Interim profit increases by 10% to £48.3m but housebuilder says that forward sales are lower than last year.

McCarthy & Stone has issued another bumper set of results, but has warned of testing times in the housing market. It increased pre-tax profit by 10% to £48.3m and turnover by 18% to £131m for the six months to 28 February 2005.

Chairman and chief executive Keith Lovelock said that the challenging market meant that forward sales were lower compared to last year. He said that uncertainty over the election and concern over higher interest rates were contributing to the market slowdown.

Lovelock said: “Although we expect selling price strength to continue to offset volume softness to a significant degree, we are slightly more cautious in relation to the expected results for the second half.”

The group said that the South East region had been the most difficult market while the Western region had to contend with tougher market conditions in Wales.

The group said that in the medium term the fundamentals of the housing market remained sound thanks to demand exceeding supply, high levels of employment, and modest interest rates. It said it had more selling points than a year ago and a significantly higher level of unreserved stock available for sale.

Unit sales for the interim period increased from 780 to 792 and average selling price grew by 16% to £165,400.