Good morning, everyone. I'm Dominic Paul, and I'd like to welcome you to Whitbread's interim results presentation. Today's presentation will take place by remote webcast, followed by a live Q&A session at 9:15 A.M., when Hemant Patel, our Group CFO, and I will be happy to answer your questions. Details of how to join the call can be found on our website. I will start with a brief run-through of our results, touching on the progress we've made towards our strategic plans during the first half. I'll then hand over to Hemant, who will take you through our half one performance in detail, including an update on our capital allocation framework. I'll then cover the key strategic initiatives which ladder up to our new five-year plan. But first of all, I will start with the highlights from our first half results.
We delivered a robust performance in the first half, with total revenues in line with last year and 45% ahead of full year 2020. This reflects lower F&B revenues as a result of the positive changes we are making to optimize food and beverage through our Accelerating Growth Plan. A slightly softer U.K. demand environment versus what was a particularly strong performance last year, and the excellent progress we've made in Germany. U.K. profit margins reduced slightly to 24.6%, reflecting our Accelerating Growth Plan, as well as the impact of net inflation. This also meant that U.K. return on capital employed was back year on year at 14%. However, it remains around two percentage points higher than it was pre-pandemic.
We have made really good progress in Germany so far this year, delivering strong RevPAR growth with a much reduced pre-tax loss, and we remain on track to break even on a run rate basis this calendar year. While lower interest receivable meant that PBT was back 13%, the strength of our vertically integrated model meant that EBITDA was down just 3% year on year and still 43% up versus full year 2020. As a result, we continue to generate significant free cash flow that funded GBP 278 million of shareholder returns in the half. Throughout the period, we executed at pace and made excellent progress against our strategic initiatives whilst continuing to deliver for our guests. In the U.K., our new reservation system is unlocking several commercial benefits and enhancing the digital guest journey.
While current trading has been slightly softer, we are encouraged by the early performance of these initiatives, which are helping us to widen our outperformance versus the market. We expect that they will drive further momentum in the second half this year and into next year, complementing our other efforts to drive like-for-like sales. In Germany, building on an excellent first half performance, our brand is getting stronger, and with improvements to our pricing mechanics, we are delivering a strong current trading performance and remain on course to reach break-even on a run rate basis later this year. As a budget brand, we remain focused on carefully managing our costs and have made great progress during the first half. We now expect to deliver a further GBP 10 million of efficiencies, taking our total cost savings this year to GBP 60 million.
While we remain a short lead business and our visibility on future demand remains limited, each of these elements underpins our confidence in delivering an improved performance during the second half, reflected by our increased dividend per share and further £100 million share buyback. We are increasingly confident about the execution of our plans and what they will deliver over the next five years. In the UK, we are continuing to extend our market-leading position, taking advantage of reduced market supply and limited growth by our competitors. With our committed and future pipeline, as well as the 3,500 extension rooms from our Accelerating Growth Plan, we have clear line of sight to 98,000 open rooms by full year 2030.
Our Accelerating Growth Plan to optimize our food and beverage at a number of sites and increase our U.K. rooms estate through extensions will deliver increased margins and returns for our U.K. business. Together, our network expansion and Accelerating Growth Plan will deliver over GBP 220 million of incremental profit before tax. These initiatives are in addition to the benefits that we expect to deliver from our commercial program that is focused on driving like-for-like sales in our core U.K. business, which over time will help offset cost inflation and drive profit margins. In Germany, we are making excellent progress and expect to have 20,000 rooms open by the end of full year 2030 as we grow towards our ambition of becoming the number one hotel brand.
With our increased scale and the continued maturity of both our estate and the Premier Inn brand, we expect to grow revenues and margins so that in five years' time, we will deliver GBP 70 million of profit before tax, an uplift of GBP 80 million versus consensus for the current financial year. We continue to drive efficiencies across all areas of our business. Having already made great progress and increased our targeted cost savings for this financial year, we are also today announcing the extension of our efficiency program and expect to deliver GBP 50 million of savings on average each year to full year 2030. This plan will be fully funded by annual Net CapEx of GBP 500 million, which is net of proceeds from property-related transactions, as we continue to recycle capital via sale and leasebacks. Bringing this all together...
Over the next five years, we expect to deliver incremental annual adjusted profit before tax of at least GBP 300 million, generating more than GBP 2 billion of dividends, buybacks, and if suitable opportunities arise, high returning investments. I will come back shortly to provide some more details on this, but first, I will hand over to Hemant, who will take you through our first half performance in more detail and give you an update on our capital allocation framework.
Thank you, Dominic, and good morning, everyone. As Dominic mentioned, we've made excellent progress in the half as we begin to execute the strategic initiatives that will deliver a step change in our financial performance over the next five years. With UK revenues slightly behind last year, offset by a strong uplift in Germany, overall group revenues were flat in the first six months of the year. Operating costs increased by 1% in the period, driven by inflation and our continued estate growth, partially offset by the cost efficiencies delivered in the half. As a result, Adjusted EBITDA was only marginally behind last year at GBP 611 million. With lower interest receivable on the group's cash balances, Adjusted profit before tax reduced to GBP 340 million.
Adjusting items in the period amounted to a net charge of GBP 31 million, resulting in a reduced statutory profit before tax of GBP 309 million. During the period, we continued to generate significant cash flow, which helped to fund capital expenditure of GBP 199 million, as well as GBP 278 million of shareholder returns via dividends and share buybacks. We've maintained a strong balance sheet with lease-adjusted leverage of 3.1 times within our stated threshold of 3.5 times. I'll now run through the drivers behind this performance, starting with our U.K. business. U.K. accommodation sales were in line with last year as our continued estate growth offset our softer like-for-like performance. Food and beverage sales performed in line with our expectations, reducing by 7% and reflecting the transitionary impact of our Accelerating Growth Plan .
As a result, U.K. revenues were 2% behind last year. Operating costs increased by 1%, reflecting our continued estate growth and cost inflation, which was partially mitigated by the cost efficiencies we delivered in the period. The net result was that U.K. adjusted profit before tax was 12% behind last year at GBP 357 million. Pre-tax margins of 24.6% were behind last year, but remained 30 basis points ahead of FY 2020. The U.K. hotel market has been slightly softer in the first half of the year as we annualize against a very strong period last year.
Our occupancy levels stepped up in the second quarter as we entered a stronger demand period over the summer months, and we delivered 83% occupancy for the half, which was slightly behind last year but remained five percentage points ahead of pre-pandemic levels. Average room rates strengthened into Q2 as we began to roll out a number of initiatives included in our commercial program. The result was that RevPAR was 2% behind last year, but remained significantly ahead of FY 2020. Our continued estate growth offset our softer RevPAR performance, and as a result, accommodation sales were in line with last year, maintaining our significant post-pandemic growth at 56% versus FY 2020. Our market-leading guest proposition is focused on delivering a consistent, high-quality product for a great price and enables us to command a substantial RevPAR premium versus the market, nearly GBP 6.
Following our significant outperformance versus the market over the last few years, our accommodation sales performance was ahead of the mid-scale economy market by 0.2 percentage points. We maintained high levels of occupancy in the period, but we were slightly behind the market after what was an exceptionally strong performance last year. However, with the optimization of our pricing strategies, we've been able to grow average room rates ahead of the market while continuing to offer great value for our guests. Moving on now to Germany. As Dominic mentioned earlier, we are really encouraged by the progress we've been making in Germany. Revenues grew strongly and were up 21% versus the same period last year, reflecting the increased maturity of our hotels and our enhanced trading capabilities, supported by a strong events calendar.
Operating costs in the period increased to GBP 85 million, reflecting our continued estate growth and cost inflation. The strong growth in revenues and our focus on driving a more efficient cost base meant that adjusted losses before tax reduced to GBP nine million for the period. We remain particularly pleased with the performance of our cohort of more established hotels, which delivered an increased profit before central overhead of GBP 10 million and are progressing well towards reaching their target levels of return. As well as having grown strongly in absolute terms, we've also made really good progress versus the market. Our momentum increased during the second quarter, led by the increasing maturity of our brand and our estate. The outperformance of our cohort of more established hotels stepped up in the period and delivered a RevPAR of 67 EUR.
The relative immaturity of our estate overall meant that at a total level, our network RevPAR was in line with the market, but our pace of growth strengthened. Turning now to group cash flow. A key component of our vertically integrated operating model is its ability to convert revenue growth into substantial free cash flow. In the period, we still delivered adjusted operating cash flow of GBP 411 million, helping to fund our significant program of investment as well as dividends and returns to shareholders. Our CapEx spend in the period was GBP 199 million, reflecting the development of our committed pipeline across the UK and Germany, our ongoing refurbishment and maintenance program, as well as spend related to our strategic IT projects.
We received GBP 44 million of disposal proceeds, including the sale of a hotel in Manchester for redevelopment into student accommodation as we continue to optimize our estate when value-enhancing opportunities arise. The net result was a total cash flow before shareholder returns of GBP 206 million . We returned GBP 278 million to shareholders via increased dividend payments and share buybacks, resulting in a net cash flow of GBP 72 million and a net debt position at the period end of GBP 370 million . Our lease-adjusted leverage increased to 3.1 times.
Our freehold property estate underpins the strength of our balance sheet and unlocks a number of advantages for the group, including total control over the location and development of our hotels, including the ability to optimize our estate to drive returns even higher, such as through our Accelerating Growth Plan, which converts lower-returning branded restaurants into high-returning extension rooms. Recycling capital through sale and leasebacks to drive higher returns and capture development profits, and a strong financial covenant helping to secure more favorable terms with landlords and financing terms with lenders. A good example of us using our in-house property expertise and our freehold backing to unlock further opportunities for growth is our newest prime London site in Paddington.
369-bed development is the first of its kind, bringing together the Premier Inn and hub brands under one roof, giving our guests both choice and flexibility whilst maximizing overall site returns. Owning a substantial freehold portfolio also gives us the ability to manage our net CapEx spend by recycling capital through sale and leasebacks whilst driving higher returns. In September 2024, we completed two sale and leaseback transactions for a total consideration of 56 million GBP and an average yield of 4.1%. We've seen an improving trend across current trading period after a soft start to September, with the result that total U.K. accommodation sales for the first six weeks were down 1% versus last year. However, with the continued deployment of our commercial initiatives, our outperformance versus the market increased to 1 percentage point.
Occupancy remained high over the period at 84%, and we're also maintaining strong room rates, resulting in total U.K. RevPAR of 72 GBP, which was 4% behind last year, but remains well ahead of pre-pandemic levels. F&B sales were down 14% in the period, in line with our expectations, reflecting the impact of our Accelerating Growth Plan. In Germany, we delivered a really strong performance through September, with total accommodation sales significantly ahead of last year. RevPAR for the total estate was 79 EUR, and our cohort of more established hotels delivered a RevPAR of 87 EUR, well ahead of both last year and the wider M&E market.
With a strong forward book position and the continued execution of our plans, we remain confident in reaching breakeven on a run rate basis later this calendar year and are on track to deliver our longer-term targeted levels of return. There are no changes to FY 2025 guidance, other than I am pleased to say that we've been able to boost and accelerate a number of cost-saving initiatives. We are now on track to deliver 60 million GBP of cost savings in FY 2025 versus our previous expectation of between 40 and 50 million GBP. As a result, we are now expecting net inflation to be between 2% and 3%. A summary of our FY 2025 guidance can be found in the appendix to this presentation.
Our Capital Allocation Framework allows us to strike an appropriate balance between investing in high-returning growth opportunities and returning excess capital to shareholders. Just as a reminder, the priorities of our framework are to maintain investment-grade leverage metrics, continue to invest in maintaining and growing our business in the U.K. and Germany, including freehold purchases and bolt-on M&A, as and when attractive opportunities arise. Grow dividends in line with earnings. And lastly, return excess capital to shareholders. Maintaining our investment-grade status is an important pillar of our framework, as it unlocks commercial and financial benefits for us, including access to more attractive financing terms with lenders. Having returned capital to shareholders in the half, our lease-adjusted leverage ended the period at 3.1 times, which is within our threshold of 3.5 times.
In line with our previous guidance, we are expecting gross CapEx spend this year to be between GBP 550 and GBP 600 million. The completion of two sale and leasebacks in September, as well as the Accelerating Growth Plan-related disposals. We remain on track to realize proceeds from property-related transactions between GBP 175 and GBP 225 million. Given our robust financial performance, our confidence in the medium-term outlook, and the strength of our balance sheet, we're increasing the interim dividend to 36.4 pence per share. We've also announced our intention to launch a further GBP 100 million share buyback to be completed by the time of the full year results announcement in May 2025. As Dominic will come on to shortly, our five-year plan is set to deliver a step change in profits, margins, and returns.
It will also see us generate more than GBP 2 billion for dividends, share buybacks, and if suitable opportunities arise, additional high-returning investments. I'll hand back to Dominic to talk through our strategic priorities and future plans in more detail.
Thank you, Hemant. I'll now take you through the key initiatives that form the basis of our new five-year plan. I am particularly pleased with the pace at which we are executing our strategy. Across all three pillars, we are making great progress. First, as a clear UK market leader with around 12% share of all hotel rooms, we are determined to both protect and extend our market-leading position. Second, we are making excellent progress in Germany. We remain on course to become the number one hotel brand. And third, ensuring that we are set up for long-term success, we need to continue to drive efficiencies across all areas of our business. The continued execution of our plans is set to deliver a step change in our profits, margins, and returns. I will start with the UK, which is our biggest market and where we see a significant opportunity.
With supply remaining below pre-pandemic levels, there is a clear opportunity for Premier Inn to take further share of the UK hotel market. Our committed and future pipeline, together with the extension rooms unlocked through our Accelerating Growth Plan, means that we expect to reach at least 98,000 rooms open by full year 2030, as we progress towards our long-term potential of 125,000 rooms across the UK and Ireland, a 45% increase from where we are today. The majority of this opportunity is in London and the Southeast, where our hub by Premier Inn brand is proving popular with guests while driving high levels of return. Our Accelerating Growth Plan will enhance the guest experience and unlock 3,500 new high-returning extension rooms in locations where we know that we have excess demand, increasing overall site level performance.
Our plans are on track, with over a third of all schemes already in planning and the first cohort of our newly built integrated restaurants nearing completion. Once complete, our Accelerating Growth Plan will deliver incremental profit versus the current financial year of at least GBP 100 million, while increasing our UK margins and returns. Moving on now to our commercial program. We have a number of initiatives that will support our market-leading position and drive like-for-like sales. Premier Inn remains the UK's best-known hotel brand, with over 90% brand awareness and high levels of returning guests. We continue to invest in our brand with the launch of our latest Rest Easy marketing campaign to drive awareness even further. We have made good progress broadening our digital footprint and distribution.
For example, we've increased the range of inventory we can sell through digital partners, such as Trivago, by making family rooms and cancelable rates available. This has led to an uplift in bookings, as you can see on the slide. Alongside this, a thorough review of our digital marketing activity has led to improvements in how we manage and structure our bidding activity, resulting in increased returns on our advertising spend. We are continuing to increase our volumes through travel management companies and have extended our reach by adding connectivity to Sabre, who are one of the big three global distribution systems. This gives us access to new corporate partners, both in the UK and internationally. Taken together, each of these initiatives will help us to drive a further increase to searches and conversion.
Following the successful rollout of our new reservation system in March 2024, we have been able to unlock new digital capabilities that will help to drive revenue growth. In the second half of this year, we will be able to provide guests with even more choice as part of their digital booking journey, which will drive ancillary revenues. We are trialing our Room with a View concept, and the early signs are really encouraging. We will also be able to price these options dynamically in response to demand, maximizing our revenue outcomes. Other benefits from our new digital platform that are helping to improve conversion include upgrades to our Premier Inn app, enhanced CRM tools, and highly effective push notifications. All of these initiatives are helping to improve customer engagement and drive like-for-like sales.
We are sustaining our position as the UK's favorite hotel brand, driven by our reputation for high quality and great value. To maintain our market-leading position, we have continued to invest in our core offer and service, including rolling out our latest standard room format called ID5, which is attracting higher guest scores than our previous room types. We are opening more Premier Plus and twin rooms that command a RevPAR uplift versus a standard room in the same hotel. In food and beverage, we have continued to introduce our integrated ground floor concept across more of our hotels, which is delivering an uplift to commercial performance and higher guest scores at these sites. For our remaining brand restaurants, we have a number of initiatives in place to help drive sales and profitability.
Looking after our teams, we continue to invest in their pay, training, and development, working hard to protect their wellbeing, and we continue to maintain high levels of engagement and employee satisfaction. Now on to our plans in Germany. Germany is a significant growth opportunity for the group, and the investment case remains highly attractive, with a large, fragmented market and no clear market leader. We've grown rapidly over the last five years, with 10,500 rooms open and nearly 7,000 rooms in our pipeline, and we are on course to become the number one hotel brand in Germany. On the back of a really strong performance in the first half, our future trajectory is underpinned by the following initiatives that will drive sales and increase profits. First, the quality of our hotels means that we are producing great guest scores.
We have seen a year-on-year increase in our brand awareness scores as a result of our first online marketing campaign and positive contribution from online travel agents. Second, our commercial program is driving increased revenues through improvements to our trading strategies, including better pricing for key events. A good example of this is our Oktoberfest performance this year, where we have seen a marked increase in RevPAR at our Munich city center hotel. Third, we have continued to roll out new products, such as Premier Plus, and drive efficiencies through positive changes to our operations without compromising the quality of service to our guests. I'm really pleased with the momentum that we're building in Germany, proving that the Premier Inn brand can travel internationally, and we remain on track to break even on a run rate basis this year.
Underpinning our confidence, we are today outlining the expected trajectory for our German business as part of our new five-year plan. As we continue to build our pipeline, in five years' time, we will have 20,000 rooms open. With this increased scale and the progressive maturity of both our estate and brand, we expect to achieve a network RevPAR of around EUR 80. The benefit of our operating leverage, improvements to our operating model, and additional scale benefits together mean that in full year 2030, we expect to deliver adjusted profits of GBP 70 million. We also expect to reach double-digit returns on our current open portfolio in the same year. As our estate and brand continue to mature beyond this point, we will see a further increase to profits, margins, and returns.
Our vertically integrated model means that we can enact positive change in the communities where we operate at the same time as delivering operational efficiencies. Our Force for Good program holds us accountable for delivering meaningful change across our three key pillars of opportunity, community, and responsibility. Key highlights in the half include the expansion of our Thrive program that helps to support young people with special education needs as they seek to enter the workplace. Continuing our work with our charity partners, including raising over GBP 25 million for Great Ormond Street Hospital over the past 12 years. We've also partnered with a local charity in Ireland, where we have a growing presence. Our focus on managing our environmental footprint has seen us roll out six sites that are now fully powered by renewable energy.
We are also already halfway to reaching our target of reducing water usage per guest by 20%, which will also deliver further cost efficiencies. We've made excellent progress on efficiencies this year and are now committing to deliver a further GBP 150 million worth of savings, equating to an average of GBP 50 million per annum to full year 2030. Whilst there are no silver bullets, the program reflects multiple initiatives across the business that, when taken together, add up to a lot, including better labor scheduling, both in housekeeping and front of house staff, increased use of new technology, such as robot Hoovers, and leveraging our new reservation system to help reduce costs. In summary, I'm really pleased with the pace at which we are executing our plans, which are set to deliver a step change in our profits, margins, and returns.
Taking these initiatives together, our five-year plan will see us deliver at least GBP 300 million of incremental profit before tax, equating to a 60% uplift from the current full year 2025 consensus. In the UK, our network expansion and the execution of our Accelerating Growth Plan will together deliver incremental profits of GBP 220 million. The trajectory of our German business is exciting, and we are continuing to build momentum. In five years' time, with an uplift to revenues and margin improvements, we will deliver incremental profit of GBP 80 million versus current consensus expectations for full year 2025. The majority of these initiatives are completely within our control, and we are confident in delivering at least GBP 300 million of incremental profit before tax. This assumes that our UK like-for-like sales growth plus efficiencies equals UK cost inflation.
However, over the life of our plan, our ambition is to do much better than this, and we are confident in growing UK margins. With the execution of this plan, we will deliver significant operating free cash flow. By maintaining Net CapEx of GBP 500 million per annum and keeping leverage at around current levels, the group will generate more than GBP 2 billion over the next five years for dividends, buybacks, and if suitable opportunities arise, high-returning investments. Our momentum is building, and whilst trading has been slightly softer this year, we feel confident in driving an improved performance in the second half.
We are executing well and have put in place a series of initiatives that will extend our market leadership position in the U.K., drive our business in Germany, where we are on track to reach break-even on a run rate basis late this year and become the number one hotel brand, deliver significant cost savings over the next five years, and through our five-year plan, we expect to deliver at least GBP 300 million of additional PBT and generate more than GBP 2 billion for dividends, buybacks, and if suitable opportunities arise, high-returning investments. When I took over as CEO just over 18 months ago, I knew we had a great business with the potential to go further. We are confident that we can deliver against this objective, outlining today a clear roadmap to deliver a step change in profits, margins, and returns.
Thank you for joining us this morning. Hemant and I will host a Q&A session starting at 9:15 A.M. U.K. time, and we look forward to taking your questions then. You'll be able to find these details of how to join the call on our website.