Costa Coffee is a winning brew for Whitbread

Whitbread posted a 13 per cent rise in annual profits yesterday, boosted by its booming Costa Coffee chain.

Since the start of its new business year, Whitbread said both its budget hotels chain Premier Inn and its restaurants business including Beefeater Inns had seen sales grow at outlets open for more than a year while Costa Coffee had "continued its good momentum, both in the UK and internationally".

Andy Harrison, Whitbread's chief executive, said news that the country is officially in recession will not make much difference to the company. "The UK economy has been going sideways for a while now... whether up 0.2 [per cent] or down 0.2 [per cent] – for me that's flat," he said.

Its annual profits for the year to 31 March came in at £305m as its sales rose 11 per cent to £1.7bn.

There has been continuing speculation that Whitbread will cash in on the success of Costa by spinning it off into a separate division or selling it to a private equity house.

The company is planning to open 4,200 Premier Inn rooms in the UK this year and 350 Costas worldwide. Profits as its sales rose 11 per cent to £1.7bn. for the year to 1 March to £305m, as sales rose 11 per cent to £1.7bn.

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