Biggest retirement home builder flourishes after float

McCarthy & Stone, the UK's biggest retirement housebuilder, posted a strong profits rise and maiden 1p dividend yesterday following its flotation last November as it unveiled ambitious sales targets for Scotland.

McCarthy & Stone is seeking to build its presence in Scotland. Picture: Contributed
McCarthy & Stone is seeking to build its presence in Scotland. Picture: Contributed

The group reported a 23 per cent lift in underlying halftime pre-tax profits to £39.1 million in the six months to 29 February, compared with £31.8m, on revenues up 33 per cent at £250.2m.

Legal completions rose 19 per cent to 923, while the net average selling price of one of McCarthy & Stone’s retirement flats increased 12 per cent to £253,000.

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On the Scottish expansion plans, Nick Maddock, group chief finance officer, said: “There’s a great market opportunity in Scotland. We will invest £200m in that market over the next four years and we think we can build 400 new retirement flats every year in Scotland. That is a substantial rise on the 250 or so we built in our last full financial year.”

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UK-wide, the company reiterated that its target is to sell more than 3,000 units annually compared with 1,923 in its last financial year, driven by the UK’s “rapidly ageing population.”

Maddock said McCarthy & Stone believed in the benefits of downsizing to address the UK’s broader housing under-supply. “The age of our average customer is 78, perhaps increasingly frail, who are now struggling with the four or five bedroom home they have lived in for many years, but don’t want to pay high nursing home fees,” he said.

The company said the “demographic opportunity of a huge structural imbalance” for the business was highlighted by there being 11 million over-65s in the UK today.