Premier Inn owner Whitbread has reported a 26.3 per cent rise in pre-tax profit to £210.3 million for the year to February 28th 2008.
The company, which owns coffee chain Costa as well as pub restaurant brands Brewers Fayre and Beefeater, said like-for-like sales were up 5.7 per cent.
Whitbread sold TGI Friday's and health club David Lloyd Leisure over the year, as part of the company's strategy to focus on its pub restaurant and hotel operations.
The company added that although the consumer environment is likely to remain challenging, it has expansion plans for the business.
Alan Parker, chief executive of Whitbread, said: "Since the start of the new financial year, two months ago, trading has been encouraging.
"We have researched the opportunities for disciplined growth across the group and have established two longer-term ambitions - in the next five years to increase the size of Premier Inn by 50 per cent to 55,000 rooms and to double Costa to 2,000 stores. Whitbread is well placed for the future."
Whitbread said Premier Inn has been particularly successful in London and the company recently announced that a further 1,200 rooms will open in London over the next three years, in time for the Olympic Games in 2012.
In addition, the company has revived its ailing Beefeater chain of pub restaurants, with like-for-like growth of 7.7 per cent and the opening of the first new Beefeater for six years.
The board has recommended a final dividend of 26.9p, an increase of 21.4 per cent over last year.