Whitbread Plc - Third Quarter Trading Update

·   Third quarter total group sales growth of 5.6%

·   Group UK like-for-like sales growth of 0.3% reflecting recent tougher market conditions

·   Premier Inn UK third quarter growth of 5.0% driven by investment in new hotel capacity

·   Costa UK strong third quarter growth of 7.2% from new stores and Costa Express expansion

 

 

UK Like-for-like

Sales Growth

UK Total

Sales Growth

UK & International

Total Sales Growth

Q31

YTD2

Q31

YTD2

Q31

YTD2

Hotels

0.0%

2.4%

5.5%

7.3%

5.2%

7.2%

Restaurants

1.8%

1.3%

3.5%

2.7%

3.5%

2.7%

Premier Inn

0.5%

2.1%

5.0%

6.0%

4.7%

5.9%

Costa3

(0.1)%

1.0%

7.2%

7.9%

6.9%

8.3%

Whitbread

0.3%

1.8%

5.8%

6.7%

5.6%

6.8%

1Q3 = 13-week period ended 30 November 2017 | 2YTD = 39-week period ended 30 November 2017

3Costa UK like-for-like includes UK equity stores (Q3: (1.5)%) and Costa Express, further details below

Alison Brittain, Whitbread Chief Executive Officer, commented:

"We have made good progress in executing our strategy and have grown group sales so far this year by 6.8%. This growth, combined with the results from our group-wide efficiency programme, means that we are on track to achieve expectations for the full year.

Premier Inn UK achieved total hotel sales growth of 5.5% in the quarter as we continued to deliver our strategy to win market share through investment in new hotels and extensions, which will mature to give strong returns over the next few years. Our performance in the quarter moderated as the budget hotel market weakened and we had a particularly challenging October. Although it is early in the fourth quarter, performance so far has been encouraging and reflects a return to year-to-date performance.

Costa UK has delivered strong total sales growth of 7.2% in the quarter, as we pursue our strategy to increase our presence in high footfall and convenient locations such as drive-thru and travel locations and we are particularly pleased with the strong performance of Costa Express. As a result of our channel strategy, more customers are drinking more cups of our coffee than ever before and we have gained market share. We have also continued to invest in the overall customer proposition, including new coffee, food and digital capability. These improvements have been well received by our customers and we have just been voted as the nation's favourite coffee shop, for the eighth consecutive year.

Our Costa high street stores in the UK are highly profitable and generate strong returns. However, the well-publicised weak retail market footfall is negatively impacting our high street stores' like-for-like performance and we expect this to continue for some time. Internationally, Costa in China continues its good momentum with another quarter of positive like-for-like sales growth.

We remain committed to delivering our strategy to invest in the attractive structural growth opportunities in the budget hotel market and the growing coffee markets, in both the UK and internationally. We do expect the tough UK high street environment and inflation in our sector to continue to pose challenges in the year ahead. However, we have good momentum in the delivery of our plan to enhance our UK market leadership positions, create an international business of scale in Germany, China and Costa Express, and develop a more efficient infrastructure. This will create further customer loyalty and deliver long-term growth in earnings and dividends and a strong return on capital."