Profit fall at McCarthy & Stone despite revenue rise

Retirement housebuilder McCarthy & Stone has reported a fall in profit, despite a rise in revenue and higher average selling prices.

Underlying pre-tax profits fell 10% to £94.1m for the year to the end of August, down from £105m at the same point last year, as McCarthy & Stone said was forced to offer higher incentives to sell homes, and faced greater building costs. The group said age and mix of units sold also hit underlying profits.

Revenues, however, increased 4% to £660.9m from £635.9m last year, and average selling prices rose to £273k from £264k. The number of legal completions nudged up to 2,302, compared to 2,296 at the same point last year.

Underlying basic earnings per share plunged 12% to 14.2p, while the group added it would pay a final dividend of 3.6p per share, giving a total dividend for the year of 5.4p per share.

Clive Fenton, chief executive of the McCarthy said: “We achieved a strong result in the second half of the year and delivered an improvement in both margins and volumes compared to the first half of 2017. Our full year completion volumes were in line with the prior year despite some headwinds as a result of the increased level of uncertainty in the secondary market and the expected lower number of first occupations. We delivered to market 49 high-quality new developments and maintained our exceptional build quality and levels of customer satisfaction.

“The group starts the new financial year with a strong forward order book and a robust balance sheet. We remain focused on delivering profitable growth and are on track to open circa 80 sales outlets and deliver more than 65 first occupations in FY18. We have sufficient land under control, much of which already has detailed planning consent, to deliver our strategic growth plan of building and selling more than 3,000 units per annum.”

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