McCarthy & Stone has said the retirement housing market is set to remain “difficult” while high national Covid-19 infection rates and lockdown measures continue.
Revenues plummeted to around £197m during the year ending October, from £725m during the 14 months to October 2019.
The retirement living developer, which is set to be acquired by Lone Star for £630m, completed just 823 units this year. This compares with 2,402 in the 14-month period last year.
Its net debt stands at around £63m, compared with £25m net cash during last year’s comparative period.
The company said its underlying operating loss, which was undisclosed, was “in line with board expectations”.
John Tonkiss, chief executive at McCarthy & Stone, said the retirement housing market is “expected to remain difficult”.
“As a result, the group will continue to cautiously and actively manage cash flow, balancing investment in land and development to support future sales with the need to preserve headroom in order to enable the group to navigate the short-term risks,” he said.
“It is against this backdrop that the board believes the 115p cash offer from Lone Star Real Estate Fund represents fair value reflecting both the future opportunities and risks facing the business.”
The company further stated that the latest lockdown measures have affected net reservations in recent weeks, “initially most pronounced in the Midlands and North where the earlier restrictions were introduced”.
It stated: “The board believes the retirement housing markets will continue to be affected by high infection rates and lockdown measures during the first half of FY21, and this will inform investment decisions and have a bearing on the timeframe for returning the business to profitability.”
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