Retirement specialist McCarthy & Stone announced a new strategy last week which focuses on keeping volumes stable at just over 2,000 units per annum and cutting the cost base and improving return on capital employed.
Despite a strong need for retirement housing in the UK, McCarthy & Stone issued a profit warning recently which acted as a catalyst for the change in strategy and also a new CEO. Clive Fenton retires while John Tonkiss, formerly Chief Operating Officer, takes the reigns as CEO with immediate effect.
The new strategy represents a contrast from many of the volume housebuilders, each of which is pushing hard to increase profit through production growth. McCarthy and Stone are, instead, committing to an increase on ROCE to 15%, an operating margin in excess of 15% and £40m worth of cost saving all by the financial year 2021. The company’s output will remain steady at around 2,100 units per annum.