Leading analyst Geof Collyer has issued a Buy recommendation for Whitbread ahead of the leisure group’s interim results on 18 October. Collyer, of Deutsche Bank, set a target price of £21 and said: “Our forecasts reflect not just the difficult UK economy but also a very tough [comparative]. “The market will be looking for any signs of a slowdown in Q3 and beyond from the outlook statement, although we believe that we have already plugged this into our forecasts. Overall, we would continue to highlight the element of self-help in the WTB performance, in terms of the rollout programmes in Premier Inns and Costa, which we estimate generated about two-thirds of H1 revenue growth.” For Costa, Collyer said he wasn’t expecting a repeat of H1 2010, the strongest half the division has reported in terms of bps margin gain. He expects the margin benefits of the +16.5% growth in franchise system sales to be offset by the “initially dilutive” impact from its acquisition of Coffee Nation in March. For the Premier Inn division, Collyer said: “Premier Inn revenues were up strongly at the 24-week stage, in line with our full year growth rate, but the real surprise within the +4.3% lfl RevPAR, was that most of this came from lfl achieved room rate +3.4%. “This was the main driver of both London lfl RevPAR, +11.4%, as well as the Provincial RevPAR, +2.9%. The rate improvement - evidence of more aggressive dynamic pricing under the new CEO - should fall straight through to the bottom line. It should help offset cost inflation and higher operating lease rent charges from the estate roll out. “The higher costs of the August sale and leaseback programme and offsetting counterbalance from lower net financing costs following the private placement should feature in H2.” On the restaurants arm, he said: “The drop in lfl revenues could also have a structurally positive impact on divisional margins, with relatively lower sales contribution vs. higher margin hotels. (Before integration, PI had an ebita margin that was c. 2,000 bps bigger than Restaurants).”