McCarthy & Stone Reports 31% Revenue Increase but Faces Uncertain Future

Retirement house building firm McCarthy & Stone has seen its revenues increase by 31% in the past year, although the company has also voiced uncertainty about whether it will be able to achieve the targets for next year.

McCarthy & Stone’s most recent financial year concluded on August 31 and while the firm’s full results will not be reported until November, it has still been able to provide a trading update.

Legal completions rose by 20% to 2,299 units from 1,923 the year before, while the net average selling price rose by 8% to £259,000 from £239,000 in 2015.

This meant that revenue rose by 31% to around £635 million, up from the previous year’s figure of £486 million.

With a land bank increased to 10,206 plots (up from 10,087 in 2015) and £52 million net cash in the bank, the firm’s board said that it is in a strong financial position.

However, Clive Fenton, McCarthy & Stone Chief Executive, said that it is difficult to predict whether the company will reach its 15% volume growth target in the financial year.

Fenton said that the company will continue to capitalise on increasing demand for retirement housing driven by the UK’s rapidly ageing population and have delivered strong growth in completions, reservations and profit this year.

Fenton continued: “Notwithstanding current increased market uncertainty following the EU referendum result and any financial impact on the business in the short term, McCarthy & Stone remains in robust health to capitalise on a continuing benign land market and the attractive fundamentals of the retirement market over the medium term.”

He also said that although it is too early to judge the medium term impact of Brexit and the Bank of England’s resulting changes to monetary policy prolonged housing market weakness, particularly in the secondary market, could affect the firm’s ability to deliver its targeted 15% volume growth previously indicated for the financial year ending 31st August 2017.


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BDC 309 : Oct 2023