Whitbread, owner of the Premier Inn hotel and Costa Coffee chains, has posted a better-than-expected 16.5% rise in full-year profit and said trading in the first two months of its new year had started well.

Britain's biggest hotel and coffee shop operator said underlying pretax profit for the year to 27 February grew to £411.8m, up 16.5% on a year ago and ahead of analyst forecasts of £402m.

Total revenue rose 13% to almost £2.3bn, helped by new store and hotel openings and solid underlying British sales growth at Premier Inn and Costa. 

The group hiked its full-year dividend by 19.9% to £68.80p.