S&NPC invests £10m in estate

The Scottish & Newcastle Pub Company (S&NPC) estate is set to benefit from a £10.5m investment in 2010.

The expenditure will be underpinned by a new strategy and approach. This includes adopting a managed house mind-set for capex, providing extra support to lessees and utilising the buying power and skills of the wider Heineken group.

A total of 175 projects are planned — 100 will enhance the pubs' existing consumer offers and 75 will completely change them. S&N Pub Company property director Chris Moore said the programme is not driven by numbers, but by what will provide maximum value for stakeholders.

He said: "All projects will need to build income streams by ensuring that the facilities are in place to cater for every consumer occasion that the target consumer might want in terms of food, drink, Wi-Fi etc and, where possible, by adding amenities such as letting rooms."

For the first time, the programme will bring a more targeted and strategic managed house approach to investment in the leased sector.

There will be more sophisticated market analysis to identify target consumer groups, consumer occasions and the right offer for each pub. Soft brands will continue to be developed to ensure best practice is shared and to de-risk investment. These will incorporate proven features and design approaches known to work in different kinds of pubs as well as reference houses for lessees to visit in the planning stages. Delivering the right consumer offer post- investment will be a major focus.

Lessee buy-in, drive and involvement in a shared vision and objectives is seen as essential to this.

They will be supported by S&N Pub Company's recently created team of project controllers. Unique in the leased pub industry, S&N Pub Company project controllers have a hybrid role of project and commercial management. They will oversee capex projects from conception through to establishing the success of the new offer after reopening. Recognising the stress refurbishments can cause lessees, a key part of the project controllers' remit will be to help lessees through the process, anticipating and solving common operational issues such as staffing and impact on cash flow.

S&N Pub Company's capex programme will also leverage value and expertise from the wider Heineken company. Group buying power will be used to bring savings on fixtures and fittings, and S&N Pub Company will tap into the company's knowledge bank in areas such as design trends and concepts and brand fit and pricing following investment.

Said Moore: "Good use of capex is key to the company's broader strategy of having an estate of quality pubs in prime locations with long-term sustainable businesses generating multiple income streams and capable of sustaining decent retail pricing levels.

"We believe this defined and targeted investment approach will ensure a good ROI for all involved."

S&NPC, which runs just more than 2,000 pubs, will complete projects in a phased way through the year.

Asked how the investments will be rentalised, Moore said: "We're being realistic — there's got to be a return for all partners."