McCarthy & Stone – full year trading update

03 September 2015

A further year of strong growth and significant investment progress.

McCarthy & Stone, the UK’s leading retirement housebuilder, announces its full year trading update in respect of the year ended 31 August 2015.  The Company will announce its full year results on 5 October 2015.

Highlights

  • Total revenue up c. 25% to £486m (2014: £388m), driven by new sales outlets, improved sales rates and higher selling prices
  • Legal completions up 15% to 1,923 units (2014: 1,677)
  • Net average selling price up 12% to £239k (2014: £214k)
  • Forward sales up 38% to £131m (2014: £95m)
  • 90 (2014:74) new development sites under control since September 2014 (c.3,520 units)
  • Strong land investment with land bank now comprising c.10,100 units (2014: c.8,700) for future development at attractive margins.  Terms agreed on a further c.468 units
  • Strong balance sheet and robust financial position, with net debt* at 31 August 2015 of £33m (2014: £49m)
  • Three new regional offices launched on 1 September 2015 to support investment programme

Commenting on the results, John White, Group Chairman, said:

“McCarthy & Stone continues to deliver strong and profitable top-line growth as it seeks to address the increasing market demand for retirement housing generated by a rapidly ageing population.  Our operating performance over the past 12 months has been excellent, with 1,923 legal completions and c.3,520 additional units under control in high-quality locations.

“In support of our investment target in land and build, we successfully refinanced the business on commercially attractive terms in December 2014, and we remain on course to deliver our growth objective of building and selling more than 3,000 new homes per annum over the medium term.”

The Group’s Chief Executive Officer, Clive Fenton added:

“Our senior management team continues to focus on improving margins and increasing our asset turn.  During financial year 2015, we have implemented new sales practices across the business to drive an increase in the rate of off-plan sales and we have streamlined core development processes, reducing our capital cycle.  We have continued to improve our products with the introduction of our higher specification Platinum range and the launch of Ortus Homes to appeal to a wider group of retirees.  We have also maintained focus on managing our cost base and have made good progress in central procurement initiatives with the outsourcing of a number of non-core activities. 

“From 1 September 2015, the Company has strengthened its regional presence further with the creation of three new regional offices, putting in place the infrastructure needed to achieve our medium term volume targets.  In addition to the new North London office, which opened in September 2014, this brings the total to nine regional offices across the UK.”

*Net debt excludes land-related promissory notes
– Ends –

For more information, please contact:

McCarthy & Stone, 01202 292480

Clive Fenton, Chief Executive Officer

Nick Maddock, Chief Financial Officer

Paul Teverson, Director of Communications

Brunswick Group, 020 7404 5959

Azadeh Varzi

Alison Kay

Notes to Editors:

McCarthy & Stone is the UK’s leading retirement housebuilder with the largest share of the owner-occupied market. The Company has sold c. 50,000 properties across more than 1,000 developments since 1977, and is renowned for its focus on the needs of those in later life.

UK demographics remain strongly in favour of the specialist retirement housing market, with the number of people aged over 85 in the UK expected to more than double between 2014 and 2033 from 1.5 million to 3.5 million, and the number of over 65 year olds expected to increase by more than 50% from 11.4 million to 17.2 million.  According to recent research, 1 in 4 over 60s are interested in retirement living (Demos, 2013), yet only c. 128,000 units of specialist retirement housing for homeowners have been built.

In addition to its established Retirement Living and Assisted Living products, the Company has also launched a new product, Ortus Homes.  Ortus Homes presents an exciting opportunity for the future and is exclusively for the over-55s and those in the early stages of retirement who are seeking to downsize for their leisure years. McCarthy & Stone is currently selling its first apartments in this new product range across five locations, helping the Company to capture a wider share of the active retiree market.