Mitchells & Butlers has said there is “significant value still to be realised” within its estate after revealing that some 250 of its sites have not been invested in for more than seven years.
The pub and restaurant group remains focused on maximising value creation from the 1,700 largely freehold sites that it operates, with the company increasing capital investment over the past three years.
Last year, it accelerated the number of capital projects in the first half of the year in order to capture more of the post investment benefit within the fiscal year, while this year it has broadly maintained the weighting of projects in the first half, completing 206 conversion, remodel and growth projects and two acquisitions.
As it moves closer to its target six- to seven-year investment cycle the proportion of the estate without recent investment is on track to reduce, improving the overall quality of its properties.
The company stated: “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 on more recent projects.”
Miller & Carter has been at the heart of much of its conversion work and that is paying dividends with the steakhouse brand continuing to perform strongly. In the second half of the financial year, M&B also plans to open its first site in Germany, building on the infrastructure of its ‘Alex’ brand.
Additionally, the group has been focusing on enhancing its accommodation offer under its Innkeepers Lodge brand.
It has more than 900 rooms across the estate with the majority attached to one of its managed sites. Over the past 18 months, it has been investing in its 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, the company says that it will have refurbished all its 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.