McCarthy & Stone delivers strong growth in year to 31 August 2014
03 November 2014
McCarthy & Stone (‘the Company’), Britain’s leading retirement housebuilder, announces its financial results for the year ended 31 August 2014. The Company delivered strong growth during the year, generating profit before tax* of £63.2m.
- Profit before tax* increased to £63.2m (2013: £12.5m)
- Revenue growth of 25% to £387.8m (2013: £310.8m)
- Legal completions up 10% to 1,677 (2013: 1,527) at net average selling price of £214k (up 16% on 2013: £184k)
- Improved operating margin* of 19% (2013: 15%) and return on average capital employed* increased to 17% (2013: 12%)
- Strong balance sheet and robust financial position with net debt at year end of £48.9m (2013: £63.1m), equivalent to gearing* of 10% (2013: 15%)
- 74 new development sites acquired since September 2013 (2013: 48); land bank of 8,701 plots, which is over 5 years’ supply
- £2bn anticipated investment in land and build over the next four years, delivering around 12,000 new homes across more than 300 different locations nationwide
- Forward sales strongly ahead at c.£160m (2013: c.£130m)
John White, Group Chairman, said: “McCarthy & Stone delivered robust year-on-year profit growth in the year to 31 August 2014 ahead of expectations, supported by strong market demand for specialist retirement housing.
“Demographics remain strongly in favour of specialist retirement development, with the number of people aged over 85 expected to increase by 130% and the number of people aged 65 and older expected to increase by over 50% by 2033(1). One in four over 60s are interested in retirement living, yet only 1% of older owner-occupiers currently live in specialist retirement housing(2). This gives the Company confidence that there is a very large addressable market for its products.
“The housing needs of this age group must now become a priority for Government. Most household growth over the next 20 years will involve older people and policy makers need to look beyond the first time buyer. Retirement housing improves well-being, releases under-occupied family-sized homes and is highly sustainable. It must become an essential part of overall UK housing output. We are encouraged to see Government begin to look seriously at encouraging retirement housing and await with interest the publication of its research on developing new policy options in this area over coming months.
“The Group increased its order book of forward sales at the end of the financial year and the early weeks of trading have been encouraging, with our weekly net reservation rate c.20% ahead of last year for the first nine weeks. Total forward sales, including legal completions in the year to date, stood at c.£160 million on 31 October 2014 (2013: c.£130 million).
“In parallel, the Group continues to drive operational improvements and invest significantly in its land bank to support future growth, improve return on capital and capture a wider share of the growing retiree market. The strong fundamentals for the specialist retirement market ensure McCarthy & Stone is well-positioned for the future and I remain confident of further progress in 2015 and beyond.”
Download the full financial results report.
For more information please contact:
McCarthy & Stone, 01202 292480
Clive Fenton, Group Chief Executive Officer
Nick Maddock, Group Chief Financial Officer
Paul Teverson, Head of Public Affairs and PR
Brunswick Group, 020 7404 5959
Craig Breheny / Alison Kay
Note to Editors
McCarthy & Stone is Britain’s leading retirement housebuilder, with a c.70% share of the owner-occupied market. The Group buys land and then builds, sells and manages high-quality retirement developments. The Group has sold c. 50,000 homes across more than 1,000 schemes since 1977.
*Operating profit, operating margin and profit before tax are stated before exceptional items (operating profit: £2.5m, profit before tax: £4.0m) and amortisation of intangibles (£4.5m). 2013/14 operating profit, operating margin and profit before tax include the impact of a change in cost capitalisation estimation technique during the year of £8.1m, as described further in the CFO’s Review. Return on average capital employed is calculated as operating profit*/ average tangible gross asset value. Gearing is calculated as net debt / net assets. Tangible gross asset value is calculated as net assets, less intangible assets and excluding net debt.
Note (1) Population projections by the Office for National Statistics (2012 based).
Note (2) Demos (September 2013)