McCarthy & Stone axes jobs in recovery battle
RetiRement housebuilder
McCarthy & Stone has taken the axe to jobs in a cost-cutting shake-up welcomed by investors.
Releasing its ‘business transformation strategy’, mcCarthy said it would slash costs by £40m per year by 2021.
A ‘reorganisation of the sales team’ would be key to this, it added, while it would also simplify its building designs and contract work out where cheaper.
the company has not yet decided how many jobs will be cut or where.
mcCarthy blamed ‘political uncertainty’ following the Brexit vote for its lacklustre recent performance, saying this had made potential house-hunters more cautious about buying.
in reaction, it lowered its housebuilding target from 3,000 properties per year to 2,100.
John tonkiss, its former chief operating officer who was installed as chief executive yesterday, said the strategy showed a ‘shift in business mindset’ from pushing for growth to increasing the return on the money it spent. He added: ‘We are positioning the business to succeed in the current challenging market environment and over the next three years, we will be focusing on increasing shareholder returns.’
Shares, which plummeted more than 17.1pc over one day in June after a surprise profit warning, climbed 8.1pc, or 9.8p, to 131.1p.
Anthony Codling, an analyst at Jefferies, said that though mcCarthy ‘may be down it certainly is not out’.
But while the firm had ‘one foot out of the grave’, Codling added, he also questioned whether the turnaround was bold enough.
in another blow for the construction sector, building materials company Low & Bonar tumbled as it issued a profit warning.
though it sold as much as it was expecting to, the firm said prices of key raw materials had continued to rise. meanwhile stiff competition from rivals meant it hadn’t dared to push up prices for its customers.
Profitability for the full year would be ‘significantly lower than previously anticipated’, the company confirmed.
to add to its woes, Low’s chief financial officer Simon Webb announced he was jumping ship ‘for personal reasons’.
Analysts at Peel Hunt reduced their recommendation from ‘buy’ to ‘hold’, as shares plunged 19.5pc, or 10p, to 41.3p.
the FTSE 100 had a moderately better day, rising 0.66pc, or 49.15 points, to 7507.56 as promising sales at Next (up 7.7pc, or 394p, to 5518p) bumped up the index.
But airlines weighed heavily after being hit with a double dose of bad news.
While the price of oil climbed, spelling increased costs for the sector, global airline industry body iAtA warned that the Government’s papers on a no-deal Brexit exposed ‘the extreme seriousness of what is at stake’.
iAtA’s boss Alexandre de Juniac said a ‘huge amount of work would be required to maintain vital air links’.
BA’s owner IAG fell 4pc, or 27.2p, to 659.4p, while Easyjet slipped 3.4pc, or 47.5p, to 1333.5p. On London’s junior market Keystone Law, the UK’s third-ever listed law firm impressed shareholders as sales shot up 29.9pc to £19.9m in the first half of the year.
the firm, which has represented tV presenter noel edmonds in his fight against Lloyds Bank, also hired 31 lawyers in the six months to June.
its flexible working model, which lets lawyers work from wherever they want, has proved popular. Keystone said they received 132 applications for a job.
Shares rocketed by 13.7pc, or 45p, to 374p as the firm said trading was ‘ahead of expectations’.