(Alliance News) - McCarthy & Stone PLC on Wednesday swung to a large loss for the first half of financial 2020 due to the uncertainty surrounding the 2019 UK general election and the Covid-19 lockdown which caused activities to cease in March and April.
Shares in the retirement homes developer were trading 0.1% lower at 74.30 pence each in London.
For the six months ended April 30, Bournemouth-based McCarthy & Stone posted revenue of GBP101.1 million, down 44% from GBP280.5 million recorded for the six months to February 28, 2019. Pretax loss was GBP91.3 million versus profit of GBP3.6 million posted a year ago.
Administrative expenses jumped to GBP84.6 million from GBP34.8 million, while other operating expenses totalled GBP103.5 million versus GBP62.7 million. Exceptional costs of GBP63.4 million were incurred representing the cost of GBP60.4 million goodwill and brand impairment charge, GBP2.7 million of costs incurred in relation to a strategic restructuring and GBP300,000 of costs associated with Covid-19.
No interim dividend was declared in order to preserve cash compared to 1.9p paid the year prior.
Looking ahead, McCarthy & Stone said: "Early activities demonstrate that sales leads and gross reservation rates are increasing in line with our gradual ramp up plan. While we are passed the peak of the crisis, the financial effect will be weighted towards the second half. However, given the significant level of ongoing uncertainty, the board currently have little visibility as to the expected financial 2020 outturn. Guidance therefore remains suspended until we have greater clarity of the Covid-19 impact on the business and wider UK economy."
Cash held as at the end of April was GBP146.5 million.
In a separate statement, the company said Nigel Turner, chief operating officer of its Build unit, will leave the company effective immediately.
Turner joined McCarthy at the start of 2019 as the COO for its building operation, while Mike Lloyd, who also joined at the start of last year was chief operating officer for customer-facing services.
However, the company said that in light of the pressures caused by Covid-19, it has reviewed its resources in line with anticipated workflow and demand and is adopting a more streamlined approach. It added that several of the initiatives Turner was hired to deliver have now been successfully completed and it has therefore decided keep only Lloyd as COO.
McCarthy's four divisional managing directors, who are responsible for all build operations, will now report directly to Chief Executive John Tonkiss.
"I would like to thank Nigel for his hard work and enthusiasm since joining us and he has helped us make significant progress with delivering our new strategy. This includes leading our build cost reduction activity, which is central to our margin improvement plans, and driving material change in our effective management of health and safety. We wish him the very best for the future," CEO Tonkiss said.
By Ife Taiwo; ifetaiwo@alliancenews.com
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