COFFEE shops to budget hotel-owner Whitbread has lifted profits by nearly a fifth after seeing Costa and Premier Inn go from “strength to strength”.

Costa’s expansion and success in tapping Britain’s coffee shop culture meant the division’s half-year profits rose 20.5 per cent to £52.4 million, while a recovery in the regional hotel market helped Premier achieve record occupancy of 84 per cent.

Across the group, which includes Beefeater and Brewers Fayre restaurants, profits rose by 18.5 per cent to £256 million in the six months to August 23.

Whitbread is in the process of spending around £500 million this year on another 4,500 Premier Inn rooms in the UK and 230 Costa stores worldwide.

The Premier Inn chain includes hotels in Bradford, Keighley, Cleckheaton and at Yeadon, near Leeds Bradford Airport.

The investment will keep the company on track to achieve its growth milestones, which include a total of 75,000 UK rooms by 2018. Today it has 681 hotels – 56,019 rooms – 36 per cent more than its nearest competitor.

Costa has expanded its presence in the UK with the net addition of 85 new stores in the first half, taking its total number of outlets to 1,840 and leaving it on track to achieve more than 2,200 stores by 2018.

Around 1,300 new UK jobs were created by Whitbread’s brands in the half year, with a further 10,000 expected over the next three years. The company currently employs 43,000 people