Good morning. I'm Alison Britton, 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 call Q and A session at 09:15AM, when Nicolas, Cabri and I will be delighted to answer your questions. Details of how to join us for the Q and A can be found on our website. Turning to our agenda this morning, I'll start by taking you through our operational performance during the first half, recapping on our ongoing response to the COVID nineteen pandemic.
I'll then hand over to Nicolas, who will explain our financial performance for the first half, talk you through our current trading performance, and cover our strong balance sheet. And finally, I will come back and finish by covering our strategy to drive long term shareholder value. For those of you who watched our full year presentation in May, you'll be familiar with the structure that you can see on this slide. Our half one headline financial performance was well trailed a month ago in our half one post close trading update, and so I won't dwell on it today except to note that it reflects the closure of our businesses for a large part of the period. So let's fast forward to where we are today.
We reopened our businesses quickly and safely with almost all our estate opened by the August. We've benefited from the strength of the Premier Inn brand, our leading customer proposition and our operating model. And as a result, our UK accommodation sales performance has materially outperformed the market, and we've taken market share. In Germany, we've more than tripled our open estate to 21 hotels and have secured a network of 53 open and pipeline hotels. And today, we've announced the signing of up to a further 15 hotels that will take our open and committed pipeline to 68 hotels, another big step on our journey to developing a national network in Germany.
As you can see from this slide, we describe our plans to manage the business through this difficult period as having three parts, protect, restore and drive long term value. It's important to note that these phases are not linear, but rather they happen in parallel, which allows us to react quickly to manage changes brought about by the response to the pandemic in both The UK and Germany. During September, we started to see local restrictions and lockdowns introduced to control the spread of the COVID virus. And recently, the governments of all four devolved nations in The UK have introduced national restrictions. As such, the near term environment is challenging and we need to be nimble and agile to respond to changing conditions as they happen.
In the short term, the extension of local and regional lockdowns brings significant operational challenges, drives increased levels of uncertainty and means that we'll have to continue to protect our business and carefully manage our cash flow. However, our long term strategy remains unchanged. We see a significant opportunity for our business to leverage the competitive advantages of our ownership model, our strong brand, direct distribution and broad customer reach. And we've already seen the evidence of this in our strong performance since reopening. We'll be operating in a weakened sector, and we are already seeing signs of distress and constraint in the competitive landscape.
It's worth remembering that some of our best returns have been achieved by investing during periods of weakened supply growth and competition. And our strong financial position gives Whitbread the confidence to invest to take advantage of the enhanced structural opportunities that will undoubtedly exist in both The UK and Germany. This slide summarizes the extensive actions we took in response to the COVID crisis, including a robust operational response to protect our guests and our people, a series of measures to act responsibly and support the national effort, a series of rapid actions to strengthen our financial position, including the rights issue in May, and continuing to take further protective action where needed, including the recent actions to right size the business and ensure that we emerge with a more flexible, cost effective and resilient operating model. I don't intend to go through each one of these points as we've covered a lot of the detail in our previous releases. However, I don't want to lose sight of what's been an incredible team effort by everyone in our business, helping position us in the best possible way, the benefits of which we're already starting to see.
I'm extremely proud of and grateful to our teams for the resilience during this very difficult period. And I'd like to take this opportunity to thank them for their tremendous hard work and commitment. This slide shows that since reopening in The UK, we're taking significant market share. Our share of the total hotel market has grown by 3.5 percentage points to around 10.5%, market share growth of almost 50%. Our reopening strategy was to maximize total sales, and we achieved this by leveraging the strength of the trusted Premier Inn brand and our direct distribution model supported with targeted direct marketing.
We introduced new flexible rate classes that enabled customers to cancel or amend bookings, which helped drive conversion rates by allowing customers to book with confidence. Using the learnings from the 39 hotels we kept open for NHS workers during the lockdown period, we implemented robust new hygiene and cleaning standards, and this allowed guests to stay with confidence and has driven even higher brand scores. Importantly, our operating model enables revenue to contribute to fixed costs at very low occupancy levels, meaning the opening of the vast majority of the estate has reduced both losses and cash outflows. All of these factors combined together to help us deliver these impressive market share gains. In Germany, our open estate has increased from six hotels at the start of the year to 19 hotels at the end of the first half.
And after the half year, a further two hotels were opened, taking the total open estate to 21. As you can see from the map on the slide, this network now gives us a national footprint with a presence in many major German cities. During the lockdown period, which in Germany started at the March and lasted until mid May, we took the opportunity to refurbish and rebrand 13 of the hotels that were acquired from the Foremost Hospitality Group at the February. These new hotels all showcase completely new reception areas and restaurants, and each guest room has been converted to a high quality, recognizable Premier Inn product. During the reopening phase, we replicated our strategy from The UK by leveraging direct distribution, implementing enhanced cleaning and hygiene protocols, and introducing new flexible rate classes.
Post the reopening, occupancy levels grew steadily across all open sites driven predominantly by leisure demand. Our current performance in Germany is encouraging despite the testing conditions with strong customer scores reflecting the strength of the customer offering and an accelerating pipeline. We believe Germany provides Premier Inn with a compelling structural long term growth opportunity as we look to replicate our UK success. We have both the ambition and the capability to become the number one budget brand in Germany, and we're gathering momentum with more to come. And as clear evidence of these opportunities, we've today announced the signing of up to 15 hotels in Germany that, subject to competition clearance, would extend our open and committed pipeline to 68 hotels.
Our business strategy is underpinned by our Force for Good ESG program. The three elements of our Force for Good program, opportunity, community, and responsibility, helps us do business in the right way and supports our teams, the environment, our communities, our suppliers, and our guests. The benefits are clear and as part of our overall strategy will help drive long term value. As you can see from the slide, the Force for Good programme covers a wide range of areas from championing inclusivity and diversity to delivering challenging environmental targets through to ensuring the integrity of our supply chain, to name just three. Operating responsibly and sustainably is embedded in what we do, We've made very good progress and have recently set new stretching targets in a number of the environmental areas.
Slide showcases some of the things we did during the pandemic to support our guests, colleagues, and the wider community. I'm extremely proud of what we achieved and how we helped support the national effort, from keeping our hotels open for NHS workers to providing meals for the needy and also raising a significant sum of money for our charity partner. It was a fantastic effort by everyone involved and one that forms another chapter in our very proud two seventy eight year history. Having taken a series of decisions to protect the business and successfully reopen, our focus is continuing to protect and also to restore our strength by continuing to drive long term value and to increase our leading position as a clear winner in the sector. The impact of the COVID pandemic on the hospitality sector will be significant, and it will change the competitive landscape with potentially a material slowdown in room growth, significantly constrained future investment and an acceleration in the structural decline of the independent sector.
Whilst we will not be immune in the short term, we are the largest player with the number one brand and our considerable financial resilience and strong balance sheet give us confidence to invest. And so we will be well placed to emerge as a winner. Whitbread's long term strategy for value creation in The UK and Germany remains unchanged, and it's highly compelling. We have a track record of deploying capital with discipline and with focus on strong returns, and this will continue. We have great opportunities to grow and optimize our large network in The UK whilst Germany offers enormous potential for structural growth.
I'll now hand over to Nicolas to talk you through the half one financials, after which I will talk in more detail about Whitbread's strategy to drive long term value.
Thank you, Alison, and good morning, everyone. Our performance in the half year was in line with our guidance and our expectations and reflects the closure of the vast majority of our business from the March through to May in Germany and to July in The UK. With the closures, the first half's revenue was down 77% year on year. We also had other income of CHF86 million from the benefit we received from the government's job retention scheme. As we reacted quickly to the environment, operating costs were £168,000,000 lower than last year, driven by the discretionary cost savings, the reduction in revenue related costs and the benefit of the suspension of business rates.
This decline in revenue partly offset by the cost reductions led to an adjusted loss before tax of £367,000,000 We also had non cash adjusting items, including an impairment of £348,000,000 triggered by COVID-nineteen, taking our statutory loss before tax to £725,000,000 The adjusting items were predominantly impairment of goodwill in Germany and of assets in The UK. The quantum of the impairment charge, as I have said, is COVID related and is largely due to an increase in the discount rate, reflecting the greater volatility in our sector and the environment and a reduction in anticipated cash flow in both countries over the next twelve twenty four months. We finished the half with a strong balance sheet and good liquidity position enhanced by the successful £1,000,000,000 rights issue we completed in June. Turning to our cash flow, this chart shows a waterfall from our EBITDAR on the left to our net cash outflow before the rights issue and debt repayment on the right. Our net cash outflow for the period was GBP $462,000,000 compared to the guidance we gave in May £600,000,000 This improvement was driven by the faster ramp up of our hotels over the summer.
There was a working capital outflow of £129,000,000 primarily from the £58,000,000 reduction in customer deposits and £28,000,000 owed to us by the government for their support schemes, including the job retention scheme and the eat out to help out scheme. Maintenance capital expenditure of 40,000,000 and expansionary capital expenditure of 81,000,000 was in line with the guidance we gave earlier in the year and relates to the expenditure already committed in March and essential IT, repairs and maintenance. On the bottom left of the chart, you can see that we started the year with net debt of EUR $323,000,000, which together with the cash outflow and the rights issue proceeds resulted in net cash at the end of the half of £200,000,000 Right now, having good liquidity and a strong balance sheet is paramount. And as we continue to manage our cash flow carefully, this will help protect us through the tough environment and ensure we can invest at previous levels in our unassailable winning platform in the future. On the left of this slide, you can see our total available facilities of GBP 1,700,000,000.0, of which GBP $734,000,000 is utilized with our RCF totally undrawn on our cash and cash equivalent following the rights issue of GBP 900,000,000, giving us a net debt cash position of £200,000,000.
We also have access to the Bank of England's twelve month COVID corporate funding facility scheme with an issuer limit of £600,000,000, which is currently undrawn and could be drawn on as late as next March. Including the CCF, we have total available facilities of £2,300,000,000. In May, we announced that an eighteen month covenant waiver had been agreed with our lenders and our pension trustees, meaning that the existing covenants will not be tested again until March 2022. In addition to our good liquidity position, it is especially in times like this that we really benefit from our valuable 60% freehold property estate. It gives us tremendous financial flexibility, providing a strong covenant to our stakeholders and importantly, giving us options to support future funding for investments or to further protect our balance sheet.
This really sets us apart from our nearest UK competitors. This slide reiterates that although we are not immune, the strength of our operating model and our brand and as Alison explained, led us to perform 6% ahead of the market in September with outperformance in both London and the regions, a market share growth of 3.4%. Since the government announcement in early October instructing working from home where possible and the recent regional lockdowns, you can see on the bottom left of this page that we have seen a slowdown in the overall market performance. Our performance has continued to be well ahead of the market. As I'm sure you can appreciate, with the fast changing nature of the COVID environment, we do not have any meaningful forward looking visibility.
Despite this, our profit and cash sensitivities remain largely unchanged from May. It still stands that a 1% movement in sales is equivalent to an £18,000,000 impact on profit. This is before taking into account the benefit from the business rates holiday, the job retention scheme and the significant reduction in discretionary costs offsetting inflationary pressures. The guidance around the job retention scheme grant has been updated since May with now GBP 85,000,000 in the first half of the year and approximately GBP 15,000,000 to 20,000,000 in the second half, of which approximately GBP 10,000,000 is offset by later than originally anticipated labor savings. In terms of cash flow, looking forward to the second half of the year, the cash flow will, of course, depend on the sales levels.
But with all our sites now open, any outflow will be substantially less than we had experienced in the year to date. As a guide, breakeven EBITDA this year on a pre IFRS 16 basis is broadly achieved at an occupancy level of approximately 55% and a price rate that is 20% down on last year. This includes the one off benefits of furlough and business rates. With the exception of the acquisition we have announced in Germany today, CapEx guidance remains broadly unchanged with GBP 120,000,000 in the first half of the year and GBP $250,000,000 across the whole year, with half of this on German expansion. In addition, the acquisition of the 15 hotels in Germany will require around GBP 40,000,000 of capital, of which well over half of this is the cost of refurbishing each hotel.
All these hotels are leaseholds. Working capital will depend on the revenue projections, but we will see an inflow of around £30,000,000 for government scheme payments that we recognized in the P and L in the first half, but were outstanding at the end of the half. We also expect adjusting items cash outflows of approximately £20,000,000 in respect of the head office and site restructuring programs. So just to summarize, we have a strong balance sheet and good liquidity. With the recent further lockdowns, we have very limited visibility, but remain absolutely focused on our cash flow and maintaining this balance sheet strength.
With this position and focus together with our freehold backing, we have financial flexibility to continue to protect the business and to recover successfully, emerging from this crisis in a position of strength to deliver strong returns where others will weaken. I will now hand over to Alison to build on how we will continue to capitalize on structural opportunities and our competitive advantages both in The UK and Germany. Thank you.
Thank you, Nicholas. I'm now going to take you through the reasons why Whitbread is well placed to drive long term value by gaining market share in The UK, growing in Germany as we replicate our UK success and delivering long term growth at good returns. I'll start by talking about The UK business and then explain why the same winning factors underpin the very exciting growth opportunity in Germany. This slide lays out the reasons why we believe Premier Inn is best placed in The UK to capitalize on the recovery opportunity, to take market share and to reinforce our market leading position. These are the enhanced structural opportunities that will exist in The UK, the advantaged budget hotel model, our best in class operations and ownership model, combined with our very strong brand, direct distribution model, and a broad customer reach.
I'll talk you through each of these points in more detail on the slides that follow. And as Nicholas has already highlighted, we have a lean and agile cost base and our strong balance sheet and freehold property value provide us with both offensive and defensive financial flexibility. These factors set Premier Inn apart from our competitors. We have an amazing platform in The UK with no competitor coming close, meaning we are very well placed to accelerate market share gains and reinforce our leading position. The UK market remains a highly compelling long term growth opportunity for Premier Inn.
The chart on the left hand side shows how fragmented the market is with 48% of The UK market taken up by independent operators. Since 2010, there's been a consistent decline in supply for independents with share declining by around one to two percentage points each year. This leaves a clear opportunity for Premier Inn to gain share. The current COVID crisis will accelerate the structural growth drivers. The downward pressure faced by both independents and budget branded competitors will materially increase as a result of the pandemic, both through demand weaknesses and increased structural cost pressures.
And we expect this to worsen as government support schemes are reduced. We're already seeing clear signs of structural distress amongst our main competitors whose brands may be capital constrained, weakening them further. We have a committed pipeline of over 13,000 rooms which will support our growth strategy for the next three to four years. We will, however, ensure our capital is carefully deployed to ensure it matches market demand and is at the right asset price. In addition, we'll also look to grow through a state optimization.
For example, building on product innovations such as our Premier Plus upgrade rooms that have proven so very popular with both leisure and business guests. The budget hotel segment in which we operate is higher growth than the rest of the hotel market and is more resilient in downturns as people seek value and quality. The top chart in this slide shows that budget branded hotels have outperformed the market in every year since 02/2008, including a material outperformance during and after the financial crisis. The bottom chart shows the midscale and economy segment is also outperforming in the current COVID crisis with total sales recovered around 17 percentage points ahead of the rest of the market from the August to mid October. Premier Inn's UK customer base is very broad with a roughly even split of business and leisure customers.
Our business customers include a significant proportion of manual professions, that is those workers who need to be physically present to perform their jobs, whilst our white collar workers are from a wide variety of sectors. Premier Inn under indexes on group business bookings, and we believe we are less exposed to those areas of business travel that may see a structural shift to virtual meetings. Our leisure guests travel for a very wide range of reasons, and the strong leisure demand evidenced during July and August demonstrates that people's propensity to travel for domestic leisure when allowed remains high. Our geographic spread with over 80 of our rooms sold based in The UK regions combined with our domestic focus with over 90% of guests based in The UK, means that we operate within the areas that should recover quickly. The success of our customer proposition is based on customer choice by virtue of having the largest network in The UK, value for money, outstanding product quality, excellent customer service, and very high hygiene standards, meaning we can offer guests great value, comfort and safety wherever they want to sleep.
As you can see from the charts on this slide, Premier Inn is by some way the strongest hotel brand in The UK. Remarkably, and as shown on the right hand chart, our brand scores have increased over the last twelve month rolling period despite the operational disruption caused by COVID. This is testament to our very high standards being maintained throughout the crisis and the recognition of those high standards as customers rely on their favorite and most trusted brands more than ever. Premier Inn's vertically integrated model provides a clear competitive advantage, enabling the delivery of a winning customer proposition that has strong appeal to guests. In addition to our brand strength, the key components of the model are industry leading low cost direct distribution with over 97% of our bookings made direct scale, providing customers with choice and driving efficiencies operational control, ownership of all aspects of our hotel results in a high quality experience delivered on a relentlessly consistent basis throughout the estate.
The operating model delivers best in class operational performance as evidenced by the very high staff and customer scores that the business regularly achieves. Property flexibility. We have end to end control of our value chain, providing an economic advantage over others and helping realize increased profits and returns. Our freehold properties, which make up around 60% of our estate, mean we have a strong asset backed balance sheet that has long been a source of strength and competitive advantage whilst historically also providing a source of funding when needed. Controlling and funding our property development enables us to get the right hotels in the right locations.
Our flexible approach to property ownership improves our ability to manage our property and make decisions to optimize the estate. When combined, these factors mean we can deliver a standout customer proposition, and we have an unrivaled platform from which to optimize and grow. Let's now move on to the German market where we have a significant opportunity to replicate our success in The UK. As you can see from the slide, we believe the same success factors that have made Premier Inn the number one operator in The UK, already exist in Germany or in the case of building the Premier Inn brand and a national direct distribution model, offer material opportunity for us. The German market is very attractive, larger than The UK with high levels of domestic business and leisure travelers with a fragmented competitor set dominated by a large declining independent sector.
Our ambition is to be the number one budget hotel operator, replicating the success of our model in The UK. Our strategy is clear and we're already making very good progress with an open and committed network of 53 hotels and soon to be almost 70 with the signing of up to 15 new leases announced today. As in The UK, we will be ready to capitalize on structural market changes, which may accelerate as a result of the pandemic. To date, we've invested over GBP $397,000,000 of capital and have committed to a further £394,000,000 of capital to build our pipeline. In the long term, we believe the opportunity still exists to deliver returns of between 1014%.
The German market remains a highly compelling long term growth opportunity for Premier Inn, similar to The UK. The chart on the left hand side shows the level of fragmentation within the market with 72% of the market taken up by the independent operators. Since 2010, there has been a consistent decline in supply from the independents with share declining by around one percentage point each year. The impact of COVID will accelerate these trends, providing Premier Inn with an enhanced opportunity to take market share. And we've already seen clear signs of distress in the market amongst both independents and budget branded competitors.
We are actively looking to grow our estate organically and inorganically, and we'll continue to assess a number of opportunities. Our current German pipeline of just over 10,000 rooms, excluding the leasehold signings announced today, would represent just over 1% of the current market. We have initial line of sight to over 60,000 rooms, which would represent around a 5% market share, still under half our equivalent market share in The UK. This slide shows that our current 53 hotel network provides us with a national framework with a presence across many major cities, and this will soon grow to 68 hotels. We have today announced the signing of up to 15 hotels in Germany that are currently operating under the Centro, 99 and Fourside brands, of which eight are open and seven are pipeline.
The transaction involves the transfer of leases from the existing operator to Whitbread and is subject to competition clearance by the German Federal Cartel Office, which if cleared, would see the hotels become part of the Premier Inn estate in December 2020. The hotels are a good fit with the existing estate with all occupying prominent locations across Tier 1 and Tier two cities and towns. The total investment for the deal is expected to be between 40,000,000 and €50,000,000 mainly driven by the investment required to refurbish and rebrand the hotels to Premier Inn, which we expect to happen in the 2021. In the meantime, the open hotels will continue to operate in the Premier Inn estate under their existing branding. The economics of this transaction demonstrate the enhanced structural opportunities that now exist in the German market that Premier Inn is well placed to take advantage of.
We are now well on the way to being able to build national brand awareness and operate at scale. A fully open network of 68 hotels represents meaningful progress in our target to becoming the number one budget hotel operator in Germany. Overall, we believe all of the factors that underpin our competitive advantage and long term success in The UK either already exist or we are on a clear path to replicating in Germany, providing a significant opportunity for us to drive long term value. To summarize, we are thinking about our business in two ways, managing the current situation and positioning ourselves to extend our market leadership thereafter. We're not immune in the short term and the market outlook is difficult to read, and so we will continue to protect the business and ensure that we manage our cash position wisely.
The current operating environment is also tough as we navigate our way through government advice and restrictions, which brings challenges to our operations and impacts consumer sentiment. However, our strong and experienced management team and owner managed model means that we're doing this well and enhancing our brand. The impact of the COVID pandemic on the hotel sector will be significant and will change the competitive landscape with potentially a material slowdown in room growth, significantly constrained investment and an acceleration in the structural decline of the independent sector. We hold a uniquely advantaged position in the market. We are the largest player with the number one brand and our considerable financial resilience and strong balance sheet give us the ability and the confidence to invest.
We'll be well placed to enhance our market leadership position as a sector winner with the opportunity for structural outperformance. Whitbread's long term strategy for value creation in The UK and Germany remains unchanged and is highly compelling. We will capitalize on the enhanced structural opportunities in our markets, continuing to grow and innovate in The UK, leveraging the competitive advantages provided by our operating model, and growing through our existing pipeline and optimization. Germany offers us an exciting structural opportunity to increase our presence as the large fragmented independent sector declines. We will create value in Germany by replicating our proven UK model, growing both organically and through m and a.
We will enhance our capabilities to support long term growth by maintaining our strong balance sheet and financial flexibility, ensuring we have an efficient and flexible cost base that appropriately reflects demand levels and by acting responsibly through our Force for Good program. These factors will enable the business to perform well in The UK and to take market share and to capitalize on the material growth opportunity in Germany. These strong fundamentals, combined with our strong balance sheet, will enable Whitbread to drive long term value for our shareholders and support our people, guests, suppliers and stakeholders. Thank you all for listening today. There will now be a short break before we start our live call q and a session at 09:15AM when Nicholas and I look forward to answering your questions.
Details of how to join us for the question and answer session can be found on our website.