Preliminary Results Announcement

Continued market outperformance by Premier Inn UK

Excellent progress in Germany

Five-Year Plan is on track, underpinning confidence in delivery

Accelerating the delivery of shareholder returns with a £250m share buy-back

Throughout this release all percentage growth comparisons are made comparing the current year (FY25) performance for the 52 weeks to 27 February 2025 with FY24 (52 weeks to 29 February 2024).

FY25 Group Financial Summary

Overview

1: Incremental adjusted profit before tax† versus FY25

2: STR data, standard basis, 1 March 2024 to 27 February 2025, UK M&E market excludes Premier Inn

3: STR data, standard basis, 1 March 2024 to 27 February 2025, Germany M&E market excludes Premier Inn

4: Using a GBP: EUR exchange rate of 1.18

Financial highlights

• Premier Inn UK: total accommodation sales were in line with last year and with the strength of our brand and commercial initiatives, we outperformed the M&E market1 by +0.7pp; while revenue per available room† ('RevPAR') was down 2%, we maintained a healthy RevPAR premium of £5.49 and outperformed the M&E market1 in the second half by +0.3pp on RevPAR growth

• UK F&B sales were in line with our expectations and fell by 11% due to the impact of AGP, partially mitigated by strong breakfast sales

• UK adjusted pre-tax profit margins† were 18.8% (FY24: 21.2%), reflecting the impact of AGP, softer market demand and cost inflation, partially offset by increased cost efficiencies

• Premier Inn Germany: our estate outperformed the M&E market2 and total sales grew 21%, driven by the increasing maturity of our hotels and brand, enhanced distribution, a strong events calendar and the positive impact of our commercial initiatives; adjusted loss before tax† reduced to £11m (FY24: £36m);

• Group: adjusted profit before tax† was £483m (FY24: £561m) and statutory profit before tax was £368m (FY24: £452m) after charging £116m of adjusting items (FY24: £109m) including a non-cash, net impairment charge of £76m, and £45m relating to the Group's strategic IT & F&B programme costs including our AGP

• Group: adjusted EBITDAR† was £1,030m (FY24: £1,057m)

• Total cash returned to shareholders via dividends and share buy-backs in FY25 of £442m (FY24: £756m)

• Strong balance sheet: lease adjusted leverage† increased to 3.0x (FY24: 2.6x) and net debt† was £483m (FY24: £298m)

Segment highlights

Premier Inn UK

Premier Inn Germany

Current trading (seven weeks to 17 April 2025)

• Premier Inn UK:

o  Total accommodation sales were down 1% versus FY25, however our brand strength and the positive impact of several commercial initiatives meant that we outperformed the M&E market3 by 2pp on both accommodation sales and RevPAR growth, with an increased RevPAR premium of £6.79

o  Our forward booked position is ahead of last year, supported by strong peak leisure demand. Although the UK macroeconomic outlook remains uncertain, with the introduction of further commercial initiatives, we remain confident in continuing to outperform the market

• UK F&B: sales were 16% behind FY25, reflecting the removal of a number of lower-returning branded restaurants, in line with our expectations

• Premier Inn Germany: total accommodation sales up 23% versus FY25; total estate RevPAR was €63 and RevPAR for our cohort of 17 more established hotels4 was €73, which were both ahead of the M&E market5

1: STR data, standard basis, 1 March 2024 to 27 February 2025, UK M&E market excludes Premier Inn

2: STR data, standard basis, 1 March 2024 to 27 February 2025, Germany M&E market excludes Premier Inn

3: STR data, standard basis, 28 February 2025 to 17 April 2025, UK M&E market excludes Premier Inn

4: 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

5: STR data, standard basis, 28 February 2025 to 17 April 2025, Germany M&E market excludes Premier Inn

FY26 guidance

• UK: open 1,000 - 1,200 new rooms, the majority of which will open in the second half of the year; 500 - 700 of these new rooms are AGP extension rooms;

• UK: with increased cost efficiencies of £60m (versus previous guidance of £50m), net inflation is expected to be towards the lower end of our previously guided range of 2% - 3% on our £1.7bn UK cost base;

• UK: AGP adjusted PBT† one-off impact of £20m - £25m in FY25 will be fully reversed

• Germany: open c.400 new rooms and deliver adjusted profit before tax† between £5m and £10m1;

• Group: £15m to £20m reduction in net finance income (excluding lease liability interest) versus FY25 reflecting lower cash balances, the outlook for Bank of England rates and the recent issue of a new £400m 5.50% bond; and

• Group: net capital expenditure of £400m - £500m, with gross capital expenditure of between £700m - £750m including AGP (£150m - £200m) and network expansion; receipts from property-related transactions of £250m - £300m

1: Using a GBP: EUR exchange rate of 1.18

Five-Year Plan and medium-term outlook

Our operational and strategic progress in FY25 mean we are positive about the medium-term outlook and the delivery of our Five-Year Plan. Whilst we have limited visibility of short-term market demand and inflation, our vertically integrated model means we have significant self-help levers that can provide positive like-for-like† sales momentum whilst also reducing our costs. By focusing on what we can control, together with strong growth potential in both the UK and in Germany, we remain confident in generating at least £300m incremental adjusted profit before tax† by FY30, releasing more than £2bn available for share buy-backs and dividends.

Commenting on today's results, Dominic Paul, Whitbread Chief Executive, said:

"Having laid the foundations for significant growth, we are executing at pace and making excellent progress on our strategic initiatives, against what has been a softer market backdrop over the past year. By focusing on what we can control, our Five-Year Plan is on track to deliver a step-change in our profits, margins and returns and we remain positive about the medium-term outlook.

"In the UK and Ireland, our Accelerating Growth Plan is progressing well and as we open our growing committed pipeline, we will reach at least 98,000 open rooms by FY30. At the same time, our commercial strategy is driving our outperformance versus the M&E market and we are continuing to realise material cost savings across all areas of our business without compromising our reputation for both quality and value.

"This will be a breakthrough year in Germany and we are set to deliver our first ever adjusted profit in FY26. We are growing quickly, driving strong guest satisfaction scores, performing well ahead of the market and our cohort of more established hotels is on track to reach its targeted double-digit level of returns. We remain confident in realising our long-term ambition of becoming the country's number one hotel brand, delivering significant revenue growth, attractive long-term returns and providing a platform for potential expansion into other international markets.

"We remain focused on disciplined capital allocation and returns. Our vertically integrated model is a key source of competitive advantage as we continue to drive further growth. With a more favourable outlook in the property investment market, we will look to recycle at least £1bn of our more mature property assets to fund future growth and drive higher financial returns. Given our confidence in our Five-Year Plan, together with the strength of our balance sheet, we are recommending a final dividend of 60.6p per share and are accelerating the planned delivery of shareholder returns with a £250m share buy-back to be completed over the next twelve months."

For more information please contact:

Investor Relations - Whitbread [email protected]

Peter Reynolds, Director of Investor Relations [email protected]

Kirsten O'Reilly, Investor Relations Manager [email protected]

Media - Brunswick [email protected]

Tim Danaher +44 (0) 20 7404 5959

A webcast for investors and analysts will be made available at 8:00am on 1 May 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).

†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.

Chief Executive's Review

Overview

We made excellent progress on delivering against each element of our Five-Year Plan that is underpinned by our vertically integrated model and by focusing on those things we can control. As a result, and given the strength of our commercial programme, we remain confident that, over the next five years, we will deliver a step change in our profits that will generate more than £2bn for share buy-backs and dividends. Reflecting this confidence we are accelerating the delivery of returns to shareholders and in addition to the final dividend, intend to launch a further £250m share buy-back.

Group Results

While the expected impact of AGP and softer market demand in the UK made for a more challenging trading backdrop, Premier Inn UK outperformed the midscale and economy ('M&E') market1 and delivered a robust financial performance. The strength of our brand and guest proposition meant that total accommodation sales were in line with last year while total UK F&B revenues fell by 11% due to the impact of the transition from lower-returning branded restaurants to an integrated F&B offering as part of AGP, partly mitigated by strong breakfast sales in our integrated restaurants. In Germany, we made excellent progress and total accommodation sales were up by 21% with good growth in both occupancy and average room rate ('ARR'). Our cohort of more established2 hotels, as well as our entire German network, performed ahead of the M&E market3 on both accommodation sales and RevPAR growth, reflecting the increasing maturity of both our estate and our brand as well as our ongoing commercial initiatives. The result was that total statutory revenue was slightly lower than last year at £2,922m (FY24: £2,960m).

The combination of the impact of AGP, cost inflation and lower interest income, partially offset by increased cost savings and excellent progress in Germany, meant that adjusted operating profit fell by 7% to £630m (FY24: £674m). Lower cash balances and a reduction in central bank base rates during the year meant that net finance income (excluding lease liability interest) also declined so that adjusted profit before tax† decreased to £483m (FY24: £561m). There was an increased charge for adjusting items in the year of £116m (FY24: £109m). The result was that statutory profit before tax was down 19% to £368m (FY24: £452m). A tax charge of £114m (FY24: £140m) resulted in a statutory profit after tax of £254m (FY24: £312m). The lower level of earnings, mitigated by a reduced weighted average number of shares following the completion of £250m of share buy-backs during the year, meant that adjusted basic earnings per share† decreased by 6% to 194.6p (FY24: 206.9p). An increase in adjusting items meant that statutory basic earnings per share decreased by 12% to 141.5p (FY24: 161.0p).

1: STR data, standard basis, 1 March 2024 to 27 February 2025, UK M&E market excludes Premier Inn

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: STR data, standard basis, 1 March 2024 to 27 February 2025, Germany M&E market excludes Premier Inn

Further detail on the drivers behind the Group's performance is set out below.

Premier Inn UK - continuing to outperform the market

Total accommodation sales were in line with last year with occupancy remaining high at 81.0% (FY24: 82.2%), and ARR only slightly lower than last year at £79.52 (FY24: £79.76). In London, softer levels of demand prompted a small reduction in both occupancy and ARR, although the resulting 4.4% reduction in RevPAR was more than offset by estate growth and accommodation sales grew by over 1%. In the Regions, occupancy levels also remained high at 81.1% (FY24: 82.0%) and ARR was 0.2% lower than last year with the result that total accommodation sales were in line with FY24.

The strength of our brand, our scale and continued network expansion are important drivers for our business and help us to stay ahead of the market in terms of accommodation sales. As the largest hotel brand in the UK, performing ahead of the market on RevPAR growth is more challenging as we have more rooms to fill than our competitors. However, with the benefit of several new commercial initiatives deployed during the year, we outperformed the M&E market1 on RevPAR growth during the second half of the year and maintained a significant £5.49 RevPAR premium versus the rest of the M&E market.

1: STR data, standard basis, 1 March 2024 to 27 February 2025, UK M&E market excludes Premier Inn

The following external and internal factors were important drivers for our UK business over the past year:

· Softer UK market demand: Overall market demand levels were softer across the year for both business and leisure but Premier Inn's overall levels of occupancy remained high. While long-lead and peak leisure demand remained robust, we saw lower levels of short-lead, discretionary leisure demand than the previous year. While business demand was broadly flat, we have continued to see good growth in our B2B channels especially through Business Booker and Travel Management Companies ('TMCs').

· Muted supply growth: Our latest market analysis1 of UK hotel rooms confirmed that the recovery in supply post-COVID remains muted. After the initial shock of the pandemic, the subsequent increase in interest rates limited the availability of funding for new developments and suppressed supply growth. While the branded budget sector, including Premier Inn, is expected to grow over the next few years, we predict that the independent hotel sector will continue to decline, with the result that the total UK market will not return to 2019 levels of supply until at least 2027.

1: Company data

· Accelerating Growth Plan ('AGP'): Our plan to optimise our F&B offer at a number of sites and unlock 3,500 new extension rooms is on track. Planning applications for over 70% of affected sites have been submitted and permission for c.50% of sites has already been approved. Construction has started at several sites and the first of our 3,500 new extension rooms will open later this year. We have sold 38 branded restaurants for a total consideration of £38m and remain confident of exiting the remaining sites over the next 12 months as planned. Having impacted profitability in FY25, we expect this to fully reverse in FY26, in line with our previous guidance.

· Network expansion: With over 850 open hotels across the UK and Ireland, Premier Inn is the UK's largest hotel chain with approximately 12% share of all hotel rooms. Having opened a total of 1,075 rooms during the year, we closed 534 lower-returning rooms as part of our estate optimisation programme, including AGP, and added more rooms to our pipeline1. As at 27 February 2025, we had 852 hotels and 85,984 rooms open while our committed pipeline1 increased to 7,192 rooms (FY24: 6,795 rooms), the majority of which are freehold.

1: UK and Ireland committed pipeline excluding extension rooms from Accelerating Growth Plan

· Commercial programme: We have deployed a broad range of commercial initiatives to drive like-for-like† sales momentum and extend our market-leading position in the UK. Highlights during FY25 include:

o Improving our trading performance: our proprietary automated trading engine is a significant source of competitive advantage and helps us to maximise revenue. Drawing upon our extensive bank of historical trading data, we improved our trading techniques, capabilities and pricing, all of which helped us to stay ahead of the wider M&E market.

o Enhancing our guest offer: Our new cloud-based reservation system has allowed us to enhance the digital guest journey by offering several new options including: early check-in, late check-out, 'Rooms with a view', and Twin rooms.

o Increasing our digital capabilities: As well as increasing the range of inventory we can sell through our digital partners, we are also optimising our website and app functionality. Early progress has been encouraging, with our app generating 9% of total accommodation sales in FY25 (FY24: 8%). Our new technology stack is also enhancing the quality and effectiveness of our customer engagement to increase revenues, as well as improving our operations to reduce costs.

o  Highly effective brand marketing: Our brand campaigns are a powerful customer acquisition tool and help keep us front-of-mind with consumers. Continuing to attract new guests is essential as we seek to extend our leadership and grow market share. In addition to the launch of our latest marketing campaign, 'Better sleep for your money', we also increased our digital marketing efforts, helping to maintain our market-leading position with over 90% brand awareness1.

1: UK YouGov Brand Consideration: 1 March 2024 to 27 February 2025

o Enhancing our business proposition: Business guests are an attractive customer segment because they tend to drive higher RevPARs and travel more frequently than leisure guests. Our Business Booker portal has grown substantially over the past few years, and we have also strengthened our relationships with several TMCs. Together, these channels represented approximately 21% of total accommodation sales in FY25 (FY24: 20%). We also extended our reach to new corporate partners by adding connectivity to Sabre, one of the big three Global Distribution Systems.

o Best-in-class operations: Premier Inn is the UK's number one hotel brand and remains the 'Best Value Hotel Chain' as measured by YouGov2. Our significant refurbishment plan, alongside our repair and maintenance programme, means we now have approximately 8,000 of our new ID5 rooms open across our UK and Ireland estate. This is helping to ensure the consistency of our offer, while our continued investment in pay, training and development ensures that team engagement remains high.

2: YouGov BrandIndex Quality & Value scores as at 27 February 2025 based on a nationally representative 52-week moving average

Taken together, these factors meant that UK accommodation sales were in line with last year, while the impact of AGP meant that F&B revenue declined by 11%, resulting in UK statutory revenue down 3%.

Despite increasing cost pressures from cost inflation and network expansion, our shift to a more efficient F&B model as part of AGP, plus increased cost efficiencies of £75m, meant that operating costs reduced by 2%. As a result of lower revenues and higher depreciation costs, adjusted profit before tax† fell to £507m (FY24: £588m). This impacted UK pre-tax margins† that reduced to 18.8% (FY24: 21.2%) and UK ROCE† was 12.9% (FY24: 15.5%).

During the year, further sites have been identified to be disposed of as part of our AGP and we have also updated cashflow assumptions for sites originally included in the scope of the plan. This resulted in a net impairment charge of £43m being incurred in the year in relation to AGP. Further net impairment charges of £10m have been incurred over the rest of the UK estate.

Premier Inn Germany - on track to replicate our UK success

Our German business is making excellent progress and the Premier Inn brand is attracting growing numbers of both German and international guests. With the increasing maturity of our estate and brand, supported by our commercial initiatives, we delivered excellent revenue growth and outperformed the M&E market on both accommodation sales and RevPAR growth1. As a result, we remain on course to deliver a positive adjusted profit before tax† in FY26 and are progressing towards our longer-term objective of becoming the country's number one hotel brand and delivering strong profit growth and double-digit returns on capital.

While the slowdown in construction during the pandemic reduced the number of new room openings to 459 in FY25, our strong balance sheet meant we were able to add nearly 1,500 new rooms to our committed pipeline that will drive a marked increase in new room openings over the next few years. Our current open and committed pipeline stands at 18,230 rooms (FY24: 16,792 rooms) with 40% of our committed pipeline being freehold sites.

Drawing upon our growing pool of guest data, we have continued to refine and improve our commercial strategy that is contributing to strong RevPAR momentum:

· Improved trading strategies - We have seen a marked improvement in our trading around key events, that in FY25 included the European Football Championship and a number of high-profile concert tours by international artists. As up to 20% of room nights in Germany are event nights (versus less than 5% in the UK), being able to trade these effectively is a key driver of profitability in the German market.

· Digital marketing - We launched our first online campaign during the year, which focused on promoting the quality of our hotel rooms and how guests can enjoy a great night's sleep at Premier Inn. The campaign is proving successful in raising our profile and is also helping to differentiate us from our competitors.

· Broadening distribution - We have seen an increase in guest volumes and revenues as we expanded our distribution to include third-party channels such as online travel agents ('OTAs') that are an important and value accretive channel in the German market.

· Increasing brand awareness - Our brand awareness increased to 19% (FY24: 14%)2 and whilst still behind some of our key competitors, given the quality of our product and the high guest scores we are achieving, we are on course to close the gap further in FY26.

As a result of these initiatives and with the increasing maturity of our estate and brand, RevPAR grew by 18% in local currency which was significantly ahead of the M&E market1. This strong performance was supported by our cohort of 17 more established hotels3, that is continuing to mature at pace, as evidenced by its 17% RevPAR growth.

As in the UK, we also made good progress on improving our operational efficiency and managing our costs. With our increasing scale, we are finding new opportunities to reduce costs without compromising our great guest experience. Examples include increased spans of control for some of our hotel managers, taking advantage of new technologies and through better procurement. 

We are particularly pleased with the performance of our cohort of 17 more established hotels3. Whilst not yet mature, the cohort delivered aggregate site-level profit4 of £16m in FY25 (FY24: £9m). As well as giving us visibility on the future profit potential for our estate as a whole, this performance contributed to a much-reduced adjusted loss before tax† for all of our German operations of £11m (FY24: £36m loss), in line with our expectations.

The Group continues to make progress through organic growth and portfolio acquisitions with current year performance reflecting the increased maturity of open sites. Having updated site-level cashflow forecasts for these sites, we have identified impairment indicators at a small number of sites which has resulted the impairment of five sites totalling £22m in FY25.

1: Local currency based on STR data, standard basis, 1 March 2024 to 27 February 2025, Germany M&E market excludes Premier Inn

2: Germany YouGov Brand Consideration: 1 March 2024 to 27 February 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

Current Trading - seven weeks to 17 April 2025

In the UK, total accommodation sales were down 1% and RevPAR was down 1% versus last year reflecting softer market demand, as evidenced by the published market data. Despite the volatility in the period, that we experience each year due to the phasing of public holidays, we have seen a positive impact from our commercial initiatives that have driven a 2pp outperformance versus the market1 on both accommodation sales and RevPAR growth.

Our forward booked position is ahead of last year, supported by strong peak leisure demand. Although the UK macroeconomic outlook remains uncertain, with the introduction of further commercial initiatives, we remain confident in continuing to outperform the market.

F&B sales were down 16% in the period, driven by the removal of a number of lower-returning branded restaurants as part of AGP and were in line with our expectations.

In Germany, our strong performance has continued into the current trading period, with total accommodation sales up 23% in local currency versus last year. The increasing maturity of our estate and brand, together with our commercial initiatives, meant that RevPAR for the total estate was €63, 17% ahead of last year. This was led by the performance of our cohort of more established hotels2 that delivered a RevPAR of €73, which was 27% ahead of last year and significantly ahead of the market3.

1: STR data, standard basis, 28 February 2025 to 17 April 2025, UK M&E market excludes Premier Inn 

2: Premier Inn more established hotels: open and trading under the Premier Inn brand for 12 consecutive months as at 4 March 2022: 17 hotels

3: STR data, standard basis, 28 February 2025 to 17 April 2025, Germany M&E market excludes Premier Inn 

FY26 guidance

A summary of our FY26 guidance is detailed below.

UK

· Sales: every 1% change in like-for-like† accommodation sales versus FY25 has a £16m - £17m impact on profit before tax; and every 1% change in total F&B1 sales versus FY25 has a £2.5m impact on profit before tax

· Inflation: with our increased efficiency target of £60m, year-on-year net inflation is expected to be towards the lower end of our previously guided range of 2 - 3% on our £1.7bn UK cost base

· New rooms:

o  c.500 (100% freehold), the majority of which will open in the second half of the year and;

o  500 - 700 AGP extension rooms, the majority of which will open in the second half of the year

· Accelerating Growth Plan:

o  Total F&B sales: further reduction of between £75m - £90m as the remaining branded restaurants that are affected by the plan are repurposed or exited

o  Adjusted PBT†: FY25 one-off impact of £20m - £25m will be fully reversed as the benefit of removing lower-returning branded restaurants offsets any remaining impact of transition

 1: F&B sales excluding sites impacted by the Accelerating Growth Plan for which separate guidance is provided

Germany

· We are on track to deliver adjusted profit before tax† of between £5m and £10m2 in FY26

· New rooms: c.400 (50% freehold)

2: Using a GBP: EUR exchange rate of 1.18

Central and other costs

· Net finance income (excluding lease liability interest): Expected £15m - £20m reduction versus FY25 reflecting lower cash balances, the recent issuance of a new £400m bond and based on the outlook for Bank of England rates

Balance sheet

· Net capex: £400m - £500m

· Gross capex: £700m - £750m, reflecting our plan to optimise F&B and unlock 3,500 extensions as part of AGP (£150m - £200m), in addition to our other network expansion and regular programme of refurbishments and maintenance

· Proceeds from property transactions: expected to be between £250m and £300m, including sale and leasebacks and disposals

Outlook

In the UK, after a softer start to the quarter that was impacted by the phasing of public holidays, our commercial programme has delivered an increasing level of outperformance versus the M&E market. Our forward booked position is ahead of last year, supported by strong peak leisure demand. Although the UK macroeconomic outlook remains uncertain, with the introduction of further commercial initiatives, we remain confident in continuing to outperform the market.

In Germany, the increasing maturity of our estate and brand, together with our commercial initiatives, means we are continuing to make excellent progress. With a strong events calendar, our forward booked position is building well ahead of last year, and we remain on track to deliver positive pre-tax profit in FY26.

Capital allocation - Investing for the long-term to drive higher returns

Having a strong balance sheet means we can strike an appropriate 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 pillars of our framework are unchanged:

· 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.

During the year, Fitch Ratings ('Fitch') changed their approach on lease methodology, moving away from capitalising profit and loss account-derived lease expense to cash lease payments which they consider better represents the Group's ongoing lease commitments. This change led to a reduction in EBITDAR net leverage for FY24 to 2.6x (from 2.9x previously). Fitch also reviewed the threshold applied to maintain the Group's investment grade credit rating and reconfirmed the Group's investment grade credit rating on 29 January 2025 with a stable outlook.

Lease liabilities at the end of the year were £4.2bn (FY24: £4.1bn) and after total capital expenditure of £488m (FY24: £509m), £442m of share buy-backs and dividends and the recent issuance of a new £400m bond1, our ratio of adjusted EBITDAR to lease-adjusted net debt† using the new Fitch methodology was 3.0x (FY24: 2.6x) versus our threshold of 3.5x.

Given our confidence in the delivery of our Five-Year Plan, the strength of our balance sheet, and the attractive returns available from repurchasing the Group's shares at current levels, the Board is recommending a final dividend of 60.6p per share (FY24: 62.9p) making a total of 97.0p for the year (FY24: 97.0p), and has announced its intention to accelerate the planned delivery of £2bn of returns with a £250m share buy-back, to be completed over the next twelve months. Further details about the share buy-back can be found in a separate announcement issued today.

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

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 that we announced in October 2024 and is set to deliver a step change in our profits, margins and returns.

Five-Year Plan

With the execution of several strategic initiatives and by maintaining a steady level of capital intensity and leverage, by FY30 the Group will:

· increase Group adjusted PBT† versus FY25 by at least £300m; and

· generate more than £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 over the life of the plan. However, we expect that our actual UK like-for-like† sales growth together with our cost efficiencies will be in excess of UK cost inflation over the life of the plan.

Our progress during FY25 is reinforcing 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. This will deliver incremental adjusted PBT† of at least £100m by FY30.

Whilst the exact phasing of new rooms coming onstream is difficult to predict, the first of our new extension rooms are nearing completion and 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 38 sites for £38m, we also remain confident of exiting the remaining sites over the next 12 months as planned.

UK: network expansion (+£120m adjusted PBT† by FY30)

By opening our current committed pipeline1 of over 7,000 rooms, adding the 3,500 extensions as a result of our AGP and by adding and opening a further 1,500 rooms over the next few years, we are on course to reach at least 98,000 open rooms by FY30. Before the benefits of our AGP, our network expansion will deliver incremental adjusted PBT† of at least £120m by FY30.

We are confident that these new rooms will be higher returning than our current open estate average. Our committed pipeline1 has a higher weighting towards London at 42% (open estate: 18%) and freehold at 70% (open estate: 55%), meaning that RevPARs are higher and costs are lower. As we optimise the estate, we are also opening bigger hotels with the committed pipeline1 hotels having 167 rooms on average (open estate: 101 rooms) which enables us to drive higher levels of profitability. Our 'Hub by Premier Inn' proposition is performing well and we are continuing its expansion over the next few years (23% of committed pipeline1).

Having identified catchments where we do not currently have a presence, or where we can add more rooms without cannibalising our existing estate, we have significant growth potential. 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 are on course to reach profitability in FY26. With the opening of our existing pipeline of 7,000 rooms and the addition of a further 2,000 rooms that will be open by FY30, our open estate will almost double to 20,000 rooms, moving us closer towards our ambition of becoming the country's number one hotel brand. In addition to continuing to grow our network, we are continuing to build the Premier Inn brand; refine our commercial strategy; enhance our business proposition; and optimise our model and product offer.

With the initiatives outlined above, we remain on track to deliver adjusted profit before tax† of between £5m and £10m in FY26. Thereafter, 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. With the benefit of operating leverage, improvements to our operating model and additional scale benefits, we expect Germany to deliver adjusted PBT† of at least £70m1 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 plan to continue to drive like-for-like† sales momentum through several initiatives that include: continuing to evolve our trading strategies and trading engine; enhancing our digital capabilities including greater usage and functionality of the Premier Inn app; refining our marketing strategies and broadening our distribution with greater use of social media channels such as YouTube and TikTok and exploring the use of third-party channels; broadening our appeal to business guests through Business Booker 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. Whilst difficult to measure the individual impact of these initiatives on our performance, we believe that each will deliver a positive contribution and help drive like-for-like† sales momentum in FY26.

We are focused on delivering value for our guests and have a long track record of delivering material cost savings which help mitigate the impact of inflation on our UK cost base. Having completed an extensive exercise looking at all areas of our P&L, we are on track to deliver £60m of cost efficiencies in FY26, with a further £190m of savings in aggregate between FY27 and FY30, totalling £250m over the life of the plan. Key areas of saving include: improvements to our operating model, more efficient labour scheduling and further savings unlocked through the deployment of new technology.

Using our balance sheet to fund growth whilst maintaining average net capex at £500m per annum

Our strong balance sheet and prudent 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 put capital to work when many of our competitors cannot, allowing us to extend our leadership position in the UK and Ireland and grow our presence in Germany, which is proving that the Premier Inn brand can travel internationally. Having a large portfolio of freehold property with significant in-house property expertise is a major source of commercial and operational advantage:

· maximising our chances of securing the right assets in our target locations because we can access both freehold and leasehold opportunities and can move quickly, funding developments from available resources;

· ensuring we have total control over the location and initial development of the hotel as well as all maintenance and redevelopment, including extensions;

· maximising the commercial opportunity in any location for the Group;

· providing protection from increasing property costs during periods of high or persistent inflation and by offering greater protection during market downturns through lower rent commitments;

· strengthening our financial position and covenant, helping us to secure more favourable lease terms with landlords and attractive financing terms with lenders; and

· enabling us to recycle capital and release significant development profits through the disposal of some of our more mature properties through sale and leasebacks and other property-related transactions.

While freehold sites do benefit from the advantages highlighted above, when assessing the merits of a site, we are broadly agnostic between freehold and leasehold, as long as the resulting returns meet our internal thresholds.

By segmenting our portfolio into a series of categories based on a site's strategic importance, size, location and maturity, we can prioritise any potential opportunities to create further value. This could be through an extension or further development or by adopting a different financial structure that results in development profits and/or additional yield potential. As a result, we have a pool of sites where there is an opportunity to generate additional value, subject to market conditions and funding.

After a challenging period post-pandemic, there are signs that the property investment market is improving and activity levels in the hotel sector are increasing. We completed two sale and leasebacks for £56m in the first half of FY25 at an average yield of just over 4% and are progressing the sale and leaseback of a further seven hotels across a variety of regional UK locations at attractive yields.

With the evidence from these sales, together with other recent freehold and long-leasehold transactions involving Premier Inn hotels, we have instructed our external property valuers to complete a current market valuation of our freehold and long-leasehold estate in the UK, Ireland and Germany based on individual sale and leaseback transaction values. This is the same approach that was used to produce the last market valuation of £4.9bn - £5.8bn that was completed in 2018 and which was based on a yield range of 4.5% - 5.0%, a rent cover range of 2.25x - 2.40x and included £400m of net book value assets that were under construction and non-trading.

As part of our Five-Year Plan we will recycle at least £1bn of our more mature 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

Opportunity at Whitbread is anchored to three key themes within our overall People Plan - diversity and inclusion ('D&I'), wellbeing, and training and development.

We have made good progress over recent years on leadership diversity and have now set stretching targets to take us through to the end of FY26. Our ethnicity target is 10% and we now have 9.3% ethnic representation while we are striving for 45% female representation and currently stand at 39.8%.

We continue to prioritise the wellbeing of our teams, encompassing mental, physical, and financial health. We utilise our trusted experts, Health Partners and Hospitality Action, to provide advice and support, supplementing the activity that we lead internally.

We have enabled several training and development initiatives in the last year. Underlining our commitment to removing barriers we partnered with Barnardo's to develop a 10-week pre-employment programme to support care experienced young people into work with 30 people attending across two pilots to date and we continued our relationship with special educational needs colleges at Derwen and Hereward to provide a pathway to employment for people with learning difficulties. We also developed a layered development programme designed to support internal talent progress to Duty Manager, Hotel Manager, and Multi-Site Hotel Manager, and we offer apprenticeships at all levels in the organisation. We currently have over 750 apprentices in learning with over 300 achieving their qualification this year.

Responsibility

The launch of our AGP, as well as our transition to new national waste and wholesale food partners have both allowed us to further align our Force for Good programme with our core business strategy, seamlessly integrating sustainability into each initiative.

Almost all of the new rooms being added as part of AGP will be all-electric which, together with our decarbonisation programme to replace gas boilers with electric heat pumps, means we are making great progress towards our goal of zero operational carbon emissions by 2040. Our property teams in the UK and Germany are focused on designing energy-efficient hotels and reusing existing structures to help minimise emissions associated with embodied carbon. Over 90% of our new UK hotels have achieved an EPC rating of A or B, while in Germany, all 11 of our new hotels have attained BREEAM Excellent or Good, LEED Gold, or DGNB Gold and Silver certifications.

Our new waste and wholesale partnerships are fully aligned with our waste reduction and supply chain decarbonisation targets. They will also provide us with more data and insight which will help to support the implementation of effective sustainability strategies across our business.

By focusing on reducing waste and optimising resource use we can minimise our environmental impact and also generate cost savings, reinforcing the business case for sustainability. We are trialling innovative AI technology to help analyse food waste, providing insights for menu design and portion sizes.

Our efforts in water conservation, such as the rollout of lower flow showerheads and taps as well as active leak detection and repair, are proving effective in reducing water usage and heating costs as well as carbon emissions from gas boilers.

Community

Giving back to our local communities is a key part of our ethos and we are proud to have launched our latest commitment to raise £20 million by 2026 for the Children's Cancer Centre at Great Ormond Street Hospital, a transformative facility featuring three clinical wards and a patient carer lounge, with completion planned for Spring/Summer 2028. Funds are raised through individual and team-sponsored activities, guest donations made in our hotels and as part of the booking process.

In Germany, we continue to support Children.de, providing opportunities for disadvantaged children to engage in activities that develop important life skills. In Ireland, we partner with the Children's Health Foundation, providing essential medical equipment and rehabilitation support to children with chronic pain.

For further information on our Force for Good programme, please see our most recent ESG Report: https://www.whitbread.co.uk/sustainability/our-strategy-targets/.Business Review

Premier Inn UK1

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 a softer level of UK hotel market demand than last year. Total accommodation sales were in line with last year and +0.7pp ahead of the wider M&E market, with a 2% decline in RevPAR offset by net room growth. Despite the softer demand environment, Premier Inn maintained a healthy RevPAR premium versus the M&E market of £5.49, underpinned by our scale, brand strength, commercial expertise, operational excellence and vertically integrated operating model.

UK performance vs M&E market

1: STR data, standard basis, Premier Inn accommodation revenue, occupancy, ARR and RevPAR 1 March 2024 to 27 February 2025, UK M&E market excludes Premier Inn

2: STR data, revenue share of total UK market, 1 March 2024 to 27 February 2025

The impact of transitioning some of our lower-returning branded restaurants to a more efficient, integrated format as part of AGP, was in line with our expectations. While mitigated in part by strong breakfast sales in our integrated restaurants, total F&B revenues were 11% lower than last year.

Operating costs reduced to £1,696m (FY24: £1,722m). While inflation across a number of cost lines and further estate growth increased cost pressures, these were more than offset by the removal of F&B costs associated with AGP and an increased level of cost efficiencies. As expected, the reduction in F&B revenues from AGP was not fully matched by a reduction in costs, prompting a reduction in adjusted EBITDAR† to £997m (FY24: £1,048m).

Right-of-use asset depreciation in the period increased by 6% to £153m and lease liability interest increased by 8% to £145m reflecting recent growth in our leasehold estate and the impact of rent reviews completed during the period. We opened a total of 1,075 hotel rooms during the year and closed 534 lower-returning rooms as we seek to optimise the portfolio to drive higher returns. As at 27 February 2025, we had 85,984 rooms across 852 hotels that were open for business with a further 7,192 new rooms committed1, the majority of which are freehold, plus an additional 1,030 AGP extension rooms that are also committed2.

UK adjusted profit before tax† fell by 14% to £507m (FY24: £588m) reflecting the impact of AGP, softer hotel market demand and cost inflation. As a result, UK adjusted pre-tax margins† reduced to 18.8% (FY24: 21.2%) and UK ROCE† was 12.9% (FY24: 15.5%).

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 Germany1

1: Includes one site in Austria

2: On a constant currency basis, EUR

Total statutory revenue in Germany increased by 24% in local currency, reflecting: the increasing maturity of our estate and brand; a strong events calendar; improvements made to our trading strategies, especially for key events; the broadening of our distribution across new channels, including OTAs; and increasing brand awareness through increased distribution and effective online marketing campaigns. Total estate RevPAR increased by 18% to €60 and RevPAR for our cohort of 17 more established hotels4 increased by 17% to €67, outperforming the wider M&E market.

Germany performance vs M&E market

3: STR data, standard methodology basis, 1 March 2024 to 27 February 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: 60 hotels as at 27 February 2025

Other income in the period was £nil, while FY24 included the release of a £3m provision relating to a prior year claim for Government support which has since been finalised.

Operating costs in the period increased by 9% to £165m (FY24: £151m) reflecting cost inflation and the impact of new hotel openings. As a budget hotel operator, we are determined to ensure that our operating model is as efficient as possible, delivering a great guest experience whilst also keeping tight control over our costs. During the year and reflecting our increased scale and density of footprint, we were able to increase our spans of control with a more streamlined management structure, increasing our agility and reducing our costs. The full year impact of recent additions to our leasehold estate meant that right-of-use asset depreciation increased to £42m and lease liability costs were £21m. Other depreciation and amortisation charges of £15m reflected the growing size of our hotel network.

As at 27 February 2025, we had 62 hotels open and trading with a total of 10,965 rooms. During the year we secured a number of new freehold and leasehold opportunities with the result that our committed pipeline increased by 16% to 7,265 rooms and we remain on course to reach 20,000 open rooms by FY30.

The quality of our hotel product, the progressive maturity of our estate and the success of our commercial initiatives are combining to both raise our brand awareness and increase customer volumes. By continuing to carefully manage our costs we significantly reduced our adjusted loss before tax† to £11m (FY24: £36m loss).

Central and other costs

Central operating costs increased slightly to £37m (FY24: £36m). Net finance income (excluding lease liability interest) reduced to £20m (FY24: £42m) reflecting a reduction in interest receivable on the Group's cash balances to £34m (FY24: £50m) and a reduction in IAS 19 pension net finance income to £8m (FY24: £16m).

Financial review

Financial highlights

Statutory revenue

Statutory revenue was slightly lower than what was a strong performance last year, reflecting a reduction in F&B revenues as a result of AGP and softer UK market demand, offset by our continued estate growth across the UK and excellent progress in Germany.

Adjusted EBITDAR

Other income in the period was £1m, while FY24 other income included a £3m provision release relating to a prior year claim for Government support which has since been finalised. Operating costs in the period were £1,893m, 1% lower than last year (FY24: £1,906m), with increased levels of cost inflation and our continued estate growth across the UK and Germany, largely mitigated by AGP and good progress on cost efficiencies. As a result, adjusted EBITDAR† decreased by 3% to £1,030m (FY24: £1,057m).

Adjusted operating profit

The increase in the size of our leasehold estate across the UK and Germany resulted in a 6% uplift to right-of-use asset depreciation to £194m (FY24: £183m). 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 4% to £208m (FY24: £200m). As a result, adjusted operating profit† decreased by 7% to £630m (FY24: £674m).

Net finance costs

Lower cash balances reflected our capital expenditure programme and share buy-backs completed during the year, resulting in lower interest receivable of £34m (FY24: £50m). A reduction in IAS 19 pension net finance income to £8m (FY24: £16m) resulted in a reduced net finance credit (excluding lease liability interest) for the period of £20m (FY24: £42m credit). Lease liability interest increased by 8% to £167m, primarily driven by the opening of new leasehold hotels across the UK and Germany.

Adjusted profit before tax

Adjusted profit before tax† for the year was £483m, compared to a profit of £561m in FY24.

Adjusting items

Total adjusting items before tax were a charge of £116m for the year compared to a £109m charge in FY24.

The Group has completed a review of site-level FY25 performance that identified a number of sites for an impairment review. Within the UK, a net impairment charge of £43m has been recorded in relation to AGP, with £10m net impairment charge over the rest of the UK estate. The Group's impairment review process of the German estate has resulted in adjusting net impairment charges of £22m relating to five sites in Germany.

During the year, the Group made gains on property disposals (including sale and leasebacks) of £40m and created a provision in relation to damaged inventory of £4m.

The Group has assessed the presentation of costs incurred in relation to the implementation of the new hotel management system, HR & payroll system, restaurant 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 year were £25m, with cumulative cash costs to date being £66m (FY24: £41m). At this time the Group expects to incur future cash costs presented within adjusting items in the next financial year of between £5m and £15m.

The Group incurred legal, advisory and project management costs in connection with AGP as well as redundancy costs. This plan represents a significant business change for the Group's strategic focus in relation to F&B. Cash costs incurred by AGP and presented within adjusting items in the period were £20m, with cumulative cash costs to date being £26m. At this time the Group expects to incur future cash costs presented within this adjusting item in FY26 of up to £10m.

The Group incurred contract exit fees in relation to a supplier of £24m. The decision to exit allows the Group to make use of a different supply model and it is expected that the commercial and strategic benefit will accrue over several years.

During the year, the Group restructured its UK and Germany Support Centres, as well as its site operations in Germany resulting in a charge of £9m, with £7m of this within provisions at the end of the year.

Taxation

The tax charge of £134m on the profit before adjusting items (FY24: £160m) represents an effective tax rate on the profit before adjusting items of 27.8% (FY24: 28.5%). This is higher than the UK corporate tax rate of 25.0%, primarily due to the impact of overseas tax losses for which no deferred tax has been recognised. The statutory tax charge for the period of £114m (FY24: £140m) represents an effective tax rate of 31.0% (FY24: 30.9%). This is higher than the effective tax rate on the profit before adjusting items of 27.8%, primarily due to impact of the impairment of Germany property in the year.

Statutory profit after tax

Reflecting all of the movements above, statutory profit after tax for the year was £254m, compared to a profit of £312m in FY24.

Earnings per share

Adjusted basic profit per share† of 194.6p and statutory basic profit per share of 141.5p reflect the adjusted and statutory profits reported in the year and are based on a weighted average number of shares of 179m (FY24: 194m). 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

Given the Board's confidence in delivering a step change in performance, as outlined by our Five-Year Plan and the Group's strong balance sheet, the Board has recommended a final dividend per share of 60.6 pence (FY24: 62.9 pence), taking the total dividend per share for the year to 97.0p (FY24: 97.0p). The final dividend will be paid on 4 July 2025 to all shareholders on the register at the close of business on 23 May 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

1: FY25 includes £2m payment of contingent consideration (FY24: £nil payment of contingent consideration)

The strength of our vertically integrated model meant that despite the lower UK revenues, we made strong progress on cost efficiencies and together with an improved performance in Germany, adjusted EBITDAR† was £1,030m (FY24: £1,057m). Lease liability interest and lease repayments increased by £8m to £313m reflecting the addition of new leasehold hotels in the UK and Germany. Together with a working capital inflow of £5m (FY24: £34m), this meant that adjusted operating cashflow† was £723m (FY24: £787m).

The corporation tax net outflow in the period was £50m (FY24: £53m). This comprises payments of £49m in the UK, £1m in Germany.

Non-expansionary capital expenditure in the period of £247m partly reflects activity relating to our accelerated refurbishment programme, in addition to spend incurred for the Group's strategic IT projects. Expansionary capital expenditure of £241m was £15m lower than last year, reflecting the continued development of our committed pipelines in both the UK and Germany and the investment in our AGP.

We continue to optimise our estate and seek to take advantage of value-enhancing opportunities. Disposal proceeds of £137m includes £56m of sale and leasebacks together with £15m of AGP related disposals and £66m of non-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 £260m (FY24: £286m).

As announced with the Group's preliminary results on 30 April 2024, the Board recommended an increased final dividend of 62.9 pence per share reflecting the strength of the Group's FY24 performance and confidence in the outlook. The resulting payment of £115m was paid on 5 July 2024. At the interim results in October 2024, the Board declared an interim dividend of 36.4 pence per share, resulting in a £65m total interim dividend payment.

On 29 April 2024, the Board approved a £150m share buy-back which completed on 24 July 2024. At the interim results in October 2024, the Board approved a further £100m share buy-back which was completed on 13 November 2024. 

As a result, net debt† at the end of the period was £483m (FY24: £298m).

Debt funding facilities & liquidity

The Group's objective is to manage to investment grade metrics, maintaining a lease-adjustedleverage† ratio of less than 3.5x over the medium term2. 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 £3,082m (FY24: £2,757m) and the lease-adjusted leverage† ratio was 3.0x (FY24: 2.6x). As at 27 February 2025, £35m of the £775m Revolving Credit Facility is carved-out as an ancillary guarantee facility for the Group's use in Germany. At 27 February 2025, guarantees issued using the Commerzbank line totalled €30m (FY24: €23m).

The 2032 bonds were issued on 12 February 2025 and interest is payable semi-annually on 31 May and30 November. The bonds pay a fixed coupon of 5.50% of face value and are unsecured. On issue of these bonds, the Group received proceeds net of discount and costs of hedging of £398.3m and incurred fees of £2.3m. The proceeds of the bonds will be used for general corporate purposes, including the refinancing of existing debt.

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

1: FY25 includes £2m payment of contingent consideration (FY24: £nil)

UK maintenance expenditure in the period was slightly lower than last year at £240m (FY24: £249m) and related to our accelerated refurbishment programme and spend relating to the Group's strategic IT projects. UK expansionary spend of £179m includes the development of our committed pipeline as well as spend relating to the first phase of AGP. In Germany, capital expenditure of £69m was £19m lower than last year. As a result, total capital expenditure was £488m (FY24: £509m).

The balance sheet value of property, plant and equipment increased to £4.7bn (FY24: £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

1: Open plus committed pipeline

The current open UK estate is 55% freehold and 45% leasehold; However, as the existing committed pipeline is brought onstream, the mix will be 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 30% freehold and 70% leasehold.

The new site openings in Germany and continued expansion in the UK resulted in right-of-use assets increasing to £3.7bn (FY24: £3.6bn) and lease liabilities increasing to £4.2bn (FY24: £4.1bn).

Return on Capital1

1: Germany ROCE not disclosed as losses were incurred in the period

Group ROCE† in the period was 11.3% reflecting several factors including lower UK revenues and the impact of AGP, partially mitigated by strong progress in Germany.

Events after the balance sheet date

The Board of Directors approved a share buy-back on 30 April 2025 for £250m and is in the process of appointing the relevant brokers to undertake the programme in accordance with that approval.

Pension

The Group's defined benefit pension scheme, the Whitbread Group Pension Fund (the 'Pension Fund'), had an IAS19 Employee Benefits surplus of £135m at the end of the period (FY24: £165m). The change in surplus was primarily driven by: asset performance being lower than the discount rate; and changes in demographic assumptions which increased the assessed value of the pension obligations. These factors were partially offset by an increase in corporate bond yields resulting in an increase in the discount rate used to value the liabilities.

There are currently no deficit reduction contributions being paid to the Pension Fund, however this year an annual contribution was paid to the Fund through the Scottish Partnership arrangements which amount to approximately £12m. 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 reconsidered the principal risks and uncertainties of the Group, which are summarised below.

Whitbread's risk profile remained relatively stable across its highest rated risks, which acknowledge ongoing external uncertainties such as geopolitical conflicts and weak near-term sentiment regarding economic growth in both the UK and Germany. This more cautious outlook has been heavily influenced by a more conservative approach to rate cuts being adopted by central banks, with inflation now expected to persist longer. At the same time, hotel market demand continues to be a subdued; and we remain mindful that reduced levels of disposable income may lead to a softening of consumer sentiment prompting increased pressure on GDP growth.

The Group is undergoing a heightened period of change that is expected to continue for the next three years as new organisational structures are finalised and embedded, and as several significant strategic programmes are delivered. These initiatives impact many areas of our business including our people, property, technology, supply chain, commercial efforts and guest contact points, testing the capacity and resilience of the organisation. In order to ensure as smooth a transition as possible, careful planning and execution are paramount so that the full benefits of these changes can be realised as expected.

Acknowledging the changing nature of the Group's principal risks and how they might impact our business, we have updated the descriptions of the Group's key risks as follows:

· Uncertain economic outlook - in both the UK and Germany due to broader macroeconomic trends, geopolitical volatility and local political instability, affecting consumer confidence, reduced travel and ultimately weaker hotel market demand and higher costs;

· Cyber and data security - data breaches or operational disruption caused by malware such as ransomware, resulting in a loss of brand trust and regulatory fines;

· Strategic business change and interdependencies - being unable to deliver major transformational programmes, across successive years and failing to realise targeted benefits due to the high volume of change;

· Prolonged focus on food and beverage propositions - continued uncertainty for our guests and team members along with proposition changes could damage brand perception, reduce our share of the branded restaurant market and put pressure on our ability to maintain a RevPAR premium in our Premier Inn hotels versus the wider M&E market;

· Brand strength and customer demand - these key success factors can be influenced by sector specific influences including changes in customer behaviour, brand perception and competitor activity. To remain relevant and resilient against potential threats from digital disruptors, especially during periods of market weakness or challenging economic conditions, the Group must continually adapt and strengthen its brands;

· Extended stagnation of the Property market - if stagnation continues for longer than expected and impacts our ability to maintain the pipeline in both UK and Germany, this could put pressure on our returns and growth in subsequent years;

· Profitable growth in Germany - we may be unable to execute our strategy in Germany successfully;

· Health & safety - adverse publicity and damage to our brand due to death or serious injury as a result of company negligence, or a significant incident resulting from food, in particular the risk from allergens, as well as fire, terrorism or another safety failure;

· Talent, attraction and retention - albeit stable currently, labour market challenges may be compounded by real cost-of-living pressures and 'hot spots' covering specific roles. Additionally, planned leadership and management changes, along with broader business transformations, contribute to uncertainty, impacting engagement and causing disruption;

· Third-party arrangements - business interruption due to withdrawal of services by one or more of the Group's critical suppliers; provision of services below acceptable standards; lack of or failure of information security controls; and/or reputational damage because of unethical supplier practices; and

· Environmental, Social and Governance including climate change risk - this encompasses a broad range of risks that may arise individually or collectively. Examples include: failing to meet carbon targets, extreme weather events impacting natural resources, socially unacceptable practices and the increasing volume of regulatory change and compliance requirements. 

The Board continually assesses a broad spectrum of emerging risks and their potential impact on the Group's strategic objectives. Over the past year, we have identified several emerging risks including: how changes to the way in which countries work together is affecting the balance of power around the world; the potential importance of recycling our assets to generate cash for future growth; the rapid pace of technological and digital advancements and our ability to respond effectively to seize opportunities; and the challenges or investments required in our operating model to ensure long-term efficiency savings.

Our approach to identifying and managing emerging risks is embedded into the risk management framework and integrated through the Group's policies and risk control mechanisms.

The detail of our principal risks can be found in our Annual Report which is available on the website 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.

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated statement of changes in equity

Consolidated balance sheet

Consolidated cash flow statement