McMullen’s has reported results for the 53 weeks to 1 October 2022, with a turnover of £101m and profit after tax of £10.1m.
The pub operator and brewer achieved over £100m in annual turnover for the first time in history, according to its accounts filed on Companies House – despite the impact of Omicron during the period.
Chairman Charles Brims stated: “While I can report a pleasing increase in turnover…the ability to convert this turnover into profit has been eroded by cost inflation.
“Nevertheless, the company has a strong balance sheet, well-invested freehold pubs, and strong senior management so it is well placed to meet these challenges.”
The company has said it continues to seek good quality pubs and sites with a “long-term future”.
Retail division
The retail division finished the year with a £94.2m turnover, growing 9.2% compared with a pre-Covid turnover of £84.7m.
Wet sales reached £54.4m vs £49.4m in 2019, while food sales reached £34.8m vs £31.8m.
Price increases and new pubs were the main drivers of growth, with underlying demand being more of a challenge. Comparable covers in food pubs were down 13.2% vs 2019, according to the accounts.
The division benefited from three recently acquired pubs in central London. These were yet reach their full potential with footfall in the area still recovering.
Other acquisitions included sites in Whitehall, Cambridge, Whitechapel, St Albans, and Stevenage.
Tenancy division
McMullen’s only operates a brewery-tie on beer and cider which has lost volume as sales shift from beer to other drinks.
While barrelage grew 62% year-on-year, it still remains behind 2019.
A review of tenants’ range is being conducted to identify support for this part of their sales mix.
The company also supported tenants with rent concessions.
Rebuilding the division is “dependent on attracting and retaining the best possible tenants in pubs that have the scale and surrounding demographics sufficient to secure a sustainable future.”
Brewing
Own-brew production remains about 10% behind pre-Covid while Rivertown keg production was up over 50% from 2019.
The brewery has broadly maintained market share of draught beer but the category is being further eroded by other categories, particularly cocktails.
The company sees keg as attractive due to better yield, margin opportunity, and ease of keeping. The category is competitive while cask beer decline is a “challenge nationwide” as brewers try to refresh the category.
Cost pressures
Utilities now cost 57.9% more than in 2019 – albeit mitigated by securing favourable rates for electricity supply – along with the energy surcharge on CO2.
Labour’s percentage of turnover continues to grow while “food was one of the places where the biggest cash consequence was felt.”
