Whitbread is to forge ahead with ambitious plans to double the size of its Costa coffee shop chain and expand Premier Inns by 50 per cent over the next five years.

Confirmation of the £1.5 billion investment plan came yesterday as the FTSE 100-listed leisure group defied the gloom in the leisure sector with a 5.7 per cent increase in like-for-like sales in the year to the end of February and a 21.4 per cent rise in the final dividend to 26.9p.

Alan Parker, the chief executive, said that Whitbread had seen no sign of a slowdown in its markets. He said that trading in the two months since the year's end had followed a similar pattern, if not “a shade better”.

The group reported a 26.3 per cent increase in continuing pre-tax profits before exceptionals to £210.3 million, from turnover up 11.3 per cent to £1.19 billion.

The figures exclude exceptionals of £60 million, including the £9.4 million cost of aborting a bond issue because of the credit crunch and a £21 million charge from having to take back almost 30 leasehold pubs after the administration of the Laurel Pub Company.

Premier Inn lifted operating profits by 9.6 per cent to £171 million as like-for-like sales rose by 10.4 per cent, while Costa lifted profits 19.3 per cent to £19.2 million after a 6.5 per cent jump in comparable sales.

Its Beefeater, Brewers Fayre and Table Table pub-restaurants increased profit per pub by 40 per cent on the back of cost and operational efficiencies and a 0.8 per cent increase in like-for-like sales.

Mr Parker denied that he was in talks to swap the pub-restaurants with Mitchells & Butlers' lodge business, although he was open to an asset swap or a deal to manage M&B's lodges.

He reiterated the group's ambition to expand Premier Inn by 50 per cent to 55,000 rooms and double Costa to 2,000 outlets over the next five years, partly through international expansion, possibly into China and Russia.

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