Whitbread profits rise by 13% as Marriott sees growth

Leisure group Whitbread has reported a strong set of full-year financial results, with even its underperforming Marriott hotel chain starting to revive.

The company reported turnover (excluding business disposals) up by 4.8% to £1.86b for the year to 4 March.

Pre-tax profit (before exceptional items) rose by 13% to £240.8m.

Chairman Sir John Banham said the profits rise was the result of "organic development of our brands, a 2.7% improvement in like-for-like sales and rigorous cost controls."

At Marriott, sales dropped by 0.3% to £391m and operating profit fell by 10% to £71.5m. This was described by Whitbread as "another gritty performance in a market that remains tough".

Occupancy edged ahead to 71.5% over the year.

Whitbread said it was looking to develop the Marriott chain further, without having to invest too much capital.

One way of doing this could be through management agreements, such as the recent deal to run the Victoria & Albert Hotel in Manchester, which is owned by Royal Bank of Scotland.

Marriott's performance has already improved since the year end, with like-for-like sales growth of 2.3% in the seven weeks to 22 April.

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Travel Inn: signs are good

Sales at Travel Inn were 12% up at £230m, and like-for-like sales rose by 3.6%. Operating profit increased by 11% to £74m. Whitbread said occupancy had dipped in the first six months of the year but later recovered, ending the year at 80.2%. Room rates increased by 3.8%, boosting revenue per room from £32.95 to £33.28. Since the year-end like-for-like sales at Travel Inn were up by 4.9%. In pub-restaurants sales increased by 1.3% to £590m and like-for-like sales were up by 2.2%. Operating profit rose by 9.8% to £84.1m. Fifty pub-restaurants were sold, against 18 new openings. A new-look for Beefeater restaurants has been introduced in 24 outlets and these were now "delivering stronger sales, profits and returns". The company intends to extend the new format to a further 40 Beefeaters this year. Since the year end like-for-like sales in the pub-restaurants were up by 2.4%. In high-street restaurants sales increased by 8.4% to £453m when the group's Pelican restaurants division, sold in 2002, is excluded. Like-for-like sales were up by 3.1% in the division, which includes Costa coffee shops, TGI Friday's and Pizza Hut. Like-for-like sales in the high-street division were up by 4.7% since the year end. Buy this week's *Caterer* magazine for more industry news and analysis