Whitbread, the leisure operator, has announced a new funding package worth £156.4m as it reported a 12.9% rise in second quarter sales for 2011, lead by the continued strong performance of Costa Coffee against sluggish growth in the restaurant arm. The company has announced a further debt private placement notes of US$210m and £25m, arranged with existing institutional investors and swapped to achieve total funding of £156.4m. It follows a similar move in 2010 that achieved £101.8m. “These private placements are due for repayment on various dates between 2019 and 2022 and were achieved at fully swapped sterling interest rates of 4.3% to 5.2% with an average rate of 4.8%,” Whitbread said. “The funding is to be effected in two tranches with £62.6m planned to be drawn later today and the balance in January next year which coincides with the maturity of £200m of 5.7% fixed rate swaps. The additional borrowings will be used to replace funds drawn under the Group’s bank facilities.” Costa lead the sales growth in the 11 weeks to 18 August, with like-for-like sales up 28.8% (total sales up were 9.7%). In contrast, the restaurants division struggled, with like-for-likes up 0.7% in Q2 (total sales were down 1.6%). The company described trading in the division as “challenging”, with “customers being particularly price sensitive”. Premier Inn like-for-likes were up 12.5% (total sales: +7.1%) and the hotels and restaurants division saw sales increase 7.9% in the quarter (total sales were up 3.7%). Across H1, Costa sales were up 6.6% on a like-for-like basis, with the restaurant arm down 1.5%. Premier Inn was up 5%, with the hotels and restaurants division up 2.3%. For Costa, system sales reached £351.3m, within which franchise sales were up 16.5% to £146.5m. Like for like sales in UK equity stores were up 6.6% with transactions up 6.9%. In total, 145 new Costas opened stores in the first 24 week; Whitbread plans to add about 300 stores worldwide in 2011/2012. Meanwhile, its Costa Express format is “progressing well”. “In the UK there are now 155 Costa Express units and we are proceeding with the rebranding of the remaining 760 Coffee Nation units.” At Premier Inn, total room nights sold grew 6.6% to 5.7m, “benefitting from both good business and leisure demand”. “Room rate was up by 3.4%, which combined with occupancy up 0.7ppts to 79.2%, increased like for like revpar [revenue per available room] by 4.3% with growth across both midweek and the weekend.” Like-for-like revpar grew by 11.4% in London and by 2.9% in the provinces. In the restaurants division, total covers grew 0.8%. Whitbread said 1,368 new rooms and five restaurants opened in the quarter, “and for the full year we plan to have opened around 4,000 new rooms and 14 restaurants in the UK”. In addition, the company completed the sale and leaseback of seven properties announced on 11 August. LaSalle Investment Management paid £53.8m and entered into 25 year leases for the properties, which will continue to operate as Premier Inns and adjacent restaurants. The net initial yield is under 5.5%. Andy Harrison, chief executive of Whitbread, said: “Whitbread traded strongly in the second quarter with total sales growth of 12.9%, making us one of the fastest growing consumer facing companies in the FTSE100. This growth, combined with a strong like for like sales increase of 4.8%, underscores our shareholder value creation and exciting future growth potential. “Premier Inn grew its total sales by 12.5% and its like for like sales by 7.1%, with growth across the country and a strong London market. Trading in our Restaurants continues to be challenging, with customers being particularly price sensitive. Costa grew its total sales by 28.8% and continues to demonstrate that it is the UK’s favourite coffee shop. We have now opened our 100th Costa store in China. “We have traded well in the first 24 weeks as a whole. On a month by month basis, trading continues to be variable with the second quarter benefitting from a strong June, whilst the first quarter was held back by a poor April. This variability is not surprising in the continuing uncertain economic environment.”