Retirement housebuilder McCarthy & Stone hit the City with a double-whammy on Tuesday as a slowing housing market in the South-East hammered profits and its chief executive abruptly announced his own retirement plans.
Boss Clive Fenton, who turned 60 last month, will leave the business at the end of August, although McCarthy & Stone has no successor in place and has just begun the hunt for one.
Fenton, who took the company public in 2015, leaves on a low as the firm accompanied the news of his departure with a shocking profit warning which knocked 16% off the share price, down 20.7p to 109.8p.
That compares with a float price down more than 30% from late 2015, when it returned to public markets after almost a decade in private ownership rebuilding a debt-laden balance sheet.
The company’s shares have barely recovered from the Brexit vote as well as a proposed Government ban on ground rents, which pays for the communal areas of McCarthy’s retirement homes.
But the firm is reliant on a healthy housing market to allow equity-rich older buyers the funds to buy its homes and McCarthy has been caught by a cooling market which has prompted buyers to sit on their hands, particularly in the South.
As a result of a “noticeable decline” in reservations, the firm has reduced its profit forecast to between £65 million and £80 million for the year to August 31, down from £96 million last year.
Chairman Paul Lester has been leading a review of the business since April and is aiming to bolster profits by driving savings among its suppliers.
On Fenton’s departure, he denied the chief executive had been forced out, saying “he had always told me that he was going this year”.
Fenton, who earned more than £750,000 last year, will be treated as a good leaver.
He refused to comment beyond a stock-market statement, in which he said that it was a “privilege” to lead the business.