McMullen's reports "creditable" performance

Hertfordshire brewer and pub operator McMullen's has reported increased sales but operating profit down in its most recent financial year.

Sales rose by 2.6% to £56.5m while operating profit, was down 14% to £6m in the year to 26 September 2009.

Same site sales in managed pubs were up 2.0% with liquor up 0.7% and food up 5.0%. "This was a creditable performance in a challenging trading environment and in an 'on trade' beer market where volumes declined by 6.4%" said managing director Peter Furness-Smith.

The results were materially affected by a return to normal levels of repair expenditure following the lower spend in 2008 and a 70% increase in tarrifs for gas and electricity.

Two new pubs acquired during the year along with the four major refurbishments are trading in line with expectations.

Food-led pubs performed well and the sites in central London showed good levels of sales growth. Community, liquor focused pubs, however, fared less well.

Furness-Smith added: "These trends have continued into the current year so the outlook remains challenging. Our customers therefore, will be as pleased as we are that beer duty has not been raised again this year in the recent emergency budget.

"Unfortunately the increase in VAT in January 2011 will further widen the differential in pricing between supermarkets and pubs with the obvious knock on effect — less overall tax revenue for the Treasury and further undermining pubs as community assets and the home of supervised socialising with friends.

"On a brighter note this was a reasonably business-friendly budget, under the circumstances, which will ensure we continue with our plans to both acquire new pubs as well as invest in our existing pubs."