Reservations ahead but sales down at McCarthy & Stone
Retirement housebuilder McCarthy & Stone issued a trading update for the 20 week period from 1 September 2016 to 20 January 2017 on Wednesday, as investors gathered in London for the company’s annual general meeting.
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The FTSE 250 firm said that, since its FY16 year end results announced in November, the group continued to experience “normal” trading conditions.
Year-to-date reservations were currently running ahead of the prior year, and contributed a further £206m of revenue to the group's forward order book, representing a year-on-year increase of 5% due to improved average selling prices achieved.
In addition, the board said new enquirers, sales leads and visitor numbers continued to run ahead of the prior year indicating good future demand for the group's products.
Total forward sales, including legal completions, were now around 2% behind the prior year at £323m, which McCarthy said reflected the lower forward order book brought into the year and a slight slowing in sales momentum since its results announcement, as a result of the lower number of sales outlets released so far during the current year.
“The group continues to secure high quality sites that meet its hurdle rates, and exchanged on 13 sites during the period which added 537 units to its land pipeline,” the board explained in a statement.
“It has been a particularly successful period for planning applications, with detailed planning consent achieved on 26 sites representing 1042 units, further securing the group's land pipeline to support future growth.”
McCarthy said it retained sufficient land, with detailed planning consent to deliver all targeted sales to FY18 and sufficient land under control to deliver all targeted sales to FY19.
“Overall, the trading outlook for the year remains in line with the board's expectations.
“The group reiterates previous guidance provided on 15 November 2016 in relation to the profile of its legal completions and profit before tax, which will both be more than usually weighted towards the second half of the year.”
McCarthy said that was mainly due to the lower forward order book brought into the year as a result of the slowdown in market conditions following the outcome of the EU referendum, and the weighting of completions from higher margin new sites into the second half of the year.
The company also confirmed that, as previously announced, Rowan Baker was appointed as the group's chief financial officer on 6 January, taking over the role from Nick Maddock whose resignation was announced on 11 October 2016.
Also as previously announced, the board was still recommending a final dividend of 3.5p per share for FY16, which would result in a total dividend for the year of 4.5p per share.
“Subject to shareholder approval at today's AGM, the dividend will be paid on 1 February 2017 to shareholders that were on the register at 6 January 2017.”
McCarthy & Stone said it will release a trading update for the half year ending 28 February on 7 March.