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What we do: Goals and strategy
In order to develop our business further, our goals are to:
- Maximise the overall profitability of every site
- Optimise our share of the available profit
- Grow through selective acquisition
In respect of these goals, we have adopted the following strategies:
Maximise the overall profitability of every site
Recruitment and retention of high quality licensees - We believe that the key factor for the profitability of an individual pub is a high quality licensee. We have developed our methods of licensee selection as well as the services, support and training we offer in an effort to continue to recruit and retain high quality individuals.
Development of individual business plans on a pub-by-pub basis - We use our experience of the pub industry and the detailed estate knowledge we have built up to develop business plans on an individual basis with each of our licensees. Helping licensees make the most of their local market leads towards an optimal products and services mix in each pub and generally results in greater profitability per pub. The individual pub plans then directly influence the area and regional business plan.
Targeted investment in individual pubs - We have identified and invest in new facilities and refurbishments jointly with our licensees. We believe that continued capital investment programmes in our pubs will enable us to set and achieve targeted returns on incremental capital expenditure.
The provision of high quality training for all of our licensees - We have consistently helped our licensees to build better businesses by delivering a first class training and development programme. We believe that the provision of our award winning training programme will ensure that our pubs are the first choice for customers in their respective communities. Punch’s Business Relationship Managers (BRMs) offer business and planning support and advice to retailers.
Expansion of the range of products and services provided to each pub - We have broadened the range of services that we offer to our licensees, including negotiating for the supply of utilities and food, we are delivering further benefits to licensees and providing additional revenue opportunities for the company. We believe that the effective use of the company’s buying power will continue to provide significant procurement benefits to our licensees on a whole range of products and services.
Optimise our share of the available profit
Selecting appropriate agreement terms - Selection of the appropriate agreement for each licensee is crucial for optimising profit sharing arrangements. Our newly launched Agreements offer choice, flexibility and clarity, both to new licensees and those renewing agreements.
Agreeing the appropriate rent to charge in each Agreement - Correctly estimating the retail profitability per pub at the outset of an agreement is essential to agreeing an appropriate rent. We use our experience in the pub industry and our customised financial models to negotiate rents that will recognise the full potential of each pub.
Ongoing monitoring of retailer compliance with the provisions of the agreement - Ensuring that buying outside the tie is minimised, that the terms of the agreement are complied with, and that debts are swiftly and effectively collected are important aspects of maintaining the relationship between us and our licensees. We intend to continue our policy of actively ensuring compliance with our licensees’ obligations.
Grow through selective acquisition
Expand our pub portfolio in the UK - We are always on the lookout for quality acquisitions to add to our estate.
Growth through acquisitions - A large number of pubs in the UK are controlled by financial sponsors or entrepreneurs who may seek to exit from their investments over the next three to five years. Substantial numbers of small or medium sized pub estates may also provide us with targets for acquisition. In addition, we actively pursue the significant opportunities which exist to make individual pub acquisitions through our dedicated acquisitions team. We believe that we are well positioned to take advantage of these acquisition opportunities and intend to pursue them if and when appropriate.
Estate management - We believe that considerable opportunities exist to expand our pub portfolio whilst continuing our policy of seeking alternative uses for or disposing of any pub which consistently fails to meet key long-term performance criteria due to factors beyond the control of its licensee. |
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