RETIREMENT developer McCarthy & Stone has blamed a range of factors including uncertainty after the EU referendum for a 40 per cent drop in underlying profits.
The Bournemouth-based group said the half-year figures reflected “market uncertainty” following last June’s vote to leave the European Union.
The figures also reflected the fact that the bulk of sales from higher-margin sites would fall in the second half of the year, the company said. There was a lower number of properties released for sale in the period.
McCarthy & Stone, based in Holdenhurst Road, said underlying operating profit was down 40 per cent to £24.1million, while profit before tax was down 25 per cent to £21.8m.
Revenue was down five per cent to £238.2m in the six months to February 28 and the number of completions was down six per cent to 866. Met debt rose by £6.5m to £30.4m.
But shareholders’ interim dividend it to rise from a penny last year to 1.8p per share this time.
Chairman John White said: “The group continues to address the increasing market demand for retirement housing generated by a rapidly ageing population and has made good progress in recovering its workflow momentum following the outcome of the EU referendum last June.
“To meet this demand our strategic growth plan will see us almost double our build starts this year and our sales releases next year.”
Chief executive Clive Fenton said: “We have made solid progress during this half-year despite the headwinds created by the lower forward order book brought into the year and the weighting of expected completions from higher margin new sites into the second half of the year.”
He added: “We have strategic 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.”
In the CEO’s report, Mr Fenton said there had been “delays to our workflow as the business paused in the summer and early autumn to calibrate the impact of the decision to leave Europe.”
He added: “After a pause following the outcome of the EU referendum, trading conditions remained stable throughout the period, supported by the continuing structural imbalance between supply and demand within the housing market. There remains a significant and growing shortage of housing supply in the UK and this imbalance is particularly acute in the market for retirement housing.”
The company’s recent local development include Horizons, a block of 60 assisted living flats near Poole Park.
The company announced it would be rebranding two areas of the business to capitalise on its brand recognition and create consistency. Assisted Living developments will be renamed Retirement Living Plus, while Ortus Homes will be called McCarthy & Stone Lifestyle Living.
McCarthy & Stone is this year marking 40 years since its founders, John McCarthy and Bill Stone, built their first development in New Milton.
It has 70 per cent of the owner-occupied retirement housing market.
The company was taken into private hands in 2006 but floated again on the Stock Market in 2015.
It employs around 170 staff at its Bournemouth head office and 60 at its southern regional office in Ringwood.