Costa and Premier Inn owner Whitbread is scheduled to release its interim results on Tuesday morning, in which its first-half sales are expected to top the one billion mark.

Whitbread said in a trading update last month that sales for the 24 weeks to August 16th were up 14.3%, up 4.3% on a like-for-like basis.

Investec said: "we assume this applies to the full H1, equating to group revenue of £1.02bn (Premier Inn +13% to £443m, Restaurants +6% to £263m, Costa +25% to £314m)." At the group level, this would represent revenue growth of 14.4% on the £973.5m reported for the first half last year.

Investec is forecasting group earnings before interest and tax (EBIT) of £205.8m, up 11% year-on-year, and a half-year pre-tax profit of £195.0m, up 11.5%.

The broker maintained its 'sell' rating on the stock on Monday ahead of the results.

Analyst James Hollins said that the shares are now pricing in a potential re-rating, "leaving negligible upside risk for shareholders, while facing downside risk from a company with, in our view, an unachievable and/or low returns international hotels strategy, with sub-7% free cash flow and sub-3% dividend yields."

Meanwhile, as Panmure Gordon pointed out in a research note last week, while the company reported a better-than-expected second quarter, each division benefitted from 'one-offs' that boost revenue growth.

"At the last update, the group reported that trading was variable month by month and we expect this to have continued," the broker said.



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