Oakman Inns chief executive Peter Borg-Neal has told M&C the company has enjoyed a buoyant start to its H2 and that after a period of consolidation it is eyeing “aggressive” expansion in 2016.
Borg-Neal said that at the end of week 34 of its financial year last week cumulative like-for-like sales were 5.1% with food and accommodation driving growth.
The company took on six sites in 12 months to grow to a 14-strong estate but since July has concentrated on laying the foundations for more rapid expansion next year.
This week the company officially launched its online craft academy Oakmanology, which Borg-Neal said was designed to make the company more competitive in the recruitment market.
On trading so far this year, Borg-Neal said: “At our half year in September we weren’t that pleased with our like-for-likes. We had opened four sites and we were really happy. When we looked back our like-for-likes were cumulatively at 1.1%, which wasn’t great for us. The way Easter didn’t help us and there was probably a bit of a loss of focus while we were expanding. The Rugby World Cup wasn’t good to us, particularly at the beginning. But since then we have been absolutely flying.
“We changed the menu and we were very pleased with that. We have kept our heads down and worked very hard. A lot of things are coming through.
“As of this Sunday, week 34, which is eight weeks into our second half, our like-for-likes are up 5.1% cumulative. We have been running well up. For the last three weeks it has been 10.5%. We seem to have been seeing a different picture to most people.”
On plans for 2016 he said: ““We are looking for further growth. We did six in 12 months and then we’ve done nothing since July. Now we are open to ideas. What we have been doing is building capacity so we can grow even quicker next year.
“If you look at the current boundaries of the estate we think those are pretty sensible. We would like to do more in the M4 and M3 corridors.
“We will continue to look at opportunities that other people miss. In 2007 people were probably saying I was a lunatic for concentrating on the market towns. Now everyone is piling into them. We like to find slightly unlikely sites because we don’t want to get into silly bidding wars. We strongly believe there are still areas of the country that are under-provided for and it’s just about finding places where there are people that want an Oakman Inn and making those people happy.
On funding the expansion he said: “We are unlikely to do any more equity. We haven’t got any bank debt in the company so we are looking at bank debt. If we wanted a steady-as-you-go year we could do that just with bank debt but we are probably looking to be a bit more aggressive than that. We will probably look at things that sit alongside bank dent rather than instead of.
On the inspiration for Oakmanology he said: “We’re in a fiercely competitive market and there’s a battle for market share. This feels to me almost like 2009 reinvented. Our strategy back then was a flight for quality while others were discounting. The difference now is competitive pressure in terms of quality is far higher. We have to offer something more than the competition and what Oakmanology allows us to do is demonstrate that ambitious people can go the extra mile with us.”
