Whitbread beats profit forecasts

Costa Coffee is one of Whitbread's many brands

Hotels and leisure group Whitbread has posted forecast-beating first half profits and said recent trading was "encouraging".

The leisure group said pre-tax profits for the six months to August rose 11% to £134.7m ($228m) from £121.3m year-earlier.

Analysts had forecast profits of between £121m and £129m.

Whitbread's brands include Marriott hotels in the UK, David Lloyd fitness clubs, the Costa Coffee chain, and Beefeater and Brewers Fayre restaurants.

The firm said trading across its major brands was improving, adding that like-for-like sales rose 2.8% in the first half.

Cautious outlook

Performance at its Travel Inn budget hotel chain improved, but the mid-market Marriott chain has fared less well.

Business travellers are still scarce

Like-for-like sales at the Marriott slipped 0.5% across the first 33 weeks of the year, after falling 1.3% in the first six months.

Whitbread chief executive David Thomas said the group would rely on itself rather than on market recovery to drive growth at the chain.

Mr Thomas said he did not expect to see a significant improvement in the market in the immediate future.

"There might be some green shoots - over the past few weeks we have seen like-for-like sales go marginally positive for the first time in a couple of years and that provides hope."

Marriott, like upmarket rivals, has been hard hit by the drop in high-spending business travellers since 11 September 2001.