Whitbread, the leisure group, is considering extending its milestones for growth at the end of its current financial year, chief executive Andy Harrison has said. The company, which this morning reported 3.3% increase in like-for-like sales for the 13 weeks to 29 November, announced its five-year growth milestones in April 2011 and Harrison told analysts today: "We are thinking about extending our growth milestones when we get to the end of our financial year." Asked about the impact of the recent negative publicity around Starbucks’ tax affairs on Costa, Harrison said it’s "impossible to disentangle the Starbucks effect from everything else in the business". He said that momentum in Costa, which saw like-for-likes grow of 7.7% in Q3, was "strong" before the quarter and highlighted initiatives such as recent advertising campaigns. Harrison added that there’s "nothing to discern" from the fact sales were "relatively weak" at the start of the quarter, before Starbucks’ tax affairs gained publicity, because the period was up against the Indian summer in 2011. Harrison said the performance is "entirely about Costa, and UK consumers are voting with their taste buds". He said guest scores are running at record levels for Costa, as they are also for the restaurants and Premier Inn. By the end of the current financial year Whitbread aims to have added c4,500 new rooms, opened 1,300 Costa Express units and have 330 net new Costa stores. The latter target has been revised downwards from 350 at the half-year, and group finance director Nicholas Cadbury said this is "purely about timings and availability of sites", rather than a slowdown in the opening programme. Harrison said that having done a "great job" rolling Costa Express out to forecourts and service stations, the "next chapter" for the brand would be corporate and international opportunities. He pointed out that Whitbread has opened more Costa Express sites in the last year that Coffee Nation, its previous owner, managed in 11 years. Harrison said he thinks Whitbread has "dealt with the operational hurdles" and it’s now about finding good quality of locations. Like-for-likes in the restaurants arm, which includes Beefeater and Brewers Fayre, grew 1.9% and Cadbury pointed to price freezes and "menu adjustments that had pushed spend per head". He said Premier Inn had benefited from the "problems" at rival hotel chain Travelodge, which underwent a Company Voluntary Arrangement in September. "I think we can probably assume it’s going to take them quite some time to improve their business. Over the medium term we are working on the assumption that we will out perform the market by a percentage point or two of RevPar." Just under 20% of total hotel sales are now in Greater London, up from about 17.5% one year ago, Cadbury said. During this time it grew room capacity by 22%, with 11% of rooms now in London, up about one percentage point in one year. Cadbury said inflation in the company is running at between 2.5% and 3%. Rents are capped at CPI, and "most of the pressure" is on food costs; Whitbread has been "working very hard" to get good value for money on food, such as by using alternative sources of supply. Analysts’ reactions Wyn Ellis at Numis said: "Whitbread has reported very solid Q3 revenue progress: total sales were up 14.4% with LFL sales growth of 3.3% ahead. WTB says it is on track to deliver full year results ‘in line with expectations’ and we do not expect much movement in consensus numbers today. "We have increased our target price from 2650p to 2700p and our recommendation remains Add." Simon French at Panmure Gordon said: "Whitbread has announced a Q3 IMS in line with our expectations reporting 3.3% LFL sales growth, split Premier Inn +2.5%, Restaurants +1.9% and Costa +7.1%. "Costa’s performance is likely to have received a boost from the negative publicity around Starbucks’ tax affairs although it has consistently reported this level of LFL sales growth over the past 18 months. The group is on track to deliver FY results in line with expectations and we expect no change to consensus forecasts of £348m PBT (148.3p EPS). On our in-line with consensus forecasts the stock trades on a CY 2013E P/E of 15.4x and an adjusted EV/EBITDAR of 9.0x whilst yielding 2.6%. "We remain cautious on current trading and the increasingly competitive environment for budget hotels and hence reiterate our Hold recommendation and 1994p target price." James Hollins at Investec said: "Whitbread’s Q3 was in line with the group’s expectations, with the perennial strong Costa revenue growth partially offset by declining LFL trends in hotels and restaurants. There is no change to our forecasts, although there is also no change to our view that the shares are pricing in an outlook for substantial group returns improvements that, Costa-aside (<25% of projected FY14E group EBIT), we do not think exists. "We retain our Sell and 1,650p TP, with better returns and value elsewhere in the sector."