Cost-cutting overhaul unveiled as McCarthy & Stone shares climb
McCarthy & Stone shares climbed more than seven per cent in morning trading, after the retirement housebuilder unveiled a new direction which is to focus more on cost-cutting and less on expansion.
As part of the overhaul the FTSE 250 firm said that John Tonkiss, the company’s chief operating officer, will take over as as boss in the wake of Clive Fenton’s retirement late last month.
According to a statement released by McCarthy & Stone this morning, it will be aiming to save more than £40m annually by 2021, while constructing “steady state volumes” of new homes of just over 2,100 a year.
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Shares had risen 7.09 per cent to 121p in mid-morning trading.
The move to prioritise margins rather than the construction of new homes comes in the wake of a persistent struggle to bolster activity in the old age pensioner (OAP) market.
Last month McCarthy & Stone called on Downing Street to provide a stamp duty exemption for buyers over the age of 65, after releasing research that showed 22 per cent of elderly people would be more likely to move if the relief was introduced.
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Earlier today John Tonkiss said: “We are positioning the business to succeed in the current challenging market environment and over the next three years, we will be focusing on increasing shareholder returns by optimising our operations to deliver strong financial performance.”
He added: “In parallel, we will also aim to leverage our longer term strategic opportunity to increase our customer appeal, diversify our revenue streams and reduce our exposure to the market cyclicality.”