AGAINST the background of a cooling housing market, Dorset retirement home specialist McCarthy & Stone has reported a 27 per cent rise in its profits for the past year.

Its preliminary results show that during the 12 month accounting period the award- winning property builder accumulated pre-tax profits of £147.8 million, up on last year's figure of £116m.

As a result of the performance, basic earnings per share were 99.2p (76.5p in 2003), an increase of 30 per cent. Directors have proposed a final dividend of 12.5p (9.8p in 2003) which, with an interim dividend of 4.8p makes a total for the year of 17.3p, an increase of 26 per cent.

Cash balances at the year end amounted to £57.2m (£82.5m in 2003) after redeeming £22.2m Preference and £10m Ordinary share buy-back.

The group's pre-tax return on capital on the basis of shareholders' funds at the year end was 41 per cent.

Keith Lovelock, chairman and chief executive said: "The group has again delivered an excellent performance for the year as highlighted in our 27 per cent increase in pre tax profits. We had strong performances from most of our divisions although the south east market faced some challenges.

"There is little doubt that the housing market is cooling, however with an ageing population, the demographics and fundamentals are in place for us to continue to expand our product base and maintain our significant presence in this growing market.

"We started the year with a forward level of reservations comfortably ahead of last year and prices, in general, are remaining steady. We look forward to demonstrating our capabilities in the year ahead."

Mr Lovelock will hand over the chief executive role to Howard Phillips at the end of the current financial year.

First published: November 5