Retirement housebuilding specialist will struggle to meet City expectations as profit falls by £100,000.
Retirement homes specialist McCarthy & Stone will have to almost double sales in the second half of the financial year to meet City expectations.

The company, which has been one of the most successful housebuilders in the UK over recent years, said it had sold 570 homes in the six months to 28 February, down from 701 for the same period last year. Pre-tax profit dropped £100,000 to £18.6m on turnover of £58.5m, down 11% from £65.5m.

Analysts expect the group to sell about 1600 homes this financial year but chief executive and deputy chairman Keith Lovelock admitted that the target would be hard to achieve.

He said poor weather had put off many elderly customers. The average age of McCarthy & Stone's customers is 75.

He said: "We will have a hard job meeting last year's levels [1536 sales]." Lovelock also said higher interest rates last year had hit sales while reservations had fallen from last year.

McCarthy & Stone managed to maintain pre-tax profit by increasing the average selling price 9% from £85,900 to £94,000 on a gross operating margin of 48%.

The group hopes to be selling 2000 units a year in three years, and has built up a landbank to more than four years at current production levels.

Lovelock said the biggest concern facing the group was planning delays. He added his voice to the chorus of complaint from housebuilders, who are waiting up to two years for some developments to be approved.

He said: "It just takes too long and we do make a bit of noise about it." He said most McCarthy & Stone projects took about a year to gain planning permission, six to nine months more than they should.

Lovelock said housebuilders were caught in the middle of a conflict between local authorities and central government and often had to resort to appeals to obtain planning permission.

Director Mike Jennings said the group was successful in 75% of appeals and that this statistic alone illustrated the problems it faced.

He said: "You wouldn't believe the gymnastics we have to do sometimes to get the permission." Lovelock said McCarthy & Stone sometimes had problems because it tended to focus on small developments with a relatively high number of homes.

This was because its homes were generally smaller than average because they were purpose-built for elderly people who often lived on their own.

He said: "Our developments sound larger than they usually are."