McCARTHY & Stone has completed a record trading year with a 37 per cent increase in profits.

Pre-tax profits came in at £39.1 million for the South Coast-based retirement housing pioneer.

Turnover for the year to August 31 was £123 million, up 15 per cent.

Chairman John McCarthy said: "These excellent results extend our exceptional performance over the past six years."

On Tuesday the group announced that it was selling its freehold reversionary interests and its leasehold flat interests for £19 million.

The sale of McCarthy & Stone Housing Ltd to Fairhold Homes Investment (No 2) Ltd will give the Bournemouth retirement homes building firm a profit of £1.5 million.

The sale involves ground rents on 3,018 flats across 63 developments, the majority of which date from 1996.

The interests being sold represent a current income stream of £1.2 million.

"The sale of the investment properties will enable the group to acquire further land and increase work in progress to generate higher levels of volume sales and profitability," said Mr McCarthy.

Earnings per share rose to 23.7p (1998: 17.2p). A final dividend of 4.97p has been recommended, bringing the full year's dividend to 6.3p.

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