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Whitbread plans expansion of Premier Inn

Leisure client Whitbread has set out ambitious plans to add 50 per cent more Premier Inn rooms in the UK and to double the size of its Costa coffee shop business.

It set out the five-year targets as it posted results showing a 20 per cent jump in underlying profits to £287.1 million in the year to 3 March 2011.

Whitbread ended the financial year with 44,295 Premier Inn rooms and 1,871 Costa stores, but under plans unveiled by chief executive Andy Harrison it hopes to increase Premier’s UK capacity to at least 65,000 rooms. This will include 4,000 additional rooms in the current financial year.

For Costa, it expects continuing rapid growth in the UK store network and “even faster international growth” as the group looks for sales of around £1.3 billion and 3,500 stores worldwide within the next five years. It now has 1,217 in the UK and is also looking to introduce 3,000 self-service Costa Express units.

Mr Harrison said: “We see a significant opportunity for Whitbread, building on our good returns on capital and the availability of quality sites.”

Total capital expenditure in 2011/12 will be around £350m. The company anticipates that about 40 per cent of its growth will come “from new catchment areas where Premier Inn is not currently present”.

The Premier Inn plan, which includes another 80-100 restaurants over five years, could include 185,000 sq m of development space each year for the next three years, with a particular focus on London along with other locations across the country where the company has identified gaps in its network. 

In the last year, Whitbread opened 22 hotels, or 2,138 rooms, and eight restaurants.

Premier’s drive for more of the leisure market, backed by an advertising campaign featuring comedian Lenny Henry, resulted in occupancy of 76.2 per cent in the financial year, up 6.6 per cent on a like-for-like basis.

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