Retirement home builder McCarthy & Stone says Brexit will hit growth plans

Caitlin Morrison
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McCarthy & Stone builds retirement homes across the UK (Source: McCarthy & Stone)

UK retirement home builder McCarthy & Stone said today that June's EU referendum had cast doubt on its plans for growth.

Shares in the company are down by more than 10 per cent in this morning's trading.

McCarthy & Stone McCarthy & Stone | mobile image

Ahead of reporting its full year results in November, McCarthy & Stone said today that legal completions were up 20 per cent in the 12 months to August 2016, hitting 2,299 units.

The net average selling price increased by eight per cent to £259,000, from £239,000 last year, and revenue was up 31 per cent to £635m from £486m.

However, the company said there was "evidence of some weakness" in the secondary housing market since it updated the market in June. "Whilst website enquiries have increased, and we have continued to take new reservations, these have been at a lower level than we saw in the first nine months of the financial year and cancellations have been at higher levels," the group stated.

The firm added that, while it is too early to judge what medium term impact the EU referendum result and the Bank of England's subsequent changes to monetary policy will have, prolonged housing market weakness, particularly in the secondary market, could affect its ability to deliver on its target of 15 per cent volume growth for the year.

"There has been some improvement in customer sentiment during the month of August, however, it is too early to predict at this stage whether these improving conditions will persist into the new financial year," the company said.

Group chief exec Clive Fenton noted that the company has "required somewhat higher levels of incentives in order to deliver (its) volume out-turn".

"Notwithstanding current increased market uncertainty following the EU referendum result and any financial impact on the business in the short term, McCarthy & Stone remains in robust health to capitalise on a continuing benign land market and the attractive fundamentals of the retirement market over the medium term," Fenton added.

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