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McCarthy & Stone swings to loss

By James Pugh | Business | Published:

Retirement home developer McCarthy & Stone swung to a first-half loss after the Covid-19 crisis slowed the completion of developments and caused revenue to dry up.

McCarthy & Stone's Summerfield Place retirement complex in Shrewsbury

The company, which has sites across the Black Country, Shropshire and Staffordshire, saw pre-tax losses for the six months through April amount to £91.3 million, compared to a profit of £3.6 million on-year.

Revenue slipped 64 per cent to £101.1 million as legal completions fell 44 per cent to 471.

McCarthy & Stone warned that while it had passed the peak of the Covid-19 crisis, the financial effect would be weighted towards the second half.

Chief executive John Tonkiss said “It has been an extraordinary period, with a positive trend following the General Election curtailed by the onset of Covid-19. This has had a significant impact on our financial performance, but thanks to our early and decisive actions to safeguard our homeowners, protect the health of the business and preserve cash, we believe we’ll emerge from the crisis in a stronger position.

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“Independent retirement living has played a vital role during this pandemic, proving to be a safe haven for older people, with significantly lower infection rates than within the general over 85 population. An increased focus on the wellbeing of older people as a consequence of Covid-19 also presents an exciting opportunity for our sector to better communicate its unique proposition and promote its many benefits.

“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. We remain particularly excited about our rental offering in terms of its benefits to customers and increased attractiveness to investors."

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The company also announced that the chief operating officer for its building functions, Nigel Turner, had stood down with immediate effect.

His departure comes as the company reviewed its resources in light of the impact of the pandemic.

"Several of the initiatives that Nigel was brought in to deliver have also now been successfully completed.

"The company has therefore decided to revert to a more traditional structure of one chief operating officer, Mike Lloyd, who will continue to focus on the core areas of sales, customers and services," McCarthy & Stone said in a statement.

James Pugh

By James Pugh

Shropshire Star Business and Farming Editor.

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