Whitbread reports like-for-like slowdown at Costa and Premier Inn: Whitbread has reported a slowdown in like-for-like sales growth at Costa and Premier Inn in the most recent 11 weeks to 11 February. Premier Inns sales grew 2.2% (4.4% for the 50 weeks to 11 February), whilst Costa sales grew 0.5% (3% in the 50-week period. Pub restaurants performed better with 2.3% sales growth in the 11 weeks as opposed to 1% for the 50-week period. Alison Brittain, chief executive of Whitbread, said: “Whitbread has had another good trading period, delivering year to date total sales growth of 10.4% and like for like sales growth of 3.2%. We expect to report full year profit in line with expectations. In the quarter, Premier Inn had a good performance growing total sales by 7.3% with occupancy rising by 0.3% pts to 71.4% and rooms available increasing by 6.9%. Like for like sales grew by 2.2%, which is ahead of our like for like revpar growth at 0.4%, as we benefitted from our substantial, higher returning, hotel extensions programme. Costa had good total sales growth of 10.5% and like for like sales growth of 0.5% reflecting lower footfall on the high street and an unusually warm winter. In the year ahead, as we build towards our growth milestones, we will continue to invest in improving our customer propositions, our digital and IT capabilities and in our winning teams to ensure we maintain our market leading positions. This will deliver long term profitable growth and sustainable returns for our shareholders.”

Hotels and Restaurants: The company said: “Premier Inn has continued to win UK market share, growing total sales for the 50 weeks by 11.1%, like for like sales by 4.4%, total revpar by 3.6% and the number of rooms available by 7.6%. Total occupancy remained high, in line with last year, at 81.1% and total room nights sold increased by 7.4% to 17.0 million. In the quarter, Premier Inn grew total sales by 7.3%, driven by a 6.9% increase in the number of rooms available, and occupancy increased by 0.3% pts to 71.4%. Like for like sales grew by 2.2%, ahead of our like for like revpar growth of 0.4%, due to our substantial extensions programme. Following the trend we highlighted in December, the market has continued to show a divergence in performance in the quarter between the regional and London hotel markets. In the regions Premier Inn grew total sales by 8.3%, with a 6.8% increase in rooms available, including c.2% from extensions. Total and like for like revpar grew by 1.5% and 1.4% respectively. Our regional occupancy remained high compared to the market at 70.6%, up 0.5% pts year on year. Total regional market revpar grew by 3.4% and the midscale and economy sector grew total revpar by 4.5%. In London, despite a softer hotel market, Premier Inn grew total sales by 3.6% in the quarter, with an 8.0% increase in rooms available. Our total London revpar and occupancy declined, broadly in line with the market, by 3.6% and 1.5% pts respectively albeit our occupancy remained high at 76.1%. Total London market revpar declined by 3.3% and revpar for the midscale and economy sector was down 2.2%. Restaurants delivered total sales growth of 2.2% and like for like sales growth of 1.0% for the 50 weeks, ahead of our competitor set.”

Costa: The company said: “Costa grew its worldwide total sales by 14.2% and like for like UK sales by 3.0% for the 50 weeks. Year to date Costa grew worldwide system sales by 13.1% to £1,516 million (13.4% at constant currency). Within this, franchise system sales grew by 10.6% to £572 million. UK Retail system sales, grew by 14.1% to £833 million with equity stores growing like for like sales by 3.0%. We opened 103 net new UK stores. Costa Enterprises (including Costa Express UK & International) delivered system sales of £374 million, up 12.6%. Costa Express maintained its success with the installation of a further 921 Costa Express machines taking the total to 5,213. International system sales grew by 11.0% to £309 million (12.4% at constant currency). 79 net new stores were opened in the period with 41 in EMEI and 38 in Asia.”

Group: The company said: “This year we shall open around 5,500 new UK Premier Inn rooms, including c.1,500 rooms from extensions, and plan to open a further c.5,000 new UK rooms next year, including c.1,700 rooms from our hotel extensions programme, which will have a c. 1% impact on our like for like revpar. For Costa this year we expect to open c.200 net new stores worldwide and install around 950 Costa Express machines and we plan to open a further c.230 net new stores worldwide and install around 1,000 Costa Express machines next year. Over the next year, as previously advised, we are planning an additional P&L investment, which we estimate to be c.£15 million. Our capital investment of c.£700 million will remain broadly the same as we continue to drive our organic growth and further improve the quality and consistency of our customer offer. Our strong freehold backing provides us the opportunity to recycle capital and we expect to carry out a sale and lease back transaction during next year. We remain on track to deliver on our growth milestones, which will enable us to create sustainable shareholder value. Our strong financial position remains unchanged.”

Domino’s reports 11.7% like-for-like sales growth in 2015: Domino’s UK has reported 11.7% like-for-like sales growth in the 52 weeks ended 27 December 2015. System sales grew 15.8% to £877.2m. The company stated: “UK performance continues to underpin growth with nine successive quarters of double-digit like-for-like sales, E-commerce system sales (are) ahead by more than 30% (and) app-based sales now represent the largest distribution channel driving 48.6% of online sales. In the UK e-commerce sales now represent 77.7% of all delivered sales. A record new store opening programme in the UK – 61 (2014: 40) stores opened in the year. New store average weekly unit sales (‘AWUS’) 15% (are) ahead of last year. Store Ebitda performance (is) up from 13.6% to 15.5%, driven by lower food prices. Like-for-like sales and year-to-date sales in the first nine weeks of 2016 trading are up 10.5% in the UK, 13.7% in the Republic of Ireland and 4.3% in Switzerland.” Chief executive David Wild said: “2015 was a terrific year for Domino’s Pizza Group; the UK performance was outstanding, reflecting continued investment in our e-commerce platform. This underpins both our like-for-like results and the success of our new store programme. Digital continues to be at the heart of our business, driving more customers and higher frequency of orders. Our cash conversion is strong and we have today announced that we are ready to resume share buy backs alongside a dividend that is up 18.6%. We have made an encouraging start to 2016, although we are conscious of increasingly tough comparatives through the rest of the year. I would like to thank the DPG team for their hard work. I also want to pay tribute to our franchisees whose tireless endeavours ensure that our customers continue to enjoy great pizzas at great prices every day – whether ordered online or by phone, delivered to the door or collected in store.” Douglas Jack, leisure analyst at Numis Securities, said: “Underlying PBT rose by 18% to £73.2m in 2015 (we forecast £71.5m; consensus £70.0m), with UK like-for-like sales up 11.7% (orders +9.0%; items/order +1.3%; price +1.4%), 65 stores opened and UK franchisee profitability/store up 27%. Given this, record sales from new UK sites (up 15% per store) and UK like-for-like sales being up 10.5% in the first nine weeks of 2016E, we are upgrading our forecasts by 3%. With £40m of net cash, the company intends to recommence share buy backs. UK operating profit rose by 17.4% to £69.4m in 2015, with like-for-like sales rising 11.7% (vs an 11.3% comp) and margins rising by 150bps. Ecommerce sales rose by 30.8% (website +0.1%; mobile +51.0%), reaching 77.7% of delivered sales, aided by app downloads rising by 40% to 11.5m, and digital innovation increasing personalisation and customer convenience. UK franchisee profitability rose by 27% to £157k/mature store in 2015, with franchisee margins rising by 190bps (of which we estimate 130bps was due to Domino’s passing on £11m of lower food costs). In 2016E, food costs should fall by a further 75bps, in addition to which the fuel cost outlook is also benign. Republic of Ireland operating profit was flat, at £5.0m, held back by an adverse currency movement, with like-for-like sales rising by 8.6% (vs an 11.3% comp) and margins rising by 10bps. In Switzerland, losses increased slightly, to £1.3m from £1.0m, due to higher costs relating to opening more stores, even though like-for-like sales rose by 5.4%. Accelerating expansion. In 2015, 61 sites opened in the UK and four opened in Switzerland. There were five closures in the UK (of which four were previous trial sites in motorway service stations) and one in Switzerland. From 2016E, we now forecast 65 new stores pa in the UK (up from 50 pa), two pa in Republic of Ireland (up from zero) and at least three pa in Switzerland. We are upgrading our 2016E forecast by 3% to £80.6m (from £78.6m; consensus £80.0m). This reflects 2015’s forecast beat and plans to open 65 rather than 50 units pa in the UK, yet still cautiously assumes just 3% like-for-like sales growth and falling margins for the UK. Potential for earnings upgrades could be enhanced by share buy backs given the £40m net cash position, strong cash flow and management’s decision to retain a debt facility.”