LEISURE group Whitbread today posted an 11.3% jump in annual profits, with its Costa coffee shops chain leading the way.

Underlying pre-tax profits for the year to March 1 totalled �320.1million, up from �287.5m the previous year, on turnover up by 11.2% at �1.778bn against �1.599.6bn.

On a like-for-like basis, group sales were up 2.6% over the year.

Profits at Costa grew by 38% to �69.7m, with world-wide sales up 24.3% at �819.3m including 5.5% like-for-like growth in the UK.

Premier Inn, Whitbread’s budget hotel chain, also contributed to the improvement as the group’s hotels and restaurants division, which includes Beefeater and Brewers Fayre, grew profits by 4.3% to �295.6m.

Premier Inn’s revenues were 8.3% ahead at �755.9m while restaurant revenues were 1.8% up at �483.4m.

The key industry measure of revenue per available room at Premier Inn improved by 1.8% in the year, with an increase of 0.8% in the regions and 7.3% in London.

Premier has benefited from customers looking for cheap deals but sales have slowed in recent months and its restaurant division has also come under pressure as food and fuel costs rise.

However, Premier is committed to aggressive expansion plans to add 10,000 new rooms, after creating more than 4,000 rooms and 29 new hotels in the last year.

Costa, meanwhile, plans to open 350 sites in the current year.

Whitbread’s full-year dividend will rise by 15.2% to 51.25p per share.

Chief executive Andy Harrison said: “We remain on track to achieve our five year growth milestones. In Premier Inn UK, we have nearly 58,000 rooms in our existing estate and committed pipeline, taking us towards our 2016 milestone of 65,000 rooms.

“Last year we grew Costa’s worldwide network by 18%, well on the way towards our five year goal of doubling the size of Costa. This growth, combined with our strong focus on returns should create substantial shareholder value.

“In the new financial year both Premier Inn and Restaurants have shown positive like for like sales growth and Costa has continued its good momentum, both in the UK and internationally,” he added.

“Trading in 2011/12 was variable month by month and we expect this to continue with short term comparatives affected by the phasing of bank holidays and the Olympics.”