Free Essay

What Does It Take to Transform an Iconic Company on the Verge of Bankruptcy? Visionary Leadership. Ford Motor Company Ceo Alan Mulally Used It to Move His Company Forward. in November 2008, Ford Was in Desperate Need of

In: Business and Management

Submitted By teacher77
Words 1185
Pages 5
UPDATE 1-Expansion helps Whitbread post first half profit rise
Firm on track to hit 2018 expansion targets
* Opened 12 hotels and 153 net Costa stores in H1
LONDON, Oct 22 (Reuters) - Britain's biggest hotel and coffee shop operator Whitbread posted a 12.6 percent rise in first half profit as new Premier Inn hotels and Costa Coffee stores helped boost sales.
The group, which also operates pub restaurant chains, on Tuesday said underlying pretax profit rose to 216.1 million pounds ($349.18 million) in the six months to Aug. 29, slightly ahead of a company compiled consensus forecast for 213 million pounds. Revenue jumped 12.4 percent to 1.14 billion pounds.
Whitbread, which makes almost all its sales in Britain, has expanded rapidly due to demand from cost-conscious customers for affordable hotels and a rising popularity for takeaway coffee, helping underlying pretax profit grow by 12.0 percent per annum since the onset of the recession.
On Tuesday it said it was on track to meet targets to grow Premier Inn UK rooms by 45 percent to 75,000 by 2018, and double Costa's total sales to 2 billion pounds through expansion at home and abroad, with a particular focus on China.
Total sales at Premier Inn rose 12.2 percent in the first half, boosted by 12 new hotel openings and strong business-led trade in London. Like-for-like sales were up 3.3 percent.
Revenue per available room (RevPAR), a key industry measure, grew ahead of the market at 1.7 percent in London where the firm is expanding, but lagged peers such as an improving Travelodge in the regions - where around 85 percent of Premier Inn's rooms are - growing at 2.1 percent versus 6.0 percent for the sector.
The group also opened 153 net new Costa Coffee stores worldwide, including 86 in the UK and 30 in China, taking its total to 2,680 globally, with 1,664 of those in the UK.
Those openings, coupled with strong demand during a cold first quarter in Britain, helped total sales rise 20.9 percent to 378.8 million pounds. Underlying UK sales rose 5.5 percent.
Shares in Whitbread, which raised its interim dividend by 11.8 percent to 21.8 pence, were flat at 3365 pence at 0716 GMT, having risen 43 percent on a year ago.
Grounds for optimism as profits rise at Costa
Profits at coffee shop chain Costa have risen by a fifth after more strong sales and a surge in the size of its UK estate to more than 1,600 stores.
The retailer, which is part of the Whitbread leisure group, grew total worldwide sales by 19.5% to £569.2m in the six months to August 29, while underlying profits were 20.5% higher at £43.5m.
It added a net 86 stores in the UK, meaning its estate of 1,664 outlets in locations ranging from high streets and shopping centres to motorway service areas and garage forecourts is now 800 greater than its closest competitor.
The chain also recently marked the milestone of 1,000 international stores with a new outlet in Bangkok.
Costa’s continued strong growth combined with further market share gains at budget hotel Premier Inn to help Whitbread post a rise in half-year underlying profits of 12.6% to £216.1m.
Premier improved like-for-like sales by 3.3% and added 1,368 UK rooms, taking its total to 53,039. Revenues grew by 12.2% to £497.4m.
Across the group, Whitbread said it created 1,200 new UK jobs over the period, with a further 10,000 expected in the next three years.
In April 2011, the company pledged to grow the number of Premier Inn rooms in the UK by around 50% to 65,000 by 2016. It extended the target in April to 75,000 by 2018.
The company expects to open around 4,000 new Premier Inn rooms in the current financial year and a further 4,500 in 2014/15.
Chief executive Andy Harrison said: “This good first half performance puts us on track to deliver this year’s business plan and we remain on the right trajectory for our 2016 and 2018 growth milestones.”
Costa, the coffee chain that keeps on growing: Brand to open hundreds more stores across the UK and around the world * British brand has benefited from customer backlash against Starbucks * Profits soared last year almost 30 per cent to £90.1million * Ambitious plans to open more stores in UK and elsewhere including China
By Sean Poulter, Consumer Affairs Editor
PUBLISHED: 23:36, 30 April 2013 | UPDATED: 23:36, 30 April 2013
It isn’t hard to find a Costa Coffee shop on most high streets – and it’s about to become even easier.
The British chain, which has benefited from a customer backlash against US rival Starbucks over its controversial tax affairs, already has 1,578 UK outlets which it has been opening at the rate of one every two days.
Now it is to open hundreds more in the UK and around the world including China over the next five years as part of an ambitious expansion.
The plans, announced yesterday by parent company Whitbread, are aimed at doubling the value of Costa’s global sales from around £1billion a year to £2billion. Profits last year soared almost 30 per cent to £90.1million. Costa was founded in London in 1971 by Italian brothers Bruno and Sergio Costa as a wholesale supplier of roasted coffee to caterers and specialist Italian coffee shops. It was taken over by Whitbread in 1995 and in 2010 overtook Starbucks to become the UK’s biggest coffee chain.
Worldwide, it is second only to Starbucks which has come under fire in the UK for paying little or no corporation tax despite generating huge sales through hundreds of outlets. Starbucks paid just £8.6million in corporation tax in 14 years of trading in Britain – and nothing in the last three years.
While the company subsequently changed its tax arrangement and will pay around £10million this year, it has suffered from protests and a customer boycott. Costa paid some £15million in corporation tax on £377million UK sales in 2011-12, compared to nothing from Starbucks which achieved sales of £398million.
The British chain has also benefited by scoring better in consumer taste tests.
Whitbread, which also owns Premier Inn hotels and restaurant chains including Beefeater and Brewers Fayre, says its expansion plans across the group will create 12,000 new jobs by 2018.
In and around London it will open a number of budget hotels on sites formerly occupied by office blocks. The group saw an 11.4 per cent increase in underlying pre-tax profits to take them up to £356.5million in 2012-13.

Similar Documents

Premium Essay

How Capitalism Will Save Us

...HOW CAPITALISM WILL SAVE US Why Free People and Free Markets Are the Best Answer is Today's Economy S T E V E FORBES and E L I Z A B E T H A M E S HOW CAPITALISM WILL SAVE US HOW CAPITALISM WILL SAVE US W h y Free People and Free Markets A r e t h e Best A n s w e r i n Today's E c o n o m y Steve Forbes AND ELIZABETH AMES CROWN BUSINESS ALSO BY STEVE FORBES Power Ambition Glory (coauthored with John Prevas) Flat Tax Revolution A New Birth of Freedom To the millions of individuals whose energy, innovation, and resilience built the Real World economy. Their enterprise, when unleashed, is always the answer. Copyright © 2009 by Steve Forbes and Elizabeth Ames All rights reserved. Published in the United States by Crown Business, an imprint of the Crown Publishing Group, a division of Random House, Inc., New York. CROWN BUSINESS is a trademark and CROWN and the Rising Sun colophon are registered trademarks of Random House, Inc. Library of Congress Cataloging-in-Publication Data Forbes, Steve, 1947How capitalism will save us / Steve Forbes and Elizabeth Ames.—1st ed. p. cm. Includes index. 1. Capitalism—United States. 2. United States—Economic policy. 3. United States—Economic conditions. I. Ames, Elizabeth. II. Title. HB501.F646 2009 330.12'20973—dc22 2009032751 ISBN 978-0-307-46309-8 Printed in the United States of America DESIGN BY BARBARA S T U R M A N 1O 9 8......

Words: 210110 - Pages: 841