REG - Whitbread PLC - Whitbread Interim Results
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RNS Number : 5648D Whitbread PLC 16 October 2025
Continued market outperformance by Premier Inn as UK market returns to growth
Further progress in Germany; on course to reach profitability in FY26
Five-Year Plan: on track to deliver a step-change in profitability and £2bn
for shareholder returns by FY30
Throughout this release all percentage growth comparisons are made comparing
the current period performance (H1 FY26) for the 26 weeks to 28 August 2025
with H1 FY25 (26 weeks to 29 August 2024).
H1 FY26 Group Financial Summary
£m H1 FY26 H1 FY25 vs H1 FY25
Statutory revenue 1,541 1,570 (2)%
Adjusted EBITDAR(†) 601 611 (2)%
Adjusted profit before tax(†) 316 340 (7)%
Statutory profit before tax 287 309 (7)%
Statutory profit after tax 217 220 (1)%
Adjusted basic EPS(†) 133.7p 137.1p (2)%
Statutory basic EPS 123.7p 121.0p 2%
Dividend per share 36.4p 36.4p 0%
Group ROCE(†) 10.3% 11.9% (160)bps
Net debt(†) (563) (370) (192)
Lease-adjusted leverage(†) 3.2x 2.8x n/a
Overview
· H1 FY26 results: adjusted profit before tax(†) ('PBT') of
£316m reflects broadly flat UK total accommodation sales and positive
momentum in Germany, offset by the anticipated lower food and beverage
('F&B') sales due to the continued implementation of our Accelerating
Growth Plan ('AGP')
· FY26 current trading(1) and outlook: positive trading momentum
and our forward booked position is ahead of last year in both the UK and
Germany; accelerating cost savings to maintain UK net cost inflation within 2%
- 3% guided range; in Germany, despite softer than expected market demand in
the second quarter, we are on track to deliver profitability this year
(revised FY26 adjusted PBT(†) of up to £5m versus £5m - 10m previously)
· Our Five-Year Plan is on track to deliver incremental adjusted
PBT(†) of at least £300m(2) by FY30:
o Accelerating Growth Plan (+£100m(2)): by replacing over 200
lower-returning branded restaurants with an integrated F&B offering, we
are unlocking 3,500 high-returning extension rooms; executing at pace, we
expect the full reversal of the one-off impact to FY25 adjusted PBT(†) and
will open 500 - 700 extension rooms during FY26;
o UK Network expansion (+£120m(2)): we continued to grow our committed
pipeline, with 500 new rooms expected to be open by the year end and
accelerating thereafter to reach 98,000 open rooms in the UK and Ireland by
FY30;
o Strong commercial programme: with a return to UK market growth, our
initiatives are continuing to deliver positive like-for-like(†) sales
momentum, contributing to our outperformance versus the market(3);
o Efficiencies: helping to partially offset higher than expected inflation,
we delivered £43m of savings in H1 FY26 and remain on course to deliver
£250m of savings by FY30;
o Germany (+£80m(2)): we have made great strategic progress, sustaining our
outperformance versus the market(4) and are today announcing an agreement to
acquire 1,500 rooms; we remain on track to reach at least £70m(5) adjusted
PBT(†) with 20,000 open rooms by FY30; and
o Disciplined capital allocation: on course to recycle £250m - £300m of
property-related proceeds in FY26 having agreed £120m of disposals, including
£99m of sale and leasebacks(6) at attractive yields in the year to date; and
we remain on course to maintain average annual net capex of below £500m
· Updated property valuation: the Group's freehold and
long-leasehold property has been valued at between £5.5bn - £6.4bn,
providing confidence in our ability to recycle £1bn into high-returning
investments, such as our AGP and network expansion
· With the planned increase in profitability and strong cashflow
conversion, we expect to return £2bn via share buy-backs and dividends by
FY30. The Board has declared an interim dividend of 36.4p per share (H1 FY25:
36.4p) and we are on track to complete our previously announced £250m share
buy-back by 30 April 2026, with 3.6m shares purchased so far for a total
consideration of approximately £108m(7)
1: Six weeks to 9 October 2025
2: Incremental adjusted profit before tax(†) versus FY25
3: STR data, standard basis, 28 February 2025 to 28 August 2025, UK M&E
market excludes Premier Inn
4: STR data, standard basis, 28 February 2025 to 28 August 2025, Germany
M&E market excludes Premier Inn
5: Using a GBP: EUR exchange rate of 1.18
6: £74m of sale and leasebacks completed in H1 FY26 with a further £25m
after the balance sheet date
7: As at 14 October 2025
Financial highlights
• Premier Inn UK: total accommodation sales were broadly in line with
last year and RevPAR was down (1)% reflecting a soft first quarter followed by
a return to market growth in the second quarter; the strength of our
commercial initiatives meant we outperformed the M&E market(1) by +0.7pp
on total accommodation sales growth, +1.0pp on RevPAR growth and increased our
RevPAR premium to £6.10
• UK F&B sales were in line with our expectations and reduced by
11% due to the impact of AGP, partially mitigated by a stronger performance in
integrated restaurants
• UK segment adjusted pre-tax profit margins(†) were 23.4% (H1 FY25:
24.6%), reflecting the impact of AGP on our F&B trading performance and
higher than expected cost inflation, partially offset by increased cost
efficiencies
• Premier Inn Germany: total sales grew by 9% and despite softer than
expected market demand, in part due to lower number of high impact events this
year, we continued to outperform the M&E market(2), driven by the
increasing size of our estate, maturity of our hotels and brand and our
commercial initiatives; as a result, segment adjusted loss before tax(†)
reduced to £3m (H1 FY25: £9m loss);
• Group: adjusted profit before tax(†) was £316m (H1 FY25: £340m)
and statutory profit before tax was £287m (H1 FY25: £309m) after charging
£28m of adjusting items (H1 FY25: £31m) including £19m of accelerated
depreciation and impairments in relation to the AGP and £5m relating to the
Group's other strategic programmes
• Group: adjusted EBITDAR(†) was £601m (H1 FY25: £611m)
• Group: adjusted basic earnings per share(†) decreased by 2% to
133.7p (H1 FY25: 137.1p) reflecting the lower level of earnings, mitigated by
a reduced weighted average number of shares following share buy-backs over the
last twelve months. Statutory basic earnings per share increased by 2% to
123.7p (H1 FY25: 121.0p)
• Total cash returned to shareholders via dividends and share
buy-backs in H1 FY26 of £182m (H1 FY25: £278m)
• Strong balance sheet: lease adjusted leverage(†) increased to 3.2x
(H1 FY25: 2.8x) and net debt(†) was £563m (H1 FY25: £370m)
1: STR data, standard basis, 28 February 2025 to 28 August 2025, UK M&E
market excludes Premier Inn
2: STR data, standard basis, 28 February 2025 to 28 August 2025, Germany
M&E market excludes Premier Inn
Segment highlights
Premier Inn UK
£m H1 FY26 H1 FY25 vs H1 FY25
Statutory revenue 1,416 1,455 (3)%
Segment adjusted profit before tax(†) 331 357 (7)%
Revenue per available room (£)(†) £69.48 £69.93 (1)%
Premier Inn Germany
£m H1 FY26 H1 FY25 vs H1 FY25
Statutory revenue 125 115 9%
Segment adjusted loss before tax(†) (3) (9) 65%
Revenue per available room (£)(†) £52.90 £51.78 2%
Outlook, current trading(1) and updated FY26 guidance
• Outlook
• While forward visibility remains limited and despite some
uncertainty around the forthcoming UK budget, positive trading momentum and
encouraging levels of bookings into future periods in both the UK and Germany
mean we remain confident in the full year outlook
• Current trading: Premier Inn UK
• Total accommodation sales and RevPAR were both up 3% versus FY25
with a strong performance in London that benefitted from a number of events in
the period
• Our forward booked position is ahead of last year and with the
continued impact of our commercial initiatives, we remain confident in
maintaining a healthy RevPAR premium versus the market
• F&B: sales were 4% behind FY25, in line with our expectations
and reflecting the removal of a number of lower-returning branded restaurants,
mitigated by a positive performance from our integrated restaurants
• Current trading: Premier Inn Germany
• After a softer start to September, market demand has stepped up in
more recent weeks and total accommodation sales were up 9% versus FY25; total
estate RevPAR increased by 3% to €82 and RevPAR for our cohort of 17 more
established hotels(2) increased by 8% to €95
• Updated FY26 guidance
Reflecting the Group's performance in the year to date, we have updated our
guidance(3) for FY26 as follows:
• Germany: after a softer market performance in the second quarter
that had a lower number of high-impact events this year, we have moderated our
guidance and now expect segment adjusted profit before tax(†) of up to
£5m(4) (versus previous guidance of £5m to £10m(4))
• UK costs: higher than expected cost inflation will be partially
mitigated by increased cost efficiencies of £65m - £70m (versus previous
guidance of £60m) so that net inflation remains within our previously guided
range of 2% - 3% on our £1.7bn UK cost base;
• Lease costs: having completed £99m of sale and leasebacks(5) in
the UK in the year to date and with further transactions in the second half,
this is expected to result in additional lease cost of £5m - £10m
1: Six weeks to 9 October 2025
2: Cohort of 17 more established German hotels that were open and trading
under the Premier Inn brand for 12 consecutive months as at 4 March 2022
3: Our FY26 guidance can be found in our FY25 full year results announcement
4: Using a GBP: EUR exchange rate of 1.18
5: £74m of sale and leasebacks completed in H1 FY26 with a further £25m
after the balance sheet date
Commenting on today's results, Dominic Paul, Whitbread Chief Executive, said:
"In the UK, with a return to market growth, we sustained our outperformance
versus the market through the strength of our guest proposition and commercial
programme. We are making strong progress on our Accelerating Growth Plan
which, together with our committed pipeline of both Premier Inn and 'hub by
Premier Inn' rooms, means we remain on track to reach at least 98,000 open
rooms by FY30, extending our position as the clear market leader.
"In Germany, we maintained our outperformance versus the M&E market,
having traded well in what was a softer than expected demand environment over
the summer. We are continuing to grow our committed pipeline and having agreed
the acquisition of eight hotels in prime city-centre locations, we are
building a business of real scale. Our growing market share, together with the
increasing maturity of our estate, means that we remain confident in
fulfilling our ambition of becoming the country's number one hotel brand,
delivering significant revenue and profit growth.
"We remain focused on disciplined capital allocation and increasing financial
returns. Having completed £99m of sale and leasebacks at attractive yields
and with the updated valuation of our estate, we are on track to recycle £1bn
by FY30 to fund future high-returning growth, such as our Accelerating Growth
Plan, and increase our return on capital employed.
"We're making great progress against our strategic priorities and our
Five-Year Plan is firmly on track to deliver a step change in profits,
margins, and returns. We remain confident in returning £2bn to shareholders
through share buy-backs and dividends and we are on track to complete the
previously announced £250m share buy-back by the time of our FY26 results.''
For more information please contact:
Investor Relations - Whitbread
investorrelations@whitbread.com (mailto:investorrelations@whitbread.com)
Peter Reynolds, Director of Investor Relations
peter.reynolds@whitbread.com
Kirsten O'Reilly, Investor Relations Manager
kirsten.oreilly@whitbread.com
(mailto:kirsten.oreilly@whitbread.com)
Kitty Hobhouse, Investor Relations
Manager
kitty.hobhouse@whitbread.com
Media -
Brunswick
whitbread@brunswickgroup.com (mailto:whitbread@brunswickgroup.com)
Tim Danaher
+44 (0) 20 7404 5959
A webcast for investors and analysts will be made available at 8:00am on 16
October 2025 and will be followed by a live Q&A teleconference at 9:15am.
Details of both can be found on Whitbread's website
(www.whitbread.co.uk/investors (http://www.whitbread.co.uk/investors) ).
(†)Alternative performance measures
We use a range of measures to monitor the financial performance of the Group.
These measures include both statutory measures in accordance with IFRS and
alternative performance measures ('APMs') which are consistent with the way
that the business performance is measured internally. We report adjusted
measures because we believe they provide both management and investors with
useful additional information about the financial performance of the Group's
businesses.
Adjusted measures of profitability represent the equivalent IFRS measures
adjusted for specific items that we consider relevant for comparison of the
financial performance of the Group's businesses either from one period to
another or with other similar businesses. APMs are not defined by IFRS and
therefore may not be directly comparable with similarly titled measures
reported by other companies. APMs should be considered in addition to, and are
not intended to be a substitute for, or superior to, IFRS measures. Further
information can be found in the glossary and reconciliation of APMs at the end
of this document.
Supplementary Information
Further information is available in a supporting supplementary information
pack (in Microsoft Excel format) from
www.whitbread.co.uk/investors/results-reports-and-presentations
(http://www.whitbread.co.uk/investors/results-reports-and-presentations) .
Chief Executive's Review
Group Results
The Group delivered a robust first half performance and continued to make
excellent progress on each of the key strategic initiatives underpinning our
Five-Year Plan. As a result, we remain on course to deliver a step change in
our profits, margins and returns by FY30, generating £2bn for shareholders
through a combination of share buy-backs and dividends.
Group statutory revenue was down 2% at £1,541m (H1 FY25: £1,570m) reflecting
broadly flat UK accommodation sales and positive momentum in Germany, offset
by the anticipated lower F&B revenues as we implement our AGP. Despite
softer market demand, the Group outperformed the market in both the UK and
Germany on total accommodation sales and RevPAR growth.
To help mitigate significant inflationary pressures, including national living
wage, national insurance and food and beverage inflation, we delivered £43m
of efficiency savings (H1 FY25: £38m) in the period and with the impact of
our AGP, this contributed to a 2% reduction in operating costs. Despite this,
as a result of lower revenues, adjusted EBITDAR was down 2% to £601m (H1
FY25: £611m). Net finance income (excluding lease liability interest) reduced
in the period reflecting higher interest payable on the Group's loans
partially mitigated by higher interest receivable, resulting in a decrease in
adjusted profit before tax(†) to £316m (H1 FY25: £340m). A lower charge
for adjusting items in the period of £28m (H1 FY25: £31m) resulted in
statutory profit before tax of £287m (H1 FY25: £309m). A tax charge of £70m
(H1 FY25: £89m) meant that statutory profit after tax was £217m (H1 FY25:
£220m).
Adjusted basic earnings per share(†) decreased by 2% to 133.7p (H1 FY25:
137.1p) reflecting lower earnings, mitigated by a reduced weighted average
number of shares following share buy-backs over the last twelve months.
Statutory basic earnings per share increased by 2% to 123.7p (H1 FY25:
121.0p).
Further detail on the drivers behind the Group's performance is set out below.
Premier Inn UK - strengthening our market leading position
Premier Inn UK delivered a robust revenue performance and total accommodation
sales were in line with last year. With the strength of our brand, guest
proposition and commercial initiatives, we performed ahead of the market by
+0.7pp on total accommodation sales growth and +1.0pp on RevPAR growth,
maintaining a £6.10 RevPAR premium versus the rest of the M&E market.
After a soft first quarter, our performance strengthened during the half,
supported by a seasonally strong summer period and a return to market growth;
occupancy remained high at 80.8% (H1 FY25: 83.1%), and ARR increased to
£85.95 (H1 FY25: £84.16). In London, increased leisure demand, supported by
a positive events calendar, led to an increase in both ARR and accommodation
sales, up 0.6% and 1.2% respectively. In the Regions, although ARR was 2.3%
higher than last year, occupancy was slightly lower at 81.1% (H1 FY25: 83.5%)
resulting in a 1% reduction in total accommodation sales.
Total UK F&B revenues fell by 11% reflecting the transition of a number of
our lower-returning branded restaurants into a more efficient, integrated
F&B offering, and the sale of sites as part of AGP.
1: STR data, standard basis, 28 February 2025 to 28 August 2025, UK M&E
market excludes Premier Inn
The following external and internal factors were important drivers for our UK
business in the first half of the year:
· UK market demand: The UK returned to market growth during the
second quarter, supported by robust leisure demand that was boosted by a
strong events calendar in July and August, and more favourable weather. While
Premier Inn's overall level of occupancy remained high, it was not quite as
strong as the previous year as we adapted our trading strategies, with the
result that we continued to outperform the market on both accommodation sales
and RevPAR growth. Although we continued to see good revenue growth via
Business Booker and Travel Management Companies ('TMCs'), overall business
demand was slightly lower in the period in line with the wider market.
· Muted supply growth: The supply backdrop post the pandemic
remains muted. Hotel construction starts are expected to plateau this year and
while the branded budget sector, including Premier Inn, is expected to grow
over the next few years, we maintain our view that the independent hotel
sector will continue to decline. As a result, we still expect that the total
UK market will not return to 2019 levels of supply(1) until at least 2027.
1: Company data
· Accelerating Growth Plan ('AGP'): The transformation of a number
of our lower-returning branded restaurants into a more tailored, integrated
F&B format and the unlocking of 3,500 new extension rooms remains on
track. Planning applications for 80% of the affected sites have been submitted
and permission has already been received for c.60% of sites. We have completed
or are in progress at over 20% of sites and the first of our new extension
rooms are already open, with 500 - 700 rooms expected to open towards the end
of the financial year. We are also making good progress on exiting over 100
branded restaurants and have sold 41 for a total consideration of £42m, with
the sale of the remaining sites expected to be completed as planned. As a
result, the impact of AGP on FY25 profitability is expected to fully reverse
in FY26, in line with our previous guidance.
· Network expansion: Premier Inn remains the UK's largest hotel
chain with approximately 12% share of all hotel rooms. During the first half,
we opened 94 new rooms and closed 396 lower-returning rooms as part of our
estate optimisation programme, including AGP, with the result that as at 28
August 2025 we had 846 hotels and 85,682 rooms open. Taking advantage of a
number of market opportunities, we were able to grow our committed pipeline(1)
by 25% to 7,800 new rooms (H1 FY25: 6,262), of which 2,205 are 'hub by Premier
Inn', underpinning our confidence in the brand's future growth potential.
1: UK and Ireland committed pipeline excluding extension rooms from
Accelerating Growth Plan
· Commercial programme: We continued to execute a broad range of
commercial initiatives that are helping us to drive like-for-like(†) sales
momentum and outperform the rest of the M&E market. Highlights during H1
FY26 include:
o Refining our marketing strategies: We continued to sustain our high brand
awareness at over 90% in the UK(1) through a continuous programme of both
brand and digital campaigns that are focused on driving cost-effective,
customer acquisition whilst ensuring we remain at the forefront of customers'
minds when making their hotel choice.
1: UK YouGov Brand Consideration as at 28 August 2025 based on a nationally
representative 52-week moving average
o Expanding our distribution channels: We continued to make excellent
progress in driving B2B volumes through our Business Booker and TMC channels
with improved account management and incentives helping to deliver increased
sales and profit. Our use of online travel agents ('OTAs'), limited to inbound
customer traffic only, has been positive and has been a helpful addition to
drive incremental international demand.
o Optimising our revenue management: At the core of our vertically
integrated business model is our proprietary automated trading engine that
remains a key source of competitive advantage, enabling us to maximise revenue
for any given volume of demand. With a number of key events over the summer
months, we were able to drive additional revenue through improvements made to
our events trading strategies and saw particular success with the Oasis
concerts at Wembley, significantly outperforming the submarket on both
occupancy and RevPAR.
o Increasing ancillary revenue: Having completed the installation of our new
reservation system in 2024, we have been able to enhance consumer choice and
generate additional revenue by offering several options to our guests as part
of the booking journey including early check-in, late check-out, 'Rooms with a
view', parking and high-speed Wi-Fi.
o Enhancing guest engagement through a better digital experience: By
continuing to optimise our website and increase our app functionality, we are
driving guest volumes and conversion and have seen an increase in app revenues
and channel share versus last year. We are also improving the digital guest
experience and have now launched online check-in across our UK estate. We are
driving higher guest engagement through our CRM database and enhanced
promotional capabilities that in turn should help to drive more revenue
growth.
o Best-in-class operations: The quality of our guest offer underpins our
position as the UK's number one hotel brand and 'Best Value Hotel Chain', as
measured by YouGov(1). Our significant and ongoing investment in our estate
includes the roll-out of our new room format, ID5, and our extensive
refurbishment and repair and maintenance programmes that together ensure that
we maintain a high level of consistency across our estate. Food and beverage
remains a core part of our offer, with our new integrated ground floor concept
and several commercial initiatives helping to drive positive guest scores and
F&B revenues. To ensure our teams continue to deliver an excellent service
for our guests, we invest in competitive pay, training, and development. This
commitment helps maintain high levels of staff engagement, staff wellbeing and
retention, as demonstrated by over 75% of our team members having over one
year's service.
1: YouGov BrandIndex Quality & Value scores as at 28 August 2025 based on
a nationally representative 52-week moving average
Despite inflationary pressures as a result of national living wage, national
insurance costs and higher food and beverage costs, the removal of a number of
lower-returning branded restaurants as part of AGP, together with increased
cost efficiencies in the period, meant that operating costs reduced by 3%.
However, with the reduction in UK revenue due to AGP, the net result was that
UK segment adjusted profit before tax(†) was £331m (H1 FY25: £357m) and UK
segment adjusted pre-tax margins(†) reduced to 23.4% (H1 FY25: 24.6%) while
UK ROCE(†) was 11.8% (H1 FY25: 14.0%).
During the period, the Group recognised £18m (H1 FY25: £nil) of accelerated
depreciation and £1m of impairment (H1 FY25: reversal of £1m) arising from
site extensions and conversions in relation to the AGP. In addition, £2m of
impairments (H1 FY25: £1m) were recognised on assets transferred to assets
held for sale.
Premier Inn Germany - on course to reach profitability
We continue to make good progress in Germany despite softer market demand in
the second quarter due to a lower events profile than the previous year. With
the increasing maturity of our estate and brand, supported by our ongoing
commercial initiatives, we reached higher levels of occupancy and higher ARR
versus last year. The net result was that we delivered 7% growth in total
accommodation sales and RevPAR grew by 2% versus last year, which was ahead of
the M&E market(1) that fell by (5)%.
Supporting our longer-term growth ambitions in Germany, we have agreed the
acquisition of 8 hotels located in prime locations, adding over 1,500 rooms to
our open and committed portfolio, with completion expected in Spring 2026. Our
current open and committed pipeline stands at 20,016 rooms (H1 FY25: 17,296
rooms) with 33% of our committed pipeline being freehold sites.
Drawing upon our growing pool of guest data, our commercial strategy is
helping to drive RevPAR momentum:
· Improved trading strategies - We continue to refine our trading
strategies with particular focus on our performance on key event nights. As up
to 20% of room nights in Germany are event nights, being able to trade these
effectively is a key driver of profitability in the German market. Through
refining our pricing strategies, we have seen an improved performance versus
the market on event nights, with our more established cohort delivering RevPAR
ahead of the market.
· Driving ancillary revenue - By offering guests several optional
extras, such as early check-in and late check-out, during the booking journey,
we enhance the overall guest experience while also driving incremental
ancillary revenues.
· Broadening distribution - We have seen an increase in domestic
and international guest volumes and revenues as we expanded our distribution
to include third-party channels such as OTAs. While the majority of our
bookings come direct, OTAs are proving to be an important and value accretive
channel in the German market. Our regional sales teams are also having a
positive effect on establishing relationships with corporate customers and
building our presence in the B2B market.
· Increasing brand awareness - Our brand awareness(2) increased to
18% (H1 FY25: 16%) and whilst still behind some of our key competitors, given
the quality of our product and the increased guest scores we are achieving, we
are confident in our ability to close the gap further.
· Enhancing our property strategy - We continuously seek to
optimise our property conversion and development strategy, strengthening
relationships with key partners to drive reductions in associated costs. As a
result, we have been able to minimise disruption and improve financial
performance at sites that are being refurbished by reducing the time period
required to complete the works.
As in the UK, we continued to make progress in enhancing our operational
efficiency and managing costs. Our growing scale is unlocking new
opportunities to reduce costs without compromising our excellent guest
experience.
Whilst not yet mature and despite the impact of market demand in the second
quarter, our cohort of 17 more established hotels(3) delivered 3% RevPAR
growth and aggregate site-level profit(4) of £17m for the 12 months to the
end of H1 FY26 (H1 FY25: £10m), providing a useful indicator of the future
profit potential of our estate as a whole. As a result, we delivered a
much-reduced segment adjusted loss before tax(†) for all of our German
operations of £3m (H1 FY25: £9m loss) and we remain on track to reach
profitability in FY26.
1: Local currency based on STR data, standard basis, 28 February 2025 to 28
August 2025, Germany M&E market excludes Premier Inn
2: Germany YouGov Brand Consideration: 1 September 2024 to 31 August 2025
3: Cohort of 17 more established German hotels that were open and trading
under the Premier Inn brand for 12 consecutive months as at 4 March 2022
4: In aggregate, adjusted profit before tax(†) excluding non-site related
administration and overhead costs
Capital allocation - Investing for the long-term to drive higher returns
Our strong balance sheet means we can strike the right balance between
investing in high-returning, long-term growth opportunities and returning
excess capital to shareholders through dividends and earnings-enhancing share
buy-backs. Our primary focus is on driving high returns on capital and the
core elements of our framework remain as follows:
· maintain our investment grade status by operating within our leverage
threshold;
· continue to fund our ongoing capital expenditure requirements and
invest through the cycle;
· complete selective freehold acquisitions and M&A opportunities
that meet our returns thresholds;
· recycle capital from lower returning assets into higher returning
investments, when suitable opportunities arise;
· grow dividends in line with earnings; and
· return excess capital to shareholders, dependent on the outlook and
market conditions.
Lease liabilities at the end of the half were £4.3bn (H1 FY25: £4.2bn) and
after total capital expenditure of £328m (H1 FY25: £199m), £182m of share
buy-backs and dividends (H1 FY25: £278m) and the issuance of a £400m bond(1)
in February 2025, our ratio of lease-adjusted net debt(2) to adjusted EBITDAR
was 3.2x (H1 FY25: 2.8x(3)) versus our threshold of 3.5x.
We are on track to deliver £2bn for share buy-backs and dividends by FY30.
Given our confidence in the delivery of our Five-Year Plan and the strength of
our balance sheet, the Board has declared an interim dividend of 36.4p per
share (H1 FY25: 36.4p) and we are on track to complete a £250m share buy-back
by 30 April 2026, with 3.6m shares purchased so far for a total consideration
of £108m.
1: The Group issued £400m of 5.50% guaranteed notes due in 2032
2: This measure aligns to the Fitch methodology, with the leverage threshold
set at 3.5x lease-adjusted net debt : adjusted EBITDAR for BBB-
and 3.0x for BBB, both of which are within investment grade
3: H1 FY25 net leverage restated to reflect Fitch Ratings updated methodology
Business strategy
Our ambition is to become the world's leading budget hotel brand, delivering a
fantastic experience for our guests, rewarding employment for our teams and
long-term, sustainable returns for our shareholders whilst also driving
positive change through our Force for Good sustainability programme. To
achieve our objective, we are executing the following three pillars of our
business strategy:
· continuing to grow and innovate in the UK;
· focus on our strengths to grow in Germany; and
· enhancing our capabilities to support long-term growth.
Each pillar is embedded within our Five-Year Plan and is set to deliver a step
change in our profits, margins and returns.
Five-Year Plan
We are continuing to execute several strategic initiatives so that by FY30 the
Group will:
· increase Group adjusted PBT(†) versus FY25 by at least £300m; and
· generate £2bn available for share buy-backs and dividends.
We have a strong track record of being able to more than offset UK cost
inflation through a combination of cost efficiencies and positive UK
like-for-like(†) sales growth. Our Five-Year Plan illustrates the position
assuming we only offset cost inflation.
Our progress during H1 FY26 reinforces our confidence in the delivery of the
plan, each element of which is summarised below:
UK: Accelerating Growth Plan ('AGP') (+£100m adjusted PBT(†) by FY30)
By optimising the delivery of F&B at around 200 of our sites and
converting a number of our lower-returning branded restaurants into a more
efficient, integrated F&B offer, we will unlock 3,500 new extension rooms.
With the first of our new extension rooms open, we expect to have between 500
- 700 extension rooms open towards the end of FY26. We are exiting over 100
branded restaurants and having sold 41 sites for £42m, we remain confident of
exiting the remaining sites as planned.
UK: network expansion (+£120m adjusted PBT(†) by FY30)
We are on course to reach at least 98,000 open rooms by FY30, extending our
market-leading position in the UK, with close to 8,000 rooms in our current
committed pipeline(1), and the additional opening of a further 1,000 rooms
over the next few years.
We are confident that these new rooms will be higher returning than our
current open estate average. Our committed pipeline has a higher weighting
towards London and freehold sites driving higher RevPARs and lower costs. As
we optimise the estate, we are opening larger hotels that enable us to drive
higher levels of profitability, while also expanding our successful 'hub by
Premier Inn' proposition.
Our significant growth potential is underpinned by our identification of
catchments where we do not currently have a presence, or where we can add more
rooms without cannibalising our existing estate. Drawing upon our suite
of development options including new builds, conversions, extensions and
single-site acquisitions, the pace and extent of our expansion will be driven
by the availability and cost of appropriate sites that can meet our target
levels of return.
1: UK and Ireland committed pipeline excluding extension rooms from
Accelerating Growth Plan
Germany: network expansion and RevPAR uplift (+£80m adjusted PBT(†) by
FY30)
We remain focused on building the Premier Inn brand; refining our commercial
strategy; enhancing our business proposition; and optimising our model and
product offer. Driven by our ambition to become the country's number one hotel
brand, our open estate is set to almost double to 20,000 rooms by FY30, with
the opening of our existing pipeline of nearly 9,000 rooms and the addition of
further rooms.
Reflecting the increasing maturity of our estate, improved distribution and
increased brand awareness, we expect to achieve a network RevPAR of c.€80
and reach double-digit returns on our current open portfolio by FY30. We are
on course to reach profitability in FY26 and with the benefit of operating
leverage driven by improvements to our operating model and additional scale,
we expect Germany to deliver adjusted PBT(†) of at least £70m(1) by FY30,
representing an uplift of at least £80m versus FY25. Thereafter, we expect to
make further progress as our estate and brand continue to mature.
1: Using a GBP: EUR exchange rate of 1.18
Strong commercial programme and cost efficiencies
We will continue to drive like-for-like(†) sales momentum through a range of
commercial and cost saving initiatives. These include: evolving our trading
strategies and proprietary automated trading engine; enhancing our digital
capabilities including the functionality of the Premier Inn app to drive
greater usage; refining our marketing strategies and broadening our
distribution, leveraging social media channels such as YouTube and TikTok and
exploring the use of third-party channels; broadening our appeal to business
guests through Premier Inn Business and TMCs; further improvements to F&B;
and continuing to invest in our significant refurbishment plan and ongoing
repair and maintenance programme, ensuring that we meet the high standards
expected by our guests.
We have a strong track record of unlocking material cost efficiencies, helping
to offset inflationary pressures across our UK cost base. With further savings
from the transformation of our F&B distribution model, improved labour
forecasting and increased spans of control for some of our hotel managers, we
now expect to deliver £65m to £70m of cost efficiencies in FY26, with a
further £175m to £180m of savings in aggregate between FY27 and FY30,
totalling £250m by FY30.
Using our balance sheet to fund growth whilst maintaining average net capex at
£500m per annum
The strength of our balance sheet and well-managed investment approach means
we can continue to invest in growing our business whilst also increasing our
return on capital. Our long-term horizon for investment means we can deploy
capital decisively, allowing us to extend our leadership position in the UK
and Ireland and continue our expansion in Germany. Our large and valuable
portfolio of freehold property, combined with significant in-house property
expertise, is a major source of commercial and operational advantage:
· Increased market penetration by maximising our chances of securing the
best assets in our target locations because we can access both freehold and
leasehold opportunities and can move quickly, funding developments from
available resources;
· Provides full control over the location and initial development of the
hotel as well as all maintenance and redevelopment, including extensions;
· Optimises commercial opportunity in any location for the Group;
· Offers inflation resilience and protection during market downturns
through lower rent exposure and reduced sensitivity to increasing property
costs;
· Strengthens our financial position, improving our covenant and enabling
us to secure more favourable lease and financing terms; and
· Supports capital recycling, enabling us to release significant
development profits through the disposal of some of our properties through
sale and leasebacks and other property-related transactions.
Our freehold and long-leasehold estate in the UK, Ireland and Germany has been
revalued in the period. The valuation of £5.5bn - £6.4bn has increased
versus the previous 2018 valuation of £4.9bn - £5.8bn and is based on a
yield range of 5.5% - 6.5%, an average rent cover 2.0x and includes £760m of
net book value assets that were under construction and non-trading.
While freehold sites offer the advantages highlighted above, our approach to
site selection remains broadly agnostic between freehold and leasehold and
each opportunity is assessed on its ability to deliver returns that meet our
internal thresholds. We segment our portfolio into several categories based on
a site's strategic importance, size, location and maturity. This enables us to
identify and prioritise opportunities to generate additional value, subject to
market conditions and funding. These opportunities include extending or
developing a site, or adopting a different financial structure that results in
development profits and/or additional yield potential.
After a challenging period post-pandemic, there are clear signs that the
property investment market is improving and activity levels in the hotel
sector are increasing. In the financial year to date, we have completed four
sale and leaseback transactions on eight hotels for £99m at an average net
initial yield of 5.3% and remain on track to receive £250m - £300m of
property-related proceeds by the year end.
As part of our Five-Year Plan we will recycle £1bn of our property over the
life of the plan. By recycling more of our freehold property into higher
returning assets, we can fund all of our plans outlined above and maintain
average annual net capex at £500m per annum to FY30.
Force for Good
Being a Force for Good is fundamental to the sustainable and long-term growth
of our business. Our programme comprises three core pillars: opportunity,
responsibility and community, and has stretching targets that are embedded
across all areas of our business, ensuring that responsible business practices
are integrated into our operations.
Opportunity
We seek to create employment opportunities for all, with no barriers to entry
and no limits to ambition. Opportunity at Whitbread anchors to our talent
development and training, opportunities for disadvantaged youth, diversity and
inclusion ('D&I'), and wellbeing.
We look to develop our people through several initiatives, including our
'Progressing Into' programmes for Hotel Management, the delivery of service
skills training to more than 20,000 people, the launch of new leadership
behaviours and a new performance framework. With over 1,000 apprentices we are
ranked 8th in the Top 100 Apprenticeship Employers. Social mobility remains a
key objective and we have supported care-experienced Young People into
employment through our partnership with Barnardo's, as well as participating
in the DWP backed 'Trailblazers' scheme in London. Our Thrive programme with
the Derwent and Hereward Colleges has been helping young people with special
educational needs into employment for a decade and our programme of working
with schools and colleges across the UK, supported 500 young people with work
experience in H1 FY26.
Our D&I efforts were recognised during H1 FY26 with our nomination for
Employee Network of the year at the British LGBTQIA+ awards and, more broadly,
we were also accredited as a UK Top Employer for the 15th consecutive year.
Our wellbeing activity continues to build on the foundations set in prior
years with a regular programme of communications around key themes, such as
the menopause and financial wellbeing, delivering specific webinars on key
topics. We achieved Henpicked's Menopause Friendly Employer Accreditation as
recognition of our work in this area.
Responsibility
Our responsibility pillar is centred around several initiatives including:
decarbonisation of our operations, water stewardship, waste management, food
health and responsible sourcing. We are actively monitoring all regulatory
developments and are leveraging our experience with TCFD, SASB and transition
planning disclosures thereby ensuring we are well positioned to meet all of
our current and future obligations.
Our SBTi-validated target to reduce our operational emissions by 2040 is
underpinned by the replacement of legacy gas boilers with air-source heat
pumps ('ASHP') and other alternatives as we shift towards electricity becoming
the main source of power for the majority of our sites. Having opened our
first all-electric hotel in 2023, we will electrify a further 600 rooms across
our UK estate, bringing the total to c.2,300 low-carbon rooms(1) by the end of
FY26.
We remain on track to reduce our water consumption by 20% by 2030. The results
of our low-flow showerhead rollout has exceeded our expectations, helping us
to lower gas usage further and supporting our Scope 1 emissions reduction.
Managing food waste is a key priority and we remain on track to achieve a 50%
reduction in food waste by 2030. In addition to selling surplus breakfast
items at an increasing number of our hotels, enhanced analytics from our new
waste management provider are delivering improved site-level insight and
operational performance. As well as assessing potential regulatory impacts
from proposed UK Government mandates on food healthiness disclosures and
targets, we are also monitoring behavioural shifts linked to weight-loss drugs
to help inform our future menu strategy.
With our shift to a new single supplier for food and consumables in the UK, we
are determined to sustain robust responsible sourcing standards on human
rights, animal welfare and environmental protection. As of H1 FY25, 100% of
our shell and liquid eggs are sourced from cage-free farms, accredited by
British Lion and Bord Bia (Origin Ireland Q-Mark). Additionally, all coffee
served in the UK is now certified by either Fairtrade or Rainforest Alliance.
We received our 2025 S&P Corporate Sustainability Assessment rating,
improving by 17 points year-on-year to 53 (out of 100), placing us in the 88th
percentile globally among 76 sector peers (the industry average score is 30).
Key contributors to our improved performance include human capital management,
corporate governance and climate strategy.
1: 'Low-carbon' rooms are powered by electricity backed by Renewable Energy
Guarantees of Origin and no gas or liquefied petroleum gas is used for water
and space heating and cooking
Community
Since 2012, we have raised over £27 million in partnership with Great Ormond
Street Hospital Children's Charity. This includes £7.5 million towards the
Premier Inn Clinical Building (opened in 2018) and £10 million for the Sight
& Sound Centre (opened in 2021). We are now committed to raising £20
million for the "Build it. Beat it." appeal, which will fund the development
of a new Children's Cancer Centre. The investment will support the creation of
three new inpatient wards and a dedicated parents' lounge, enhancing care and
family experience during treatment.
For further information on our Force for Good programme, please see our most
recent ESG Report here
(https://cdn.whitbread.co.uk/media/2025/05/Whitbread-PLC-Environmental-Social-and-Governance-Report-2024-25.pdf)
.
Business Review
Premier Inn UK(1)
£m H1 FY26 H1 FY25 vs H1 FY25
Statutory Revenue 1,416 1,455 (3)%
Other income (excl rental income) - - n/a
Operating costs before depreciation, amortisation & rent (834) (856) 3%
Adjusted EBITDAR(†) 582 599 (3)%
Net turnover rent and rental income 1 0 75%
Depreciation: Right-of-use asset (80) (76) (6)%
Depreciation and amortisation: Other (98) (95) (4)%
Adjusted operating profit(†) 405 430 (6)%
Interest: Lease liability (74) (72) (3)%
Segment adjusted profit before tax(†) 331 357 (7)%
ROCE(†) 11.8% 14.0% (220)bps
Segment adjusted PBT margins(†) 23.4% 24.6% (120)bps
Premier Inn UK(1) key performance indicators
H1 FY26 H1 FY25 vs H1 FY25
Number of hotels 846 855 (1)%
Number of rooms 85,682 85,920 0%
Committed pipeline (new rooms)(2) 7,800 6,262 25%
Committed pipeline (AGP extension rooms)(3) 1,374 79 >100%
Occupancy 80.8% 83.1% (230)bps
Average room rate(†) £85.95 £84.16 2%
Revenue per available room(†) £69.48 £69.93 (1)%
Sales growth:
Accommodation 0%
Food & beverage (11)%
Total (3)%
Like-for-like(†) sales growth:
Accommodation (1)%
Food & beverage (1)%
Total (1)%
1: Includes one site in each of: Guernsey and the Isle of Man, two sites in
Jersey and six sites in Ireland
2: UK and Ireland committed pipeline excluding extension rooms from
Accelerating Growth Plan
3: Planning approval received for Accelerating Growth Plan extension rooms
Premier Inn UK's total statutory revenue was down 3%, reflecting an 11%
reduction in F&B sales driven by the impact of AGP and soft market demand
during the first quarter followed by a return to market growth in the second
quarter. Total accommodation sales were broadly in line with last year and
+0.7pp ahead of the wider M&E market, with a 1% decline in RevPAR offset
by net room growth. Reflecting the strength of our commercial initiatives,
brand, operational excellence and guest proposition, Premier Inn continued to
outperform the market by +1.0pp on RevPAR growth and increased its RevPAR
premium versus the M&E market to £6.10.
UK performance vs M&E market
Q1 Q2 H1
FY26 FY26 FY26
PI accommodation sales growth performance (vs FY25)(1) +1.6pp 0.0pp +0.7pp
PI occupancy growth performance (vs FY25)(1) (1.6)pp (0.8)pp (1.2)pp
PI ARR growth performance (vs FY25)(1) +3.6pp +1.6pp +2.5pp
PI RevPAR growth performance (vs FY25)(1) +1.6pp +0.6pp +1.0pp
PI RevPAR premium (absolute)(1) +£5.88 +£6.40 +£6.10
PI market share(2) 8.6% 8.1% 8.3%
PI market share losses (vs FY25)(2) (0.1)pp (0.1)pp (0.1)pp
1: STR data, standard basis, Premier Inn accommodation revenue, occupancy, ARR
and RevPAR 28 February 2025 to 28 August 2025, UK M&E market excludes
Premier Inn
2: STR data, revenue share of total UK market, 28 February 2025 to 28 August
2025
Total F&B revenues were in line with expectations, falling by 11% in the
period, reflecting the impact of transitioning around half of our
lower-returning branded restaurants to a more efficient, integrated format as
part of AGP, partially offset by strong breakfast sales in our integrated
restaurants.
Operating costs reduced by 3% to £834m (H1 FY25: £856m). This decrease
reflects the continued progress on cost efficiencies and the removal of
F&B costs associated with AGP, more than offsetting higher than expected
inflation across labour and food and beverage costs. As expected, the
reduction in F&B revenues from AGP was not fully matched by a reduction in
costs, prompting a modest reduction in adjusted EBITDAR(†) to £582m (H1
FY25: £599m).
Right-of-use asset depreciation in the period increased by 6% to £80m and
lease liability interest increased by 3% to £74m reflecting the growth in our
leasehold estate and the impact of rent reviews completed during the period.
We opened 94 new rooms in the period and closed 396 lower-returning rooms as
we seek to optimise the portfolio to drive higher returns. As at 28 August
2025, the total open estate comprised 846 hotels and 85,682 open rooms, with a
further 7,800 new rooms committed(1), the majority of which are freehold, plus
an additional 1,374 committed AGP extension rooms(2).
UK segment adjusted profit before tax(†) fell by 7% to £331m (H1 FY25:
£357m) reflecting the impact of AGP on our F&B trading performance,
softer market demand during the first quarter, higher than expected cost
inflation and increased lease associated costs. As a result, UK segment
adjusted pre-tax margins(†) reduced to 23.4% (H1 FY25: 24.6%) and UK
ROCE(†) was 11.8% (H1 FY25: 14.0%).
1: UK and Ireland committed pipeline excluding extension rooms from
Accelerating Growth Plan
2: Planning approval received for Accelerating Growth Plan extension rooms
Premier Inn Germany(1)
H1 FY26 H1 FY25 vs H1 FY25 vs H1 FY25 CC(2)
£m
Statutory revenue 125 115 9% 9%
Other income (excl. rental income) 0 - n/a n/a
Operating costs before depreciation, amortisation and rent (88) (85) (4)% (4)%
Adjusted EBITDAR(†) 37 30 23% 23%
Net turnover rent and rental income 0 0 0% 0%
Depreciation: Right-of-use asset (21) (21) (3)% (3)%
Depreciation and amortisation: Other (8) (8) 4% 4%
Adjusted operating profit(†) 8 1 >100% >100%
Interest: Lease liability (11) (11) (5)% (5)%
Segment adjusted loss before tax† (3) (9) 65% 64%
Premier Inn Germany(1) key performance indicators
H1 FY26 H1 FY25 vs H1 FY25 vs H1 FY25 CC(2)
Number of hotels 63 59 7% -
Number of rooms 11,175 10,506 6% -
Committed pipeline (rooms) 8,841 6,790 30% -
Occupancy 68.7% 68.3% 40bps -
Average room rate(†) £77.01 £75.78 2% 2%
Revenue per available room(†) £52.90 £51.78 2% 2%
Sales growth:
Accommodation 7% 7%
Food & beverage 19% 19%
Total 9% 9%
Like-for-like(†) sales growth:
Accommodation 3% 3%
Food & beverage 14% 14%
Total 4% 4%
1: Includes one site in Austria
2: On a constant currency basis, EUR
Total statutory revenue in Germany increased by 9% in local currency,
reflecting the increasing maturity of our estate; improvements made to our
trading strategies, particularly our performance on event nights; the
broadening of our distribution across channels, including OTAs; and continued
progress on increasing our brand awareness. Total estate RevPAR increased by
2% to €62 and RevPAR for our cohort of 17 more established hotels(4)
increased by 3% to €69, both of which outperformed the wider M&E market.
Germany performance vs M&E market
Q1 Q2 H1 vs H1
FY26 FY26 FY26 FY25
Germany M&E RevPAR performance(3) €57 €58 €58 (5)%
PI more established hotels RevPAR performance(4) €72 €66 €69 3%
PI total hotels RevPAR performance(4) €64 €61 €62 2%
3: STR data, standard methodology basis, 28 February 2025 to 28 August 2025,
M&E excludes Premier Inn
4: Premier Inn more established hotels: open and trading under the Premier Inn
brand for 12 consecutive months as at 4 March 2022: 17 hotels and Premier Inn
total: 61 hotels as at 28 August 2025
Operating costs in the period increased by 4% to £88m (H1 FY25: £85m)
reflecting our continued estate growth and cost inflation. As a budget hotel
operator, we remain focused on tight cost control and driving margin growth,
while continuing to deliver a high-quality guest experience. To support this,
we continued to refine our operating model to ensure it remains efficient and
agile, streamlining management structures and leveraging technology.
Right-of-use asset depreciation remained flat at £21m, with lease liability
costs unchanged at £11m, consistent with the size of our leasehold estate.
Other depreciation and amortisation charges of £8m were flat year on year.
As at 28 August 2025, we had 63 open hotels and 11,175 open rooms and a
further 8,841 rooms in our committed pipeline. We remain on course to open
c.400 new rooms this year.
The quality of our hotel product, the progressive maturity of our estate and
the success of our commercial initiatives continue to raise our brand
awareness and drive customer volumes. These factors alongside our focus on
cost efficiencies, contributed to a 65% reduction in our segment adjusted loss
before tax(†) to £3m (H1 FY25: £9m loss).
Central and other costs
£m H1 FY26 H1 FY25 vs H1 FY25
Operating costs before depreciation, amortisation and rent (19) (19) (1)%
Share of profit from joint ventures 1 1 25%
Adjusted operating loss(†) (18) (18) 0%
Net finance income 6 10 (40)%
Adjusted loss before tax(†) (12) (8) (55)%
Central operating costs of £19m were flat year on year (H1 FY25: £19m). Net
finance income (excluding lease liability interest) reduced to £6m (H1 FY25:
£10m) reflecting higher interest payable on the Group's loans of £24m (H1
FY25: £12m), partially mitigated by higher interest receivable of £19m (H1
FY25: £17m).
Financial review
Financial highlights
£m H1 FY26 H1 FY25 Vs H1 FY25
Statutory revenue 1,541 1,570 (2)%
Other income (excl rental income) 0 - n/a
Operating costs before depreciation, amortisation and rent (941) (960) 2%
Share of profit from joint ventures 1 1 25%
Adjusted EBITDAR(†) 601 611 (2)%
Net turnover rent and rental income 1 1 60%
Depreciation: Right-of-use asset (101) (96) (5)%
Depreciation and amortisation: Other (106) (103) (3)%
Adjusted operating profit(†) 395 413 (4)%
Net finance income (excl. lease liability interest) 6 10 (40)%
Interest: Lease liability (86) (83) (3)%
Adjusted profit before tax(†) 316 340 (7)%
Adjusting items (28) (31) 9%
Statutory profit before tax 287 309 (7)%
Tax expense (70) (89) 21%
Statutory profit after tax 217 220 (1)%
Statutory revenue
Statutory revenue of £1,541m (H1 FY25: £1,570m) was slightly lower than the
prior year, reflecting broadly flat UK accommodation sales and positive
momentum in Germany, more than offset by the reduction in F&B revenues as
a result of AGP.
Adjusted EBITDAR
Operating costs reduced by 2% in the period to £941m (H1 FY25: £960m),
reflecting our continued progress on cost efficiencies and the impact of AGP,
offset by higher than expected cost inflation and our continued estate growth.
Adjusted EBITDAR(†) decreased by 2% to £601m (H1 FY25: £611m).
Adjusted operating profit
The increase in the size of our leasehold estate across the UK and Germany
resulted in a 5% uplift to right-of-use asset depreciation to £101m (H1 FY25:
£96m). The addition of new hotels in combination with our continued focus of
investing in our core estate meant that other depreciation and amortisation
charges increased by 3% to £106m (H1 FY25: £103m). As a result, adjusted
operating profit(†) decreased by 4% to £395m (H1 FY25: £413m).
Net finance costs
Net finance income (excluding lease liability interest) reduced to £6m (H1
FY25: £10m) reflecting higher interest payable on the Group's loans of £24m
(H1 FY25: £12m), partially mitigated by higher interest receivable of £19m
(H1 FY25: £17m). Lease liability interest increased by 3% to £86m, primarily
driven by the opening of new leasehold hotels across the UK and Germany.
Adjusted profit before tax
Taking all of the above movements together, adjusted profit before tax(†)
for the first half was £316m, compared to a profit of £340m in H1 FY25.
Adjusting items
Total adjusting items before tax were a charge of £28m in the period,
compared to a £31m charge in H1 FY25.
During the period, impairments of £1m (H1 FY25: reversal of £1m) were
recognised in relation to AGP and £2m of impairments (H1 FY25: £1m) were
recognised on assets transferred to assets held for sale. There were no other
impairments recognised in relation to core UK and Germany assets. This charge
was partially offset by settlements received of £1m in insurance settlements
related to stock damage.
The Group recognised £18m (H1 FY25: £nil) of accelerated depreciation
arising from site extensions and conversions in relation to the AGP to
transform and exit a number of the Group's branded restaurants. A commitment
is deemed to exist from the date that the site has both planning permission
and an approved internal business case to proceed. From this point, the useful
life of affected assets is reassessed to the expected completion date of the
redevelopment.
The Group recorded gains of £3m (H1 FY25: £31m) from property disposals,
including sale and leasebacks. A provision of £1m related to historic tax
positions was released, offset by a new property-related provision of £4m.
The Group has incurred significant business change costs in relation to the
implementation of the new hotel management system, HR & payroll system and
our strategic network programme, upgrading the IT networks across our estate.
Cash costs incurred on the programmes and presented within adjusting items in
the period were £5m, with cumulative cash costs to date being £71m (H1 FY25:
£54m). At this time the Group expects to incur future costs presented within
adjusting items across future financial periods as follows: during FY26
between £3m and £8m and during FY27 up to £5m.
The Group has incurred legal, advisory and project management costs regarding
the announced changes to facilitate the AGP. Cash costs incurred on the
programmes and presented within adjusting items in the period were £1m, with
cumulative cash costs to date being £27m. At this time the Group expects to
incur future cash costs presented within this adjusting item across the next
three financial years of up to £10m in total.
As part of the Group's strategic supply chain programme the Group has incurred
costs of £1m (H1 FY25: nil) in relation to associated IT and project
management costs. This decision allows the Group to make use of a different
supply model and it is expected the commercial and strategic benefit will be
seen over the long-term.
The Group completed the previously announced restructuring of its UK Support
Centre, resulting in a charge of £1m.
Taxation
The statutory tax charge of £70m (H1 FY25: £89m) represents an effective tax
rate on statutory profit of 24.5% (H1 FY25: 26.8%). This is lower than the UK
statutory corporate tax rate of 25.0%, primarily due to the impact of a rate
change in Germany and certain overseas tax rates being lower than the UK,
partially offset by the impact of lower overseas tax losses for which no
deferred tax asset has yet been recognised.
Statutory profit after tax
Reflecting all of the movements above, statutory profit after tax for the year
was £217m, compared to a profit of £220m in H1 FY25.
Earnings per share
H1 FY26 H1 FY25 vs H1 FY25
Adjusted basic profit / earnings per share(†) 133.7p 137.1p (2)%
Statutory basic profit / earnings per share 123.7p 121.0p 2%
Adjusted basic profit per share(†) of 133.7p and statutory basic profit per
share of 123.7p reflect the adjusted and statutory profits reported in the
period and are based on a weighted average number of shares of 175m (H1 FY25:
182m). The reduction in the weighted average number of shares reflects shares
purchased and cancelled as part of the Group's previously announced share
buy-back programmes.
Dividend
The Board has declared an interim dividend per share of 36.4 pence (H1 FY25:
36.4 pence). This reflects the Group's robust performance in the period, it's
strong balance sheet and the Board's confidence in delivering a step change in
performance, as outlined by the Five-Year Plan. The interim dividend will be
paid on 5 December 2025 to all shareholders on the register at the close of
business on 31 October 2025. Shareholders will be offered the option to
participate in a dividend re-investment plan. The Group's dividend policy is
to grow the dividend broadly in line with earnings across the cycle. Full
details are set out in note 8 to the accompanying financial statements.
Cashflow
£m H1 FY26 H1 FY25
Adjusted EBITDAR(†) 601 611
Change in working capital (16) (46)
Net turnover rent and rental income 1 1
Lease liability interest and lease repayments (179) (155)
Adjusted operating cashflow(†) 406 411
Interest (excl. lease liability interest) (3) 2
Corporate taxes (57) (34)
Pension (3) (3)
Capital expenditure: non-expansionary (101) (118)
Capital expenditure: expansionary(1) (227) (81)
Disposal proceeds 95 44
Other (10) (15)
Cashflow before shareholder returns / receipts and debt repayments 102 206
Dividend (107) (115)
Share buy-back (75) (163)
Payment of facility fees and costs of long-term borrowings 0 0
Net cashflow (79) (72)
Opening net debt(†) (483) (298)
Closing net debt(†) (563) (370)
1: H1 FY25 includes £2m payment of contingent consideration
To help mitigate significant inflationary pressures we delivered £43m of
efficiency savings (H1 FY25: £38m) in the period contributing to a (2)%
reduction in operating costs. However, as a result of lower revenues, adjusted
EBITDAR was down 2% to £601m (H1 FY25: £611m). Working capital outflow of
£16m, together with an increase in lease liability interest and lease
repayments to £179m, reflecting the addition of new leasehold hotels in both
the UK and Germany, meant that adjusted operating cashflow(†) was £406m (H1
FY25: £411m).
The corporation tax net outflow in the period was £57m (H1 FY25: £34m). This
comprises payments of £56m in the UK, £1m in Germany.
Non-expansionary capital expenditure in the period of £101m partly reflects
hotel refurbishments and spend incurred for the Group's systems-related IT
projects. Expansionary capital expenditure of £227m reflects the continued
development of our committed pipelines in both the UK and Germany and the
investment in our AGP.
We continuously seek to optimise our estate and take advantage of
value-enhancing opportunities. Disposal proceeds of £95m includes £74m of
sale and leasebacks together with £21m of AGP related disposals.
The significant operating cashflow generated in the period helped to fund our
continued programme of investment, resulting in a cash inflow before
shareholder returns of £102m (H1 FY25: £206m).
As announced with the Group's preliminary results on 1 May 2025, the Board
recommended a final dividend of 60.6 pence per share reflecting the strength
of the Group's FY25 performance and confidence in the outlook. The resulting
payment of £107m was paid on 4 July 2025. On 30 April 2025, the Board
approved a £250m share buy-back of which £75m was completed in the period.
As a result, net debt(†) at the end of the period was £563m (H1 FY25:
£370m).
Debt funding facilities & liquidity
£m Facility Utilised Maturity
Revolving Credit Facility (740) - 2029
Bond (450) (450) 2025
Green Bond (300) (300) 2027
Green Bond (250) (250) 2031
Bond (400) (400) 2032
(2,140) (1,400)
Cash and cash equivalents 831
Total facilities utilised, net of cash(1) (569)
Net debt(†) (563)
Net debt and lease liabilities(†) (4,884)
The Group's objective is to manage to investment grade metrics, maintaining a
lease-adjusted leverage(†) ratio of less than 3.5x over the medium term(2).
In January 2025, we received confirmation from Fitch Ratings that we have
maintained our investment grade status with a rating of BBB. The Group's
lease-adjusted net debt was £3,295m (H1 FY25: £2,902m) and the
lease-adjusted leverage(†) ratio was 3.2x (H1 FY25: 2.8x). As at 28 August
2025, £35m of the £775m Revolving Credit Facility is carved-out as an
ancillary guarantee facility for the Group's use in Germany. At 28 August
2025, guarantees issued using the Commerzbank line totalled €30m (H1 FY25:
€25m).
1: Excludes unamortised fees associated with the debt instrument
2: This measure aligns to the Fitch methodology, with the leverage threshold
set at 3.5x lease-adjusted net debt : adjusted EBITDAR for BBB- and 3.0x for
BBB, both of which are within investment grade.
Capital investment
£m H1 FY26 H1 FY25
UK maintenance and product improvement 99 118
New / extended UK hotels 172 53
Germany and Middle East(1) 57 28
Total 328 199
1: H1 FY25 includes £2m payment of contingent consideration
UK maintenance expenditure was (16)% lower at £99m (H1 FY25: £118m),
reflecting a return to more normalised levels following the completion of our
bed replacement programme. In the period, UK expansionary spend was £172m,
driven by additions to our committed pipeline, as well as investment in the
AGP. In Germany, capital expenditure was £57m, £29m higher than the prior
year, in line with our estate growth as we continue towards our ambition of
becoming number one in the country. Overall, total capital expenditure for the
period was £328m (H1 FY25: £199m).
The balance sheet value of property, plant and equipment increased to £4.9bn
(H1 FY25: £4.6bn) as the increased expenditure in growing and maintaining our
estate was offset by transfers to assets held for sale, depreciation and
impairment charges.
Property backed balance sheet
Freehold / leasehold mix Open estate Total estate(1)
Premier Inn UK 54%:46% 56%:44%
Premier Inn Germany 23%:77% 27%:73%
Group 51%:49% 51%:49%
1: Open plus committed pipeline
The current open UK estate is 54% freehold and 46% leasehold. However, as the
existing committed pipeline is brought onstream, the mix will become slightly
more weighted towards freehold. The current estate in Germany is 23% freehold
and 77% leasehold reflecting the skew towards leasehold properties in city
centre locations, however with the opening of our committed pipeline, this
will shift to 27% freehold and 73% leasehold.
New site openings in Germany and continued expansion in the UK resulted in
right-of-use assets increasing to £3.7bn (H1 FY25: £3.6bn) and lease
liabilities increasing to £4.3bn (H1 FY25: £4.2bn).
Return on Capital(1)
Returns H1 FY26 H1 FY25
Group ROCE(†) 10.3% 11.9%
UK ROCE(†) 11.8% 14.0%
1: Germany ROCE not disclosed as losses were incurred in the period
Group ROCE(†) in the period was 10.3% reflecting several factors including
lower UK revenues reflecting the impact of AGP, partially mitigated by
positive momentum in Germany.
Events after the balance sheet date
We have completed a further sale and leaseback transaction for a total
consideration of £25m since the period end, representing a net initial yield
of 5.1%.
Pension
The Group's defined benefit pension scheme, the Whitbread Group Pension Fund
(the 'Pension Fund'), had an IAS19 Employee Benefits surplus of £123m at the
end of the period (H1 FY25: £158m). The change in surplus was primarily
driven by: asset performance being lower than the discount rate; and higher
than expected inflation. This was partially offset by: an increase in
corporate bond yields resulting in an increase in the discount rate used to
value liabilities; and a reduction in expectations for future inflation.
There are currently no deficit reduction contributions being paid to the
Pension Fund, however over the 12 months to 28 August 2025, an annual
contribution of £12m was paid to the Fund through the Scottish Partnership
arrangements. The Trustee holds security over £532m of Whitbread's freehold
property which will remain at this level until no further obligations are due
under the Scottish Partnership arrangements, which is expected to be in 2026.
Following that, the security held by the Trustee will be the lower of: £500m;
and 120% of the buy-out deficit and will remain in place until there is no
longer a buy-out deficit. The Pension Fund is currently in the process of
conducting the triennial actuarial valuation of the Fund as at 31 March 2025.
Going concern
The directors have concluded that it is appropriate for the consolidated
financial statements to be prepared on the going concern basis. Full details
are set out in note 1 of the attached financial statements.
Risks and uncertainties
The directors have reviewed the Group's principal risks and uncertainties and
confirm that those outlined in the Annual Report and Accounts ('Annual
Report') 2024/25 remain relevant for the second half of the financial year.
These should be read in conjunction with the following updates reflecting the
evolving risk landscape.
The overall risk environment continues to be uncertain and changeable,
recognising the ongoing geo-political tensions and subdued growth in the UK
and Germany. Specifically in the UK we recognise the mounting pressure for tax
rises and broader fiscal tightening as part of the upcoming budget. There is a
risk that these measures could disproportionally impact hospitality and
property sectors, an issue we have actively lobbied against, in collaboration
with other industry groups. As a result, this has been reflected specifically
within the uncertain economic outlook risk and rated accordingly.
Remaining relevant to our customers and delivering great value remains
paramount whilst also being mindful of competitor activity. We see this risk
as being slightly elevated increasing the importance of our commercial plan
and guest-focused initiatives to protect against any potential loss of market
share.
We have also recognised the potential risk to our direct booking model from
the changing distribution landscape and emergence of AI-led searches,
especially in certain consumer groups such as the under-35's who are less
likely to go directly to a brand when finding accommodation. Our strategy is
to deepen our use of strategic partnerships with TMCs as well as explore the
use of OTAs whilst optimising our content for AI search and aligning with the
approach of major technology players.
We remain vigilant regarding cyber and data risk with significant assurance to
mitigate against incidents such as those experienced by a number of UK
businesses. With a number of strategic change programmes already underway,
this risk remains heightened due to their number and strategic importance,
although we take comfort from the governance and rigour applied by our
transformation team in managing the delivery of the programmes.
The funding of the strategic plan requires a significant level of property
refinancing via sale and leasebacks. While this has been raised to a principal
risk due to timing and value dependencies, it is also mitigated by a strong
and established control framework and the availability of alternative
financing options.
Finally, we recognise the increased risk likelihood in Germany where softer
than expected hotel market demand in the second quarter has slowed progress
and resulted in the moderation of our planned profitability target for the
year.
The following summarises the risks and uncertainties set out in the Annual
Report including current emerging themes and new principal risks:
· uncertain economic outlook leads to changeable hotel demand and
inflationary cost pressures;
· cyber attacks and data breaches resulting in operational
disruption and loss of income;
· failure to deliver strategic business change programmes due to
the number of programmes that time-critical, for example, the replacement of
legacy technology systems and estate optimisation via AGP;
· extended focus on the food and beverage proposition which can
impact RevPAR due to guest disruption and operational challenges;
· change in brand-led customer demand for our products and services
can be impacted by sector specific factors resulting in a loss of market
share;
· changing distribution landscape and emergence of AI-led search
reducing direct bookings;
· inability to execute our strategy in Germany, impacting
profitable growth;
· extended stagnation of the UK & German property market slows
growth;
· adverse publicity and brand damage due to death or serious
injury;
· change in macro labour market and organisational structure
impacting talent, attraction and retention;
· business interruption within our supply chain and third-party
arrangements;
· inability to execute significant property-related financing
within required timeframes; and
· uncertainty associated with the collective environmental, social
and governance risks including climate change and compliance with the volume
of new regulations.
Our Board and management team continue to review and monitor our risk profile
closely, with regular reviews of emerging external and internal trends. We
remain committed to maintaining robust risk management and internal control
frameworks to ensure resilience and agility in navigating the evolving
operating environment.
The detail of our principal risks can be found on pages 64 to 69 of the Annual
Report which is available on the website www.whitbread.co.uk
(http://www.whitbread.co.uk) .
American Depositary Receipts
Whitbread has established a sponsored Level 1 American Depositary Receipt
('ADR') programme for which JP Morgan perform the role of depositary bank. The
Level 1 ADR programme trades on the U.S. over the counter ('OTC') markets
under the symbol WTBDY (it is not listed on a U.S. stock exchange).
Notes
(†)The Group uses certain APMs to help evaluate the Group's financial
performance, position and cashflows, and believes that such measures provide
an enhanced understanding of the Group's results and related trends and allow
for comparisons of the financial performance of the Group's businesses either
from one period to another or with other similar businesses. However, APMs are
not defined by IFRS and therefore may not be directly comparable with
similarly titled measures reported by other companies. APMs should be
considered in addition to, and are not intended to be a substitute for, or
superior to, IFRS measures. APMs used in this announcement include
like-for-like revenue, revenue per available room ('RevPAR'), average room
rate ('ARR'), direct bookings/distribution, adjusted operating profit /
(loss), return on capital employed ('ROCE'), adjusted pre-tax profit margins,
adjusted profit / (loss) before tax, adjusted basic profit / earnings per
share, net cash / (debt), net cash / (debt) and lease liabilities,
lease-adjusted net debt / (cash), lease-adjusted net debt to adjusted EBITDAR
for leverage, adjusted operating cashflow, adjusted EBITDA (post-IFRS 16),
adjusted EBITDA (pre-IFRS 16) and adjusted EBITDAR. Further information can be
found in the glossary and reconciliation of APMs at the end of this document.
Cautionary Statement
Nothing contained in this announcement is intended to constitute an offer,
invitation or inducement to engage in an investment activity for the purposes
of the prohibition on financial promotions under the Financial Services and
Markets Act 2000. In making this announcement available, Whitbread PLC makes
no recommendation to purchase, sell or otherwise deal in shares in Whitbread
PLC or any other securities or investments whatsoever and you should neither
rely nor act upon, directly or indirectly, any of the information contained in
this announcement in respect of such investment activity.
No representations, express or implied, are given in, or in respect of, this
announcement. To the extent permitted by law, Whitbread PLC, and its
subsidiaries, shareholders, affiliates, representatives, partners, directors,
officers, employees, advisors or agents shall not be liable for any direct,
indirect or consequential loss or loss of profit arising from the use of this
announcement, its content or otherwise arising in connection therewith.
Certain statements included or incorporated by reference within this
announcement may constitute "forward looking statements" in respect of
Whitbread PLC's operations, performance, prospects and/or financial condition.
Forward looking statements are sometimes, but not always, identified by their
use of a date in the future or such words as "momentum", "transform", "plan",
"continue", "pathway", "roadmap", "transition", "anticipate" "intend",
"expect", "target", "potential ", "outlook", "future" or "accelerate"
(including in their negative form). Such statements are based on Whitbread
PLC's current expectations and beliefs concerning future events and are
subject to a number of known and unknown risks and uncertainties that could
cause actual events or results to differ materially from any expected future
events or results referred to in these forward looking statements. Such
statements are also based on numerous assumptions regarding Whitbread PLC's
present and future strategy and the environment in which it operates, which
may not be accurate. Whitbread PLC undertakes no obligation to update any
forward looking statements contained in this announcement or any other forward
looking statements it may make.
Nothing in this announcement should be construed as a profit forecast. Past
performance cannot be relied upon as a guide to future performance and persons
needing advice should consult an independent financial advisor.
( )
Interim consolidated income statement
(Reviewed) (Reviewed)
6 months to 28 August 2025 6 months to 29 August 2024
Adjusted Adjusting items Total Adjusted Adjusting items Total
(Note 4) (Note 4)
Continuing operations Notes £m £m £m £m £m £m
Revenue 2 1,541.0 - 1,541.0 1,569.8 - 1,569.8
Other income 2.5 1.0 3.5 2.9 0.9 3.8
Operating costs 3 (1,149.6) (29.4) (1,179.0) (1,160.7) (32.1) (1,192.8)
Operating profit before joint ventures 393.9 (28.4) 365.5 412.0 (31.2) 380.8
Share of profit from joint ventures 1.0 - 1.0 0.8 - 0.8
Operating profit 2 394.9 (28.4) 366.5 412.8 (31.2) 381.6
Finance costs 5 (101.6) - (101.6) (93.6) - (93.6)
Finance income 5 22.3 - 22.3 21.2 - 21.2
Profit before tax 2 315.6 (28.4) 287.2 340.4 (31.2) 309.2
Tax expense 6 (81.2) 10.9 (70.3) (91.2) 1.9 (89.3)
Profit for the period 234.4 (17.5) 216.9 249.2 (29.3) 219.9
(Reviewed) (Reviewed)
6 months to 28 August 2025 6 months to 29 August 2024
Earnings per share (Note 7) pence pence pence pence pence pence
Basic 133.7 (10.0) 123.7 137.1 (16.1) 121.0
Diluted 132.5 (9.9) 122.6 136.1 (16.0) 120.1
Interim consolidated statement of comprehensive income
Notes (Reviewed) (Reviewed)
6 months to 28 August 2025 6 months to 29 August 2024
£m £m
Profit for the period 216.9 219.9
Items that will not be reclassified to the income statement:
Remeasurement loss on defined benefit pension scheme 15 (14.9) (11.8)
Current tax on defined benefit pension scheme 6 0.6 (1.0)
Deferred tax on defined benefit pension scheme 6 3.0 3.8
(11.3) (9.0)
Items that may be reclassified subsequently to the income statement:
Net (loss)/gain on cash flow hedges:
Net fair value movement (0.1) 4.9
Reclassified and reported in the consolidated income statement 1.6 4.0
Deferred tax on cash flow hedges 6 (0.3) (2.2)
Net (loss)/gain on hedge of a net investment (26.1) 8.2
Current tax on hedge of a net investment 6 2.4 (1.0)
Cost of hedging 0.5 0.5
(22.0) 14.4
Exchange differences on translation of foreign operations 23.1 (12.9)
Current tax on exchange differences on translation of foreign operations 6 (2.8) 1.3
20.3 (11.6)
Other comprehensive loss for the period, net of tax (13.0) (6.2)
Total comprehensive income for the period, net of tax 203.9 213.7
Interim consolidated statement of changes in equity
6 months to 28 August 2025 (Reviewed)
Share Share Capital Retained Currency Other Total
capital premium redemption earnings translation reserves £m
£m £m reserve £m reserve £m
£m £m
At 27 February 2025 145.2 1,038.7 70.3 4,437.7 22.0 (2,379.4) 3,334.5
Profit for the period - - - 216.9 - - 216.9
Other comprehensive (loss)/income - - - (11.3) 4.0 (5.7) (13.0)
Total comprehensive income - - - 205.6 4.0 (5.7) 203.9
Ordinary shares issued on exercise of employee share options 0.1 1.9 - - - - 2.0
Loss on ESOT shares issued - - - (8.4) - 8.4 -
Accrued share-based payments - - - 8.4 - - 8.4
Tax on share-based payments - - - 0.5 - - 0.5
Equity dividends paid (Note 8) - - - (106.5) - - (106.5)
Share buy-back, commitment and cancellation (1.9) - 1.9 (250.3) - - (250.3)
At 28 August 2025 143.4 1,040.6 72.2 4,287.0 26.0 (2,376.7) 3,192.5
6 months to 29 August 2024 (Reviewed)
Share Share Capital Retained Currency Other Total
capital premium redemption earnings translation reserves £m
£m £m reserve £m reserve £m
£m £m
At 29 February 2024 151.8 1,031.8 63.5 4,645.3 25.9 (2,398.9) 3,519.4
Profit for the period - - - 219.9 - - 219.9
Other comprehensive (loss)/income - - - (9.0) (3.9) 6.7 (6.2)
Total comprehensive income - - - 210.9 (3.9) 6.7 213.7
Ordinary shares issued on exercise of employee share options 0.1 1.5 - - - - 1.6
Loss on ESOT shares issued - - - (6.4) - 6.4 -
Accrued share-based payments - - - 8.5 - - 8.5
Tax on share-based payments - - - (0.4) - - (0.4)
Equity dividends paid (Note 8) - - - (114.9) - - (114.9)
Share buy-back, commitment and cancellation (4.3) - 4.3 (151.0) - - (151.0)
At 29 August 2024 147.6 1,033.3 67.8 4,592.0 22.0 (2,385.8) 3,476.9
Interim consolidated balance sheet
(Reviewed) (Reviewed) (Audited)
Notes 28 August 2025 29 August 2024 27 February 2025
£m £m £m
Non-current assets
Intangible assets 166.1 180.8 174.3
Right-of-use assets 3,725.1 3,638.8 3,662.7
Property, plant and equipment 9 4,918.0 4,583.9 4,677.4
Investment in joint ventures 51.7 49.4 54.4
Derivative financial instruments - 14.9 -
Deferred tax assets 1.4 - -
Defined benefit pension surplus 15 123.3 157.6 134.6
8,985.6 8,625.4 8,703.4
Current assets
Inventories 16.8 19.2 17.1
Derivative financial instruments 3.9 - 19.9
Trade and other receivables 126.6 116.7 127.1
Cash and cash equivalents 830.6 625.3 909.0
977.9 761.2 1,073.1
Assets classified as held for sale 11 61.7 139.8 128.2
Total assets 10,025.2 9,526.4 9,904.7
Current liabilities
Borrowings 450.0 - 450.0
Lease liabilities 174.2 158.2 167.0
Provisions 15.3 9.9 27.6
Derivative financial instruments - 7.0 1.4
Current tax liabilities 2.1 5.9 12.2
Trade and other payables 655.1 610.8 660.8
Other financial liabilities - share buy-back commitment 13 175.2 - -
1,471.9 791.8 1,319.0
Non-current liabilities
Borrowings 943.3 995.6 942.4
Lease liabilities 4,146.9 4,013.3 4,066.8
Provisions 6.7 8.6 7.2
Derivative financial instruments 7.4 - -
Deferred tax liabilities 256.5 240.2 234.8
5,360.8 5,257.7 5,251.2
Total liabilities 6,832.7 6,049.5 6,570.2
Net assets 3,192.5 3,476.9 3,334.5
Equity
Share capital 13 143.4 147.6 145.2
Share premium 1,040.6 1,033.3 1,038.7
Capital redemption reserve 72.2 67.8 70.3
Retained earnings 4,287.0 4,592.0 4,437.7
Currency translation reserve 26.0 22.0 22.0
Other reserves (2,376.7) (2,385.8) (2,379.4)
Total equity 3,192.5 3,476.9 3,334.5
Interim consolidated cash flow statement
Notes (Reviewed) (Reviewed)
6 months to 28 August 2025 6 months to 29 August 2024
£m £m
Cash generated from operations 14 590.9 552.9
Payments against provisions (16.9) (1.5)
Defined benefit pension scheme payments 15 (2.9) (2.9)
Interest paid on lease liabilities (85.6) (82.8)
Interest paid on other items (21.7) (15.6)
Interest received 19.1 17.7
Corporation taxes paid (57.0) (34.0)
Net cash flows from operating activities 425.9 433.8
Cash flows used in investing activities
Purchase of property, plant and equipment 2 (319.4) (185.5)
Proceeds from disposal of property, plant and equipment 95.5 44.2
Investment in intangible assets 2 (8.2) (11.9)
Payment of deferred and contingent consideration - (1.9)
Net cash flows used in investing activities (232.1) (155.1)
Cash flows used in financing activities
Proceeds from issue of ordinary shares 2.0 1.6
Payment of facility fees - (0.8)
Net lease incentives (paid)/received (3.7) 2.9
Payment of principal of lease liabilities (89.8) (75.0)
Purchase of own shares, including transaction costs (75.1) (163.3)
Dividends paid (106.5) (114.9)
Net cash flows used in financing activities (273.1) (349.5)
Net decrease in cash and cash equivalents 12 (79.3) (70.8)
Opening cash and cash equivalents 12 909.0 696.7
Foreign exchange differences 12 0.9 (0.6)
Closing cash and cash equivalents 830.6 625.3
Notes to the consolidated financial statements
1. Basis of accounting and preparation
The interim condensed consolidated financial statements were authorised for
issue in accordance with a resolution of the Board of Directors on 15 October
2025.
The financial information for the year ended 27 February 2025 is extracted
from the statutory accounts of the Group for that year and does not constitute
statutory accounts as defined in Section 434 of the Companies Act 2006. A copy
of the statutory accounts for that year has been delivered to the Registrar of
Companies. These published accounts were reported on by the auditor without
qualification, did not draw attention to any matters by way of emphasis and
did not contain a statement under Sections 498(2) or (3) of the Companies Act
2006.
The interim condensed consolidated financial statements are prepared in
accordance with UK listing rules and with United Kingdom adopted IAS 34
Interim Financial Reporting. The interim condensed consolidated financial
statements for the six months ended 28 August 2025 and the comparatives to 29
August 2024 are unaudited but have been reviewed by the auditor; a copy of
their review report is included at the end of this report.
Going concern
A combination of the strong cash flows generated by the business and the
sufficient available headroom on its credit facilities supports the directors'
view that the Group has sufficient funds available to meet its foreseeable
working capital requirements. At the balance sheet date, these credit
facilities include both the £400m notes issued in February 2025 and the
£450m notes maturing in October 2025. In reaching this conclusion, the
directors have considered all elements of the capital allocation framework.
The directors have also determined that, over the period of the going concern
assessment, there is not expected to be a significant impact as a result of
climate change.
The directors have therefore concluded that the going concern basis of
preparation remains appropriate.
Accounting policies
The accounting policies adopted in the preparation of the interim condensed
consolidated financial statements are consistent with those followed in the
preparation of the Group's annual financial statements for the year ended 27
February 2025.
As a result of the adjusting items recorded in the period, the accounting
policy used in determining adjusting items is set out below.
Adjusting items and use of alternative performance measures
We use a range of measures to monitor the financial performance of the Group.
These measures include both statutory measures in accordance with IFRS and
alternative performance measures (APMs) which are consistent with the way the
business performance is measured internally by the Board and Executive
Committee. A glossary of APMs and reconciliations to statutory measures is
given at the end of this report.
The term adjusted profit is not defined under IFRS and may not be directly
comparable with adjusted profit measures used by other companies. It is not
intended to be a substitute for, or superior to, statutory measures of profit.
Adjusted measures of profitability are non-IFRS because they exclude amounts
that are included in, or include amounts that are excluded from, the most
directly comparable measure calculated and presented in accordance with IFRS.
The Group makes certain adjustments to the statutory profit measures in order
to derive many of its APMs. The Group's policy is to exclude items that are
considered to be significant in nature and quantum, not in the normal course
of business or are consistent with items that were treated as adjusting in
prior periods or that span multiple financial periods. Treatment as an
adjusting item provides users of the accounts with additional useful
information to assess the year-on-year trading performance of the Group.
On this basis, the following are examples of items that may be classified as
adjusting items:
· net charges associated with the strategic review of the Group's
hotel and restaurant property estate;
· significant restructuring costs and other associated costs
arising from strategy changes that are not considered by the Group to be part
of the normal operating costs of the business;
· significant pension charges arising as a result of changes to UK
defined benefit scheme practices;
· net impairment and related charges for sites which are/were
underperforming that are considered to be significant in nature and/or value
to the trading performance of the business;
· costs in relation to non-trading legacy sites which are deemed to
be significant and not reflective of the Group's ongoing trading results;
· transformation and change costs associated with the
implementation of the Group's strategic IT programmes;
· profit or loss on the sale of a business or investment, and the
associated cost impact on the continuing business from the sale of the
business or investment;
· acquisition costs incurred as part of a business combination or
other strategic asset acquisitions;
· amortisation of intangible assets recognised as part of a
business combination or other transaction outside of the ordinary course of
business; and
· tax settlements in respect of prior years, including the related
interest and the impact of changes in the statutory tax rate, the inclusion of
which would distort year-on-year comparability, as well as the tax impact of
the adjusting items identified above.
The Group income statement is presented in a columnar format to enable users
of the accounts to see the Group's performance before adjusting items, the
adjusting items, and the statutory total on a line-by-line basis. The
directors believe that the adjusted profit and earnings per share measures
provide additional useful information to shareholders on the performance of
the business. These measures are consistent with how business performance is
measured internally by the Board and Executive Committee.
Seasonality
The Group operates hotels and restaurants, located in the UK and
internationally. The Group generally earns higher profits during the first
half of the financial year because of lower demand in the final quarter of the
financial year.
Critical accounting judgements and key sources of estimation uncertainty
With the exception of the performance of impairment reviews of the Group's
property, plant and equipment, right-of-use assets and useful economic life
review of AGP site extensions and conversions, in preparing these condensed
consolidated financial statements the critical judgements made by management
in applying the Group's accounting policies and the key sources of estimation
uncertainty were principally the same as those applied to the Group's
consolidated financial statements for the year ended 27 February 2025.
The Group has considered the impact of climate-related risks on its financial
performance and position, and although the impact represents an uncertainty,
it is not considered to be material.
Critical accounting judgements
The following are the critical accounting judgements, apart from those
involving estimations (dealt with separately below) that management has made
in the process of applying the Group's accounting policies and which have the
most significant effect on the amounts recognised in the financial statements.
Adjusting items
During the year certain items are identified and separately disclosed as
adjusting items. Judgement is applied as to whether the item meets the
necessary criteria as per the accounting policy disclosed earlier in this
note. This assessment covers the nature of the item, cause of occurrence and
the scale of impact of that item on reported performance. Reversals of
previous adjusting items are assessed based on the same criteria. Note 4
provides information on all of the items disclosed as adjusting in the current
year and comparative financial statements.
Assets held for sale
Assets are classified as held for sale only if the asset is available for
immediate sale in their present condition and a sale is highly probable
and expected to be completed within one year from the date of classification.
As a result of the Group's Accelerating Growth Plan the Group is actively
marketing a significant number of sites. Judgement exists on a site-by-site
basis as to whether the sale will complete within one year. In exercising its
judgement management has taken into consideration all available information
including external market expert advice.
Recognition of German Deferred Tax Asset
The Group, through its market entry in Germany, has generated tax losses that
will be available for offset against future taxable profits. These losses have
resulted in a material unrecognised deferred tax asset of £74.3m
(unrecognised tax losses carried forward of £274.1m) at this balance sheet
date. If the Group were to fully recognise the deferred tax asset in this
financial year it would have the effect of reducing the Group's effective tax
rate from 24.5% to (3.6)%.
The German reportable segment's results have continued to improve, with this
forecast to continue in future reporting periods. However, the forecasts used
to support whether sufficient positive evidence exists to recognise the
deferred tax asset are instead based on the German taxable profits profile.
Following this assessment, the Group has judged that at the balance sheet date
there remains to be insufficient convincing other evidence, as required under
IAS 12, that it will have sufficient taxable profits to realise the above
deferred tax asset at this time.
In July 2025, the German legislator substantively enacted a reduction to the
corporate income tax rate by 1 percentage point per annum over a five-year
period, commencing in 2028 and concluding in 2032. This phased reduction will
lower the statutory corporate income tax rate from 15% to 10% by 2032. Trade
taxes have not been amended and as a result the Group's German average blended
tax rate under IAS 12 will lower from 32% to 27%. The unrecognised deferred
tax asset above has been calculated accordingly.
Useful economic life review - AGP site extensions and conversions
Where site extensions or conversions are committed as part of Whitbread's
Accelerating Growth Plan, the Group commences accelerated depreciation on
assets that will no longer be used after the site redevelopment. The Group's
key judgement here has been assessing that the trigger point for commitment to
the extension or conversion is from the date that the site has both planning
permission and an approved internal business case to proceed.
From this point, the remaining useful life of affected assets is reassessed
with an estimated end date aligned with when the asset will no longer be used.
The resulting depreciation charge, along with any write-offs of similar assets
that have been disposed of as at the balance sheet date, are treated as
adjusting items.
Key sources of estimation uncertainty
The following are the key areas of estimation uncertainty that may have a
significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year.
Defined benefit pension
Defined benefit pension plans are accounted for in accordance with actuarial
advice using the projected unit credit method. The Group makes significant
estimates in relation to the discount rates, mortality rates and inflation
rates used to calculate the present value of the defined benefit obligation.
Note 15 describes the assumptions used together with an analysis of the
sensitivity to changes in key assumptions.
Impairment testing - Property, plant and equipment and right-of-use assets
The performance of the Group's impairment review requires management to make a
number of judgements and estimates which are presented together below for ease
of understanding but identified separately:
Estimates within impairment testing:
Inputs used to estimate value in use
The estimate of value in use is most sensitive to the following inputs:
· Forecast period cashflows - the initial five-year period's
cashflows are drawn from the five-year business plan.
· Discount rate - judgement is required in estimating the weighted
average cost of capital (WACC) of a typical market participant and in
assessing the specific country and currency risks associated with the Group.
The rate used is adjusted for the Group's gearing, including equity,
borrowings and lease liabilities.
· Maturity profile of individual sites - judgement is required to
estimate the time taken for sites to reach maturity and the sites' trading
level once they are mature.
Methodology used to estimate fair value
Fair value is determined using a range of methods, including present value
techniques using assumptions consistent with the value in use calculations and
market multiple techniques using externally available data. For the purpose of
assessing fair value for sites, the Group has sought expert valuations based
on insight into local market specific factors.
Judgements within impairment testing:
Strategic impact on composition of CGUs
The Group has judged that where there is a commitment and expectation that
part of a trading site's value will be realised through a sale, an impairment
review should be completed on the trading site as separate cash generating
unit (CGU). This is due to the change in how the Group now expects to receive
cashflows from the trading site's assets which are largely independent.
Identification of indicators of impairment and reversal
The Group assesses each of its CGUs for indicators of impairment or reversal
at the end of each reporting period and, where there are indicators of
impairment or reversal, management performs an impairment assessment.
2. Segment information
The Group provides services in relation to accommodation, food and beverage
both in the UK and internationally. Management monitors the segment
performance separately for the purpose of making decisions about allocating
resources and assessing performance. Segment performance is measured based on
segment adjusted profit/(loss), defined below. Included within central and
other in the following tables are the costs of running the public company,
other central overhead costs and share of profit from joint ventures.
The following tables present revenue and profit information regarding business
operating segments for the periods ended 28 August 2025 and 29 August 2024.
6 months to 28 August 2025 6 months to 29 August 2024
Revenue UK & Ireland(1) Germany(2) Central and other Total UK & Ireland(1) Germany(2) Central and other Total
£m £m £m £m £m £m £m £m
Accommodation 1,085.4 106.0 - 1,191.4 1,088.8 99.0 - 1,187.8
Food and beverage 311.2 15.2 - 326.4 349.2 12.8 - 362.0
Other 19.6 3.6 - 23.2 17.0 3.0 - 20.0
Revenue 1,416.2 124.8 - 1,541.0 1,455.0 114.8 - 1,569.8
6 months to 28 August 2025 6 months to 29 August 2024
Profit/(loss) UK & Ireland(1) Germany(2) Central and other Total UK & Ireland(1) Germany(2) Central and other Total
£m £m £m £m £m £m £m £m
Adjusted operating profit/(loss) 408.1 4.9 (18.1) 394.9 429.6 1.3 (18.1) 412.8
Segmental royalty fees(3) (2.9) 2.9 - - - - - -
Segment adjusted operating profit/(loss) 405.2 7.8 (18.1) 394.9 429.6 1.3 (18.1) 412.8
Net finance (costs)/income (74.4) (11.1) 6.2 (79.3) (72.2) (10.6) 10.4 (72.4)
Segment adjusted profit/(loss) before tax 330.8 (3.3) (11.9) 315.6 357.4 (9.3) (7.7) 340.4
Adjusting items before tax (Note 4) (28.4) (31.2)
Profit before tax 287.2 309.2
6 months to 28 August 2025 6 months to 29 August 2024
Other segment information UK & Ireland(1) Germany(2) Central and other Total UK & Ireland(1) Germany(2) Central and other Total
£m £m £m £m £m £m £m £m
Capital expenditure:
Property, plant and equipment - cash basis 262.6 56.8 - 319.4 159.3 26.2 - 185.5
Property, plant and equipment - accruals basis 267.9 55.0 - 322.9 151.6 25.6 - 177.2
Intangible assets 7.8 0.4 - 8.2 11.5 0.4 - 11.9
Cash outflows from lease interest and payment of principal of lease 146.1 29.3 - 175.4 131.0 26.8 - 157.8
liabilities
Depreciation - property, plant and equipment 81.6 7.6 - 89.2 78.4 8.0 - 86.4
Depreciation - right-of-use assets 79.7 21.4 - 101.1 75.5 20.7 - 96.2
Amortisation 16.5 0.1 - 16.6 16.1 - - 16.1
(1) The UK and Ireland segment includes operations of the Group within Crown
Dependencies.
(2) The Germany segment includes operations of the Group within Austria.
(3) Royalty fees are charged from the UK to other geographies.
Segment assets and liabilities are not disclosed because they are not reported
to, or reviewed by, the Chief Operating Decision Maker.
The Group's revenue, split by country in which the legal entity resides, is as 6 months to 28 August 2025 6 months to 29 August 2024
follows:
£m £m
United Kingdom 1,389.8 1,430.6
Germany 123.3 112.4
Ireland 18.7 16.4
Other 9.2 10.4
1,541.0 1,569.8
The Group's non-current assets(1), split by country in which the legal entity 28 August 2025 29 August 2024
resides, are as follows:
£m £m
United Kingdom 7,225.3 6,943.1
Germany 1,334.9 1,228.1
Ireland 195.7 179.6
Other 106.4 102.1
8,862.3 8,452.9
(1) Non-current assets exclude derivative financial instruments and the
surplus on the Group's defined benefit pension scheme.
3. Operating costs
6 months to 28 August 2025 6 months to 29 August 2024
£m £m
Cost of inventories recognised as an expense 116.4 120.1
Employee benefits expense 404.3 427.0
Amortisation of intangible assets 16.6 16.1
Depreciation - property, plant and equipment (Note 9) 89.2 86.4
Depreciation - right-of-use-assets 101.1 96.2
Utilities 60.7 63.0
Rates 61.0 52.7
Other site property costs 244.1 241.8
Variable lease payment expense 1.6 2.4
Net foreign exchange differences (0.6) 0.2
Other operating charges 55.2 54.8
Adjusting operating costs (Note 4) 29.4 32.1
1,179.0 1,192.8
4. Adjusting items
As set out in the policy in Note 1, we use a range of measures to monitor the
financial performance of the Group. These measures include both statutory
measures in accordance with IFRS and APMs which are consistent with the way
that the business performance is measured internally. We report adjusted
measures because we believe they provide both management and investors with
useful additional information about the financial performance of the Group's
businesses. Adjusted measures of profitability represent the equivalent IFRS
measures adjusted for specific items that we consider hinder the comparison of
the financial performance of the Group's businesses either from one period to
another or with other similar businesses.
6 months to 28 August 2025 6 months to 29 August 2024
£m £m
Other income:
Legal claim settlements and insurance proceeds(1) 1.0 0.9
Adjusting other income 1.0 0.9
Operating costs:
Net impairment charges - property, plant and equipment, right-of-use assets (1.7) (13.2)
and assets held for sale(2)
Accelerating Growth Plan-related net impairment charges and write-offs(3) (19.3) (23.2)
Net gains on disposals, property and other provisions(4) - 30.9
Strategic IT programme costs(5) (5.0) (13.2)
Strategic F&B programme costs(6) (1.1) (13.4)
Strategic supply chain programme costs(7) (1.1) -
Other restructuring costs(8) (1.2) -
Adjusting operating costs (29.4) (32.1)
Adjusting items before tax (28.4) (31.2)
Tax on adjusting items 8.6 1.9
Impact of change in tax rates(9) 2.3 -
Adjusting tax credit 10.9 1.9
( )
(1) During the period, the Group received settlements of £1.0m in relation to
insurance claims for damaged inventory. In the comparative period, the Group
received settlements for business interruption insurance claims of £0.9m.
(2) During the period, impairments have been recognised on assets transferred
to assets held for sale in the year of £1.7m (HY25: £2.9m). There were no
other indicators of impairment or impairment reversals and as such, no
impairment assessment was performed on other assets.
In the comparative period, the Group has identified cash-generating unit
specific indicators of impairment and impairment reversals in relation to
sites identified as higher risk and sites impacted by the Accelerating Growth
Plan. For those sites identified as higher risk an adjusting impairment charge
of £10.3m has been recognised (£8.0m impairment charge relating to property,
plant and equipment and £2.3m relating to right-of-use assets). In addition,
impairments have been recognised on assets transferred to assets held for sale
in the year of £2.9m. This brings the total adjusting net impairment charges
outside of the Group's Accelerating Growth Plan-related to £13.2m, within
operating costs.
Further information is provided in Note 10.
(3) Included in the amounts recorded for impairment this period are
impairments as a result of the Group continuing with the optimisation of the
UK F&B strategy, the Accelerating Growth Plan, totalling £1.5m of
impairment (HY25: reversal of £1.4m).
This also includes accelerated depreciation of £17.8m (HY25: £nil)
arising from site extensions and conversions in relation to the AGP to
transform a number of the Group's branded restaurants. The trigger point for
commitment to the extension or conversion is from the date that the site has
both planning permission and an approved internal business case to proceed.
From this point, the useful life of affected assets is reassessed to the
expected completion date of the redevelopment.
At this time the Group expects to incur further accelerated depreciation
within adjusting items totalling between £40.0m and £60.0m.
During the comparative period, the net impairment of £23.2m is comprised of
impairment charges on sites of £29.0m (£17.0m relating to property, plant
and equipment, £9.1m relating to right-of-use assets and £2.9m relating to
assets held for sale) offset by impairment reversals of £5.8m (£1.3m
relating to property, plant and equipment and £4.5m relating to assets held
for sale).
(4) During the period, the Group made gains on property disposals (including
sale and leasebacks with proceeds of £73.9m) of £2.9m (HY25: £30.9m). The
Group has created a property-related provision of £4.2m whilst it also
released a provision in relation to historic tax positions of £1.3m. There
are no gains or losses recognised in other comprehensive income with respect
to these assets. Sites are classified as held for sale only if they are
available for immediate sale in their present condition and a sale is highly
probable and expected to be completed within one year from the date of
classification. If a site no longer meets these criteria at future reporting
dates it is transferred back.
(5) The Group has assessed the presentation of costs incurred in relation to
the current and future strategic IT programme implementations. The recent
programmes have included the Group's Hotel Management System, HR & Payroll
System, Restaurant System and Strategic Network. These represent significant
business change costs for the Group rather than replacements of IT systems
with the System products being Software as a Service (SaaS). The start date of
these projects varies and as such we expect costs to be incurred within this
category over the next few financial years, with their commercial and
strategic benefit seen as lasting several years.
Cash costs incurred on the programmes and presented within adjusting items in
the period were £5.0m, with cumulative cash costs to date being £70.7m
(FY25: £65.7m). At this time the Group expects to incur future costs
presented within adjusting items across future financial periods as follows:
during the financial year ended 2026 between £2.5m and £7.5m and during the
financial year ended 2027 up to £5.0m.
(6) The Group has incurred legal, advisory and project management costs
regarding the announced changes to facilitate the AGP. This programme
represents a significant business change for the Group's strategic focus in
relation to F&B. Cash costs incurred on the programmes and presented
within adjusting items in the period were £1.1m, with cumulative cash costs
to date being £26.9m. At this time the Group expects to incur future cash
costs presented within this adjusting item across the next three financial
years of up to £10.0m.
(7) As part of the Group's strategic supply chain programme the Group has
incurred costs of £1.1m in relation to associated IT and project management
costs (FY25: £24.1m in relation to contract exit fees in relation to a
supplier). This decision allows the Group to make use of a different supply
model and it is expected the commercial and strategic benefit will be seen
over several years.
(8) During the period, the Group has restructured its UK Support Centre
resulting in a charge of £1.2m.
(9) In July 2025, the German government substantively enacted legislation to
reduce the corporate income tax rate by 1 percentage point per annum over a
five-year period, commencing in 2028 and concluding in 2032. The change has
resulted in the remeasurement of certain deferred tax assets and liabilities
which are forecast to be utilised or to crystalise from 2028. As a result, a
credit of £2.3m is recorded in the income statement.
5. Finance (costs)/income
6 months to 28 August 2025 6 months to 29 August 2024
£m £m
Finance costs
Interest on bank loans and overdrafts (2.5) (2.4)
Interest on other loans (23.5) (12.1)
Interest on lease liabilities (85.6) (82.8)
Interest capitalised 10.5 4.2
Cost of hedging (0.5) (0.5)
(101.6) (93.6)
Finance income
Bank interest receivable 18.6 17.0
IAS 19 pension net finance income (Note 15) 3.7 4.2
22.3 21.2
Total net finance costs (79.3) (72.4)
6. Taxation
The Group effective tax rate applied to the profit before tax before adjusting
items for the six months to 28 August 2025 is 25.7% (HY25: 26.8%). The tax
charge for the six months to 28 August 2025 has been calculated in line with
IAS 34 by applying the effective rate of tax which is expected to apply in
each jurisdiction in which the Group operates for the year ending 26 February
2026.
A UK current and deferred tax rate of 25.0% has been applied to discrete and
adjusting items.
A forecast effective tax rate of 0.0% has been applied to the German pre-tax
loss as the Group does not currently deem it appropriate to recognise a net
deferred tax asset in this jurisdiction. The impact on the effective tax rate
from the non-recognition of German tax losses in the current period is 1.9%
(HY25: 0.7%).
6 months to 28 August 2025 6 months to 29 August 2024
Consolidated income statement £m £m
Current tax:
Current tax expense 47.0 29.0
47.0 29.0
Deferred tax:
Origination and reversal of temporary differences 25.6 60.3
Effect of in-year rate differential/change in tax rates (2.3) -
23.3 60.3
Tax reported in the consolidated income statement 70.3 89.3
Consolidated statement of other comprehensive income 6 months to 28 August 2025 6 months to 29 August 2024
£m £m
Current tax:
Defined benefit pension scheme (0.6) 1.0
Tax on net movement on hedge of a net investment (2.4) 1.0
Tax on exchange differences on translation of foreign operations 2.8 (1.3)
(0.2) 0.7
Deferred tax:
Cash flow hedges 0.3 2.2
Defined benefit pension scheme (3.0) (3.8)
(2.7) (1.6)
Tax reported in other comprehensive income (2.9) (0.9)
In July 2025, the German legislator substantively enacted a reduction to the
corporate income tax rate by 1 percentage point per annum over a five-year
period, commencing in 2028 and concluding in 2032. This phased reduction will
lower the statutory corporate income tax rate from 15% to 10% by 2032. Trade
taxes have not been amended and as a result the Group's German average blended
tax rate under IAS 12 will lower from 32% to 27%. The unrecognised deferred
tax asset above has been calculated accordingly.
The Group has unrecognised German tax losses of £274.1m (FY25: £253.6m).
Recognition of these in their entirety would increase deferred tax assets
reported by £74.3m (FY25: £80.9m).
7. Earnings per share
The basic earnings per share (EPS) figures are calculated by dividing the net
profit/(loss) for the period attributable to ordinary shareholders of the
parent by the weighted average number of ordinary shares in issue during the
period after deducting treasury shares and shares held by an independently
managed employee share ownership trust (ESOT).
The diluted earnings per share figures allow for the dilutive effect of the
conversion into ordinary shares of the weighted average number of options
outstanding during the period. Where the average share price for the period is
lower than the option price, the options become anti-dilutive and are excluded
from the calculation.
The number of shares used for the earnings per share calculations are as
follows:
6 months to 28 August 2025 6 months to 29 August 2024
million million
Basic weighted average number of ordinary shares 175.3 181.8
Effect of dilution - share options 1.6 1.3
Diluted weighted average number of ordinary shares 176.9 183.1
The total number of shares in issue at the reporting period date, as used in
the calculation of the basic weighted average number of ordinary shares, was
186.5m, less 12.5m treasury shares held by Whitbread PLC and 0.5m held by the
ESOT.
The profits used for the earnings per share calculations are as follows:
6 months to 28 August 2025 6 months to 29 August 2024
£m £m
Profit for the period attributable to parent shareholders 216.9 219.9
Adjusting items before tax (Note 4) 28.4 31.2
Adjusting tax credit (Note 4) (10.9) (1.9)
Adjusted profit for the period attributable to parent shareholders 234.4 249.2
6 months to 28 August 2025 6 months to 29 August 2024
pence pence
Basic EPS on profit for the period 123.7 121.0
Adjusting items before tax 16.2 17.2
Adjusting tax credit (6.2) (1.1)
Basic EPS on adjusted profit for the period 133.7 137.1
Diluted EPS on profit for the period 122.6 120.1
Diluted EPS on adjusted profit for the period 132.5 136.1
8. Dividends paid and proposed
6 months to 28 August 2025 6 months to 29 August 2024
pence per share £m pence per £m
share
Final dividend, proposed and paid, relating to the prior period 60.60 106.5 62.90 114.8
Total equity dividends paid in the period on ordinary shares 106.5 114.8
Dividend on B shares - - 7.70 0.1
Total dividends paid 106.5 114.9
An interim dividend of 36.40p per ordinary share (HY25: 36.40p) amounting to a
total dividend of £63.0m (HY25: £65.0m) was declared by the directors on 15
October 2025. A dividend reinvestment plan (DRIP) alternative will be offered.
These consolidated financial statements do not reflect this dividend payable.
9. Property, plant and equipment
During the reporting period the Group has had additions of £322.9m (HY25:
£177.2m), depreciation charges of £89.2m (HY25: £86.4m), net impairment
charges of £19.5m (HY25: £26.6m), net movements to assets held for sale of
£16.2m (HY25: £95.8m), capitalised interest cost of £10.5m (HY25: £4.2m),
disposals of £1.8m (HY25: £5.3m) and increase of net book value from foreign
currency translation of £30.3m (HY25: reduction of £10.8m).
Included in property, plant and equipment are assets under construction of
£922.4m (FY25: £682.3m).
There is a charge in favour of the pension scheme over properties with a
market value of £531.5m (FY25: £531.5m).
Capital expenditure commitments
28 August 2025 27 February 2025
£m £m
Capital expenditure commitments for property, plant and equipment for which no 313.1 271.8
provision has been made
10. Impairment
During this period, net impairment charges of £21.0m (HY25: £36.4m) were
recognised within operating costs.
Accelerating Growth Plan:
Net impairment of £19.3m (HY25: £23.2m) has been recognised in respect of
the Group continuing with the Accelerating Growth Plan (the optimisation of
the UK F&B strategy), with £nil impairment reversal being recorded (HY25:
£1.6m) within Accelerating Growth Plan-related assets held for sale.
UK:
Outside of Accelerating Growth Plan-related impairments, £1.7m (HY25: £4.2m)
impairment charges in the UK have been recorded on transfer from property,
plant and equipment to assets held for sale.
Germany:
The Group has completed a review of site-level H1 performance that identified
higher risk sites. An impairment review of those assets was undertaken,
resulting in no impairment charges recognised (HY25: £9.0m).
The charges/(reversals) were recognised on the following classes of assets:
6 months to 28 August 2025 Impairment charge Impairment reversal Total
£m £m £m
Impairment charges/(reversals) included in operating costs
Property, plant and equipment(1) 19.5 - 19.5
Accelerating Growth Plan sites 17.8 -
Rest of estate 1.7 -
Right-of-use assets 0.7 - 0.7
Accelerating Growth Plan sites 0.7 -
Rest of estate - -
Assets held for sale 0.8 - 0.8
Accelerating Growth Plan sites 0.8 -
Total charges/(reversals) for impairment included in operating costs 21.0 - 21.0
(1)The net impairment charge includes £17.8m of accelerated depreciation in
relation to the AGP site extensions and conversions programme.
All of the impairment assessments take account of expected market conditions
which include future risks including climate change and related legislation.
Methodology in relation to the Group's Accelerating Growth Plan
During the period, the Group continued the plan to optimise its UK F&B
offering through the Accelerating Growth Plan. The following material topics
have been considered in relation to the Group's impairment review:
AGP site extensions and conversions:
As part of the Group's AGP site extensions and conversions programme, some of
the Group's branded restaurants will be repurposed with smaller space devoted
to providing integrated F&B services and remaining space being converted
to additional hotel rooms. The composition of the CGU remains unchanged.
Planning applications have been submitted, and permission obtained for a
number of sites. The useful economic life of relevant buildings and furniture,
fittings and equipment has been reassessed based on the current status of
relevant approvals and work commencement on-site. The carrying amount of such
assets are being written down at the point that all relevant internal and
external approvals are received. During the period, an amount of £17.8m
(FY25: £1.0m) has been written off, the Group expects to incur further
charges of between £40.0m and £60.0m over the next few financial years.
Disposal sites:
The Group has a committed plan to dispose of a further group of sites to third
parties. At the reporting period end, sites that are being actively marketed
with a valid expectation that they will be disposed of within 12 months from
the balance sheet date have been moved to Assets Held for Sale (AHFS). As the
economic benefit of these sites is expected to be recovered through sale
rather than by continuing to trade, these sites have been measured at the
lower of cost and expected proceeds less costs of disposal, with the remaining
NBV having been moved to assets held for sale.
11. Assets classified as held for sale
The following table presents the major classes of assets and liabilities
classified as held for sale:
28 August 2025 27 February 2025
£m £m
Property, plant and equipment 62.4 128.8
Right-of-use assets 1.4 1.1
Lease liabilities (2.1) (1.7)
Assets classified as held for sale 61.7 128.2
At the period end, there were 88 sites with a combined net book value of
£61.7m (FY25: 107 with net book value of £128.2m) classified as assets held
for sale (AHFS). There are no gains or losses recognised in other
comprehensive income with respect to these assets. The value and number of
assets held for sale are both heightened by the Group's continued commitment
to the Accelerating Growth Plan.
There are no individually material assets within this group of assets.
Sites are classified as held for sale only if they are available for immediate
sale in their present condition and a sale is highly probable and expected to
be completed within one year from the date of classification. Where there has
been a delay in disposing of a site, the Group remains committed to its plan
to sell the asset. If a site no longer meets this criteria at future reporting
dates it is transferred back to property, plant and equipment.
12. Movements in cash and net debt
27 February 2025 Share buy-back commitments including transaction costs Cash flow Net new lease liabilities Foreign exchange Transfers from assets held for sale Cost of borrowings and amortisation of premiums and discounts 28 August 2025
£m £m £m £m £m £m £m £m
Cash and cash equivalents 909.0 - (79.3) - 0.9 - - 830.6
Liabilities from financing activities:
Borrowings (1,392.4) - - - - - (0.9) (1,393.3)
Lease liabilities (4,233.8) - 89.8 (136.4) (40.7) - - (4,321.1)
Committed share buy-back - (250.3) 75.1 - - - - (175.2)
Total liabilities from financing activities (5,626.2) (250.3) 164.9 (136.4) (40.7) - (0.9) (5,889.6)
Less: lease liabilities 4,233.8 - (89.8) 136.4 40.7 - - 4,321.1
Less: committed share buy-back - 250.3 (75.1) - - - - 175.2
Net debt (483.4) - (79.3) - 0.9 - (0.9) (562.7)
Within borrowings above is the Group's £450.0m bond due for repayment on 16
October 2025.
13. Share capital
Ordinary share capital
Allotted, called up and fully paid ordinary shares of 76.80p each (FY25: million £m
76.80p each)
At 27 February 2025 188.8 145.2
Issued on exercise of employee share options 0.1 0.1
Cancellations following share buy-back (2.5) (1.9)
At 28 August 2025 186.4 143.4
Share buy-back, commitment and cancellation
The Company purchased and cancelled 2.5m shares with a nominal value of £1.9m
under the share buy-back programme running through this financial period.
Consideration of £75.1m, including associated fees and stamp duty of £0.3m,
was paid during the period. The buy-back represents an irrevocable commitment
and therefore the liability to purchase the remaining shares of £175.2m is
recorded as a liability on the consolidated balance sheet.
14. Analysis of cash flows given in the cash flow statement
6 months to 28 August 2025 6 months to 29 August 2024
£m £m
Profit for the period 216.9 219.9
Adjustments for:
Tax expense 70.3 89.3
Net finance costs 79.3 72.4
Share of profit from joint ventures (1.0) (0.8)
Depreciation and amortisation 206.9 198.7
Share-based payments 8.4 8.5
Net impairment (Note 10) 21.0 36.4
Gains on disposals, property, and other provisions (3.0) (30.9)
Other non-cash items 8.4 5.1
Cash generated from operations before working capital changes 607.2 598.6
Decrease in inventories 0.6 1.9
Decrease in trade and other receivables 1.0 1.8
Decrease in trade and other payables (17.9) (49.4)
Cash generated from operations 590.9 552.9
15. Retirement benefits
Defined benefit scheme
During the period, the defined benefit pension scheme has moved from a surplus
of £134.6m to a surplus of £123.3m. The main movements in the surplus are as
follows:
£m
Pension surplus at 27 February 2025 134.6
Administrative expenses (3.0)
Net interest on pension liability and assets (Note 5) 3.7
Losses recognised in other comprehensive income (14.9)
Contributions from employer 2.8
Benefits paid directly by the Company in relation to an unfunded pension 0.1
scheme
Pension surplus at 28 August 2025 123.3
The principal assumptions used by the independent qualified actuaries in
updating the most recent valuation carried out as at 31 March 2023 of the UK
scheme to 28 August 2025 for IAS 19 Employee benefits purposes (FY25: 31 March
2023 to 27 February 2025) were:
28 August 2025 27 February 2025
Pre-April 2006 rate of increase in pensions in payment 2.80% 3.00%
Post-April 2006 rate of increase in pensions in payment 2.00% 2.10%
Pension increases in deferment 2.80% 3.00%
Discount rate 5.80% 5.50%
Inflation assumption 2.90% 3.20%
Life expectancies
Retiring at the balance sheet date at age 65 - male 19.7 years 19.7 years
Retiring at the balance sheet date at age 65 - female 22.4 years 22.4 years
Retiring at the balance sheet date in 20 years at age 65 - male 20.7 years 20.7 years
Retiring at the balance sheet date in 20 years at age 65 - female 23.5 years 23.5 years
The life expectancies shown above are based on standard mortality tables which
allow for future mortality improvements. The mortality improvement assumption
has been updated to use the CMI 2023 model. The CMI 2023 model parameters
include some weighting for 2023 mortality experience.
The assumptions in relation to discount rate, mortality and inflation have a
significant effect on the measurement of scheme liabilities. The following
table shows the sensitivity of the valuation to changes in these assumptions:
(Increase)/decrease in net (Increase)/decrease in gross defined benefit liability
defined benefit surplus
28 August 2025 27 February 2025 28 August 2025 27 February 2025
£m £m £m £m
Discount rate
1.00% increase to discount rate (117.0) (131.0) 149.0 165.0
1.00% decrease to discount rate 142.0 159.0 (178.0) (199.0)
Inflation
0.25% increase to inflation rate 25.0 23.0 (30.0) (29.0)
0.25% decrease to inflation rate (24.0) (23.0) 30.0 29.0
Life expectancy
Additional one-year increase to life expectancy 36.0 38.0 (57.0) (60.0)
The sensitivity analysis above is based on a change in an assumption whilst
holding all other assumptions constant. In practice, this is unlikely to occur
and changes in some of the assumptions may be correlated. Where the discount
rate is changed this will have an impact on the valuation of scheme assets in
the opposing direction.
16. Asset acquisitions
During this and the previous period, the Group has purchased a number of
properties; the legal form of the transactions varies between acquisition of
the property or acquisition of the company holding title of the property, as
well as noting that a number of properties are purchased in a state that means
they do not meet the definition of a business on acquisition.
For the remaining properties which do meet the definition of being a business
on acquisition, these transactions have been accounted for as asset
acquisitions under IFRS 3 Business Combinations as the fair value of the
assets is concentrated in a single group of similar assets in each deal
analysed. The transactions form part of the Group's strategic priorities over
both international growth and continued UK market share gains.
17. Events after the balance sheet date
Sale and leasebacks
On 12 September 2025, the Group entered into sale and leaseback transaction in
relation to one property which was included within assets classified as held
for sale at the period end date, receiving gross proceeds of £24.5m.
18. Contingent liabilities
The Group has contingent liabilities in respect of property related
remediation claims arising in its normal course of business. A provision for
such matters is only recognised to the extent that the Group has a legal or
constructive obligation as a result of a past event and it is probable that an
outflow of economic benefit will be required to settle the obligation. The
Group will seek to recover any claims for remediation with the original
developers of the site and no asset has currently been recognised for this.
The Group previously stated that it was involved in legal proceedings in
relation to a third-party intellectual property claim, this matter was
successfully defended during the current period and the Group no longer deems
this to be a contingent liability.
Responsibility statement
We confirm that to the best of our knowledge:
a) The condensed set of financial statements, which has been prepared in
accordance with IAS 34 Interim Financial Reporting, gives a true and fair view
of the assets, liabilities, financial position and profit or loss of the
issuer, or the undertakings included in the consolidation as a whole;
b) The interim management report includes a fair review of the information
required by the Financial Statements Disclosure and Transparency Rules (DTR)
4.2.7R - indication of important events during the first six months and their
impact on the financial statements and description of principal risks and
uncertainties for the remaining six months of the year; and
c) The interim management report includes a fair review of the information
required by DTR 4.2.8R - disclosure of related party transactions and changes
therein.
By order of the Board
Dominic Paul Hemant Patel
Chief Executive Chief Financial Officer
INDEPENDENT REVIEW REPORT TO WHITBREAD PLC
Conclusion
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 28
August 2025 which comprises the interim consolidated income statement, the
interim consolidated statement of comprehensive income, the interim
consolidated statement of changes in equity, the interim consolidated balance
sheet, the interim consolidated cash flow statement and related notes 1 to 18.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 28 August 2025 is not prepared, in
all material respects, in accordance with United Kingdom adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by the Financial Reporting
Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim
financial information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with United Kingdom adopted international accounting
standards. The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with United
Kingdom adopted International Accounting Standard 34, "Interim Financial
Reporting".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410; however future events or conditions may cause the entity to
cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the group's ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the
company or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly financial report, we are responsible for
expressing to the company a conclusion on the condensed set of financial
statements in the half-yearly financial report. Our conclusion, including our
conclusion relating to going concern, are based on procedures that are less
extensive than audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our report
This report is made solely to the company in accordance with ISRE (UK) 2410.
Our work has been undertaken so that we might state to the company those
matters we are required to state to it in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company, for our review work,
for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
London, United Kingdom
15 October 2025
Glossary
Basic earnings per share (Basic EPS)
Profit attributable to the parent shareholders divided by the weighted average
number of ordinary shares in issue during the year after deducting treasury
shares and shares held by an independently managed share ownership trust
(ESOT).
Cash rent
The total of interest paid on lease liabilities, payment of principal of lease
liabilities and variable lease payments, adjusted to reflect one year's rent.
Committed pipeline
Sites where the Group has a legal interest in a property (that may be subject
to planning/other conditions) with the intention of opening a hotel in the
future.
Direct bookings / distribution
Based on stayed bookings in the financial year made direct to the Premier Inn
website, Premier Inn app, Premier Inn customer contact centre or hotel front
desks.
Food and beverage (F&B) sales
Food and beverage revenue from all Whitbread owned restaurants and integrated
hotel restaurants.
GOSH charity
Great Ormond Street Hospital Children's Charity.
IFRS
International Financial Reporting Standards.
Lease debt
Eight times cash rent.
Occupancy
Number of hotel bedrooms occupied by guests expressed as a percentage of the
number of bedrooms available in the year.
Operating profit
Profit before net finance costs and tax.
OTA's
Online travel agents.
Rent expense
Rental costs recognised in the income statement prior to the adoption of IFRS
16.
Team retention
The number of permanent new starters that we retain for the first 90
days/three months.
Trading site
A joint hotel and restaurant or a standalone hotel.
Segment adjusted operating profit/(loss)
The adjusted operating profit/(loss) excludes the impact of segmental royalty
fees charged from the UK to other segments to aid comparability of segment
performance.
WINcard
Whitbread In Numbers - balanced scorecard to measure progress against key
performance targets.
YourSay
Whitbread's annual employee opinion survey to provide insight into the views
of employees.
†Alternative Performance Measures
We use a range of measures to monitor the financial performance of the Group.
These measures include both statutory measures in accordance with IFRS and
alternative performance measures (APMs) which are consistent with the way that
the business performance is measured internally. APMs are not defined by IFRS
and therefore may not be directly comparable with similarly titled measures
reported by other companies. APMs should be considered in addition to, and are
not intended to be a substitute for, or superior to, IFRS measures.
APM Closest equivalent IFRS measure Adjustments to reconcile to IFRS measure Definition and purpose
REVENUE MEASURES
Accommodation sales Revenue Exclude non-room revenue such as food and beverage Premier Inn accommodation revenue excluding non-room income such as
food and beverage. The growth in accommodation sales on a year-on-year basis
is a good indicator of the performance of the business.
Reconciliation: Note 2
Average room rate (ARR) No direct equivalent Refer to definition Accommodation sales divided by the number of rooms occupied by guests. The
directors consider this to be a useful measure as this is a commonly used
industry metric which facilitates comparison between companies.
Reconciliation 6 months to 28 August 2025 6 months to 29 August 2024
UK accommodation sales (£m) 1,085.4 1,088.8
Number of rooms occupied by guests ('000) 12,628 12,937
UK average room rate (£) 85.95 84.16
Germany accommodation sales (£m) 106.0 99.0
Number of rooms occupied by guests ('000) 1,377 1,307
Germany average room rate (£) 77.01 75.78
UK like-for-like accommodation sales growth Movement in accommodation sales per the segment information (Note 2) Accommodation sales from non like-for-like Year over year change in accommodation revenue for outlets open for at least
one year with no significant changes in room numbers. The directors consider
this to be a useful measure as it is a commonly used performance metric and
provides an indication of underlying revenue trends.
Reconciliation 6 months to 28 August 2025 6 months to 29 August 2024
UK like-for-like accommodation sales growth (1.2%) (1.6%)
Impact of extensions > 5% of rooms 0.0% 0.0%
Contribution from net new hotels 0.9% 2.0%
UK accommodation sales growth (0.3%) 0.4%
Revenue per available room (RevPAR) No direct equivalent Refer to definition Revenue per available room is also known as 'yield'. This hotel measure is
achieved by dividing accommodation sales by the number of rooms
available. The directors consider this to be a useful measure as it is a
commonly used performance measure in the hotel industry.
Reconciliation 6 months to 28 August 2025 6 months to 29 August 2024
UK accommodation sales (£m) 1,085.4 1,088.8
Available rooms ('000) 15,620 15,569
UK REVPAR (£) 69.48 69.93
Germany Accommodation sales (£m) 106.0 99.0
Available rooms ('000) 2,004 1,913
Germany REVPAR (£) 52.90 51.78
INCOME STATEMENT MEASURES
Adjusted(1) operating profit/loss Profit/loss before tax Adjusting items Profit/loss before tax, finance costs/income and adjusting items
(Note 4), finance income/costs (Note 5) Reconciliation: Consolidated income statement
Adjusted(1) tax Tax expense/credit Adjusting items Tax expense/credit before adjusting items.
(Note 4) Reconciliation: Consolidated income statement
Adjusted(1) profit/loss before tax Profit/loss before tax Adjusting items Profit/loss before tax and adjusting items.
(Note 4) Reconciliation: Consolidated income statement
Adjusted(1) basic EPS Basic EPS Adjusting items Adjusted profit attributable to the parent shareholders divided by the basic
weighted average number of ordinary shares in issue during the year after
(Note 4) deducting treasury shares and shares held by an independently managed share
ownership trust (ESOT).
Reconciliation: Note 7
Profit/PBT margin No direct equivalent Refer to definition Segmental adjusted profit before tax divided by segmental adjusted revenue, to
demonstrate profitability margins of the segmental operations.
Reconciliation: Business review
BALANCE SHEET MEASURES
Net cash/debt Total liabilities from financing activities Excludes lease liabilities, other Cash and cash equivalents after deducting total borrowings. The directors
consider this to be a useful measure of the financing position of the Group.
financial liabilities and derivatives
Reconciliation: Note 12
held to hedge financing activities
Adjusted(1) net cash/debt Total liabilities from financing activities Exclude lease liabilities and derivatives held to hedge financing activities. Net cash/debt adjusted for cash, assumed by ratings agencies to not be readily
Includes an adjustment for cash assumed by ratings agencies to not be readily available, and excluding unamortised debt-related fees. The measure has been
available amended in the year to exclude unamortised debt-related fees. The directors
consider this to be a useful measure as it is aligned with the method used by
ratings agencies to assess the financing position of the Group.
Reconciliation As at 28 August As at 29 August
2025 2024
£m £m
Net debt 562.7 370.3
Less: unamortised debt costs 6.7 4.4
Restricted cash adjustment 10.0 10.0
Adjusted net debt 579.4 384.7
Lease-adjusted net debt/cash Total liabilities from financing activities Exclude lease liabilities. Includes an adjustment for cash assumed by rating In line with methodology used by credit rating agencies, lease-adjusted net
agencies to not be readily available debt includes lease debt which is calculated at 8x Cash Rent as defined in the
Glossary. The directors consider this to be a useful measure as it forms the
basis of the Group's leverage targets.
Reconciliation As at 28 August As at 29 August
2025 2024
£m £m
Adjusted net debt 579.4 384.7
Lease debt 2,715.2 2,517.6
Lease-adjusted net debt 3,294.6 2,902.3
Net debt/cash and lease liabilities Cash and cash equivalents less total liabilities from financing activities Refer to definition Net debt/cash plus lease liabilities. The directors consider this to be a
useful measure of the financing position of the Group.
Reconciliation As at 28 August As at 29 August
2025 2024
£m £m
Net debt 562.7 370.3
Lease liabilities 4,321.1 4,171.5
Net debt and lease liabilities 4,883.8 4,541.8
CASH FLOW MEASURES
Lease-adjusted net debt to EBITDAR for leverage No direct equivalent Refer to definition This measure is a ratio of lease-adjusted net debt compared against the
Group's adjusted EBITDAR. The directors use this to monitor the leverage
position of the Group. This measure may not be directly comparable with
similarly titled measures utilised by credit rating agencies, however on a
normalised basis these measures would be expected to move proportionally in
the same direction.
Reconciliation 12 months to 28 12 months
August 2025 to 29
£m August 2024
£m
Lease-adjusted net debt 3,294.6 2,902.3
Adjusted EBITDAR 1,019.9 1,040.1
Lease-adjusted net debt to adjusted EBITDAR for leverage 3.2x 2.8x
Adjusted(1) operating cash flow Cash generated from operations Refer to definition Adjusted operating profit/loss adding back depreciation and amortisation and
after IFRS 16 interest and lease repayments and working capital movement. The
directors consider this a useful measure as it is a good indicator of the cash
generated which is used to fund future growth, shareholder returns, tax,
pension and interest payments.
Reconciliation 6 months to 28 August 2025 6 months to 29 August 2024
£m £m
Adjusted operating profit 394.9 412.8
Depreciation - right-of-use assets 101.1 96.2
Depreciation - property, plant and 89.2 86.4
equipment
Amortisation 16.6 16.1
Adjusted EBITDA (post-IFRS 16) 601.8 611.5
Interest paid - lease liabilities (85.6) (82.8)
Payment of principal of lease liabilities (89.8) (75.0)
Net lease incentives (paid)/received (3.7) 2.9
Movement in working capital (16.3) (45.7)
Adjusted operating cash flow 406.4 410.9
Cash capital expenditure No direct equivalent Refer to definition Cash flows on property, plant and equipment and investment in intangible
assets, payments of deferred and contingent consideration, and capital
(cash capex) contributions or loans to joint ventures.
OTHER MEASURES
Adjusted(1) EBITDA Operating profit Refer to definition Adjusted EBITDA (post-IFRS 16) is profit before tax, adjusting items,
interest, depreciation and amortisation. Adjusted EBITDA (pre-IFRS 16) is
(post-IFRS 16), further adjusted to remove rent expense. Adjusted EBITDAR is profit before
tax, adjusting items, interest, depreciation, amortisation, variable lease
Adjusted(1) EBITDA payments and rental income. The directors consider this measure to be useful
as it is a commonly used industry metric which facilitates comparison between
(pre-IFRS 16) companies. The Group's RCF covenants include measures based on adjusted EBITDA
(pre-IFRS 16).
and Adjusted(1) EBITDAR
Reconciliation 6 months to 28 August 2025 6 months to 29 August 2024
£m £m
Adjusted operating profit 394.9 412.8
Depreciation - right-of-use assets 101.1 96.2
Depreciation - property, plant and equipment 89.2 86.4
Amortisation 16.6 16.1
Adjusted EBITDA (post-IFRS 16) 601.8 611.5
Variable lease payments 1.6 2.4
Rental income (2.4) (2.9)
Adjusted EBITDAR 601.0 611.0
Rent expense, variable lease payments and rental income (169.3) (156.9)
Adjusted EBITDA (pre-IFRS 16) 431.7 454.1
Return on Capital Employed (ROCE) No direct equivalent Refer to definition Adjusted operating profit/loss (pre-IFRS 16) for the period divided by net
assets at the balance sheet date, adding back net debt/cash, right-of-use
assets, lease liabilities, taxation assets/liabilities, the pension
surplus/deficit and derivative financial assets/liabilities, other financial
liabilities and IFRS 16 working capital adjustments. The directors consider
this to be a useful measure as it expresses the underlying operating
efficiency of the Group and is used as the basis for remuneration targets.
12 months to 28 August 2025
Reconciliation UK & Ireland
Total £m
£m
Adjusted operating profit 611.7
Depreciation - right-of-use assets 199.2
Rent expense (337.6)
Adjusted operating profit (pre-IFRS 16) 473.3 465.3
Net assets 3,192.5
Net debt 562.7
Current tax liabilities 2.1
Net deferred tax liabilities 255.1
Pension surplus (123.3)
Derivative financial assets (3.9)
Derivative financial liabilities 7.4
Lease liabilities 4,321.1
Right-of-use assets (3,725.1)
Other financial liabilities 175.2
IAS 17 rent adjustments (65.0)
Adjusted net assets 4,598.8 3,959.9
Return on capital employed 10.3% 11.8%
12 months to 29 August 2024
Reconciliation UK &
Total Ireland
£m £m
Adjusted operating profit 641.7
Depreciation - right-of-use assets 190.1
Rent expense (308.9)
Adjusted operating profit (pre-IFRS 16) 522.9 541.1
Net assets 3,476.9
Net debt 370.3
Current tax liabilities 5.9
Deferred tax liabilities 240.2
Pension surplus (157.6)
Derivative financial assets (14.9)
Derivative financial liabilities 7.0
Lease liabilities 4,171.5
Right-of-use assets (3,638.8)
IAS 17 rent adjustments (65.0)
Adjusted net assets 4,395.5 3,860.4
Return on capital employed 11.9% 14.0%
(1) Adjusted measures of profitability represent the equivalent IFRS measures
adjusted for specific items that we consider relevant for comparison of the
Group's business either from one year to another or with similar businesses.
We report adjusted measures because we believe they provide both management
and investors with useful additional information about the financial
performance of the Group's businesses.
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