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Business strategy

Strategic priorities

Our Ignite 2 programme of work continues to deliver individual gains across several areas. The programme of work remains focused on our three strategic priorities:

  • Build a more balanced business
  • Instil a more commercial culture
  • Drive an innovation agenda

Building a more balanced business

Our priority in this area continues to be to maximise value creation from our estate of around 1,700 largely freehold sites. We have been unlocking value through our estate investment plan by ensuring optimal brand fit in each site with improved amenity standards and an evolving brand environment to meet the needs of our guests. Whilst we have increased the capital investment in our estate over the past 3 years there is significant value still to be realised, with over 250 sites which have not been invested in for over 7 years. As we move closer to our target 6-7 year investment cycle the proportion of the estate without recent investment reduces, improving the overall quality of our properties.

Last year, we accelerated the number of capital projects in the first half of the year in order to capture more of the post investment benefit in year. This year we have broadly maintained the weighting of projects in the first half, completing 206 conversion, remodel and growth projects and 2 acquisitions. Capital spend has reduced slightly through marginally fewer projects and as the proportion of conversion projects reduces and remodels increase. We have been pleased with the increased returns generated from our investment programme, particularly the more recent projects.

Miller & Carter continues to perform very strongly and in the second half of the financial year we will open our first site in Germany, building on the infrastructure of our Alex brand. This is an opportunity to test the concept in a new market and, if successful, would provide a further pipeline of growth for the brand.

We have also been focusing on enhancing our accommodation offer under our Innkeepers Lodge brand. We have over 900 rooms across the estate with the majority attached to one of our managed sites. Over the past 18 months, we have been investing in our accommodation in order to enhance the amenity level and diversify the portfolio such that rooms are appropriately positioned in the context of the site brand they are attached to. By the end of FY20, we will have refurbished all our room stock and will have rooms from the top end of the budget sector to premium boutique rooms attached to Premium Country Pubs and Miller & Carters. We have also invested in the management system which supports the booking of our accommodation and plan to relaunch the brand to the market on completion of the refurbishment programme.

Instilling a more commercial culture

We continue to work hard across many fronts to instil a more commercial culture across all aspects of our business, centrally and at site level. By empowering people across the business to challenge the commerciality of processes through Ignite 2 we have identified areas where marginal improvements can add up to substantial gains.

From a trading perspective, the benefit of improved commercial skills from sales workshops coupled with increased local ownership of sales-driving activity can be seen in a broad-based improvement in all brands' sales performance. This improvement has also been aided by specific sales focused Ignite workstreams including encouraging our team members to find additional selling opportunities across the 100 million meals and 400 million drinks we sell each year and the enhanced use of our table management software and booking capabilities. We have also continued to benefit from the introduction of reputation.com to the business, giving managers local ownership and oversight of feedback from guests.

Centrally, we have become more sophisticated in our approach to pricing, enabling us to be more agile in positioning each site within their local market and more refined in our approach to the pricing of products within one site. We know that consumers are willing to pay for quality and that different occasions command varying propensities to trade up a menu, therefore by providing a range of products and add-ons within one menu we can accommodate a variety of guest needs whilst also enabling the guests to flex their experience to suit the occasion.

We have also invested in our labour and stock management systems which are designed to give our managers the tools to drive efficiencies within their businesses.

Drive an innovation agenda

Our innovation agenda focuses on enhancing our technological and digital capability and developing new products and concepts to position ourselves to benefit from changing consumer behaviour and expectations.

We have made significant improvements in our ability to communicate with guests, including a more seamless booking process which has resulted in an increased conversion of website visits to bookings. We have also enhanced our ability to send personalised marketing communication allowing us to be more targeted in our messaging to guests as well as continuing to invest in our brand apps and websites.

Delivery continues to be a growth area of the industry and we now have over 170 sites live with Deliveroo and JustEat. As this market develops we continue to look for opportunities which fit our core business operations. We also have options for guests to pay via their mobile at all sites as well as our order at table facility which is being trialled in O'Neill's. Our next focus is to create a data platform which will enable us to quickly and smoothly integrate with third party software, allowing us to be more nimble in our response to developments in the market place.

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Contact Us

A photograph of Tim Jones
Tim Jones Finance Director Carlie Wakefield PA to Finance Director +44 (0) 121 498 6112
A photograph of Denise Burton
Denise Burton Deputy Company Secretary +44 (0) 121 498 6514
Amy De Marsac Head of Investor Relations +44 (0) 121 498 6514