(Alliance News) - McCarthy & Stone PLC on Tuesday said sales improved in its most recently ended financial year, but profit was hurt by increased expenses.
The FTSE 250-listed company changed its financial year end to October 31 from August 31 previously, to decouple itself from the peak holiday season.
The retirement housebuilder said its pretax profit in the 14 months to the end of October declined by a quarter to GBP43.4 million from GBP58.1 million reported for the twelve months to the end of August 2018. Revenue, meanwhile, rose by 8% to GBP725.0 million from GBP671.6 million.
During the 14-month period, McCarthy & Stone said it has completed the sale of 2,301 apartments, up 8% from 2,134 sold in the prior financial year. Average selling price rose slightly to GBP308,000 from GBP300,000.
Less positively, administrative expenses jumped by 46% to GBP64.1 million from GBP44.0 million. Also, McCarthy & Stone incurred exceptional costs of GBP17 million, related its strategic review, up from GBP2 million the year before.
The company maintained an annual dividend per share at 5.4 pence.
McCarthy & Stone shares were trading 0.5% higher in London on Tuesday at 154.70p each.
"The group's new strategy has driven a solid trading performance in a difficult market," said Chief Executive John Tonkiss.
He added: "We are also making excellent progress across our key strategic initiatives as set out in September 2018, particularly rental, where our initial pilots have confirmed strong demand for renting in later life. This is a hugely positive step for the business as it enables our business model to become more resilient and ensures we are in a strong position to capitalise on future market recovery."
Back in September 2018, the company said it is aiming, for the 2021 financial year, to achieve an improvement in operating margins to 15% or more, cost savings of GBP40 million per annum, and cumulative cash savings of GBP70 million. It also wants to reduce its capital employed by GBP70 million between 2018 and 2021.
Thus, sales teams were reorganised and the group's workflow realigned, attempting to create a stable monthly flow of land exchanges.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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