Strategy and business objectives
As the Group's trading performance stabalised during 2010, we undertook an intensive review of our future business strategy to ensure that this reflected the market conditions and economic environment that can be expected in the medium term. Although the Group's financial position has strengthened over the past two years, we envisage that the general availability of capital will become more limited in the short to medium term. Consequently, generating superior returns on capital deployed will be crucial in differentiating the Group's performance and investment cast against other investment alternatives.
The review of our strategy has confirmed that our focus should be on ensuring our operating structure is configured for the best market opportunities in each country of region. Consequently, in certain countries, our objective is to be leader in those service market subsectors (geographies, customer groups or project types) where we can average an acceptable return on capital employed through a typical five-seven year economic cycle. This shift is strategic emphasis will see a progressive move in capital employed away from structurally low-return to structurally higher-return areas of activity over the next two to three years.
Growing Depot Scale
The creation of larger operating units, not only improves our ability to satisfy customer demands, due to breadth of available fleet, but also allows us to provide a more stimulating work environment for our staff and a consequently higher level of efficiency and effectiveness. There is a close correlation between average depot scale and profitability.
Extending Equipment Life
Planned and proven preventative maintenance programmes and the progressive roll-out of our own internal Technical Excellence accreditation standards to all Group workshops provide the basis for an ability to extend useful equipment life beyond its normal depreciation period. Deep refurbishment programmes can turn old machines into new.