Whitbread chief executive Andy Harrison has announced his intention to retire from the role at the end of the next financial year, after the company reported a rise in sales, earnings and profit for the year ended 26 February 2015.
Harrison, who previously occupied the same role at easyJet and RAC, said "it is time for me to plan my retirement from full time executive life and seek new challenges".
The hospitality company's chief executive heralded a 13.7 per cent increase in total sales to £2.6bn for the full year, driven by a 15.3 per cent rise in sales at hotel chain Premier Inn and a 17.9 per cent rise at the Costa coffee shop chain.
Underlying profit before tax rose by 18.5 per cent to from £411.8m to £488.1m as earnings per share soared 19.4 per cent to 213.67p per share.
Costa's underlying profit came in at £132.5m (a 20.7 per cent rise) while Whitbread's hotel and restaurant chains, which include Premier Inn and Brewers Fayre, rose 15.3 per cent to £401.4m.
Whitbread has now set "new growth milestones" for 2020 when it aims to increase its Costa sales by more than £1bn, add over 25,000 rooms to Premier Inn and create around 15,000 new jobs.
Chairman Richard Baker said the plans showed belief in "the continuing profitable growth opportunities available to both these businesses".
The company will reward investors with a final dividend of 56.9p per share, making a total dividend for the year of 82.15p - an increase of 19.4 per cent.
Whitbread's share price fell by just over one per cent in early trading.
Why it's interesting
Whitbread's strong end-of-year results were to be expected following trading momentum and company growth throughout the year. The UK regional hotel market has been on the road to recovery after the financial crisis left things looking bleak.
So now Whitbread is looking outwards with its sights set on Germany. The company bought its first German site in Frankfurt last year and plans to invest £25m to build the 200-bed hotel by the first half of 2016. Whitbread hopes to open six to eight hotels in three or four major cities in Germany by 2020.
Investors will also be keeping an eye on the recruitment process for Harrison's replacement. The chief executive has seen the group's market capitalisation increase by 288 per cent in five years and will be a tough act to follow.
What Whitbread said
Whitbread has gone from strength to strength under Andy's leadership, delivering consistent rapid and profitable growth built around our strong brands and the company's unique culture. Over the last five years our revenues have grown by 13 per cent per annum, driving a 17 per cent per annum growth in our earnings per share, which has increased the company's market capitalisation from £2.5bn to £9.7bn.
Whitbread has a clear strategy, ambitious growth milestones and the strength of leadership to successfully deliver these goals.
- Chairman Richard Baker
Coffee and cheap hotel rooms continues to be a winning formula for Whitbread, who are now looking for another winning chief executive.