Whitbread Plc, the owner of Premier Inn budget hotels and Costa Coffee shops, said revenue growth accelerated as the U.K. cafe market strengthened. The shares rose to the highest since at least January 1992.
Sales at Costa shops open for at least a year rose 7.1 percent in the 13 weeks ended Nov. 29, Whitbread said today in a statement. The Dunstable, England-based company last year reported 3.8 percent like-for-like revenue growth at the coffee chain in the comparable period.
Sales at Premier Inn rose 2.5 percent on a like-for-like basis, compared with a 2.6 percent increase a year earlier. Revenue per available room, an industry gauge of profitability, fell 0.9 percent in London compared with a 1.9 percent drop across the industry, Whitbread said.
“We would plan for Premier Inn to outperform the market in terms of revpar by a percentage point or two,” Chief Executive Officer Andy Harrison said on a call with analysts. “We’ve outperformed the midscale and economy segment much more than that and we are clearly benefitting from Travelodge’s financial problems.”
Whitbread was up 60 pence, or 2.5 percent, to 2,488 pence at the 4:30 p.m. close of trading in the London. The shares have climbed 58 percent in the past 12 months, increasing the company’s market value to 4.44 billion pounds ($7.2 billion).
Revpar at Premier Inn grew 0.7 percent compared with a decline of 5.4 percent for the mid-scale and economy hotel market, Whitbread said in the statement, citing data compiled by STR Global. The number of rooms Premier Inn operates in London increased by 22 percent this year.
Like-for-like sales companywide rose 3.3 percent in the period, compared with 2.4 percent in the same period last year.
“The economic environment remains challenging with no change in our background consumer market,” Harrison said in the statement. “We are on track to deliver full-year results in line with expectations.”
Travelodge Ltd., a competitor in the U.K. budget-hotel market, completed a financial restructuring in October, cutting its debt by half and giving lenders stakes in the business.