Costa and Premier Inn owner Whitbread has reported a bright start to the year with sales growth of 7.6 per cent for the 13 weeks to 1 June, which was in line with expectations.
Investors have certainly perked up, with shares up five per cent in early trading.
The firm posted a 2.9 per cent rise in like-for-like sales for the first quarter of the year.
Comparable revenue was boosted mostly by the Premier Inn hotel chain, where sales rose 4.7 per cent, compared to 2.1 per cent over the equivalent period last year.
Like-for-like sales at Costa Coffee rose 1.1 per cent during the period, down on the 2.6 per cent growth posted for the same period in 2016.
Why it's interesting
The update came ahead of Whitbread's annual general meeting today, so it'll be hoping the figures keep investors happy. In April the company hiked its dividend by six per cent, but warned of a "tougher consumer environment".
The robust performance from Premier Inn has helped boost Whitbread, though Costa Coffee sales could do with a caffeine hit, buffeted by a dip in consumer confidence.
Still, the firm's boss said Whitbread remains on track to open between 230 and 250 Costa shops this year.
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: "These results are pretty solid all things considered. They don’t show the spectacular growth of years past, but the UK business is a more mature animal than it was and that is inevitably going to slow growth. Against a rather chilly economic backdrop Whitbread has delivered growth across the board."
What the company said
Whitbread's chief executive Alison Brittain said:
Our continued drive to grow and innovate in our core UK businesses, focus on our strengths internationally and build capabilities to support long-term growth, combined with our ongoing cost efficiency programme, gives us confidence that we will make further good progress this year.
Premier Inn continued to win overall market share with strong sales growth of 9.2 per cent as we benefited from a resilient hotel market and the contribution from the c.9,000 rooms we opened over the last two years, which are maturing well.
Our digital development team continued to innovate for our customers and we launched our personalised business to business booking platform that helped to maintain our direct bookings at 94 per cent of sales.