COSTA Coffee owner Whitbread has cheered a jump in annual profit, but said it remains "cautious" amid forecasts for a tougher year ahead.

The group reported a 6.2 per cent rise in underlying pre-tax profits in the 52 weeks to March 2 to £565.2 million, while total revenue increased by 8.2 per cent to £3.1 billion.

It comes as its Premier Inn and restaurants business chalked up a 7.4 per cent rise in full-year underlying operating profit to £468m, while the Costa unit saw a 5.3 per cent rise to £158m.

However, chief executive Alison Brittain said the company is steadying itself for the months ahead.

It comes as retailers start to prepare for a pullback in consumer spending due to rising inflation, caused by the post-Brexit vote collapse of the pound.

"Whilst we are only seven weeks into our new financial year, Premier Inn has had a good start to the year and Costa has also seen positive like-for-like sales growth, although we remain cautious and expect a tougher consumer environment than last year," said Ms Brittain.