Whitbread plc (WTBDY) Q3 FY2026 Earnings Call Transcript & Summary

Hello, everyone, and thank you for joining us today for the Whitbread Full Year '26 Q3 Trading Update Call. My name is Sami, and I'll be coordinating your call today. [Operator Instructions] I would now like to hand over to your host, Dominic Paul, CEO of Whitbread, to begin. Please go ahead, Dominic.

Thank you, Sami. Good morning, everyone, and thank you very much for joining the call for our Q3 full year 2026 trading update. I'm joined by Hemant Patel, our Group CFO. Hopefully, you've had a chance to review our announcement this morning. I'm going to start with a brief overview for those who haven't seen it before opening up the call for Q&A, when Hemant and I will be happy to answer your questions. I'll start with a few comments on our financial performance in the quarter. We saw strong trading momentum in both the U.K. and Germany. And as I'll come on to shortly, I'm pleased to say this has strengthened into the current trading period. In the U.K., the return to market growth that we saw in the summer has continued and occupancy remained high at 83%. RevPAR was up 3%, and we maintained a healthy premium versus the rest of the mid-scale and economy market. We traded particularly well in London, where we increased both occupancy and rates, resulting in RevPAR up 7% versus the prior year. U.K. food and beverage sales were in line with our expectations as we continue to make excellent progress on our Accelerating Growth Plan that will both improve the guest experience and drive higher returns for shareholders by transforming some of our lower returning branded restaurants into higher returning hotel extensions. Our German business also delivered a strong trading performance in the period, and we remain confident in reaching profitability this year. Total accommodation sales up 12% and RevPAR was up 7% in local currency. This performance reflects the increasing maturity of our estate and brand, supported by our commercial initiatives, and we continue to outperform the rest of the market on both accommodation sales and RevPAR growth. Now moving on to current trading and starting with the U.K. Our performance has strengthened versus the third quarter. And in the 6 weeks to the 8th of January 2026, total accommodation sales and RevPAR were both up 4%, and we outperformed the wider market. In Germany, trading during the first 6 weeks have also been strong and total accommodation sales were 11% ahead of last year and total estate RevPAR was up 5% to EUR 56. Our cohort of more established hotels are also performing strongly with RevPAR up -- with RevPAR of EUR 66, up 8%. Now turning to costs. We have made great progress with our efficiency program and so we've been able to increase our expected savings in full year '26 by a further GBP 10 million to between GBP 75 million and GBP 80 million. And looking forward to next year, whilst there is no change to our underlying inflation assumptions following clarification from the government on the mechanics of transitional relief on U.K. business rates across over 1,000 of our properties, we now expect the cost impact will be circa GBP 35 million in full year '27, which is lower than our preliminary estimate of GBP 40 million to GBP 50 million. We continue to believe the proposed changes to business rates are punitive and will impact future investment and job creation. And we, along with the wider hospitality industry, are actively engaged in pressing the U.K. government for changes. Taking into account the GBP 60 million of efficiency savings that we're on track to deliver next year, we therefore now expect net inflation in full year '27 of between 3% and 4%. And finally, a word on the outlook. Starting with the U.K., while forward visibility remains limited, our booked position for full year '27 is building nicely and is ahead of last year with positive long lead leisure bookings into peak periods. And in Germany, we have continued to perform ahead of the market and remain on course to reach profitability this year. We are continuing to focus on what we can control and are making great progress on each of our strategic initiatives. Our Accelerating Growth Plan is on track, and we are building out our committed pipeline in the U.K. We're growing our business in Germany, and we are on track to become the country's #1 hotel brand. Our commercial programs are continuing to drive like-for-like sales momentum. We're continuing to maintain a tight grip on costs with our ongoing efficiency program, and we are recycling capital by sale and leasebacks into high-returning investments like Accelerating Growth Plan. As we said back in November, in response to the U.K. budget, we are exploring a variety of options to further drive profits, margins and returns. That work is ongoing, and we expect to provide an update to the market regarding our Five-Year Plan at the time of our full year results in April. I'll now hand back to Sami to host the Q&A. Can I please ask you to limit your questions to 2 per person, so we can get through as many as possible. Thank you.

[Operator Instructions] Our first question comes from Jamie Rollo from Morgan Stanley.

The first question is just on U.K. RevPAR. Obviously, encouraging to see that back in growth after 6 quarters of declines. But your occupancy is still down year-on-year. So I'm really wondering, first, what your sort of confidence level is in RevPAR staying positive. I know you don't guide, but just be good to talk about the drivers there. And also what drove the 2 percentage point outperformance in the current trading period. It's quite a big number. And then the second question is just on the end of April on the variety of options that you're exploring with regards to the Five-Year Plan. I'm just wondering how wide-ranging that review is? Is it going to be mainly operational? Or is it also strategic? Is it just a response to the budget? Or is this also a response to the activist letter? And is this a review by Whitbread? Or does it involve an independent third party?

Thanks, Jamie. So let's talk about current U.K. trading first. I mean occupancy was slightly back year-over-year, but you also see in current trading, it was very, very close to the year before. Pricing was strong. As you know, we optimize by room, by night, by hotel. And some of our hotels have higher occupancies than the year before, some have slightly lower. The key thing is to optimize revenue every single room, every single night. And I think we're doing a really strong job of doing that. So occupancy is very slightly back. There's actually pretty much at the edges, which I think is really encouraging. I think the market, to your point about the 6 quarters, there was an inflection point earlier in the summer. I think we feel very confident in the underpinning of the U.K. hotel market by this lack of supply and the supply growth coming into the market is still very low, and we think will support the hotel industry in the U.K. for a number of years. And we think we're best placed to take advantage of that. Super strong brand, fantastic operations, really strong commercial program. And I think you can see in the numbers that we are talking about today, real momentum building in that commercial program. You asked a question about current trading in particular and what drove that. We had a really clear strategy to trade through December, the Christmas period and into the New Year period. We take every single period very carefully. We're very, very operationally and trading focused as an organization. There are a number of things that drove that. One, consistency of the product, the strength of the brand, strength of our locations. Frankly, no one in the U.K. market can match us on those things. And then we traded the business really well. We're making fantastic progress on things like our CRM using the data. Remember, the majority of our customers book direct. We've got that data from our customers. Getting better and better at utilizing that data to drive revenue. And our pricing actions were very carefully orchestrated, very smart and I think helped underpin the fact that we outperformed the market quite materially through that period. So I think really, really encouraging. Overall, I think we feel very good about that, and we feel confident about the underlying market in the U.K. To your kind of question about the independent review and I guess, kind of Corvex in particular, I mean the first thing I should say is we are very confident in delivering long-term value for our shareholders. We said in November that we're reviewing a range of options to drive profits, margins and returns, and we're going to come back and update on the Five-Year Plan at the end of April. We have got a fantastic Board at Whitbread. We've got an experienced strong Board. We regularly review all the strategic options available to us in order to maximize the long-term value for our shareholders. I would reiterate that we are open-minded, we're objective, we're critical in the assessments that we do. And we've got a really good track record of demonstrating this. Two examples, our decision to separate and sell Costa Coffee and return capital to shareholders and more recently, the Accelerating Growth Plan that we announced. And these are structural changes to our business that we won't shy away from if they are the right thing to do for our shareholders. Part of the review that we will do, of course, we're taking very careful consideration the views of our shareholders. And we'll come back at the end of April and update on that. We're open-minded. We are very confident that we've got a strong plan that's going to deliver value for our shareholders. And I think the trading statement today kind of shows the momentum that we're building, but we're open-minded. We'll review all options. And we'll come back to the market and update on that at our full year results at the end of April.

Our next question comes from Leo Carrington from Citi.

Firstly, can I ask on the transaction this morning with LondonMetric? Can you give some more color around this, just given the timing around the budget, I suppose, was this agreed before the budget? If not, in what way did the terms or valuation change over the last few weeks? And then secondly, on the net cost outlook. Firstly, for FY '26, in the past -- and I'm thinking of the cost savings. In the past, you've mentioned the robot vacuum cleaners, the food procurements, et cetera, in the operations, but the quantum of these savings and the increase itself suggests something else possibly. If you could just give some color on what you've managed to achieve since the last update, that would be really helpful.

Thanks, Leo. I'll take this. Yes. So I think, first of all, the transaction with LondonMetric, we said at the beginning of the year, we were guiding to GBP 250 million to GBP 300 million of disposal proceeds for the full year. This is part of that. We're still on track to get that, that includes sale and leasebacks as well as other disposals. It's an GBP 89 million deal across 9 sites, net initial yield of 5.3%, which we think is really good value. So a wide range of sites, including regional sites as well as London sites as well. So we're very happy with that pricing. As you can imagine, these deals don't just happen overnight. So we've been talking to them amongst other options for a while. The most important thing for us is to make sure that when we are making these kind of transactions, we are maximizing returns to our shareholders. And what we're trying to do here is raise funds to actually invest into very high returning projects like the Accelerating Growth program, which is returning high teens returns on capital. We're happy that we've got the best pricing for those in the marketplace. Clearly, things like the change in business rates has a small impact on pricing things like sale and leasebacks, but it's not significant, and we're still really happy that we got very good pricing, and we're making, as I say, creating great value for shareholders by doing the deal. On net costs, I think we've got a big cost base. It's a GBP 1.7 billion cost base, and we've got a good record of looking for efficiencies over the last few years, very, very comprehensively. It's a large process in terms of -- there are many different initiatives that make up the [indiscernible] that we're going to save efficiencies this year. And across the whole cost base from labor, across procurement costs, across technology costs, et cetera. And what we're looking for is real efficiencies here. This is not just cost cutting. This is not just taking investment out. This is actually doing the things we want to do that are right for our guests and for our guests in the most efficient way possible. It's an ongoing program. As we get closer to the end of the year, obviously, we get more and more certainty in terms of what's going to land. We're always looking to accelerate programs, bring them forward for next year. We're always looking to increase the scope of our individual programs and make them land better. And some of the examples you mentioned are good examples of that. We're also adding things in as well that we haven't been able to affect it might increase some investment in technology that allows us to do that or even new ideas. As I said, this is just something that we continue to do. As inflation comes into the business, we always find further opportunities that come apparent. As labor costs go up, it makes sense for us to invest in technologies. You mentioned robot vacuum cleaners is a great example where we invest in technologies that allow us to take those costs down. The same applies to utility costs. The same applies to procurement costs as well. You mentioned that there's a large supply program. We've been able to accelerate that. That's where we've taken a site-by-site and warehouse model for food and beverage supply. And we've been able to put in a wholesale model in, which has cut the cost of procurement, the actual individual items for us, we'll be able to take advantage of the wholesalers buying scale, but also the actual delivery costs that are much more efficient -- much more efficient network for sharing with other customers. Our program going forward is going to be informed heavily by things like AI, where we know there are more opportunities for things like, for instance, improving labor scheduling and forecasting. And then we have a host of other things, which we probably even thought of that AI is going to bring us. And obviously, there are many examples in terms of just day-to-day management of the business that we're looking at as well. So we're very confident in the program now. We've been able to, as I say, accelerate significant cost savings into this year. We're still happy we've upped up -- we upped in November the target for next year of GBP 6 million. We're very happy we're able to achieve that as well.

Our next question comes from Jarrod Castle from UBS.

I guess you changed the impact you'll see from the rates in 2027. Do you care to give any guidance on the profile post 2027 based on existing plans? Or indeed, has your view improved like it did for 2027 in terms of the rates impact? And then just because you raised it, AI Agentics, we've obviously seen like signings with Google's Gemini. I mean, what are you doing on that front for distribution? I know historically, it's probably been the highest in the industry by far in terms of direct. But how do you view the challenge there in terms of having to potentially do more through third parties, et cetera?

Thanks, Jarrod. I'll take the first part, and then I'll hand over to Hemant. I mean, firstly, on the business rates, of course, you're right. We're now forecasting a circa GBP 35 million increase in business rates next year. It is really complicated the way it's calculated. The government -- when we came out with GBP 50 million, it was a preliminary number. The government clarified a few things, that's brought it down to GBP 35 million. Of course, that is a short-term financial hit. We've got a very strong track record of mitigating costs over time. And we feel very confident in our ability to drive returns for our shareholders for long-term share -- to drive long-term returns for our shareholders, and we'll be updating on that further, as I said, by the end of April. We are not just taking this increase in business rates lying down. That's what good leadership teams do is they -- if they get a surprise increase in cost, they work out how to mitigate that. We've also in ongoing conversations with the government about that. We do think the increase in business rates is punitive. We are having direct conversations with the government about that. Also U.K. hospitality and the CBI are lobbying the government hard on that. There is a consultation process running at the moment. It's due to finish by middle of February. We are working on the assumption that those business rates won't get reduced further, but it's a consultation process. We do believe what we've set out is the worst-case scenario. What we'll do is continue to work very, very hard on how we mitigate those increasing costs and how we drive the shareholder returns over the next few years. I will just quickly touch on the distribution point and then hand back to Hemant for the kind of multiyear view. Really interesting, isn't it? I mean, you're right, Premier Inn has got this incredibly strong direct distribution model in the U.K. Our approach is actually to set ourselves up really well for whichever way this goes. So we are doing a lot of work behind the scenes on optimizing our web and app content for AI. There is a school of thought that says actually Agentic AI will threaten the big distributors because customers over time will increasingly go direct because they'll use Agentic AI to do that as opposed to use a distribution platform. And we are setting ourselves up to ensure that we will benefit from that. We're also, as you know, using distribution to access incremental groups of customers. So Expedia inbound into the U.K. is an example of that. So the beauty of our model is I think we are very well set up for whichever direction this goes. But we are doing a significant amount of work behind the scenes to make sure that our business is very well set up for this kind of movement to how customers are researching and choosing accommodation providers. The key thing that comes up very strongly is they look at guest ratings, they look at the strength of brand, and we're very strong on both of those things. So the consistency of the product, the strength of the brand actually is our biggest strength when it comes to a changing distribution platform. So I think we're well set up, and I feel very encouraged that we are approaching this with a very open mindset.

Jarrod, yes, just on business rates, so I'm just building on what Dominic has already said. So clearly, yes, we came out with a straight off the budget with a view on GBP 40 million to GBP 50 million next year. We've updated that as we sign up more about our transitional relief was going to be applied with this business rate regime it's slightly different to the previous regimes, not just in the profile, but actually in the application of that, which became apparent. And hence, the estimate of GBP 35 million for next year, which are fairly very clear on. We haven't said anything about what that means over the longer term. I mean, clearly, it's very easy to do the math, but we have a mix of different hotels with slightly different depending on valuation, different transitional relief profiles. We've only -- obviously it's a 3-year rating regime. We don't know what's going to happen by year 4 and 5. We feel confident that as Dominic said, that on April 1, we come back and talk about the overall mitigation, illustrate and an update to our Five-Year Plan, we will give some more detail in terms of what we think the overall phasing looks like for the business in terms of that plan. So we will give some more detail at that point. I think the other thing is, obviously, there are rebates as well that we will be challenging valuations as soon as we can from April onwards. And then there will be a multiyear process of getting rebates back against the business as we get those valuations agreed. Again, we don't know the phasing of that. We don't know how quickly that will happen, that we will guide to as part of our efficiency plans. So these numbers are unmitigated before any of those rebates numbers and before any impact of protection lobbying government. So yes, we'll give some more details in terms of what that looks like, but we haven't done so at the moment, and we'll work through what that looks like for years 4 or 5 as well.

The other thing just building on what Hemant said at the end there, Jarrod, I mean the other point about business rates, which is interesting is we are in a privileged position to do a lot of work behind the scenes to mitigate the impact of business rates over time. And we are well set up to do things like the challenges, for example, that Hemant just touched on. The independent sector is going to be particularly hit by this. And the supply constraints in the hotel market are going to become more exacerbated, we believe, because of the various increases in costs in the hotel industry, whether that's minimum wage or national insurance or business rates, which is actually going to support the hotel sector over the next few years. And we are very, very well placed to take advantage of that. And we are -- got a great track record of driving efficiencies. As we become more and more efficient and utilize the scale of the business that we've got, we can actually extend our leadership position versus our competitors and make us harder and harder to compete against. And that's our focus. How do we get even stronger as a brand and a business through this despite the headwinds.

Our next question comes from Timothy Barrett from Deutsche Numis.

Can I start with a question on costs? Obviously, that GBP 10 million incremental for this year is very impressive with only 6 weeks to go. It wasn't in your plan at the interims. I'm just wondering how much of it is cash and how much of it is noncash, please? And then the second thing, just going back to the RevPARs actually. In the third quarter, London was a standout at 7%. Was that consistent through the quarter? Or is there lumpiness in London that we need to be aware of?

Yes, Tim. I'll pass to Hemant for the first part of the question, and I'll pick up the second part of the question.

Yes, it's all cost -- it's all cash. [indiscernible] we have all through the year, we've got a large plan and a probability against what we're going to deliver in terms of the efficiency programs because of timing, because of the actual -- once we trial things and how effective they are. So there's a large corporate stuff we're always working on. And as things crystallize, we will commit to and then we'll talk to the market throughout the year in order to deliver GBP 75 million to GBP 80 million or at the beginning of the year, obviously, we were only kind of about GBP 50 million. In order to deliver that, we have a very wide range of potential opportunities that we're going to be able to deliver. We crystallized that over time. It's real cash, real costs are coming out of the P&L. Some of it, obviously, we move into -- start this year and move into next year and some of it has been accelerated from this year. So for instance, we mentioned earlier on the change in our F&B supply that through the year, we've been able to bring that forward, and we've got more and more of the benefit for this year. So we've been able to commit to that as we've seen that land. But it's real hit on money, is real cash.

And Tim, just on the question about London, consistently strong actually, not particularly lumpy, consistently strong through the quarter. And again, and I've said this on the calls before, we feel very good about London overall as a market. We're increasing our capacity in London, which is turning out to be categorically the right thing to do. It's a high-quality market. We're relatively under-indexed in the London market. A number of our new hotels opening are there, they're driving very strong returns. And one of the reasons that we feel so confident about the profitability of the new rooms that we're putting in is they disproportionately are in London, which is, as I said, a consistently strong market.

Our next question comes from Alex Brignall from Rothschild & Co Redburn.

First one, just in terms of full year '26 PBT, Hemant, I know you've talked about this earlier, but the release sort of says happy with full year expectations, but the kind of components of it suggests that there's probably a bit of an upside both in terms of the statement of the better cost efficiencies and also the better trading. I wonder if you could sort of give us an expectation of how those pieces drop through to PBT, [indiscernible] give guidance, but just how we might think about it sort of formulaically? And then a couple on the consequences of rates. How have your sort of creditors and banks and the rating agencies kind of given you a -- tell us what you're going to do in April kind of comment? Are you in that situation where they're effectively waiting for your plan? And then the second bit of it would be, as the #1 market share business in the U.K., do you think that this is the moment where maybe you say, well, this is our opportunity to take a lot of share. You've talked a lot about supply coming out. Often these kind of times of weakness when the biggest businesses take a lot of market share. Is there sort of a theoretical aggressive route where you massively bolster your balance sheet and then you have a big [indiscernible] money that you can go and take a lot of share from some of your struggling competitors?

Thanks, Alex. So let me take the second part of the question, and then I'll hand over to Hemant about full year '26. I guess -- I mean, the first thing I'd say is we are extremely disciplined about our returns focus. So what we won't do is just chase growth for the sake of growth. What we will do is add capacity when we are really confident that, that capacity is going to be accretive overall for our returns. Now we are in a fortunate position and a lot of our competitors are not in this position. We are in the fortunate position of having strong profit from the vast majority of our hotels, very strong profit and high margin. So although the business rates next year, has an impact on our business. The reality is the vast majority of our hotels will still deliver very, very strong, very, very strong returns and very strong profitability. Our focus, of course, is how we continue to drive that profitability moving forward, which is what we talked about updating at the end of April, where we'll update and say, talk about how we mitigate business rates over time, but also how we further drive margins and returns for the business. Now in terms of going for growth, I do think that supply is going to remain constrained in the U.K. for quite a long time. That will mean that sites to us probably will offer strong returns. But just to reiterate the point, our growth program that we've got planned is very returns focused, and we will continue that returns net approach to our strategy. And in terms of full year '26?

Yes, Alex. So on FY '26, yes. Very clearly, we are guiding to a GBP 10 million improvement in our cost base this year, the efficiency program, which drops to the bottom line. So that should be an increase in your forecast of GBP 10 million. And clearly, depending on exactly what you're assuming for RevPAR, we don't guide on RevPAR. But clearly, trading has been very strong across this last quarter. We've outperformed the market. So although you'll be seeing weekly STR market data, we've outperformed that. So again, depending on the view going forward, we might expect to see some upside from that RevPAR as well against previous forecast.

Yes, Alex, I suppose just building on that point about the growth, which is we talked about the Accelerating Growth Plan, 3,500 extra rooms to the Accelerating Growth Plan. I mean that is us taking market share in the market. It is also driving accretive and incremental returns because we're removing the drag of a lower-performing branded restaurant, replacing it with higher-performing extension rooms. That's a great example of how we can both drive growth but also drive returns. And we'll take that kind of focus on returns moving forward.

Our next question comes from Kate Xiao from Bank of America.

My first question is a follow-up on the '26 guide. Can I just confirm that U.K. net cost inflation is still the 2% to 3% range? I want to do the math of the GBP 10 extra million of cost savings is equivalent to about 60 basis points of year-on-year increase of the U.K. cost last year of EUR 1.63 billion. So if the range still holds, can I understand this as the guide used to be closer to the 3%, and now it should be closer to the 2% of year-on-year net cost inflation for U.K. cost? That's the first question. And then just the second question, can I ask on your property valuation. Obviously, you did at 1H property valuation of GBP 5.5 billion to GBP 6.4 billion. I wonder what's your view on that valuation range after the U.K. business rate change? Are you looking to do another round of property valuation accordingly?

Yes. So yes, I mean, overall kind of net cost inflation is now at the bottom of that range effectively. So yes, I mean, the important thing is it's a GBP 10 million reduction to the kind of the forecast we have with in line with our previous cost guidance. But it's the bottom of that range, you're absolutely right. 2% to 3%, but 2% 2.5%. In terms of property valuation, I mean, we did the property valuation as you say, I mean it's something we do every few years in reality as for information and also to give some support to our ability to recycle capital as well. There's no other implications in regards to that property valuation in terms of an accounting revaluation or anything like that. So it's not something we'll do that often. Yes, business rates obviously has an impact on that. But clearly, that's an unmitigated view. We're going to come back on April 30 with a full view of what our Five-Year Plan looks like, clearly, it's value property, think about future cash flows on that property overall. So there is some impact from business rates in terms of property valuation, but it's relatively minor and unmitigated as well. But there's no -- yes, we don't need to do a property valuation at this stage and time.

[Operator Instructions] Our next question comes from Jaafar Mestari from BNP Paribas.

Just one follow-up on U.K. business rates impact. Hemant Patel, I think you said doing the math is relatively easy for year 2 and year 3, but maybe it's worth just doing it all out just so we're on the same page. So if I assume that the EUR 35 million impact for '27 is effectively right at the cap. It cannot increase more than 30%. That's the transitional relief. Would it be fair to assume it's sufficiently big that in year 2, you're also again right at the cap. So another 25% increase this time, call it, EUR 37 million. And I guess more debatable in year 3, is it still big enough that you're again right at the cap and increases another 25%, and that would be GBP 45 million in year 3. So it increased completely unmitigated, of course, but GBP 110 million, GBP 120 million over 3 years. Is that what you're trying to mitigate?

Yes, of course. I mean we haven't given the detail in terms of what [ BRs ] looks like. So I'd say we want to be able to give a mitigated view of what the impact is for us across the next 5 years, which we'll do on April 30, including how we're going to drive overall profit returns across the whole of the business. I don't think the question is easy, but you can do the math to an extent. The reality is it's not quite as simple as you said, because obviously, some properties aren't going to go up at the full amount to get to the full cap. So by the time you get to year 2, there will be some properties that will be reached their increase in valuation. And obviously, by the time you get to year 3, you'll have some as well even potentially in year 1 as well. It's not quite as simple as that. I'd say what we'll do, because obviously it's not as simple as it's more complicated because actually there are different transitional relief profiles for different valuations of site as well within that. And there are other aspects of the business rates as well. We'll be talking about England here effectively because obviously 3 other nations that we need to consider as well and other kind of supplementary and perhaps from local authorities as well. So it's not quite as simple as that. We will -- we've got a better view of what it looks like over the next 5 years as I said April 30th, including a full kind of mitigated view of what we think it means for the Five-Year Plan.

Just a couple of things. As we said at the beginning, the level of increase in business rates on the hotel industry overall is punitive. We're already working on how we mitigate those costs over time. We've got a very good track record of mitigating costs over time. We are open-minded. We will look at all of the different options open to us. And in parallel, we are working very hard with the government as they go through the consultation period to show why this isn't the right outcome for the hotel industry. Having said that, if the government does not change their view on it, we are better placed than any of our competitors to deal with this and make sure that we are one of the winners as we come out of this in terms of driving long-term returns and actually driving market share over time.

Very clear. So for the year 1, it is 30%, and then you can only get a little bit better.

Yes. I'd say we'll give a better view on April 30. Thanks, Jaafar.

And Jaafar, we can follow up separately post the call. I'm sure there'll be a number of questions on business rates, which we are happy to follow up on. I'd like to thank everybody for the -- I'd like to thank everybody for their time today. I mean, as you can see, we feel really good about the progress we're making, but also the momentum that we've got in the business. We appreciate your time, and thank you very much.

That concludes today's call. We thank everyone for joining. You may now disconnect your lines.