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Strong growth for McCarthy & Stone

30 Mar 15 House-builder McCarthy & Stone remains on track to reach its goal of doubling in size after reporting a strong rise in half-year revenue and profit.

Chief executive Clive Fenton (left) and chairman John White
Chief executive Clive Fenton (left) and chairman John White

McCarthy & Stone, which specialises in building houses for retired people, made £32.0m profit before tax and exceptional items in the six months to 28th February 2015. This was a 76% increase on the £18.2m made for the same period the previous year.

Revenue was up 26% to £188.5m (2014: £149.7m), while the overall net asset value of the business grew to £497.4m (2014: £444.1m).

Legal completions were up 18% to 776 (2014: 659) at a net average selling price of £226k (up 10% on 2014: £205k)

Operating profit (before exceptional items and amortisation of intangible assets) was up 50% to £36.5m (2014: £24.3m) with the operating margin improving to 19% (2014: 16%).

The order book of forward sales was up 36% to £194m at 27th March 2015.

Since September 2014 McCarthy & Stone has started work on 39 new sites and taken control of 44 additional development sites.

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A new North London region has been opened by the business and there are now plans to open three more new regions.

The company has been mulling a stock market flotation for several years now but there was no news on that in today’s interim results announcement.

Group chairman John White said: “McCarthy & Stone continues to deliver strong growth as evidenced by another robust set of results for the first half of the 2015 financial year.  The company has seen further significant increases in revenue, completion volumes, average selling prices, net reservations and profit before tax during the period.  The housing market has remained strong during the first half, as has the demand for specialist retirement accommodation.

“The challenges presented by an ageing population means that there remains a pressing need to build more specialist retirement housing, and we have been actively calling on all political parties to focus on this area ahead of the forthcoming general election.  It is imperative that they look beyond the needs of first time buyers and proactively encourage more and better housing options for our growing elderly population.

“We continue to target investment of £2bn in land and build over four years to deliver around 12,000 new homes across more than 300 locations, support growth and capture a wider share of the active retiree market. Our strategy of creating an efficient and scalable business capable of building and selling more than 3,000 units per annum over the medium term remains firmly on track.”

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