growth
• Year end net debt down by £79.5 million to £391.6 million
Statutory Highlights
• Profit after tax and exceptional items up 10.7% to £323.4 million (2012/13: £292.1
million)
• Total basic EPS up 10.4% to 182.98p (2012/13: 165.71p)
On track for 2016 and 2018 growth milestones
• Premier Inn now has 55,035 UK rooms, up 6.5% in the year with a committed pipeline of c.11,500 rooms
• Costa system sales increased by 19.4% to £1.2 billion
• Around 3,000 net new UK jobs created in 2013/14
Anthony Habgood, Chairman, said:
“This is another set of good results. Once again strong cash flow funded the necessary capital investment for our growth engines, Premier Inn and Costa, to increase their share of the market. We have recommended an increase in the full year dividend of 19.9% while maintaining a prudent balance sheet structure. I am confident that the brand strength of Premier Inn and Costa will continue to fuel the Company’s growth into the future.”