McCarthy & Stone’s profits to fall amid sales slowdown
The retirement housebuilder has embarked on an overhaul of its operations.
McCarthy & Stone’s profit is set to fall amid a slowdown in retirement homes sales.
McCarthy & Stone, which specialises in housing for retirees, has said its sales completions fell in the year ended August 31, down from 2,302 units to 2,134 units.
The firm put this down to economic uncertainty, and falling prices in some of its key sales regions, particularly the South.
The housebuilder’s operating profit is likely to come in between £65 million and £73 million, compared with £96 million the year before.
Full-year revenue will rise to about £670 million, up from £661 million in the prior year.
The group said the sales rise was aided by a 10% increase in the average selling price of its retirement properties, with the average price increasing from £273,000 to £300,000.
It has been a tough year for the group John Tonkiss
John Tonkiss, McCarthy & Stone’s interim chief executive, said: “It has been a tough year for the group, with ongoing adverse market conditions continuing to impact the business, and without the benefit of additional government support for the retirement housing sector.”
McCarthy & Stone is currently reviewing its operations to find cost savings, and said on Thursday that it would provide more detail on its plans later this month.
Mr Tonkiss said the company will focus its efforts on reducing its building costs, and was also looking at how to make its homes more appealing to consumers, with more affordable prices and a wider range of tenure options.
The group is also slowing down its house completions to boost profit margins and improve its return on capital.
McCarthy & Stone’s plans for an overhaul of the business were announced in April, months before it issued a profit warning and said its chief executive Clive Fenton was leaving.
Shares in the retirement housing group tumbled after it said its profits would be lower than expected due to the slowdown in sales reservations.