Retirement homes group's £8.8m loss blamed on loan costs

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The Independent Online

McCarthy & Stone, the Bournemouth-based retirement homes group that was taken private for £1.1bn in 2006, has posted an £8.8m loss following heavy interest payments.

The group's results for the year to 31 August 2010, filed with Companies House last week, showed interest payments of £31.2m. At a trading level, McCarthy & Stone performed strongly with a £22.5m operating profit on £203.3m of turnover, both more than double the 2009 levels.

The finance director, Michael Ball, said that the business would return to profit this year. "The business is growing, we are selling at a high volume and the interest charge will probably be lower as we have paid some of the debt down."

Though dominant in its market, the group struggled at the height of the financial crisis. About 60 lenders took control in 2008, and the consortium that took the business private, led by Sir Tom Hunter and the Reuben Brothers, suffered heavy writedowns.

The accounts said: "Subject to market conditions, the board has agreed a plan with shareholders to grow sales to in excess of 2,000 units per annum by 2015. In order to meet this target, land acquisition activity has increased with 58 sites secured during the year."