Retirement housebuilder McCarthy & Stone revealed a slump in orders and an increased reliance on discounts in its results for the six months to the end of February , as the company seeks to undergo a strategic shift in challenging market conditions.
McCarthy & Stone relied on incentives such as part-exchange and discounts in order to reach a number of sales in the period and anticipates continuing to do so. The company’s forward order book is around 17 per cent down on last years’, with £485m of orders.
Revenues at the group increased 17 per cent year on year, to £281m, but pre-tax profits were down 66 per cent to £3.6m, due to exceptional costs incurred as part of the company’s strategic shift. Those expenses include redundancy costs of £3.5m, consultants fees of £4.5m and the cost of land which will no longer be developed.
Legal completions increased 11 per cent and the company’s average selling price was up 7 per cent, to £319,000
John Tonkiss, chief executive, said the results were “encouraging”, “against the backdrop of continuing uncertainty and challenging market conditions”.
“We are making significant progress across our strategic objectives, which focus on optimising our operations to deliver strong financial performance and increasing our return on capital employed, margins and cash generation over the next three years,” added Mr Tonkiss.
The company was on track to meet volume expectations for the full year, but would continue to rely on discounts and incentives in order to do so, he added.
McCarthy & Stone also announced the appointment of Gill Barr as non-executive director.
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