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Last Updated: Tuesday, 25 October 2005, 08:55 GMT 09:55 UK
Whitbread profits up but jobs go
Costa Coffee shop interior
Costa fared better than Whitbread's other High Street brands
Hotels and leisure group Whitbread is cutting 250 jobs despite reporting an 11% rise in interim profits.

Profits rose to 102.9m ($181.9m), with a 13% sales rise to 809m, but the company warned that the consumer environment remained challenging.

The job cuts will take place at its headquarters in Luton with the aim of saving the company 25m a year.

Robust trading at its budget hotels was offset by weakness at its David Lloyd leisure arm and its pub restaurants.

Though Costa Coffee did well, some of its other High Street businesses, such as Pizza Hut and TGI Friday's had a difficult six months, Whitbread said.

Costa continues to perform well and is growing strongly with 100 sites to open this year

Whitbread said trading had been affected by the 7 July bomb attacks on London's transport system which deterred some tourists from visiting the capital.

"Costa continues to perform well and is growing strongly with 100 sites to open this year," the company said.

Whitbread is currently selling off about 1.3bn of assets, including its UK Marriott hotels, its Chiswell Street brewery site and its holdings in Britvic soft drinks.

The company has returned 400m to shareholders, with another 400m yet to be returned.

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