Whitbread achieves efficiencies target, reveals premier results

Costa coffee owner Whitbread has achieved its planned business efficiency targets with the help of Microsoft Dynamics NAV ERP software.

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Costa coffee owner Whitbread has achieved its planned business efficiency targets with the help of Microsoft Dynamics NAV ERP software.

The company said that it is on track to achieve £25 million cost savings, with “more to come”. It delivered £7 million in savings in 2008/09, and is targeting £13 million in 2009/10, and £5 million in 2010/11.

The savings achieved as a result of reaching these targets contributed to Whitbread’s 6.6 percent increase in pre-tax profits, from £224.4 million in 2009 to £239.1 million in the financial year up to 4 March 2010. The company, which also owns hotel chain Premier Inn and a range of restaurants, reported a 7.5 percent growth in total revenues to £1.4 billion, from £1.3 billion the previous year.

Whitbread also said that it had managed to reduce its operating costs by streamlining management and improving the efficiency of its back-office processes, which includes IT.

Andrew Brothers, Information Systems and Change director at Whitbread, said: “In 2008/09, we outsourced logistics and transactional accounting. We are in the process of outsourcing payroll. IT was obviously a key contributor to making sure our systems were appropriate to meet the outsourcing needs.

He added: “Business efficiency has been gained as a result of implementing NAV Dynamics [in Costa].”

As well streamlining its back office, Whitbread has also invested in new technology in order to launch an electronic loyalty scheme and customer database for its Costa Coffee business. It worked with WRS Systems to carry out till integration, Torex for customer registration, and with loyalty cards technologies provider Givex for the cards and loyalty transaction capture.

Using the Costa Coffee Club card allows customers to earn points with every purchase from the coffee chain, and the company said that since its introduction on 4 March, “well over” one million cards had been used.

Meanwhile, Whitbread announced the launch of purpose-built ‘green’ hotel and Beefeater Grill restaurant at Burgess Hill. Due to open in autumn 2010, the company said that it will use high-performing sustainable construction materials to deliver 70 percent carbon and 60 percent water savings. Whitbread opened its first green hotel in Tamworth, Staffordshire in December 2008.

"Our continuous focus on tight cost control, through both procurement and operating efficiencies, has helped underpin our operating margin," the company said in its results.

Last October, Whitbread said it would focus on improving its online hotel booking services after its Premier Inn hotel chain's sales dropped.

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