Coffee sales drive Whitbread's growth

As hotel and restaurant group Whitbread reports a rise in first-quarter sales Graham Spooner, investment adviser at The Share Centre, explains what this means for investors:

"Whitbread reported a 9.2% increase in total sales for the 13 weeks to 2 June, with strong performances in Costa Coffee and Premier Inn driving the company forward. Total sales for Costa Coffee rose by 20.4% and by 8.1% for Premier Inn, offsetting weakness in the restaurant operations where a cut in consumer spending has impacted casual dining habits.

"Investors seeking growth will be pleased to see the company implementing its aggressive five year growth strategy, with 73 new Costa Coffee stores opened in the period and a further 300 units planned to open over the next year. Whitbread hopes investing in its stronger brands will win the company market share and as a result deliver good returns to its shareholders.  

"Early morning trading showed Whitbread's share price as the biggest riser on the FTSE 100 - a sign this update was well received by investors. This year the share price has drifted so we hope these growth figures will help to underpin the company at this lower level. We currently recommend Whitbread as a ‘hold' for investors."