- Whitbread said it intended to demerge its Costa coffee chain business and focus on its Premier Inn hotels unit.

The company said the demerger would be pursued 'as fast as practical' and was expected to be completed within two years.

'The board has for some time been of the view that separating Premier Inn and Costa at the right time would enhance focus and enable value to be optimised for shareholders over the longer term,' Whitbread said.

'Given the significant strategic progress that has been made and the momentum in the delivery of the plan, the board is confident that both Premier Inn and Costa will soon be businesses of sufficient strength, scale and capability to enable them to thrive as independent companies.'

Whitbread also reported a 6.4% increase in annual pre-tax profit to £548m, while raising its full-year dividend by 5.6% to 101p per share.

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