Whitbread raises its dividend by almost a fifth as its core brands see strong annual growth, particularly in the UK.

Solid sales growth at Whitbread's Premier Inn and Costa coffee brands has helped the company's annual pre-tax profit rise 1.1% to £347m.

The performance over the year to February 27 prompted the company to confirm a 19.9% increase in its dividend to 68.8p-per-share.

The results highlighted a 20% rise in total sales at Costa - with like for like sales at its own stores in the UK going up 5.7% in the period.

This contrasts with figures posted last week by rival Starbucks, which confirmed its first decline in UK sales for 16 years.

Total sales at Premier Inn rose 13.4%.

Whitbread, which is Britain's biggest hotel and coffee shop operator, said it had created 3,000 net new jobs over the period.

Chief executive Andy Harrison said: "We continue to invest in improving our customer propositions and international expansion.

"This includes the rollout of our “best ever bed” in Premier Inn, the launch of “hub by Premier Inn” and rejuvenating our restaurant brands.

"In Costa we are focussed on international growth in China and France and our rebranding in Poland, together with the continuing growth of Costa Express.

We had a strong finish to last year, with all our brands performing well, boosted by good Christmas and New Year campaigns and helpful weather comparatives.

"The first two months of the new financial year have started positively, with good trading again helped by relatively soft comparatives which will become tougher as we move into the second half of this year".