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McCarthy & Stone maintains growth path

5 Oct 15 McCarthy & Stone is on course to double the size of the business after 25% revenue growth in the past year.

Chief executive Clive Fenton and chairman John White
Chief executive Clive Fenton and chairman John White

For the year ended 31st August 2015, the UK’s leading retirement house-builder booked revenues of £485.7m (2014: £387.8m).  Profit before tax was up 42% to £80.9m (2014: £57.1m).

Legal completions increased by 15% to 1,923 (2014: 1,677) and net average selling price was up 12% to £239,000 (2014: £214,000).

The aim is to grow the business to 3,000 unit sales per year over the medium term.

During the past year,  90 new development sites were acquired (2014: 74) with a land bank of 10,087 plots, equivalent to 5.2 years’ supply for future development. This is a record high for the company.

McCarthy & Stone plans to invest £2.5bn in developments over the next four financial years. Three new regional operations launched on 1st September 2015 covering the Northwest, Southwest and East Midlands.

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Chairman John White said: “It has been another strong year of profitable growth for McCarthy & Stone. We continue to capitalise on the increasing demand for specialist retirement housing, driven by a rapidly ageing population and a structural under-supply of this form of accommodation in the UK.

“The Group is well-positioned to benefit from this unprecedented market opportunity, and the scale and quality of our land bank provides significant visibility over the medium-term for our potential rapid growth.  Against this backdrop, we have increased our investment target for land and build to £2.5bn over the next four years and remain on track to deliver 3,000 specialist retirement apartments per year over the medium term, doubling the size of the business.

“In parallel, we continue to make operational improvements to the business to deliver improved capital turn, ensuring that our increasing margins and profit translate into higher returns. The Group also increased its order book of forward sales at the end of the financial year and the early weeks of trading have been encouraging, with our weekly net reservation rate 23% ahead of last year for the first five weeks. Total forward sales, including legal completions in the year to date, stood at £177m on 2nd October 2015.

“The strong fundamentals for the specialist retirement market ensure McCarthy & Stone is well-positioned for the future and I remain confident of further progress in 2016 and beyond.”

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