Retirement homes specialist McCarthy & Stone (MCS) returned to the London market last November, having been taken into private ownership in 2006. These maiden interim results give a reasonable foretaste of how much growth potential there is to come. The shares are already up by over 40 per cent since flotation, and management wasted no time in declaring an interim dividend with a full-year payout target of 4.5p.
Some evidence of the strong progress can be seen from the forward order book, which jumped 26 per cent to around £306m by April this year. Revenue is expected to grow by a fifth in the current financial year, while the return on capital employed is forecast to grow by 100 basis points to 21 per cent. And there's a medium-term target to achieve a return on capital of at least 25 per cent.
Legal completions grew by 19 per cent to 923, with an annual target of more than 3,000 units by 2019. A total of 36 new sites were opened in the first half, while the net average selling price was up 12 per cent at £253,000.
Analysts at Peel Hunt are forecasting adjusted pre-tax profits for the year to August 2016 of £122.5m and EPS of 19.4p (from £88.4m and 15.1p in FY2015).
| MCCARTHY & STONE (MCS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 258.8p | MARKET VALUE: | £1.39bn | |
| TOUCH: | 257.4-258.8p | 12-MONTH HIGH: | 295p | LOW: 180p |
| DIVIDEND YIELD: | 0.4% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 121p | NET DEBT: | 4% | |
| Half-year to 29 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 189 | 29.1 | 4.8 | nil |
| 2016 | 250 | 29.0 | 4.2 | 1 |
| % change | +33 | - | -13 | - |
Ex-div: 28 Apr Payment: 31 May | ||||
