Retirement housebuilder says revenue for the year has slumped 73%
Sales at listed retirement housebuilder McCarthy & Stone have been hit in recent weeks by the second wave of covid infections and the national lockdown, the firm admitted today.
McCarthy & Stone, which is in the middle of being bought by US private equity giant Lone Star, said in a trading update for the year to the end of October that completions had slumped to just a third of their 2019 level, and that current trading was increasingly being affected by rising covid-19 infection rates and government lockdown measures.
It said net reservations for the latest quarter, ending on October 31, were just 22 per site per week, 40% below the same period last year.
Revenue for the full year will be just £197m, 73% down on the £725m reported last year.
While the firm said its full year results would see a loss “in line with board expectations”, the update is in stark contrast to profit upgrades from mainstream housebuilders including Taylor Wimpey and Crest Nicholson in recent days.
Those upgrades follow months of reports of rising prices and a rebound in sales since lockdown restrictions on the housing market were eased in May, boosted further by the temporary stamp duty holiday introduced by chancellor Rishi Sunak in July.
McCarthy & Stone’s trading update put its bad news down to the fact its customer base, with an average age of 79, had been more cautious regarding the risk of coronavirus than the rest of the population, and therefore had been less likely to move house since lockdown measures were lifted.
Private equity group Lone Star launched an offer to buy the business for a cost of £630m late last month, a bid slightly below the firm’s net asset value.