June 18, 2013 / 6:32 AM / in 4 years

Costa Coffee demand helps Whitbread to first-quarter sales rise

A man drinks at a Costa Coffee branch in Loughborough, central England June 17, 2008.Darren Staples

LONDON (Reuters) - Britain's Whitbread (WTB.L) posted a 3.1 percent rise in first quarter sales, as demand for hot drinks at its Costa Coffee chain helped ease the impact of cold weather on its restaurant business.

The company, whose Premier Inn hotels and Costa Coffee chains are the biggest in the country, said on Tuesday the like-for-like sales rise in the 13 weeks to May 30 was underpinned by 8 percent underlying sales growth at UK Costa stores.

Underlying sales at Premier Inn were also up, growing 2.7 percent, helping to more than offset a flat performance at its Beefeater and Brewers Fayre restaurant arm, where cold weather at the start of the year kept customers at home.

The overall 3.1 percent rise for the group compares to growth of 2.7 percent in its last quarter, when its restaurant business was hit by heavy snow fall.

Whitbread has expanded rapidly in recent years on growing demand for more affordable hotels during the economic downturn and a rising popularity across Britain for coffee on the go.

In April, when posting an 11 percent rise in annual profit, the firm unveiled new targets to grow Premier Inn UK rooms by 45 percent to 75,000 by 2018, and double total sales at Costa Coffee to 2 billion pounds through expansion at home and abroad, with particular focus on China.

The group said on Tuesday it planned to open 300 net new Costa stores in the full year. Total sales at Costa grew 23.1 percent in the quarter to 281.8 million pounds ($443 million).

Shares in Whitbread closed at 2,925 pence on Monday, up 60 percent on a year ago, valuing the firm at about 5.3 billion pounds.

Reporting by Neil Maidment; editing by James Davey

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