Churchill Retirement, the company run by the two sons of John McCarthy, the co-founder of McCarthy & Stone, has fallen £2.4m into the red

The pre-tax loss in the year to 31 May 2008 compared with a profit of £6.8m in the previous year. Dean Marlow, the firm’s finance director, blamed the loss on the recession.

Turnover was also down, falling 12% from £48m to £42.3m.

Marlow said: “Retirement housing has been hit by the problems in the wider economy.”

Churchill is run by Clinton and Spencer McCarthy and it was rumoured earlier this year that the family would mount a takeover bid for ailing retirement specialist McCarthy & Stone.

The group ended the year with net debt of £91m but Marlow said more than £60m of that was not repayable until 2022.