Whitbread plc

Good morning all, and thank you for joining us for the Whitbread FY25 interim results live Q&A. My name is Carly, and I'll be your call coordinator for today. If you'd like to register a question during the call, you can do so by pressing star followed by one on your telephone keypad, and to remove yourself from the line of questioning will be star followed by two. And I'd like to hand over to your host, Dominic Paul, to begin. The floor is yours.

Thank you, Carly. Good morning, everybody. Thank you for joining myself and Hemant Patel, our group CFO for our half-year results call. Hopefully, you've had a chance to read through our release and listen to our results presentation this morning. Before we open up the call for Q&A, I thought I would pull out a few key points. Firstly, I'd just like to cover the progress we've made in the first half and what we are seeing in current trading. And secondly, how that is underpinning our confidence in the medium-term outlook as set out in our new five-year plan. As you've all seen, the UK market has been a little bit softer than last year, where demand was particularly strong, and we outperformed the rest of the mid-scale and economy segment by some margin. This year, despite being up against some really challenging comparators, we stayed ahead of the market on accommodation sales. And whilst revenues were impacted by our decision to transform our food and beverage offer through our accelerating growth plan, with an improved performance in Germany, we delivered a robust performance during the first half. As we moved into quarter three, after a softer start to September in the UK, recent trading has been more encouraging and with an improving trend relative to the market in both London and the regions. As we look forward, I'll just note a few things. Firstly, our commercial initiatives are starting to land, evidenced by our outperformance versus the market that stepped up in the current trading period. Secondly, our forward book position is positive across the rest of October and November. And thirdly, comparatives for the remainder of the year will start to get easier. Food and beverage is performing exactly as expected and we continue to make good progress on our accelerating growth plan. We're also really pleased with the progress we've made on efficiencies and have increased our guidance this year to deliver 60 million pounds of cost savings, a 10 million pound uplift. We see significant opportunity in Germany. We're really pleased with the strength of our performance in the first half, which has continued into the current trading period, and we remain on track to break even on a run rate basis later this year. This performance and our excellent progress on the key initiatives has increased our confidence in the medium-term outlook, as summarized by our new five-year plan. The five-year plan will deliver an additional £300 million more profit over the next five years. And by keeping net capex at £500 million per annum after proceeds from property-related transactions and leverage in line with current levels, this will generate more than £2 billion for dividends, share buybacks and, if suitable opportunities arise, additional high-returning investments. Now, for illustrative purposes, Our plan only assumes that UK like-for-like sales growth and efficiencies in our plan equals UK cost inflation. Obviously, we can't predict inflation and UK market growth, but we have controllable levers through our efficiency and commercial programs that will help us to grow margins over the life of the plan, and we feel confident in doing so, driving returns and profits even higher. We're executing really well. We're confident in the outlook as reflected in our increased dividend per share and further £100 million share buyback. Before we move into Q&A, in the interest of time, could I ask each of you to keep your questions to a maximum of two, please? Thank you. And with that, I'll hand you back over to Carly to host the Q&A.

Thank you very much. We'd now like to open the lines for Q&A. If you would like to ask a question, please press star followed by one on your telephone keypad. And to remove yourself, it will be star followed by two. Our first question comes from Jamie Roller of Morgan Stanley. Jamie, your line is now open.