Keith Lovelock stepped down as chief executive of housebuilder McCarthy & Stone this week as the firm posted record profits.
Lovelock will be replaced by fellow McCarthy director Howard Phillips at the beginning of next September, but will remain as chairman of the firm. Lovelock has shouldered the dual role of chairman and chief executive since August last year.
The group’s pre-tax profit was £148m compared with £116m last year, an increase of 27%. The group, which has a 60% market share in the retirement homes sector, increased its turnover from £255m in 2003 to £317m this year. In the year to 31 August, McCarthy sold 2055 units – 5% more than a year earlier. Average selling price rose 18% to £154,300.
Lovelock hailed the performance as “the best we’ve ever done” and said it was the result of steady growth over a number of years, as well as strong performances from most of its divisions.
He said the group’s South-west operation performed well with reduced stock levels, although its South-east region faced the difficulty of operating closer to London.
He said: “There is little doubt that the housing market is cooling, but with an ageing population, the fundamentals are in place for us to continue to expand.”
Lovelock said that he was stepping down primarily because of corporate governance issues. He added: “I’m 64 and it’s the right thing for the firm.”
Phillips, his successor, who is operations director of McCarthy & Stone’s northern regions, has been at the firm for 16 years.
Analysts reacted to the results positively. Dresdner Kleinwort Wasserstein raised its expectation of 2005 pre-tax profit for the firm by £2m to £153.6m, although it was more cautious about the firm’s projected margins.
Analyst Alastair Stewart said: “We believe margins will slip to 44% this year, then 42% and 41% over the following two. We actually expect prices to rise 5.5% this year, based on the mix of new developments coming through, but expect little change in 2006 and none in 2007.”
- Churchill Retirement Living, the retirement property developer has made three senior appointments: development director Fred Andress, project surveyor David Hodges and design manager Kevin Shakespeare. It has secured planning permission for the development of 46 one and two-bedroom retirement apartments in Chippenham, Wiltshire.