The retirement homes developer, which has several schemes in the North West, said it will “emerge stronger” from the pandemic despite falling to a loss for the six months ending 30 April, from a £3.6m pre-tax profit the previous year.
Half-year 2020 revenues were down 64% to £101m, compared to £280m in the year-earlier period, McCarthy & Stone said in a statement to the London Stock Exchange. The £91m pre-tax loss was mainly attributed to project delays and interruptions during the months of lockdown.
Chief executive John Tonkiss said: “Covid-19 has had a significant impact on our financial performance, but thanks to our early and decisive actions to protect the health of the business and preserve cash, we believe we’ll emerge from the crisis in a stronger position.”
The company said that uncertainty surrounding the general election last December, as well as the impact of the Covid-19 pandemic in March and April, had affected its financial performance.
Closures of sales offices and construction sites during the early part of the lockdown in March resulted in a 44% decrease in project completions year-on-year, down to 471, from 845 for the same period of 2019.
“Remobilisation” of both sales and build activities will continue to be gradual, McCarthy & Stone said, “reflecting the nature of our customer base.
“While we have passed the peak of the crisis, the financial effect will be weighted towards the [second half of the year].”
In response to the pandemic, the company cancelled its scheduled dividend to shareholders, some staff were furloughed and members of the board took a 20% pay cut.
The firm also secured a £300m Covid Corporate Financing facility in June, resulting in a 300% increase in available cash year-on-year. The facility remains undrawn, the statement said.
McCarthy & Stone also announced today that Nigel Turner, one of two chief operating officers, would leave the company with immediate effect as part of its Covid-19 “streamlining” efforts. Mike Lloyd will remain as the company’s sole chief operating officer.
Despite issues arising from the pandemic, McCarthy & Stone reported that its monthly cash burn reduced to £7m from around £10m over the course of the lockdown period.
“Beyond Covid-19, we see exciting opportunities due to our unique proposition and our strong brand, enhanced by recent Government policy announcements around stamp duty, planning and adult social care reform, the evolving land market and the emergence of a new and attractive retirement living property asset class,” the statement said.
The chief executive said McCarthy & Stone would look at opportunities to redevelop unused commercial buildings into retirement housing in the aftermath of the pandemic.
The company’s stock exchange statement today noted that the independent retirement living sector “has proved to be a safe and happy place for older people” throughout the pandemic.
“There is a real opportunity to redefine how we support our ageing population in future.”