Thank you, Lydia. Good morning, everyone, and thank you for joining the call for our FY27 interim results.

I'm joined by Hemant Patel, our Group CFO, and we look forward to answering your questions shortly. Hopefully, you've been through our release and had a chance to 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. Starting with our first-half results, in the UK, we have delivered a strong trading performance with accommodation sales growth up 3% versus last year, and we have increased our outperformance versus the market.

With the delivery of £39 million of efficiencies and AGP related reductions in our cost base, UK operating costs were flat versus last year despite industry-wide inflationary pressures, including the unexpected hike in business rates. As a result, UK EBITDA was up 1%, demonstrating the strength of our model.

In Germany, we opened 1,800 rooms and delivered double-digit accommodation sales growth that was ahead of the wider market, which was flat versus last year. Despite the majority of the previously guided one-off impacts falling in the first half, Germany EBITDA still increased by 10%.

Now turning to current trading. First, in the UK, our strong trading momentum has continued during the first 5 weeks, with total accommodation sales up 4.5% and RevPAR up 3.2%, and we continue to outperform the market.

Food and beverage sales were down 37%, in line with our expectations with the closure of all remaining branded restaurants in September. In Germany, we delivered total accommodation sales growth of 31% and RevPAR growth of 10%, and we outperformed the market.

We are confident in driving a positive second-half performance in Germany and remain on course to deliver profitability this year. Alongside our strong trading momentum, we have achieved a lot in the first half and we have laid the foundations for the delivery of our 5-year plan that will deliver higher margins, cash flow, and returns, and generate £2 billion of cash flow available for shareholders by FY31.

We have made excellent strategic progress against each of the key initiatives, and our accelerating growth plan is transforming our business. Our dynamic approach to capital allocation is key to the delivery of our plans, ensuring that we will always deliver an attractive spread of returns over our cost of capital, and we are targeting at least 15% returns on all of our gross investment.

In summary, we're trading strongly, with market outperformance in both the UK and Germany, and our forward booked position is ahead of last year. We are executing at pace, delivering tangible results and increasing momentum across all areas of our business.

As a result, we remain confident in the full-year outlook and the delivery of our 5-year plan. Finally, you will have seen today that we have written to all shareholders recommending them to vote against the resolution proposing the election of the Corvex nominee to the Whitbread Board.

Our position is simple. We've got the right plan, the plan is already in flight and gaining momentum, and our business has a highly experienced and strong board.

Corvex's agenda will significantly distract us from delivering our plan, and we believe these disruptions will be to the detriment of shareholders. Now, we do have a lot of people on our call today, before I move to Q&A, in the interest of time, could I ask each of you to keep to a maximum of two questions each?

With that, I'll now hand back to Lydia to host the Q&A. Thank you, Lydia.

Thanks. Good morning, everyone.

First question is just on costs. You generated about 2/3 of the £60 million efficiencies in the first half.

You've beaten your efficiency targets for each of the last 2 years. Do you think there's upside to that £60 million number?

Is there any early steer on FY28 costs, particularly on the energy side? Then the other question on disposal proceeds, clearly you've maintained your target for £450 to £500, which leaves quite a lot of wood to be chopped in the second half of the year.

Could you just give us a flavor for where your confidence comes from in meeting that number? I see you've given a couple of sale and leaseback yield examples, but just talk about demand for sale and leasebacks given the current gilts environment and sort of timing of that second-half disposal process.

Thank you very much.

Thanks, Jamie. Let me answer the first part of that, and then I'll hand over to Hemant.

On the efficiency numbers, of course, you're absolutely right, £39 million delivered in the first half, full-year target of £60 million. We've got a really strong track record of delivering efficiencies.

It's one of the key pillars of our plan, £250 million worth of efficiencies over the next 5 years. We are increasingly confident about our ability to drive material cost efficiencies.

I think we did very well to get ahead of that when we announced our updated efficiency plan a couple of years ago. As we do have a track record of delivering on our efficiency numbers.

We're very confident of hitting that £60 million, and we will continue to stay focused on driving continued efficiencies. What I think is really important is this is not blunt cost cutting.

We're making really smart decisions about rewiring and adjusting our business to make as efficient as possible. Technology is also really helping us in that area.

It's going to be one of the key drivers of the plan and we feel very good about the efficiency plans we've got moving forward. In terms of sale and leaseback, the short answer is we feel confident in our position on getting to the guided number for this year.

Hemant, can add a bit of color to that.

On efficiencies, Jamie, you're right. We've built 2/3 of the program so far this year.

A lot of that has happened in this first half. A lot of that's come from initiatives that landed last year.

Continued transformation of our food and beverage supply chain, our labor forecasting, the way we support our customers in our contact center, etc. We're seeing the benefits of all that come through.

We've got many more initiatives this year, as Dominic has talked about, including how check-in process, front desk, and then digital journey for the guests. All of that's coming through.

We're still expecting £60 million. It isn't easy.

It's great that we've been able to beat our targets in the past, but it's not something and we should take for granted. We're working hard to get to the £60 million this year.

I'm happy with the phasing that we've had, but it's great next year ahead of it, but the £60 million is still our expected target. We're not giving guidance on next year yet.

We're fully hedged this year on energy, well-hedged next year. I'm happy with where we are.

In January, when we get to our Q3 results, we'll give you a lot more detail on inflation next year and our efficiency targets as well, you'll have a much better understanding of the program, and also the contracts that we'll have signed for next year. Then just building a little bit more on the disposal proceeds, you're right.

There's a lot what we still need to deliver. We still actually confident £450 to £500 million for the full year.

We've delivered £21 million the first half, actually £30 million since then since the balance sheet date, as well as selling 57 restaurants and another hotel as well. The vast majority of our target, we are in discussion on and well-proceeded with.

We're feeling very confident. We're obviously very aware of that gilt rates are elevated and might well remain so.

What we won't do is do a deal where we don't think it gives the right outcome for shareholder value. What we're trying to do here is recycle capital at kind of 4% to 5% cap rates into 15% returning programs like the accelerated growth program.

That's the intention of this. What we won't do is do that blindly.

We'll be able to manage how we engage with those proceeds, but also how we're spending capital if necessary. We'll watch that.

At the moment, we're still very confident in the £450 to £500 million. Thank you very much.

Good morning. Thank you.

Firstly, could I ask on the Germany pipeline? It's much reduced due partly with the openings in H1.

I think this puts your open and pipeline rooms around the 5-year target. Is this where you might start to slow down growth in Germany?

Is this where the scale could be appropriate, or do we expect more thereafter? Then secondly, on top of the activist, a few comments, I guess you've alluded to this, but what is actually wrong about or what elements of the activist plan would be distracting?

Is there something that they're specifically looking for which you've already taken off the table in arriving at this new 5-year plan? Thank you.

Thanks, Leo. Two really good questions.

Let me talk a little bit about the capital allocation plan that we've got and why we're so confident in it. If you look at the capital that we are going to spend within the 5-year plan, it's actually focused on three key areas, the growth capital.

The significant area is accelerating growth plans, and that is truly transformative for our business. Removing the drag of unprofitable or less profitable restaurants, replacing them with high returning extension rooms is really accretive for our business and it simplifies our business.

Back to Jamie's question earlier about efficiencies, having a focused hotel group that is simpler and higher returning becomes a much more efficient and profitable business, and it's one of the pillars of the 5-year plan that we've got. The next area is UK new room growth.

Now we've already taken a number of sites out of the UK pipeline. We took £500 million worth of growth CapEx out of the UK, and remember we'd already significantly slowed that down during COVID.

That gives us high confidence that the sites that we're investing in for the next 5-year plan will be north of 15% returns, and we've got data to support that. The hotels that we've opened over the past few years are already generating circa 13.5% returns and they're not fully mature yet.

We have high confidence that those sites, the sites we are investing in and opening, in exclusive catchment areas where there isn't cannibalization and are overall very accretive to our both our returns and profitability. The third area then for the growth capital is Germany.

Actually when you look at Germany, we've taken £500 million of growth capital for Germany during these 5 years, which leaves £200 million, £100 million of which will be spent this year. Over the remaining 4 years, we're effectively spending £100 million of growth capital in Germany.

The good news is, our capital is really focused on the high returning areas from all of the lessons that we've learned in being in Germany for the last 10 years and specifically over the past few years. Then where we end up with Germany, actually is a business of scale.

As of today, we're happy to call we've got 75 hotels open in Germany. We've already created a business of scale, that means we're getting efficiencies moving forward, investing in sites where we have high confidence will generate accretive returns moving towards somewhat more leasehold model.

You put all of that together, investing in sites where we get north of 15%, recycling capital at a significantly lower rate than that, that's one of the drivers for this significant cash flow creation, shareholder returns creation, and an increase in margins and returns. You're right, the Germany pipeline has come down somewhat.

We've guided to 18,000 rooms by the end of FY31, but it's a higher returning, more profitable business, and the data points to support the delivery of that are clear to see with the results today to see that the momentum from both the sales point of view, but actually results point of view in Germany support that. That's kind of your first question, and then the second question was activists and Corvex.

It's really interesting, isn't it? We got hammered in the UK budget last year on the back of being hammered on the budget before.

The year before, together £60-odd million increase in employment costs driven by national insurance, and then the budget last year frankly, where the government [pissed?] , have made mistake and hit the hotel business rates particularly hard.

That's £160 million worth of extra costs that came through in that budget over what now is the next 2 years. We have two ways of reacting to that.

You can either continue with the plan we have, and we adjust that plan quite dramatically in order to actually more than offset the increased costs and deliver materially higher margins and returns over the next 5 years. Obviously, that's exactly what we did.

We spent multiple months doing a very detailed piece of work, literally straight after the budget last year, supported and guided by a world-class board and three global investment banks, and we came up with what we believe is a very strong plan, which we outlined in April, which will not only more than offset the increase in these costs, it will strengthen our position in both the UK and Germany to drive material increases in margins and returns. We've got a very strong plan.

The announcement today, you can see we've got real momentum building in the delivery of that plan. We are literally ticking every single area of the 5-year plan in terms of delivery, and we have a world-class board, and we have further strengthened our board over the last 12 months with a number of really positive additions to our board.

In parallel to that, we have had noise from Corvex. Earlier in the year, they announced that we should do a strategic review, but we'd already said we would do a strategic review, which we outlined in April.

At a similar time, they said that we should put the company up for sale. Which is a bit ironic, we're a public company.

Obviously, a public company always has to be open for sale. Then more recently, Corvex have come out and said that actually they don't think we should put the company up for sale, but we should do a strategic review and that we should give them a board seat.

When we step back and we look at the plan we've got, which is going to deliver a material increase of return for shareholders, the momentum we've got, and the fact we have a world-class board, we cannot see that giving a board seat to an activist investor that appears to be changing their mind, and that a board nominee doesn't appear to offer any materially accretive skill set to our board could be the right thing to do. Our message today is unanimous from the board, which is we've got the right plan, we've got momentum in delivering the plan, we've got a world-class board.

In terms of distraction, yes, going back over a business review, which we've already done in enormous detail, following the agenda for one shareholder, not all shareholders, yes, that would be distracting, and that risks the delivery of the plan. Let's be completely clear: we're here to deliver the plan and we're here to deliver significant increases in returns for our shareholders.

We're confident in being able to do that and we don't want distraction. Thank you.

Super clear. Thank you.

Thanks, Dominic.

Morning, Dominic and Hemant. Congratulations on the results.

Two questions. First one, I wanted to ask about your Q2 RevPAR outperformance in the UK, cuz I think it's the strongest that it's been in a very long time, 270 bps.

What's driving this? Do you see this as a sustainable run rate?

I'm conscious that in your current trading, it's narrowed slightly to 100 bps. Just walk us through what's driving it and how we should think about H2 there.

Then question number two, could you remind us how hedged you are on utilities for FY27 and FY28? Thank you.

Thanks, Jaina. We're really pleased and proud of the results that we've announced today cuz we think it really shows the strength of the plan that we've got, but also the execution of that.

Of course, the RevPAR performance is one of the key ways of measuring that, and you're absolutely right, in Q2, outperformance versus the market widened. This does ebb and flow, and of course we're not in control of what our competitors do, we're in control of what we do.

It's quite hard to call what will happen to that outperformance, other than the fact that we're very confident that we will continue to outperform the market. What really drove in Q2?

I think there are a few things going on. We're seeing a lot of dislocation in the UK market at the moment.

These cost increases that we've been talking about, the business rates and the National Insurance, this is an industry-wide issue. Of course, this is not just us.

Now I think we have been particularly rapid at coming up with a plan that more than mitigates those cost increases, but frankly better at doing that than our competitors, and we're seeing the industry generally, there are areas where they're struggling with cost increases. You'll see in the STR data, the independent sector, the numbers are not encouraging for the independent sector.

We think that's going to hasten the decline of the independent sector. You can see that's creating very, very good tissue supply growth in the UK.

Travelodge, you'll see from their numbers, are also going through a tough patch at the moment. I think there are a few things happening.

The first thing is, with every set of industry challenges, it creates opportunity. We've grabbed that opportunity to really really solidify our position in the UK market.

Our commercial trading engine is doing exceptionally well. The strength of our brand, our revenue management, and it shows that we've got strong pricing power, which is a combination of strength of brand, consistency of experience, and we believe the best-in-class revenue management system.

You put those things together, oh and by the way, increasing focus on ancillary revenues, and you can see how we can deliver that outperformance. Then, behind the scenes, the efficiencies that we're driving, the simplification in our business, the ability to invest in technology that's going to drive competitive market performance, that is fortressing our business versus the competitive set, and we really set ourselves exceptionally well to deliver very strong performance over the coming years.

It's a mixture of the industry going through at a fairly tough time, and our performance and focus on outperformance, I think being really, really strong. Then from an inflation point of view, hedging point of view, I'll hand over to Hemant,

too. Jaina.

As previously said, we're fully hedged this year, and we haven't given any guidance yet, and we'll give some more guidance in January for next year. At this stage, I would say I'm very very comfortable we're well hedged next year.

Comfortable with the positioning, obviously very aware of what's happening with utility gas and electricity pricing, and we'll answer that carefully and we'll make sure that we hedge appropriately.

Thank you.

Thanks, Jaina.

Thanks you. Hi, both of you.

Hi there. First question actually also about the RevPAR trend.

What wasn't brought out in that answer was London, and it looks like you were close to 5% in Q2, which is kind of the inverse of what we're seeing in the STR data. Just really wondering what's going on in London and sustainability there.

Question two, apologies for mentioning the government again, but since we all spoke, the visitor levy has come out, and I just want to just get to your understanding of that. It feels like it's potentially uncapped.

People I talk to think it could be around 5% on average. Do you think you have the pricing power to pass that on in due course?

Thank you.

Thanks, Tim. A couple of things on London.

As as I think we underindex in London in terms of sites. When you look at our kind of national footprint, and London is a fantastic market for us.

The recent openings that we've done have been particularly strong. Gives us high confidence that the new sites will deliver north of 15%.

When you look at our performance in London, you have to remember we're underindexed in there. I also think London is one of those markets where there's always strong underlying demand.

You'll see London at the moment lots of business travelers, both within the UK coming to London, but also coming from overseas. Of course, there's always a strong amount of tourist travel coming into London as well.

You put those things together with the fact that we're underindexed, it means we can strongly outperform the market. The new sites that we've got coming on, this is a great example of the level of detail, obviously, that we go through on a site-by-site basis.

The new sites that we've got open in London, prime locations, in areas where we're underindexed, and we have high confidence we can deliver very accretive returns for the group. That's a fundamental reason for our performance in London.

Then, when you talk about the visitor levy, of course, we're not in favor of the visitor levy, and we've made that clear to the government. A couple of things: one, if it comes into effect, it will be 2028.

We believe it will be capped, although, initially, they said it would be uncapped. There's been some rowing back from that.

We do already have visitor levy in a number of areas, Scotland would be one of those things. We were very quick to get ahead of this, we made system changes to ensure that the price is shown separately to the customer when they come to check out, which means we pass all of that cost along.

If we look at the visitor tax levy, no, we're not in favor of it. It's another tax for UK consumers.

Yes, we set our business up to be able to pass on that cost. We also think we've got more pricing power than our competitors, and actually it will probably hit them harder overall.

We're already set up to show to customers that is a separate cost.

Then just a couple of points to add to that. On your first question on London, we did put some supply in, as Dominic says.

The market also put some supply in. What we were able to do there because of our commercial engine pricing power is take significantly more rate.

It's very rate-led outperformance the market. We outperformed the market by something like 7% in that quarter, rate driven because of our commercial engine, where we were able to take so much more rate than the rest of the competition.

Then, finally, the only other point is this levy as Dominic says, we're seeing this elsewhere. We're seeing this in Manchester a little.

We've got good evidence to say we're able to pass the price on based on our performance. Again, one of the benefits of our strong commercial engine, our really excellent pricing system, and our scale means we've been able to see that really well.

That's super.

Thank you.

Hi. Thank you for taking my questions.

Really appreciate it. I wanted to ask you about rooms growth, UK network expansion.

Obviously, you have 1,000 room guidance, but that's gross. If I look at what you did in the first half, the new openings are on track, but you also closed slightly more than that.

I guess any thoughts on your UK net rooms growth? Anything you can share there would be helpful.

The second question is kind of related. Obviously, you showed in your presentation deck slide 9, your UK average ROIC has improved to 13%, but that's still below the 15%, which is the hurdle you have for your incremental CapEx.

I was just wondering if that means you would look to close a bit more of your UK existing network as a result of that? Thank you.

Thanks, Kate. Let me answer the second part of the question and then I'll hand over to Hemant to answer the first part of the question.

If you look at UK returns, we are highly confident of driving a 500 basis point increase in returns. That is because we're fundamentally improving the quality of our business.

Let me give you an example. Accelerating growth plan, removing the drag of the unprofitable or less profitable restaurants, replacing with highly profitable extension rooms, that's a material driver of group returns for our business.

That site that was previously had the drag of a restaurant attached to it becomes a much more profitable, efficient site, and that drives up significant improvements in returns. We're also improving the overall quality of our estate.

You're right, there's always some churn that we do where we move out of generally smaller, subscale-type hotels, and then we replace them with newer, more modern, more efficient, larger-footprint hotels that have a much higher return on capital and a much higher profitability. There's that, and then we've got Germany, which is moving from a headwind, where we've been losing money over the past few years, to now a profitable business that is going to increase our profit over the next few years.

We've then of course got our commercial engine, driving strong RevPAR and overall sales growth, and then really underpinned by a really strong, best-in-global-class efficiency engine. We're improving the quality of our business, and then making material strategic improvements to our business to drive this 500 bps basis points return.

That's what gives us so much confidence. Actually, we think makes us quite an unusual UK business, that we are improving the quality of the underlying business so much over the next 4 4.5 years.

That's really what gives us both the confidence in driving returns, but also explains why the returns are increasing so much. In terms of room growth?

I think nothing has changed in terms of where we're going to get to by the end of this plan. 96,000 rooms we're expecting to get to in the UK.

We've reduced the pipeline that we were discussing. That's made up of these higher returning hotels, particularly based on London, Southeast, where our market share is lower, as Dominic just talked about.

It's made up of rooms from the AGP program, extension rooms. It's also, as we guided, it nets out the about 1,500 room exits as well as part of the broader plan where the AGP are closing, we're expanding some rooms, but also taking some rooms out, obviously, as part of that program.

We've netted that off to give you that in terms of the impact of that as a guidance in the numbers. Also some of the lower-returning sites that Dominic's just talked about.

We don't tend to model the lower-returning sites. When we take a site out, it tends to be sites where we're able to migrate most of the trade.

Therefore, actually, the profitability impact of us closing some of these smaller hotels is negligible. We need to model that, which is why we give you the gross room additions.

This year, we're still going to get to 1,000 underlying rooms plus 750 rooms through the accelerated growth plan.

That's really helpful. They're all accretive rooms.

Thank you. Perfectly clear.

Okay.

Hi, good morning. Thanks for taking my questions.

I guess one thing that has not been mentioned today is your two purchases of the Future Inns in I think Bristol and Plymouth. Is that a broader trend that there may be some opportunistic opportunities to buy in some freehold sites, either your own or ones from third parties given the state of the UK market, the rate environment, etc.?

Then second question, on slide 26, I think you've got a new definition of ROCE called Capitalised Lease ROCE in footnote two. Just wondering how are you capitalizing lease in that definition?

Is that the ROCE that you're using for the 15% target on future development, or is it your other ROCE, which strips out the capitalized leases?

Thanks, Richard. Let me answer your first question, and then I'll hand over to to Hemant.

We are we're very, very specific about any new sites that we sign off. As I as sign off, as I've said, post-COVID, we did a trawl through our pipeline and removed any site that we felt weren't going to deliver increased returns.

Then, when we had the increase in business rates, we did that process again as part of the business review that we did at the end of last year, which we announced in April, where we took out quite significant £500 million worth of growth capital in the UK to ensure that the sites that we were opening in the future, we were absolutely confident were going to deliver accretive north of 15% returns. We're generally quite cautious about doing conversions.

We like we generally like new builds because we can make that site super efficient and get scale at the site, that drives the cost efficiencies but also and therefore, the profitability returns for that site. Occasionally, conversions do come up which are really interesting, and those two sites fell into that category.

It gives us an opportunity, effectively, to open hotels very quickly after purchasing, spend relatively little relatively minimal CapEx on those sites, and and have a a immediately profitable and high returning and high returning site. Occasionally, those kind of things come up, but we reject many, many more than than we accept, because we are returns-focused and we have a very high bar for for these sites.

Hemant? Yeah.

Richard, your question on Capitalised Lease ROCE, this is a definition we use internally in our investment appraisal process that allows us to compare leaseholds acquisitions with freehold acquisitions. Obviously, cash flows are very different for those sites for each type, and the accounting is very different.

We need to make sure that when we are taking a new lease on, we're looking at it to make sure it's adding shareholder value. We think about the rent cover so the EBITDA versus rent cover to make sure that we've got strong cover there, and it's then adding value overall as to make sure leases aren't too expensive.

We also then look at it as if it were an investment up front, we capitalize the lease and we therefore very prudently try to get leasehold sites the equivalent of this 15% return on capital we would be looking for for the freehold sites as well. This is just an internal definition that we're using as part of our investment appraisal process.

Our overall ROCE calculation, as much as we can provide it, we are pleased to the extent of pre-IFRS 16 view of the world and less being and follows the cash flows effectively. This is prudent, I guess what I'm trying to say is, our investment appraisal process is very, very prudent, and it should drive higher returns on capital than we target internally for shareholders.

Thank you, Richard. Appreciate the questions.

Hi, good morning. I have two if that's all right.

First one, just on your exits from branded restaurants, some of the press reports on recent disposals get a bit confusing. An operator like [Common Table?]

taking on 57 of your exited restaurants. They're also buying a hotel in the package, and then they're talking about rethinking the menus for hotel guests and building new things together.

I'm aware there's different buckets in AGP, but could you maybe explain some of these edge cases? I thought the main model was closing down the restaurants, converting whatever space you can to higher-returns rooms, and then opening your own, more efficient, integrated restaurants within the remaining space.

Is that still the main model? Then on cost phasing, you've talked about cost efficiencies being 2/3, 1/3 between H1 and H2, so that helps a little bit.

Could you help us understand the potential phasing on some of the other costs? Top of my mind, there's £10 million rebranding costs in Germany.

Was that all in H1? There's a £40 million disruption from the accelerated AGP in the UK.

Is that, on the other hand, mostly going to be in H2? Lease cost increases, with the transactions being back-end loaded, will lease costs increase more in H2 than in H1?

Just trying to understand if H1 was a little bit helped by those phasing items, please.

Thanks, Jaafar. Let me ask the first question about AGP, and then Hemant will answer probably some of your second question, but might have to take it offline to help you through that.

On the first question, a really good question on the so-called edge cases. It's a very, very good data point and evidence of our returns-led focus overall as a business.

If I step back to the accelerating growth plan, I'll talk about what we've done. We have, say, we had 430 branded restaurants, just about okay pre-COVID, but clearly, as a group, a headwind to us as a group coming out of COVID and therefore, loss-making.

We looked at every single site in excruciating detail, and our findings was that of roughly half of those sites, it made huge financial sense to build extensions. These are sites which have very high occupancy, particularly during the week, driving high RevPAR, and the accretion of adding extension rooms to our hotel, at the same time as removing the drag of the branded restaurant, literally transforms the economics of that site.

At the same time as we're doing that to that site, building the extension rooms, we've already got over 50 of these sites now open, we've got good data to support the fact they're performing well, at the same time as building the extension, we built an integrated food and beverage area. Guests really like that proposition.

It basically offers breakfast and dinner. It's a tailored menu for our hotel guests, super efficient for us to deliver, but guests like it.

This is the perfect example of a strategic shift that is better for our guests and better for our shareholders. Very exciting.

There is another group of sites, circa 200, where when we looked at it, we could build extension rooms on those sites, but actually, we wouldn't get a strong enough return on capital. That's either because the catchment area wouldn't really support a significant-sized extension, or it'd only be full at certain times of the year, like the summer.

We've taken a very returns-led focus and said, in those sites, we're not going to build extension rooms if we don't get a strong enough return on capital. We're going to sell the restaurant to someone else who can operate that restaurant.

One of the announcements or deals that we did over the past few months was selling 57 of those branded restaurants to a new operator. This is fantastic news.

It means that the majority of those sites are going to be operated by another restaurant operator. They'll be serving a dinner menu for the local community, but also for our guests.

At the same time, we will build a small and highly efficient breakfast room in our hotel to ensure that we always future-proof that hotel for offering a breakfast for our hotel guests. We know how important that is and it drives RevPAR growth.

The end position on those sites is you end up with our hotel with a super efficient breakfast room delivering the breakfast the guests want, and then part next door, operated by someone else, that can offer dinner for our guests or for the local community. That's a really nice model and is a lot better for us than us operating that restaurant ourselves.

Now, there is time taken to build those breakfast rooms, in the interim period, we have a contract with that operator to serve breakfast for our guests for an interim period. Then moving forward, we end up with a highly profitable hotel because we've removed the drag of the unprofitable restaurant, a breakfast proposition actually secured for our guests driving high guest satisfaction, and then a local pub next door serving a decent evening meal for our guests and the local community.

It is a really good outcome and solution for us. I think the pace that we're executing AGP is frankly phenomenal.

It's a complicated program. It is the most transformative program, we're making really good progress.

Thank you, Jaafar.

Then Then just on cost phasing, Jaafar, you've identified most of kind of the key factors. The cost saving program, efficiency program, is probably the biggest one.

You say £40 million year-on-year effect in the first half of the year, £20 million in the second half of the year. That's because, as I've said, a lot of the delivery in the first half has come from programs that started last year and have been brought forward last year, to get more of those cost savings in earlier.

Clearly, they build into the base of the part of our cost base permanently going forward, but the year-on-year phasing is as you've said. AGP is quite lumpy because, obviously, there is a first phase that we've been working through and then the second phase, obviously, has a big impact as we start closing restaurants before we fully take the costs out.

We saw some of that impact in Q2. We'll see a lot of that in Q3, and then we'll see the costs coming out in Q4.

Then lease costs will be more back-end weighted right at the end of the year and some of the lease costs will start to come up a little bit. The team will be happy to talk offline with that in a bit more detail.

I think the biggest thing is the overall efficiency numbers, as you've said. There is a little bit of kind of front-half phasing benefit brought forward of that.

I think we've got a really good clear understanding where we think consensus should land, based on discussions that we have with you and your colleagues.

Thanks, Jaafar. As you've probably seen in our presentation, this year is a year of heavy lifting, particularly on AGP, where we start seeing the benefits come through quite clearly next year.

Let me just sum I think that was our last question. Let me just summarize where we are.

We have a great plan. It's going to deliver material increases in margins, returns, and £2 billion for shareholders by full-year by by full-year 2031.

We've got momentum in delivering the plan, and you can see that from our results today. We've got a world-class board focused on delivery of this plan for all shareholders.

I really appreciate all of your time today. Thank you for the questions.

I'm sure we'll have some follow-up questions, but we appreciate the time. Thank you for joining us.