McCarthy & Stone swings to a loss as completed projects halve
McCarthy & Stone posted a £25m loss for the first half of 2020 this morning, and warned of further difficulties as the pandemic continues.
The retirement-home builder said coronavirus had dampened housing transactions, affecting the number of sales it was able to complete in the six months to the end of April.
McCarthy & Stone added it would be letting go its chief operating officer for build Nigel Turner as a cost-cutting measure, as it adjusts to the reduced demand from buyers.
It had already scrapped its dividend in March.
The number of completed projects nearly halved — falling 44 per cent in the first half of the year compared to the same period a year ago.
Revenue fell 64 per cent to £101m, while its underlying operating loss of £24.8m came against a profit of £21.3m a year earlier.
Construction was permitted to restart on homebuilding sites as lockdown measures were eased two months ago, following a complete ban on both building works and legal transactions.
McCarthy & Stone added this morning that the impact of the crisis “would be weighted” to the second half of this year, indicating it will be taking further hits to its financials.
Despite noting the positive impact of government measures such as the stamp duty holiday, the firm said guidance would be suspended until the situation for the rest of 2020 becomes more clear.
Chief executive John Tonkiss said the onset of Covid-19 “has had a significant impact on our financial performance”.
“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.”