Retirement homes specialist McCarthy & Stone’s chief executive Clive Fenton is to step down, as the company issues a profit warning for the year.
Fenton will retire and step down from the board at the end of the business’s current financial year on 31 August 2018. The board has begun a search for Fenton’s successor.
The retirement home outfit said there had been a “noticeable decline” in reservation rates in a trading update today. It blamed economic uncertainty, a slower secondary market and a softening of pricing, particularly in the South East.
McCarthy & Stone is now forecasting 2,100 to 2,300 legal completions, compared with 2,302 last year, and operating profit of £65m to £80m, compared with £96m during last year’s equivalent timeframe.
Fenton said: “Unfortunately, since Brexit, in the absence of any government support and now with the additional challenges posed to the business by the proposed ban on ground rents, it is clear that the group must embark on a new strategy to carry it safely through the next five years and beyond.
“Having reached the age of 60, I have decided it is right that I stand aside at the end of our financial year to enable a new chief executive to be responsible for this journey.
“We have a strong balance sheet and talented and committed people and I have no doubt that the group will have a successful future.”
Chairman Paul Lester will carry out a strategic review focusing on improving margins and returns on capital employed.
McCarthy & Stone said: “This strategic review will seek to focus on improving margins and returns on capital employed (targeting mid-teens in the short to medium term) together with a more balanced workflow.
“This will lead to a more measured growth trajectory and a right-sizing of the group’s cost base, with build cost savings as an additional area of focus.”
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