Growth plans for Whitbread brands

Whitbread today unveiled ambitious expansion plans as its Costa Coffee and Premier Inn brands continue to thrive in tough economic times.

Posting results for the year to March that show business on the up, new chief executive Andy Harrison set out a five-year plan to increase the number of hotel rooms by 50% and double the amount of coffee shops.

He said: "Thirty million UK adults don't have access to a Costa. People will not walk far for a coffee. There are a lot of places where we aren't present and we are under-represented in London."

Sales in the year grew 11.5% to £1.6 billion, with profits up 20% to £287 million. That allowed an increase in the dividend, up 17% to 33.25p.

Harrison, who joined from easyJet last year, thinks the economic recovery will be a slog. "We are in for a slow recovery. If the economy is better than people expect then interest rates will rise. It will be a long haul," he said.

In some ways, the prolonged downturn has aided Whitbread. Costa is seen as an affordable treat and Premier Inn as good value for money by tourists and business people.

The subdued property market means this is a good time to snap up well-located buildings, Harrison added.

Whitbread ended the year with 44,295 Premier Inn rooms and 1871 Costa stores.

It expects rapid expansion in Costa's UK network and "even faster international growth", aiming for 3500 stores worldwide within five years.