Whitbread to expand Costa Coffee and Premier Inn

The hotel and restaurant group Whitbread has said it wants to expand its Costa Coffee and Premier Inn chains further.

Over the next year the company plans to add 4,000 rooms to Premier Inn - a 9% increase - and to open another 300 Costa Coffee outlets - a 15% increase.

It says this will create 2,500 jobs.

The company also announced underlying profits, which it said excluded "volatile" pension costs, rose by 20% to £287m.

In the next five years, Whitbread plans to expand Premier Inn in the UK by 50% and to double the number of Costa outlets worldwide.

Premier's rooms were occupied for 76.2% of the time, a 6.6% rise which was helped by an advertising campaign led by the comedian Lenny Henry.

Whitbread also owns the restaurant chains Beefeater, Brewers Fayre and Table Table. Revenues at its restaurants grew more slowly, by 2% to £474m.

Despite the higher profit figure, Whitbread said recent sales growth had slowed and said the trading environment was "challenging". The comments sent shares in Whitbread more than 5% lower in morning trading.