McCarthy & Stone on track, despite slow start

Working towards this target, build activity was started on 44 new sites, up from 34 a year earlier, with a further 16 sites expected in the third quarter. These sites are expected to double the number of sales releases in the year to March 2018. And management confidence was reflected in an 80 per cent hike in the interim dividend.

Trading in the first half was affected by the referendum, which caused some potential buyers to hold off, leading to a drop in completions from 923 to 866. New site releases (ready for sale) were also down from 36 a year earlier to 32, while completion on some higher-margin sites was weighted towards the second half. Average selling prices edged ahead to £260,000, but that was not enough to stop a sharp drop in underlying margins from 16 per cent to 10 per cent. However, margins are expected to recover in the second half.

Early trading in the second half saw increased sales momentum and the forward order book is now just 1 per cent down on a year earlier. Detailed planning consent has also been secured on 34 sites representing 1,314 units; that's up from 780 units on 19 sites a year earlier.

Demand for purpose-built retirement homes is expected to grow significantly, with 3.5m people over the age of 65 expressing an interest in buying a retirement home, per management figures, while only 141,000 specialist retirement properties have ever been built. Land prices remained benign, with demand for a typical brownfield site "highly fragmented". McCarthy's land bank now stands at 10,035 plots, equivalent to 4.4 years of supply.

Analysts at Peel Hunt are forecasting adjusted pre-tax profits for the year to August 2017 of £103m and EPS of 15.5p (from £105m and 16.3p in 2016).