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McCarthy & Stone revenues leap but confidence softens

2 Sep 16 Retirement house-builder McCarthy & Stone has seen a 31% leap in revenues in the past year, but has voiced uncertainty about achieving next year’s targets.

Chief executive Clive Fenton
Chief executive Clive Fenton

McCarthy & Stone’s latest financial year ended on 31st August 2016 and while it will not report its full results until November, it has provided a trading update.

Legal completions increased by 20% to 2,299 units (2015: 1,923) and the net average selling price increased by 8% to £259,000 (2015: £239,000).

This meant that revenue increased by 31% to approximately £635m, up from £486m the previous year.

With £52m net cash in the bank and a land bank increased to 10,206 plots (2015: 10,087), the company is in a strong financial position, the board said.

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Whether it hits its target of 15% volume growth in the financial year just started remains difficult to predict, however, chief executive Clive Fenton said.

Mr Fenton said: “We 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. 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 added: “Whilst it is too early to judge what medium term impact we will see from the EU referendum result and the Bank of England's subsequent changes to monetary policy, prolonged housing market weakness, particularly in the secondary market, could affect our ability to deliver our targeted 15% volume growth previously indicated for the financial year ending 31st August 2017.  There has been some improvement in customer sentiment during the month of August, however, it is too early to predict at this stage whether these improving conditions will persist into the new financial year.”

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