Whitbread's H1 Profits Rise 11%
LONDON -- In a positive trading statement this morning, Whitbread (ISE: WTB.L) announced a pre-tax profit for the first half of 193.4 million pounds, up 10.6% from H1 2011's figure of 174.9 million pounds. The interim dividend was duly lifted by 11.4% to 19.5 pence.
The boost came predominantly from the firm's Premier Inn hotel and its Costa Coffee chains, which benefited from increased trading during the Olympics and the Jubilee celebrations earlier in the year as tourists flocked to London.
In the U.K., Premier Inn grew its total sales by 12.9%, with like-for-like sales up 3.7%. These figures were helped by 1,591 new rooms opening in the period, taking the total to 49,020 -- and a secured pipeline of 11,000 rooms, with the brand on course to reach 65,000 rooms by 2016.
Whitbread's star performer, though, was Costa Coffee, with total sales up a whopping 25%. Underlying profits increased 29%, while like-for-like sales were up 6.8%.
However, there were words of warning from chief executive Andy Harrison, who commented:
As expected, the London hotel market is settling post the Olympics and we wait for a clearer trend to emerge. The regional hotel market has continued its revpar decline. More generally, our consumer market context continues to be broadly flat. Against this background we expect to continue to outperform our competitors and like-for-like sales growth to be more moderate than the high levels achieved in the first half.
This statement contributed to Whitbread's shares falling in morning trade by 70 pence, or 3%, at the time of writing, with chairman Anthony Habgood also highlighting the "difficult economic conditions."
But the first-half boost from the Jubilympics has only served to aid Whitbread in its "rapid profitable organic growth," as Habgood described it, and the company looks set to continue along a profitable path for years to come.
Whitbread is a good example of a company to have benefited from a special boost, offering hospitality to an increased number of consumers as Britain, and London in particular, had a global spotlight shone on it due to two big events in close succession. The double-digit profit announced today was already priced into the shares, as seen by the slight drop this morning, but it's well worth analyzing the market to find companies that could profit from future events.
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