Retirement homes specialist McCarthy & Stone has made 25 staff redundant this month.
The job losses, which account for 2% of the workforce, were made after it decided to defer construction starts in the next financial year.
Executive chairman Keith Lovelock said: “We are tweaking staffing levels. We don’t want to build up too much stock. We are cautious about how high our stock should go.”
McCarthy & Stone presently has 4295 units, either finished and unsold or work in progress. Last year it had 4194 last year.
Lovelock added that about half of the redundancies were construction-related staff, such as buyers. The rest were office support staff. He said all regions would be affected, although it is understood that about one-third of the redundancies have been made in the in the Bournemouth office.
The news emerged after McCarthy & Stone made a downbeat trading statement last Thursday. In the year to 31 August it sold 1983 units, down on 2055 the previous year. But average selling price rose £9200 to £163,500, an increase of 6%.
At the start of the company’s financial year some in the market had expected it to complete on more than 2300 homes. However, McCarthy & Stone warned in July that unit completions might be 10% lower. In fact the figures was 3.5%.
We are tweaking staffing levels. We don’t want to build too much
Keith Lovelock of McCarthy & Stone
The statement said that the housing downturn had hit the business. It said: “All our regions have been affected by the more difficult market conditions that have prevailed over the last year. The market continues to be tougher than the group has experienced in recent years but the board is encouraged by visitor levels.”
The group holds £39m in cash, down from £57m last year, partly a result of repaying the £18m lease on its head office last October. The company has also bought more than 950,000 of its shares this year.
On Tuesday McCarthy & Stone shares opened at 592p, well down on the year-high of 702p.
John McCarthy, who founded the firm in 1963 and left last year after his management buyout failed, started legal proceedings in June. He issued a writ complaining that the board had refused to allow him to exercise almost 25% of an £800,000 share option. This week Lovelock said that there was no change to the situation.