1:00PM New York, 7:00PM London, Whitbread reports weaker like-for-like sales growth, plans to save £25 million per year through merger of subsidiaries.

Whitbread Plc, U.K’s largest hospitality group said last Thursday like-for-like sales in the 50 weeks to February 14 rose 5.7%, down from 5.8% reported in the comparable period in 2006 on slower sales growth in the pub and restaurants division. Fiscal 2007 sales gained 11.3%.

Comparable same location sales at Premier Inn rose 10.5%, at restaurants increased 0.8%, and at Costa coffee chain surged 6.3%. Total sales at Premier Inn increased 15.1%, restaurants rose 2.1%, and at Costa surged 25% in the 50 weeks ending on February 14, 2008.

The group announced plans to merge three of its main units - Premier Inn, Beefeater restaurants and Brewers Fayre bars. Whitbread said the merger would save £25 million per year in 2009 and 2010. In an interim trading statement, chief executive Allan Parker said the amalgamation would cost £35 million and take at least a year to complete.

The hotel group has already disposed of some of its subsidiaries including TGI Friday, Deep Pan Pizza, David Lloyd and Marriot in the past few years. In 2006, Whitbread sold 235 restaurants to Mitchells & Butlers, leaving it with 130 restaurants.

For the 50 weeks, like-for-like sales at Premier Inn rose faster up 10.5%. Total sales at the unit gained 15.1%.

Premier Inn maintained like-for-like occupancy at 79.2% and plans to add 3,400 rooms in the current year after adding 2,500 in the calendar 2007.

Whitbread will release preliminary results for the year to February 28 on April 28. The company expects pre-tax profit of around £208 million, in line with analysts’ forecasts.

Whitbread also expect room expansion at Premier Inn to rise to 3,400 in 2008 compared to 2,500 last year, according to initial targets.

During the review period, the company spent £340.2 million or 11.3% of its share capital and repurchased 22.3 million of its shares.

Shares of Whitbread rose 7.2% to 1,314 pence after release of the interim trading statement Thursday. At close Friday, the stock was down 3.51% or 46 pence at 1,266 pence. Over the past 52 weeks, the stock has traded in the range 1,038 pence and 1,968 pence.

Whitbread plc operates leisure businesses. The company operates fitness clubs, hotels, pub restaurants, coffee shops, and franchised chain restaurants.