McCarthy & Stone trebles profits

McCarthy & Stone, the specialist builder of retirement homes, said it is encountering difficulties with the supply of specialist labour subcontractors in the South East.

However, pressure on materials prices is not yet a problem. Announcing the group's interim results last week, John McCarthy, chairman, said: "Despite comments from the building industry about rising material costs, we have been able to contain these."

In the six months to February, McCarthy & Stone reported pre-tax profits had trebled to œ6 million while turnover jumped ahead to œ32 million (œ24 million).

After the collapse in the early 1990s, the revival of the specialist market for retirement homes is now outstripping that in general private housing.

McCarthy built 2,600 flats a year in the late 1980s, capturing a quarter of the market for homes for the elderly. This year's sales, expected to run to 1,000, will give McCarthy three-quarters of the entire market. Rivals such as Laing Homes and Wimpey havewithdrawn.

Gross margins for the latest six month period were 39 per cent (34 per cent) as selling prices rose and incentives were trimmed. Only 34 per cent of McCarthy's sales involved part-exchange compared with 50 per cent in the comparable period. At the end of February McCarthy's investment in part-exchange had fallen to œ8.6 million (œ10.3 million).

Four out of five McCarthy customers are women in their 70s.