Whitbread has reported UK retail sales at Costa up 15.7% in the year to 3 March with like-for-like sales in UK equity stores increasing by 2.9%.

Total group sales for Whitbread grew 12% to £2.9bn during the year with like-for-like sales up 3%. Underlying profit before tax was up 11.9% to £546.3m and overall profit was up 5.8% to £387.3m.

Costa’s underlying operating profit grew 15.8% to £153.5m, while the Hotels and Restaurants division grew 11.3% to £446.9m.

The company said its innovations within the Costa estate – the more food-led model Costa Fresco and fast format Costa Pronto had strengthened its position in the market place and said its target growth to 2,500 stores by 2020 would be “largely underpinned by more diversified channel growth”.

The company also said it planned to further expand its food range at Costa to offer customers fresher, healthier options, and to introduce new tills and ovens to increase speed of service.

It said: “We will build on the taste of our great Mocha Italia coffee and continuously improve our coffee credentials so we can respond to customers’ increasing demands for quality coffee anytime, anywhere. This includes plans to expand our coffee range through the launch of single origin coffee and new brewing techniques.”

Costa Enterprises had a successful year, growing system sales by 14.4% and installing 924 net new Costa Express machines, giving a total of 5,216 at year-end. The company plans to install around a further 1,000 machines in 2016/17. It said this put the company well on track to achieve its target of c.8,000 machines by 2020 as it expands into new growth channels internationally and in the UK.

Margins in the hotels and restaurants division improved from 24.2% to 24.5% in 2015/16, principally driven by like for like sales growth, partially offset by inflation and investment in its teams and systems. Rent costs increased, ahead of sales growth, by 14.8% to £123.4m (2014/15: £107.5m), which it said reflected the higher mix of leasehold properties.

The company said it continued to make good progress in rejuvenating its restaurant brands. It has converted 62 sites to its new Beefeater brand proposition to date. On the recent launch of its new Beefeater Bar + Block model in Birmingham, it said: “This small format, new joint site model is designed to improve returns versus those of our solus sites in city and town centres and although early days, has already received great customer feedback.”

New chief executive Alison Brittain identified three key strategic themes to develop the business: to grow and innovate in the core UK businesses; focus on the company’s strengths to grow internationally; and build the capability and infrastructure to support long-term growth.

She said: “Both Premier Inn and Costa benefit from attractive market growth opportunities and we will continue to capitalise on these by developing our network and brand strength as we fulfil our ambitions to reach c.85,000 UK hotel rooms and c.£2.5 billion system sales in Costa, by 2020.

“The world around us is shifting, with rising customer expectations, an evolving competitor landscape, rapid technological developments and changing cost structures. In responding to this change, I am especially keen to reinforce our relentless focus on our customers and on innovation to develop our brand propositions ensuring we stay ahead and become more productive.”

On trading in the current year, she said: “It is only six weeks into our new financial year. However, indications are that Costa UK has had a good start to the year and Premier Inn is growing share in a flat market. However, trading comparators have been impacted by the early timing of Easter and we will have a much better view on 21 June when we present our first quarter trading statement. We remain confident of making good progress this year.

The company also announced it would be changing the regularity with which it provides market updates, moving to two trading statements in addition to the Interim and Preliminary announcements. The first update will be in June for 13 weeks of trading with the Interim results in October remaining as previously announced. There will be an update in January for the third quarter extended to 44 weeks to include the key December trading period and the full year announcement in April.