Good morning. I'm Alison Brittain, and I'd like to welcome you to Whitbread's Financial Year 2023 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 delighted to answer your questions. Details of how to join the call can be found on our website. Turning to our agenda this morning, I'll start by giving an overview of our trading performance and the outlook for the rest of the financial year. I'll then hand over to Hemant, who will present our financial review and summarize our capital allocation framework. I'll then finish with a strategic update which outlines how we're going to continue to drive long-term value. Our performance in the first half of the year was outstanding. Revenues and profit exceeded pre-pandemic levels, and we outperformed the market.
This outperformance is in large part due to our Investing to Win strategy, which has meant that we've been particularly well-positioned to capitalize on the strong market recovery in both the U.K. and Germany. Premier Inn's hotel performance in the U.K. was excellent, with accommodation sales doubling versus last year and up 35% versus pre-pandemic levels. We continue to outperform the market by 26 percentage points thanks to our scale, the strength of our brand, direct distribution model, and the quality and consistency of our customer proposition. These are all areas where we've continued to invest in order to drive our competitive advantage. F&B traded well ahead of the same period last year, but remained slightly behind pre-pandemic levels as the recovery in the Pub and Restaurant value sector continues to lag the wider market.
In Germany, COVID restrictions were in place until the end of April, following which the market rebounded. We opened 7 hotels during the first half and now have 42 hotels with a similar number in the pipeline. Given the pace of room openings, the majority of our hotels have only traded restriction-free for a few months, and so they will have some way to go before they fully mature. However, an important milestone was reached during the second quarter when our cohort of 18 hotels that have been trading for more than a year became profitable. This is a fantastic achievement and increases our confidence in achieving our goals in this large and exciting market. Current trading has been strong, and whilst the macroeconomic environment remains uncertain, our forward lead indicators are encouraging, giving us good momentum into quarter three.
Our continued investment in our teams, our estate, and our commercial initiatives combine to deliver a sustained outperformance versus the market. Looking further ahead, the continued decline in the Independent sector is creating an increased market opportunity of 125,000 rooms in the U.K. and Ireland. The strength of our balance sheet is important as it underpins the success of our operating model. It's also given us the confidence to continue to invest, even during periods of uncertainty over the last few years. This investment has meant that we have been able to take advantage of the recent improved market conditions and extend our market-leading position. For many years, we've had a strong focus on healthy returns and a disciplined approach to capital allocation.
This remains central to our business strategy, and we regularly review our key priorities in order to ensure an appropriate balance while maximizing shareholder returns. Given the strength of our recent performance, and with Hemant now fully on board, it's been an appropriate time to revisit our capital allocation framework, and Hemant will cover this shortly in his section of the presentation. We have a clear policy to grow dividends in line with earnings, and we are pleased to have declared an interim dividend of GBP 49 million, equivalent to GBP 0.244 per share. I'll now provide a bit more color on the drivers behind our performance, starting with U.K. accommodation sales. This slide highlights the significant rebound in our U.K. accommodation sales performance and the acceleration of that growth over the last 18 months.
Our U.K. sales have continued to grow quarter-on-quarter and were 35% ahead of pre-pandemic levels in the first half. The key drivers behind this are set out on the next slide. The successful execution of our commercial strategy, coupled with high consumer demand and a favorable supply backdrop, has translated into very strong RevPAR growth. We have invested in opening almost 6,000 new rooms over the last three years, and our focus has been on continuing to drive occupancy across our increased number of rooms whilst judiciously increasing rate. This balanced approach has allowed us to deliver a strong financial performance without compromising our reputation for both value and quality. We've used this slide in our previous presentations to demonstrate the strength of our performance versus the market. As you can see, we've not only sustained our market outperformance, but we've increased it.
We were 26 percentage points ahead of the market in half one. As shown on the previous slide, we've continued to increase our average room rate, reflecting the strong levels of demand. However, you can also see that we've chosen to be more judicious than the rest of the sector when taking rate in order to maintain our reputation for value and continue to drive occupancy and market share gains. This next slide provides a summary of the factors behind our continued outperformance, underpinned by our operating model and our competitive advantage. I'll go into a bit more detail on these later in the presentation. However, the key drivers in half one include our improved proposition for business customers, where we've enhanced our relationships with travel management companies and are delivering a high-quality service through our business account and business booker portal.
Our highly effective marketing strategy that attracts high customer volumes through both digital and brand marketing. Our operational and commercial initiatives that are opening up new opportunities to increase yield. Our increased scale and national coverage, coupled with a decline in the overall level of hotel supply, which is creating a favorable market backdrop and an increased opportunity for Premier Inn to grow market share. Each of these factors, in conjunction with our long-standing sources of competitive advantage, which are listed here, are all driving our outperformance, and they are all underpinned by our Force for Good sustainability program. In Germany, COVID restrictions were lifted at the end of April 2022, and since then, the mid-scale and economy market has rebounded, with increasing occupancy and average room rate driving market RevPAR back towards pre-pandemic levels.
We've continued our expansion and now have a strong platform of 42 open hotels and a similar number in the pipeline. Our hotels have not been trading very long and so have not yet reached maturity. Nevertheless, we're achieving high guest scores and our cohort of 18 more established hotels have become profitable in quarter two. We remain confident of hitting our business case and reaching our long-term target of 10%-14% return on capital. Now looking forward. On the left-hand side of this slide, we outline the strong trading momentum that we're continuing to see as we move into the third quarter, both in the U.K. and Germany. In the first 7 weeks of quarter three, U.K. accommodation sales are 37% ahead of pre-pandemic levels and over 24 percentage points ahead of the market.
In Germany, our accommodation sales momentum has also continued, and our more established hotels are broadly performing in line with the market. On the right-hand side of the slide, we've highlighted some of the leading indicators that we're seeing both for business and leisure guests in the U.K. Whilst we remain vigilant for any signs of a slowdown, overall, website visits continue to be strong and demand is robust. Forward bookings are in line with pre-pandemic levels and at higher rates. Turning to outlook. As you're fully aware, the current macro environment is highly uncertain, with concerns around cost of living, inflation, and broader operational pressures. However, our market position and our proven resilience in previous downturns provides us with confidence that we can weather these headwinds.
We believe we are better placed to deal with them, thanks to the significant investments made in the last few years across our business, including our proprietary trading system, which gives us our dynamic approach to pricing, our cost efficiency program, our focus on operational excellence, leading to a high-quality value for money customer proposition, and the outstanding performance of our team members who have continued to deliver across all areas of our business, as evidenced by the outstanding results. I'm hugely grateful to them for their continued dedication and hard work. Recognizing the huge contribution and to support them with rising cost of living, we've recently announced a further investment of GBP 15 million in team member pay, which takes effect next month. This slide illustrates the four key pillars of our Investing to Win strategy that will underpin our ability to continue to outperform the market.
We believe that the meaningful reduction in market supply creates a significant structural opportunity in the U.K., and given our scale, ongoing commercial initiatives, and our proprietary pricing engine, we are very well-placed to continue to outperform. Our German business has grown rapidly, and the fact that our more established hotels have already reached profitability gives us real confidence in our prospects in this large and exciting market. Sector-wide cost pressures remain a concern. However, we feel confident in our ability to mitigate much of this, and we're on track to deliver GBP 100 million of further cost savings by full year 25. At the heart of our strategy is our strong balance sheet, which enables us to invest in our teams, our sustainability program, and other revenue-generating activities.
Our strong financial covenant, investment-grade metrics, and financial flexibility are clear competitive advantages, enabling us to invest with confidence and create long-term shareholder value. While macroeconomic uncertainties remain, given our proven resilience in previous downturns, strong current trading, our robust balance sheet, along with the significant growth potential of both the U.K. and Germany, we remain confident in the full-year outlook and our ability to deliver long-term value for all our stakeholders. I'll now hand over to Hemant, who will talk you through our financial performance in more detail.
Thank you, Alison, and good morning, everyone. I'll start off by outlining the strength of our financial performance in the first half. Statutory revenue was significantly ahead of last year, up by over GBP 660 million and 25% ahead of pre-pandemic levels. As Alison has already mentioned, this was driven by a strong performance in our U.K. hotels and also reflects the growth of our estate in Germany. While operating costs also increased, this strong sales performance, coupled with our focus on cost efficiency, meant the EBITDA grew to GBP 512 million, and the adjusted profit before tax was GBP 272 million, which was GBP 36 million ahead of pre-pandemic levels. Statutory profit before tax was GBP 307 million, benefiting from GBP 35 million of adjusting credits related to net property impairment reversals and property disposals.
Net cash inflow for the half meant that our net cash position increased to GBP 182 million. We're pleased to return to investment-grade and leverage metrics for the first time since the pandemic, with net debt to funds from operations of 2.8 times. As I'll come on to later, we have always had a clear focus on returns and a disciplined approach to capital allocation. Now we've emerged from the pandemic, I wanted to remind you of our capital allocation framework that we use to actively manage our investment priorities on a regular basis. I'll come back to this a little later. Turning now to the segmental P&Ls for our U.K. and German businesses. Starting with the U.K., it's worth remembering that the first half of this year was the first trading period, which wasn't impacted by any COVID-related restrictions.
As we've already covered, demand was strong and our accommodation sales performance was well ahead of the market, with revenue nearly doubling versus last year and up over 20% versus the same period pre-pandemic. This outperformance reflects the continued successful execution of our Investing to Win business strategy. Having continued to invest with the cycle, we were particularly well positioned to take advantage of the strong market recovery post-COVID. Whilst operating costs increased, adjusted profit before tax in the U.K. also increased to GBP 317 million, which is GBP 56 million ahead of pre-pandemic levels. In Germany, we now have 42 hotels with over 7,500 rooms, many of which are trading restriction-free for the first time following the easing of COVID restrictions in April of this year.
The reopening of the market prompted a strong rebound in demand, which, coupled with our straight growth over the last two years, meant that statutory revenue was significantly ahead of both last year and FY 2020. Operating costs increased to GBP 51 million for the half, reflecting our continued estate growth. Despite the pace of our expansion program and the fact that most of our hotels have only traded for a very short period, German pre-tax losses were better than expected at just below GBP 25 million. This slide summarizes our cash flow for the first half. Our strong trading performance meant that operating cash flow more than doubled to GBP 409 million.
The uplifting performance and increased occupancy meant that refurb and maintenance CapEx increased to GBP 81 million as we continue to ensure our assets meet the expectations of our guests, safeguarding our reputation for both quality and value. Expansionary CapEx was GBP 223 million, including our ongoing program of estate growth and also including the purchase of two large freehold properties that will deliver highly attractive returns for us over the medium term, resulting in an overall CapEx spend in the first half of GBP 304 million. Therefore, total net cash flow before shareholder returns and debt repayments was an inflow of GBP 112 million.
At the end of FY 2022, the board resumed dividend payments and recommended a final dividend of 34 and a half pence per share, resulting in a GBP 70 million dividend payment that was paid in July, leaving a net cash inflow of just under GBP 42 million and net cash of GBP 182 million. With a healthy cash position and the strength of our business performance in the first half, it feels appropriate for us to revisit our thinking about the group's balance sheet, our priorities for capital allocation, and how we strike the right balance between them. First, some context. We've always had a clear focus on returns and a disciplined approach to capital allocation. This is illustrated by our impressive track record of delivering consistent returns on capital whilst growing our estate, as shown on this chart.
Our internal target is to deliver between 10% and 14% on our U.K. business, which, as you can see, apart from the pandemic, we've delivered each year. Following the last two years of disruption, the U.K. business has returned to just over 11% in the first half. Although I should point out that this is on a rolling 12-month basis and so includes the second half of FY 2022, which is impacted by COVID-related restrictions. This strong track record is important because it provides some context as to how we think about capital allocation and is something of which we are incredibly proud and equally determined to maintain. As I mentioned earlier, the first half of this year was the first time we had returned to investment-grade leverage metrics since the onset of the pandemic.
Our leverage policy is centered on remaining within investment-grade metrics, a position that delivers significant commercial and financial benefits for us. Not only does it keep our cost of debt low and ensure access to the capital markets should we need it also provides us with a strong financial covenant, making Premier Inn the preferred tenant in leasehold negotiations. It gives us the flexibility to invest through the cycle and take advantage of attractive freehold acquisitions and M&A opportunities in Germany as and when they arise. At the heart of our leverage policy is our property-backed balance sheet. Our freehold property portfolio represents a significant source of competitive advantage for the group. The stability of our portfolio supports the strength of our brand and market position, while also giving us full control over our network plan, ensuring we have hotels in prime locations and on attractive terms.
Maintaining our capital discipline ensures the consistent delivery of long-term returns for our shareholders, as shown on the previous slide. We last valued our property portfolio at the end of 2018. As a reminder, this valued the property at between GBP 4.9 billion and GBP 5.8 billion using a marginal sale and leaseback valuation approach. It remains difficult to value hotel properties due to a lack of representative transactions and market volatility. However, yields over this period on properties where we are the tenant have been in line with or below the yields used in the 2018 valuation of between 4.5% and 5%. Considering each of these elements in turn, I thought it might be helpful if I set out our capital allocation framework, which outlines our key priorities over the next few years.
Maintaining investment grade status unlocks the significant commercial and financial benefits that I talked through in the previous slides. Continuing to invest through the cycle via our program of Investing to Win has underpinned our strong returns profile, and we have an annual CapEx program, excluding M&A, of between GBP 350 million and GBP 400 million per year, which is focused on organic growth in the U.K. and Germany and the expansion, maintenance, and refurbishment of our estate, as well as investing in our IT systems. Clearly, we also want the flexibility to enter into strategic M&A opportunities where they meet our strict investment criteria. We are a highly cash-generative business and fully intend to complement our continued program of investment by growing dividends in line with earnings and where appropriate, through the return of excess capital to shareholders.
We use this framework to actively manage our capital priorities on a regular basis and will provide a further update at the time of our full year results when we will have an improved view on our outlook and the broader business environment. Moving on to guidance and current trading. Current trading for the last seven weeks has continued to be strong, as outlined at the top of this slide. Whilst the macro environment remains uncertain, our lead indicators remain positive, and our trading performance gives us real momentum as we move through the third quarter. In the U.K., we are continuing to invest in maintaining our market leading position in the budget sector that has traditionally performed well in economic downturns. This slide also sets out the additions to our previous guidance for the current financial year.
The full detail is available in the RNS, but I'll just pull out the following points. Having announced GBP 20 million-GBP 30 million of additional investment at the time of the Q1 result in June, we are bringing forward a further GBP 50 million of spend in IT and marketing to help drive revenue growth in the current financial year and to sustain that demand on into next year. The global energy crisis and conflict in Ukraine has triggered a range of additional inflationary pressures across the business, resulting in further cost inflation in FY 2023 of approximately GBP 30 million. In Germany, we now anticipate adjusted losses will improve to the GBP 40 million-GBP 50 million range.
We remain confident of the long-term opportunity and having invested around GBP 1 billion to date, we still expect to get to a break-even run rate at a profit before tax level at some point during 2024 and remain confident of reaching our long-term target of between 10%-14% return on capital. Whilst macroeconomic uncertainties continue, given our proven resilience in previous downturns, our current trading momentum, a strong balance sheet, and significant growth potential in both the U.K. and Germany, we remain confident in the full-year outlook and our ability to deliver long-term value for our stakeholders. I'll now hand you back to Alison, who will take you through our strategy in more detail.
Thank you, Hemant. I'll now spend a few minutes talking you through the drivers behind our recent strong performance and also why we can sustain our outperformance for some time to come. First, I want to look at market supply. Having recently completed our detailed network planning exercise, we know that the Independent Hotel sector contracted by around 12% between 2010 and 2019, and that this rate of decline then accelerated to around 10% over the last 2 years, largely as a result of the pandemic. This contraction has created a decline in total hotel supply and a favorable market backdrop into which we have continued to invest and grow.
Even for those independents that have come through the pandemic, fresh operational challenges created by labor shortages and cost inflation may accelerate the decline further, and we expect total hotel supply to remain below 2019 levels until 2026. Such market dynamics create structural opportunities for Premier Inn to take more market share across both the U.K. and Ireland. As a result of this contraction, we've increased our long-term network target in the U.K. and Ireland from 110,000 rooms up to 125,000 rooms. This would equate to approximately 17% market share versus around 12% share today. The plan to achieve this room growth is through a combination of extensions, organic growth, the utilization of our hub concept, and the optimization of our estate.
To support our estate growth, we have a highly effective marketing platform driving large volumes of customers to our website. In September this year, we launched our latest Rest Easy campaign across a variety of media channels, including TV, radio, and social. The campaign is already delivering considerably higher customer consideration scores and increased search and website visits. As well as broadening our reach through brand and digital marketing campaigns, we've also focused on improving our proposition for business customers who tend to drive higher RevPAR and travel more frequently. Our business account provides credit to corporate customers and is proving popular, with new account sign-ups having increased significantly since last year. Our business booker portal provides corporates with a guaranteed discount off our headline flex rate, as well as a helpful online tool to help them manage their staff accommodation needs.
We now have over 76,000 active business booker accounts in the U.K. and Germany, and together they represent about 8% of the total accommodation sales in the first half. Finally, we've also enhanced our relationships with travel management companies, giving us access to customers that previously would not have been able to book via Premier Inn. We've invested in our proprietary trading engine that manages all of our pricing strategies across the U.K. and Germany. As we developed it in-house, we're able to respond quickly to changing market dynamics, opening up new opportunities to extract additional RevPAR. Our platform allows us to use targeted marketing spend in both areas of higher demand to drive increased room rate, as well as in areas of low demand to ramp up occupancy.
This targeted approach enables us to increase yield while still maintaining a healthy mix of business versus leisure and short versus long lead sales. Innovation is a key driver of incremental RevPAR. On this slide, we've provided four recent examples of where we've increased choice for our customers in terms of both price and product. We're providing many more pricing options to our guests, and for a modest premium to our standard room rate, our guests can secure all of the flexibility that they might need. Such options are proving highly popular, with 85% of our guests choosing flexible options. Within the hotel rooms themselves, we're in the process of rolling out over 65,000 new beds that will both raise the overall quality of our proposition and allow us to offer interlocking units for more flexible room formats.
Our Premier Plus room concept is proving popular with our guests and on average is able to deliver a meaningful uplift to RevPAR versus a standard room at the same hotel. As a result, we've increased the number of Premier Plus rooms across our U.K. estate to over 3,000 in the first half and plan to add a further 1,000 rooms by the end of the year. Finally, we're in an advanced stage of testing the next version of our standard room. Whilst being trialed, our latest room is achieving higher guest scores, and is also expected to deliver operational cost savings when it's rolled out next year. All of these examples demonstrate the continuous evolution of our customer proposition and our relentless ambition to provide an excellent customer experience. Our ongoing success is heavily dependent on the continued dedication of our operational teams.
The strength of the Premier Inn brand is thanks to our operating model that enables us to control all the key elements of the customer experience. This level of control provides us with several competitive advantages, including the ability to maintain high guest scores, having a highly engaged team, being able to respond quickly to changes in the operating environment, and ensuring that our customer proposition is delivered consistently and to a high standard. Premier Inn is the U.K.'s number one hotel brand, synonymous with high quality and good value. The chart on our left is an updated version of the one we've presented before, highlighting the strength of our customer proposition. This in turn drives a high degree of customer loyalty with around 75% of all weekly bookings being made by customers that have stayed in a Premier Inn at least once before.
Remember, that's without the cost of a loyalty program. Our food and beverage offer is a core part of our customer proposition, and it's important in achieving higher levels of RevPAR. While the value Pub sector remains challenging, we've launched a number of initiatives to help boost the number of covers as well as revenue in our Restaurants. For example, improvements made to our gardens and our expanded drinks offer are both driving an uplift in sales. We have a long history of delivering cost efficiencies, and with the current inflationary pressures and tight labor market, these initiatives are more important than ever. We're on track to realize GBP 100 million of previously announced cost savings over the next three years. The scale and breadth of our estate means that we have a sizable cost base.
However, it also means we're able to leverage our partnerships, and we continue to seek new and alternative ways to drive operational efficiencies and reduce costs. These savings, combined with our estate growth and commercial pricing flexibility, mean that we're well-placed to help mitigate some of the inflationary pressures seen across the broader market. Let's now turn to Germany and an update on our progress towards capturing what we see as a significant value creation opportunity. On the left-hand side of this slide is a reminder of our investment thesis and the business rationale. The German market is highly attractive. It's larger than the U.K., with high levels of domestic business and leisure travelers, and it also has a large Independent Hotel sector. We've made a significant commitment to the German market, having invested around GBP 1 billion of capital to date.
This time 3 years ago, we had just 3 hotels open, but now our German business has grown very rapidly, and we have 42 hotels trading and a similar number in the pipeline. With an encouraging first half performance, we remain on course to reach our long-term returns target of 10%-14%. We have a clear ambition to be the number one hotel operator in Germany. As the fastest-growing hotel chain, we are building our customer base and achieving great customer scores. We reached an important milestone in the second quarter of this year when our cohort of 18 hotels that have been trading for more than 1 year turned profitable as a site level. This achievement gives us confidence that in line with our previous guidance, our current estate will reach break-even at profit before tax level sometime in 2024.
Although of course, our ambition is to continue to grow further and to add to our trading estate and pipeline. Finally, I want to update you on our Force for Good sustainability program that comprises three pillars and is embedded across our business. It's an ambitious program, and we're continuing to make great strides towards achieving our targets. I'm proud to see so many of these important initiatives really take shape, and a few highlights include under our opportunity pillar, we've continued to make good progress in bringing to life our eight diversity and inclusion commitments. We have already met our female representation target with 41% of Senior Leadership positions now being held by women, and we're actively working towards improving our ethnic minority representation. For community, we recently renewed our charity partnership with Great Ormond Street Hospital, having met our previous fundraising target of GBP 20 million.
During this half year period, we also raised over GBP 650 thousand to support Ukraine, along with donating bedding from our hotels. Lastly, under our responsibility pillar, we have our target to reach net zero carbon by 2040. We are focused on removing gas from our hotels, and we now have electric alternatives to gas boilers in 40 of our sites. We've begun construction of our first Gasless Hotel in Swindon, and we continue to build our hotels to the BREEAM excellent standard. In order to effectively communicate our strategy, we actively engage with our stakeholders, and we have maintained our leading sustainability ratings with MSCI and Sustainalytics. It's through these stakeholder partnerships that we're able to drive meaningful change. To conclude, I'll recap on the points from our first slide.
We continue to significantly outperform the market, driven by our Investing to Win commercial strategy and our focus on operational excellence. The group's robust balance sheet underpins the success of our business model and allows us to continue to confidently invest in our strategy and to extend our market-leading position. We continue to focus on strong returns with a disciplined approach to capital deployment. Our capital allocation framework allows us to think strategically, striking the right balance between ongoing investment, maintaining our strong financial position, and delivering attractive returns to shareholders. Our current trading is strong and despite macroeconomic uncertainties, we remain confident in the full-year outlook. We're excited about the significant and increasing growth opportunity that we have across the U.K., Ireland, and Germany. Thank you all for your time today.
Hemant and I will host a question and answer session shortly, starting at 9:15 A.M. U.K. time, and we look forward to taking your questions there. You'll be able to find details of how to attend the Q&A session on our website.