A slowdown in transactional volume in the existing housing market means that retirement home specialist McCarthy & Stone (MCS) will not be selling as many apartments as it had hoped in the year to August 2018.
As a result, operating profit will be £65m-£80m against £96m in the previous year. A strategic review of operations is expected to complete in September. That's focused on improving margins and targeting a return on capital expenditure in the mid-teens in the short to medium term. As a result, growth will be more "measured", alongside a "right-sizing" of the group's cost base. Before then, chief executive Clive Fenton will retire in August.
Softer prices and fewer sales of existing homes have hit the south east of England the hardest, and with lower sales volume as retired people put off any decision about moving into a retirement apartment, the group expects completions to be in the region of 2,100-2,300 against 2,302 in 2017. McCarthy maintains that this is achievable, given that the forward order book remains strong at £706m.
