LEISURE group Whitbread today hailed a recession-busting performance from its Costa coffee chain as it posted better than expected interim results.

Costa showed an "outstanding" 70% rise in operating profits to £12.6 million in the six months to August 27 on revenues up 21% to £155.4 million.

Whitbread continued to expand the chain through the downturn, adding 100 new shops in the first half - bringing the total to nearly 1,000 stores in the UK and more than 400 overseas.

The chain’s performance was the highlight of half-year results showing a 3% fall in underlying pre-tax profits to £118.2 million - slightly ahead of the £113 million forecasted by the City.

The firm said there was also an "improving trend" at its Premier Inn budget hotel chain. Like-for-like sales were down 7.5% in the period, bettering the 7.7% decline seen at its previous update.

Whitbread’s pub restaurant brands - Beefeater, Brewers Fayre, Table Table and Taybarns - put in a "robust" performance, it added.

Chairman Anthony Hapgood said: "Whitbread is coming through a difficult period relatively well."