Whitbread has set a target of making at least £300million more in annual profits and handing investors more than £2billion by 2030, after a first-half earnings slump. 

The Premier Inn owner said it was making 'excellent progress' on its five-year plan to expand its estate to 98,000 rooms and 'optimise' its food and beverage offering by exiting lower-returning restaurants.

But Whitbread reported a 13 per cent decline in adjusted pre-tax profits to £340million for the six months ending 29 August.

Whitbread said profits were partly impacted by the conversion of half its branded restaurants from a full-service offering under its 'accelerating growth' plan.

This also affected the FTSE 100 firm's revenues, which flatlined at £1.6billion, despite solid growth in Germany and accommodation levels in the UK outperforming the broader market.

Domestically, occupancy rates were 1.3 percentage points down at 83.1 per cent, with London outlets experiencing a bigger drop than the regions, while revenue per available room was 2 per cent lower at £69.93.

Yet Whitbread said UK sales had improved in the first six weeks since the first-half trading period ended, while accommodation revenues in Germany had jumped 26 per cent ahead of last year.

Dominic Paul, chief executive of Whitbread, said: 'In the UK, we have a clear pathway to further extend our market-leading position and capitalise on the favourable UK supply backdrop.

'We are determined to build on our significant outperformance since the pandemic, and whilst the market has been slightly softer than last year, we remain on course to grow our UK returns substantially over the medium term.'

Whitbread has announced a 7 per cent hike in its dividend to 36.4p per share and a £100million share buyback programme.

Under its transformation plan, the company intends to offload 126 poorly performing branded restaurants and convert another 112 into 3,500 hotel rooms.

The group's hospitality business includes the Beefeater and Brewers Fayre brands, as well as Table Table and steakhouse establishment Bar+Block.

Julie Palmer, partner at Begbies Traynor, said: 'In spite of the challenging backdrop, Whitbread has made encouraging strategic progress in moving away from its poorer performing individual restaurants and focusing on the hotels business.

'If the economy continues to stabilise and consumer confidence begins to rebuild, Whitbread's emphasis on hotel expansion should position it well for increased demand for travel and accommodation over the vital Christmas period.'

Whitbread shares were 4.3 per cent up at £32.03 on Wednesday morning, but have still fallen by around 11 per cent so far this year.