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McCarthy & Stone PLC (LON:MCS) said the retirement housing market is expected to remain difficult with national coroanavirus (COVID-19) infection rates rising and lockdown measures in place.
The firm, which recently agreed to a 115p a share cash takeover offer from Lone Star Real Estate Fund, said it will deliver a full-year underlying operating loss in line with expectations.
READ: McCarthy & Stone private equity bid expected to “put a floor under valuations across the sector”, according to one City broker
In the financial year to October 31, 2020, McCarthy & Stone said its revenue tanked by 73% to £197mln amid the COVID-19 pandemic.
The developer and manager of retirement communities completed 832 units in the period, down from 2,402 last year, including 166 rentals. The rental portfolio now contains 267 units, up from 101 a year ago.
At period-end, net debt was £63mln, compared to net cash of £25mln in 2019, and debt is expected to increase during the first half of financial year 2021 due to further investments in the portfolio, while sales continue to be affected by COVID-19.
The COVID-19 pandemic caused significant disruption to the business as it was forced to close construction sites and sales offices during the first lockdown.
After that, the remobilisation of sites and sales activity has been phased through the second half of the financial year, and now 41 of the group’s 44 construction sites are operating.
Average total net reservations level for the quarter ended October 31 have been at 22 per week, which is 40% below the same period last year, the company said.
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