Retirement home specialist says unit completions will fall 10% in 2004.

McCarthy & Stone has announced that pre-tax profit for 2005 will be below market expectations. The retirement home specialist said that pre-tax profit for the year ending 31 August 2005 would be below £140m, brokers' mid-point forecast.

McCarthy & Stone said that housing completions would be 10% lower than in 2004 and that margins would be eroded because of higher build and land costs and the higher cost of sales incentives.

It said the housing market was the toughest it had experienced for some years, and an upturn in the market following the General Election had failed to materialise.

Despite the difficult conditions the average selling price for a home to 1 July was £164,100 (full year 2004: £154,300).

McCarthy & Stone said that the final results would depend on the performance during July and August. The board said it would provide a further trading update on 8 September 2005 and would announce full year results in early November.