Retirement home specialist McCarthy & Stone is making up lost ground after a tough first half.

The company, which has a number of projects on the go in the West Midlands, yesterday reported an in-line-with-expectations 20 per cent drop in interim pre-tax profits.

It reported earnings before tax for the six months to February 28 of £39.1 million compared with £48.8 million previously.

That translated into a basic earnings per share of 26.7p, a fall of 22 per cent.

But the Bournemouthbased group is keeping investors sweet by raising the half-time payout by 11 per cent to 6p per share.

Interim revenues were static at £131.1 million.

Much of McCarthy's business depends on buyers of its properties being able to sell existing homes to finance the purchase.

A sticky housing market resulted in a smaller pipeline of deals in the first half, but numbers were picking up again, chief executive Howard Philips said.

The company, which is embarking on its first ever television advertising campaign, is helping to change its customers' perceptions of the market by way of part-exchange deals and by offering to help them to sell existing homes.

"We are having to convince them that we can help make a sale happen," Mr Philips said.

McCarthy, which has a regional office employing about 50 people at Coventry, has developments under way at a number of West Midland locations, including Aldridge, Droitwich, Stourbridge, Mere Green, Selly Oak, Streetly and Tamworth.

Chairman Keith Lovelock said that given the market, the company had achieved a "satisfactory outcome" in the first half.

"By pursuing a strategy of expanding the number of active sales sites, we achieved a 31 per cent increase in reservations to 991 and entered the second half with a 22 per cent increase in forward reservations at 493.

"We now believe that there is an opportunity for the group to exceed last year's sales of 1,983 units although we expect margins to ease as the higher historic margin sites are sold out.

"Looking beyond the next few months, there remains considerable opportunity for McCarthy & Stone to expand and grow within its retirement niche," Mr Lovelock added.

The company also said yesterday that it planned to accelerate its programme of "assisting living" accommodation in order to capture a growing slice of retirement home market.

The trend towards more secure accommodation for the elderly and infirm has prompted McCarthy to look at increasing the number of "assisted living" units - which include care and nursing facilities and 24-hour security - over the next few years. ..SUPL: