Costa helps drive profit at Whitbread
Costa, the Whitbread owned chain of coffee shops, has increased its full-year underlying operating profit by 21.9% to £109.8 million as trade was driven by product innovations and a new store opening programme.
In the year to 27 February 2014, Costa’s total sales increased by 20.1% while total worldwide system sales grew by 19.4% to £1.2 billion. As a result, Whitbread said the coffee chain is on track to deliver its target of reaching around £2 billion of system sales in 2018.
In the UK, Costa’s retail sales grew by 16.5% with like-for-like sales in UK equity stores edging up 5.7%, mainly as a result of a 5% growth in transactions per store.
Whitbread said the growth was largely driven by Costa’s store opening programme, successful Christmas campaign and the introduction of a new breakfast range and hot chocolate drinks.
During the year Costa opened an additional 177 net new stores in the UK to take the total 1,755. Whitbread is expecting the number of UK stores to increase to over 2,200 by 2018.
Costa Enterprises grew its system sales by 22% and added 955 net new Costa Express machines to give a total of 3,515 units at the year end.
Across the wider Whitbread Group, pre-tax profit rose by 1.1% to £347 million after taking into account one-off exceptional items and costs. Underlying operating profit climbed by 16.5% to £411.8 million while total revenue increased by 13% to £2.3 billion.
Whitbread chief executive Andy Harrison said: “Whitbread has delivered another year of strong double digit growth.
“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."
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