Whitbread (LSE:WTB) said its New Five-Year Plan will generate £2bn of free cash flow available for shareholder returns by FY31 while cutting net capital investment by more than £1bn.
The group, owner of the Premier Inn brand, will refocus growth in the UK and Germany to drive higher margins and returns. It will reduce gross capex by £1bn, recycle £1.5bn of freehold real estate to fund future growth and reduce net capex to around £200m–£250m per year.
The plan targets an incremental adjusted PBT contribution of £275m versus FY26, including £65m from Germany, and a 500 basis-point uplift in Group ROCE.
Whitbread aims to extend its Accelerating Growth Plan to convert all 197 remaining branded restaurants to an integrated F&B format, having sold 51 sites for £50m and agreed terms on a further 60.
The AGP extension is expected to add about £100m of incremental adjusted PBT by FY31, will require total investment of c.£660m and will cause a £40m reduction in adjusted PBT in FY27 (netting to a £10m hit after prior AGP progress).
Germany, which reached profitability in FY26, will shift to higher-return formats while still growing rooms by over 50% to c.18,000 by FY31.
The group says the actions will fund dividends and buy-backs but that share buy-backs will be paused in FY27 as the AGP extension is implemented.
“This plan will transform Whitbread into a higher-margin, higher-returning pure-play hotel business,” Dominic Paul, Chief Executive, said.
Whitbread expects Germany to be cash flow positive in FY29 and the full suite of targets to be delivered by FY31.
