Whitbread sales surge

Sales have picked up strongly at the leisure group over the past three months.

Morningstar.co.uk Editors 13 December, 2006 | 11:33AM
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Sales have picked up strongly at the leisure group over the past three months.

Over the first 39 weeks of the current financial year, which runs to the end of February, total sales were up 10.1% and like-for-like sales by 3.9%.

This represents a considerable improvement on figures for the first half, which were 9.1% and 2.9% respectively and means that sales must have been running about 12% ahead recently, with like-for-likes approaching 6%.

The star performer is Premier Travel Inn, where total revenue is up 16.3% and like-for-likes 7.7% over the 39 weeks. Whitbread has opened 1,640 new rooms, building 14 new hotels and extending another nine. The target is to have added 2,500 rooms by the end of the financial year.

The Costa coffee shop chain has boosted sales by 22.1% but that is mainly because of new openings. There are now 500 outlets in the UK, a first store has been opened in Eastern Europe and Shanghai will see its first Costa before Christmas.

Even so, like-for-like sales are up an encouraging 5.9%.

Pub restaurants are lagging but at least like-for-like sales are now in positive territory after falling back earlier in the year. Some benefit has been realised by putting pubs and Travel Inns on joint sites.

Membership numbers are stable at the David Lloyd Leisure clubs but individual members are being persuaded to spend more.

The Whitbread figures do not include the 239 pub restaurants that have been sold. Also excluded are the Pizza Hut joint venture and TGI Fridays, which is up for sale.

Whitbread shares rose 9p to 1616p on the encouraging sales figures but a lot of good news is already in the price. The forward PE is a demanding 23 while the prospective dividend is 1.9% after a dramatic surge in the share price from 1027p in May.

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