Mccarthy & Stone Share Discussion Threads

[gswredland] 19/2/2018 12:21

When do they report please?

[speedsgh] 13/2/2018 19:29

Write up on MCS in today's Tempus column in The Times with a SELL recommendation...

[speedsgh] 25/1/2018 11:54

Peel Hunt: McCarty & Stone faces near-term worries -

McCarthy & Stone (MCS) is growing steadily but uncertainties around ground rents continue to dog the housebuilder, says Peel Hunt.

Analyst Clyde Lewis retained his ‘buy’ recommendation and reduced his target price from 205p to 185p. The shares were trading at 144p yesterday.

Lewis said there was ‘good momentum’ when it came to site openings and the order book was up 13% but the timing of completions will be weighted towards the second half of the year.

‘There is still no clarity on the timing and extent of the government’s proposed ban on ground rents,’ he said.

‘Overall, we have reduced our top-end forecasts, bringing full-year 2018 in line with current consensus and making c.9% reductions to full-year 2019 and 2020 profit before tax.’

He added that the ‘long-term growth story…remains intact, but near term uncertainties persist’.

[jopper74] 19/1/2018 20:44

Yes but it’s way over done

[argylerich] 19/1/2018 14:15

Mainly the ground rent uncertainty at the moment.

[jopper74] 19/1/2018 13:17

Really disappointing share this one.......good steady growth company so don't understand why its share price is below the 220 mark

[argylerich] 04/1/2018 15:27

There's a fair bit of blurb on the FAQs section of their website:

hxxps://www.mccarthyandstone.co.uk/faq/

[7kiwi] 04/1/2018 14:32

"Its retirement apartment model incorporates an annual leasehold ground rent charge to ensure that the long term maintenance of the development is effectively managed on behalf of elderly homeowners who have less desire to be directly involved in this activity. These ground rents have been long-established on fair and consistent terms, with rental growth linked to the higher of 2% or RPI.

McCarthy & Stone has fully disclosed its practice of aggregating and selling forward its freehold reversions. This is a profit stream which is recognised in the price at which the Group bids for land; funds the communal areas and facilities so critical in a retirement development; and enables the pricing of its apartments to remain affordable. "


In my opinion, this statement is misleading.

The long term maintenance of developments is funded by the service charge, not by ground rents. They sell off the ground rents, and the buyers of the FRI have no involvement in carrying out short or long term maintenance.

The part about funding the communal areas is also misleading. The land appraisal model of course factors in the revenue from FRI. ANd in some ways the communal areas can be thought of as reduced revenue, in that they take up space that is not saleable. But the maintenance of the communal areas is funded again by the service charge, which is entirely separate from the ground rent.

This looks like an unvaliant attempt to defend the indefensible. The Government is right on this, ground rents need to be reduced to zero or peppercorn levels.

The really bad news for MCS, that they haven't really commented upon, is the £33m they were expecting this FY won't be coming in as positive cash flow, and a similar level of cash flow will be missing from future years. This will impact the rate of growth they can achieve by quite a significant amount imho.

[argylerich] 04/1/2018 09:02

Ex divi today, kinda exaggerates what's been happening since the Govt announcement. Goldman's update the other day probably didn't help either. On the plus side it provides a handy price dip for the divi reinvestment.

[miti 1000] 21/12/2017 09:43

finkie..try reading the rns

[mfhmfh] 21/12/2017 09:34

top up opportunity. IMHO.

[finkie] 21/12/2017 09:18

It seems an over reaction other Housebuilders down only marginally and the article specifically says it will exclude properties with shared services ie blocks of flats!

It also says it will not affect the delivery of retirement housing.....

I don’t understand why the shares are down 10% therefore today?

[skyship] 21/12/2017 08:18

I admit I certainly wasn't aware! Logically they should have a good case for exemption...

[emptyend] 21/12/2017 08:10

Interesting market response (-12% in 10 minutes) to the comment about ground rents and selling forward of the freehold reversions. Perhaps suggests that shareholders weren't as aware of the issue as the company supposed?

[skyship] 01/12/2017 15:01

free stock charts from uk.advfn.com

[skyship] 01/12/2017 10:53

Hi again speedsgh - we seem to follow many of the same stocks - CRST, INL, LMP, MCS, NRR, PCTN....

Have been watching these for some time; finally bought a few this morning @ 163.85p. Only a small allocation as I see them as a trading spec rather than an investment - though I perhaps should rethink that!

Personally I feel the brand is so iconic that they could well find themselves a bid target from one of the major house-builders looking to grow their Retirement division.

Chart looks great for a run back to the 190s.

[speedsgh] 30/11/2017 12:59

FWIW...

Deutsche Bank issues a broker note on McCarthy Stone Plc -

Deutsche Bank today reaffirms its buy investment rating on McCarthy Stone Plc (LON:MCS) and raised its price target to 219p (from 211p).

[bigbertie] 22/11/2017 19:36

They shouldnt have to rely on handouts - they have just got to get on with their present plan of increasing output and reducing working capital, and it seems as though they are. I'm holding.

[wan] 22/11/2017 14:53

No stamp duty concessions to downsize.....all ammunition has instead been dispensed at first time buyers!

[mfhmfh] 16/11/2017 17:06

Given buy rating in IC from previous hold rating.

[speedsgh] 15/11/2017 12:16

Chairman (John White) buys 100,000 shares at 157.68p = £157,680
CFO (Rowan Baker) buys 6,552 shares at 151.47p = £9,924

Director/PDMR Shareholding -

[walbrock82] 15/11/2017 11:47

For those who are lacking in McCarthy & Stone knowledge, here is how you should interpret their annual results: -

1). 2017’s results were alright with sales rising by 4% thanks to home price rising by 3%. PBT was down by 1%, as profitability fell to 16% from 20%.

2). Cash balance fell to £40.7m from £119m is mainly from paying a £28.5m dividend and repaying loans of £45m. There is no new issue of equity.
3). Although net cash profit was a negative £3.8m, this was due to a smaller increase in cash inflow from payables.
And management has said H2 2017 saw a recovery in sales volume from H1 2017.

Their forecast outlook makes for some interesting reading. Apparently, McCarthy & Stone acquired 3,164 plots and estimate the cost of build totals £472m, this equates to £149k per unit, down from last year £179k per unit. That would increase the homebuilder margins! And management seems to confirm this with the aim of achieving ROCE of 25% over the medium-term.

So, with a 25% ROCE in say the next two to three years, then we have to assume the following:

Currently, Capital Employed is around £755.5m, assuming it rises to £790m-£830m.
Then, a 25% operating margin is applied giving operating profit of between £197.5m and £207.5m.
Next, we deduct 20% and 2% net interest costs, then net profit range from £161.9m and £170m. Therefore, we are looking at a 2 to 3-year forward PE of between 4.98 times and 5.22 times by 2020.

For full analysis of McCarthy & Stone with share price forecast, brief comparison with other homebuilders and the issue of land bank, click here
Remember to always do your research.

[7kiwi] 14/11/2017 11:02

Wait and see the outcome of Government consultation on ground rents.

They made £29m from FRI sales last year. Substantially all of this is at risk if they press ahead with the peppercorn rent plan.

[mfhmfh] 14/11/2017 10:14

Peel Hunt re-iterate 205p target price today