McMullen’s, the Hertfordshire-based brewer and pub operator, would look at newbuilds and unlicensed units as well as existing pubs for acquisitions, managing director Peter Furness-Smith has told M&C Report.
The company opened three managed pubs in its most recent financial year (to 28 September) and Furness-Smith pointed out that one of those, Baroosh in Marlow, was previously an unlicensed premises, as was Baroosh in Bishop’s Stortford. In February this year the company opened its first newbuild, the Prince George in Milton Keynes.
“It’s very difficult to find good quality pubs for sale,” said Furness-Smith. “We’re constantly looking at other areas, whether it’s pieces of land that we can build a new pub on or an unlicensed property that we can get a licence on.
“Like everyone else we’re finding those quality pubs don’t come on the market and when they do they’re going go for a very rich price.”
Asked if he expects new openings to come from such newbuilds and unlicensed outlets, Furness-Smith said: “I think so. We’re looking at everything, whatever opportunities are in our trading area. There’s stuff out there - not a lot. We’re quietly confident that we’ll be able to continue to acquire the odd site.”
On the prospect of disposals, he said: “We are constantly reviewing our estate. Hardly a week goes by that somebody doesn’t make an offer on one of our pubs. Most of the time we tell them to go away. If someone comes up with an offer that means we can then recycle that cash into one of our other pubs, or into a new pub, that’s got to make commercial sense.”
McMullen’s reported an acceleration in like-for-like sales growth in its managed estate in the first half of its current year (six months to the end of March) to +6.7%, up from +4.2% in the year to 28 September.
Furness-Smith highlighted the impact of the good weather, adding: “There’s been a pick up in the economy, particularly in the south east, which is helpful.”
Trading since the end of March has “carried on” but has been “not as good as that”.
He added: “For however many years, we’ve had massive increases in like-for-like costs, with like-for-like sales being flat or marginal, which put real pressure on the P&L. Even now with the appalling levels of taxes and general costs going up, you’ve still got to have a fairly healthy increase in like-for-like sales just to stand still.”
McMullen’s reported a 15% rise in profit before tax and exceptionals to £7.6m in the full year on turnover up 5.9% to £67.5m. Operating profit increased by 16.7% to £7.7m.
