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McCarthy & Stone falls into the red as COVID-19 nearly halves sales
Retirement house builder McCarthy & Stone reported a loss of £25m in the first half of the year, with the coronavirus pandemic blamed for sales falling by 44%.
The firm reported an underlying loss of £24.8m, down from a profit of £21.3m in 2019. Its chief executive has said that the pandemic and the subsequent lockdown restrictions has had a “significant impact” on its financial performance.
Closure of sales offices and sites under construction from March have meant that McCarthy & Stone’s sales fell by 44% from 845 in the first half of 2019 to 471 in the same period in 2020. Revenue fell by 64% from £280.5m to £101.1m.
John Tonkiss, chief executive officer at McCarthy & Stone, said: “It has been an extraordinary period, with a positive trend following the general election curtailed by the onset of COVID-19.
“This has had a significant impact on our financial performance, but thanks to our early and decisive actions to safeguard our homeowners, protect the health of the business and preserve cash, we believe we’ll emerge from the crisis in a stronger position.”
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In a separate announcement the house builder revealed that its chief operating officer, Nigel Turner, will leave the company with immediate effect.
Mr Tonkiss said: “I would like to thank Nigel for his hard work and enthusiasm since joining us and he has helped us make significant progress with delivering our new strategy.”
In an effort to save cash, McCarthy & Stone paused building activity across its entire development programme, halted land spend, cut dividend payments and sold £300m through the Bank of England’s Covid Corporate Financing Facility scheme.
Despite the financial difficulties, Mr Tonkiss remained confident about the organisation’s business model.
He said: “Going forward we will continue to focus on our long-term strategy to transition to a service-led organisation, offering a choice of tenures and a range of services – a strategy we know is the right one and which has supported our homeowners during this difficult time.
“We remain particularly excited about our rental offering in terms of its benefits to customers and increased attractiveness to investors.”
