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McCarthy & Stone on course to build 3,000 units a year

19 Apr 16 Retirement house-builder McCarthy & Stone has seen its half-year sales leap by a third in its first financial results since its stock market listing last November.

The business is on course to meet its target of building 3,000 units a year by 2019, up from fewer than 2,000 last year.

For the six months ended 29th February 2016 McCarthy & Stone generated revenue of £250.2m, up 33% on the £188.5m revenue of H1 2015.

Underlying profit before tax was up 23% to £39.1m (2015 H1: £31.8m) although reported pre-tax profit was unchanged at £29.0m.

McCarthy & Stone opened 36 new sales outlets in the period (2015 H1: 29), contributing towards a 21% increase in net reservations. Legal completions increased by 19% to 923 units (2015 H1: 776 units) at a net average selling price of £253k (12% increase on 2015: £226k).

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Chief executive Clive Fenton said: "The UK's population is maturing at a fast rate, but continues to suffer from a chronic undersupply of suitable retirement properties of the type we provide.  McCarthy & Stone is uniquely placed to capitalise on this opportunity.

"Our land bank now includes sufficient land with full planning consent to deliver all targeted sales to 2017, and sufficient land under control to deliver all targeted sales to 2019.  In the first half, we have put in place the regional infrastructure and management capability necessary to help deliver these sales, which gives us confidence in the progress we are making in achieving our strategic objective of building and selling more than 3,000 units per annum.

"We are also starting to see tangible benefits from our three strategic initiatives focusing on improving sales rates, reducing time taken between securing land and starting build and implementing build programme efficiencies, reflected in the acceleration of our capital cycle, and we continue to target ROCE [return on capital employed] of at least 25% over the medium term."

ROCE was 18% in 2016 H1, as it was in 2015 H1.

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