Last week it was announced Punch Pubs & Co had acquired a package of 30 sites from McMullen’s, comprising 27 leased and tenanted sites and three smaller managed pubs, for an undisclosed sum.
Given the fact 28 of them had been part of the family-owned business for an average of more than 120 years, the decision to sell them, and close the door on its entire L&T division was a “huge” one for shareholders, Mizon admitted.
“It was hard to say goodbye to those pubs. From a shareholder perspective, I think it was a huge decision,” he said.
No rush
“It’s always something we’ve considered. We’ve churned the estate, selling the tail and buying more premium sites over the past 10 years, but we got to a point with the tenanted division where it was getting smaller, and the overheads don’t really justify the pubs. But we were in no rush to get rid of them because we were quite wedded to them.”
The impact of the previous two consecutive Budgets changed all that, the managing director added.
He continued: “It really impacted these pubs, where margins are that bit thinner, and it makes it harder for the operators to make money.
“When business property relief gets thrown into the ring as well, that really impacted shareholders of family businesses – and that was probably the absolute clincher.
“It was a seismic game-changer for shareholders planning their future. I think without that we’d have probably just pondered it as an idea, but those two budgets quite close together were quite a shock.”
Develop and grow
The sale will enable McMullen’s to continue to develop and grow its 86-strong managed house and hotel division, investing much of the proceeds into its existing estate.
The business also owns a collection of additional pubs that are run by other operators, which Mizon said McMullen’s will look to bring back into its own managed division over time – as and when leases expire. “All the growth will come from managed in the future.”
Alongside its core pub estate, McMullen’s has also revisited an earlier decision not to build its accommodation business, and has recently been adding rooms above some of its prime sites in London, and is looking to add rooms elsewhere where it can, Mizon explained.
“Our challenge is that rooms are really expensive to invest in, so we generally only want to do them where the room rate is quite high – which tends to be cities.”
Commenting on the performance of the business, Mizon said that McMullen’s had had “an incredible year” in FY204/25 (to end of September 2025), with the business adding nearly £3m in revenue on the previous year.
“We’ve had some great years, after great years and we’ve had some amazing growth which has been fantastic, But this year it’s been flat.”
Exceptional target
Mizon said the business had still achieved like-for-like growth since October but that it was single-digit, rather than the double-digit growth it had seen the previous year.
“Given that we’ve just sold 30 pubs which were profitable, I would say that we would do really well at the end of this year, if we can hit last year’s profit. That would be an exceptional target.”
Demand has been a lot tougher than this time last year – especially on food, with some “pretty chunky” cost inflation impacting profit margins. While customers are trading down – it is seeing the same proportion of people order desserts, sides and starters as being – there is simply less footfall.
“We’re not seeing people cut back on the luxuries. What we’re seeing is less footfall for food, but more footfall for drinks.”
Looking ahead, McMullen’s is hoping to get spades in the ground on the renovation of the six-storey Stoke Mill building in Guildford, this spring.
It acquired the site – the former offices of the Surrey Advertiser – in May last year and has plans to transform it into a new riverside pub and restaurant.
There is also a lot of planned investment into its existing core estate, as it continues to play catch up from the covid years. “We’ll probably complete about nine or 10 jobs this year and the same next year.”
- This article originally appeared in The Morning Advertiser’s sister publication MCA here.
