The share price boom for house builders largely passed McCarthy & Stone PLC (LON:MCS) by, but it was playing catch-up today after releasing strong results.
The retirement homes builder’s shares were up 6.3% at 156.48p in mid-morning trade after the company said a strong result in the second half of the year to the end of August resulted in an improvement in both margins and volumes.
READ: McCarthy & Stone says full-year revenue at record levels as selling prices for its retirement homes hit all-time high
The underlying operating margin recovered to 17% in the second half of the financial year – unchanged year-on-year – from 10% in the first half.
Over the full year, the company completed 2,302 residences, which was six more than the year before.
The average selling price rose 3% to £273,000 from £264,000 the year before, contributing to a 4% increase in revenue to £660.9mln from £635.9mln the year before.
Reported profit before tax ebbed to £92.1mln from £92.9mln, but excluding certain one-off items, it showed a 10% decline to £94.1mln from £105.0mln the previous year.
Starts new year with strong forward order book
Nevertheless, the board recommended a final dividend of 3.6p, taking the total dividend to 5.4p, up 20% on a pro-rate basis from 4.5p the year before.
"The group starts the new financial year with a strong forward order book and a robust balance sheet,” said Clive Fenton, chief executive officer of McCarthy & Stone.
“We remain focused on delivering profitable growth and are on track to open c.80 sales outlets and deliver more than 65 first occupations in FY18.
"We have sufficient land under control, much of which already has detailed planning consent, to deliver our strategic growth plan of building and selling more than 3,000 units per annum," he added.