UK retirement housebuilder McCarthy & Stone PLC (LON:MCS) has posted a 42% drop in first half underlying pre-tax profit, blaming uncertainty surrounding the Brexit vote.
Underlying pre-tax profit in the six months to 28 February 2017 fell to £22.8mln from £39.1mln in the year-ago period.
Revenue declined 5% to £238.2mln from £250.2mln as legal completions edged down 6% to 866 from 923. Legal completions from higher margin sites will be weighted towards the second half.
The company said first half trading was affected by a lower forward order book brought into the year due to uncertainty following the UK’s vote to leave the European Union last June and less sales releases during the period.
Following a pause shortly after the referendum, trading conditions remained stable through the period, supported by a lack of supply and strong demand in the housing market.
The gross average selling price rose 1% to £260,000 from £257,000 while the net average selling price was broadly unchanged at £254,000.
"The group continues to address the increasing market demand for retirement housing generated by a rapidly ageing population and has made good progress in recovering its workflow momentum following the outcome of the EU Referendum last June,” said chairman John White.
“To meet this demand our strategic growth plan will see us almost double our build starts this year and our sales releases next year. Our strong progress on planning consent delivery ensures we are on track to achieve this."
Sales momentum in the past five weeks has picked up. However, the total forward order book , including legal completions, remains 1% behind the previous year at £496mln at end of March, compared to £503mln a year earlier.
McCarthy reiterated its guidance for full year outturn to remain in line with market expectations.
The company also welcomed the government's Housing White Paper, announced in February, saying policies to deliver new homes for older people will encourage further demand for its products.
The group raised its interim dividend to 1.8p from 1.0p.