The outgoing chief executive of Whitbread, the owner of Costa Coffee and the budget hotel chain Premier Inn, has warned that the impact of today's Comprehensive Spending Review will be prolonged.
As Alan Parker unveiled his last set of results before leaving Whitbread on 25 November, he said: "What the impact of the spending review and the cuts will be still has to be seen. It will not be an instant thing – it will be over the course of the next year."
However, he said Whitbread had "performed well in recession and out of recession". The company, which also owns the Taybarns, Beefeater, Brewers Fayre and Table Table pub restaurants, reported a 28.4 per cent rise in underlying profits to £151.8m for the six months to 2 September. Total revenues jumped by 14.5 per cent to £805.4m.
Premier Inn benefited from a hefty investment in the marketing of its £29-a-room "Premier Offers" campaign, fronted by the comedian Lenny Henry, which has attracted more leisure visitors at weekends.
Mr Parker, who will be succeeded by the former easyJet boss Andy Harrison, said: "We focused all our advertising on the leisure market and that is why we have seen the increase at the weekend."
Saturday nights now rivalled Tuesdays and Wednesdays as Premier's peak time for bookings, he added. Premier Inn, which has 43,588 rooms and hotels in India, Dubai and Ireland, saw like-for-like sales rise 10.1 per cent during the half year, although this figure was comparable with a 7.5 per cent fall last year. The chain's revenue per available room – a key performance measure for hotels – was 5.9 percentage points ahead of the total hotel market.
Whitbread said it was also on track to open 250 new Costa Coffee shops in the current financial year, bringing its total to about 1,850 stores in 25 countries. Mr Parker, who joined Whitbread in 1992, vowed to open a similar number of coffee shops in 2011-12.
While he said Costa was buoyed by British customers drinking more barista-style coffee, he said it also provided a "warm, safe and friendly environment" where the average "dwell time" was 25 minutes. Total sales grew by 33.2 per cent to £311.2m, while like-for-like sales were up 8.5 per cent.
Whitbread raised its interim dividend by 16.6 per cent to 11.25p. Asked about his legacy, Mr Parker said: "I think the legacy is the company as it stands today. We are in good shape for the age of austerity and uncertainty we are in."
Since he became chief executive in June 2004, Whitbread's share price has risen by 107.6 per cent, while the FTSE 100 rose 29.5 per cent.Reuse content