Bottom Line: Be shy and retiring

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THE MOST surprising thing about McCarthy & Stone, the retirement home developer, is that it was still around yesterday to announce its now traditional loss for the year to August. In the past four years it has notched up an aggregate loss of more than pounds 50m, and a deficit on its distributable reserves means that it cannot pay a dividend.

The company believes that last year's pounds 11.2m loss, compared with a pounds 20.2m deficit in the previous 12 months, represents the now largely irrelevant nadir. Irrelevant because since the year-end the disposal of the company's accumulated ground rents for pounds 30m has reduced debts to pounds 20m, only 30 per cent of net assets of pounds 66m. An 11 per cent increase in sale prices is apparently running faster than land inflation, which is pushing up margins, and the banks are now happy to lend more to fund expansion.

That is the optimist's scenario, and those who bought at 400p at the peak in 1988 cannot afford to be anything else. For anyone else, even a 42 per cent discount to net assets should not blind them to a bad record. The shares, down 1p at 38p, are highly speculative.