Subcontractors next target of McCarthy & Stone cost cuts

Grant Prior 1 week ago
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McCarthy & Stone is ramping-up its build cost reduction programme with a new approach to competitive tendering for subcontractors.

The programme involves “increasing standardisation, more efficient designs and optimising subcontract procurement practices.”

The retirement home specialist said: “We have completed design reviews of all FY19 and FY20 schemes, identifying savings in build costs and margin improvements.

“We have rolled out a standard construction programme, preliminary schedule and agreed Wave 1 (of four) of framework/specification value improvements for materials.

“A programme for competitive tendering of sub-contract packages has also been launched.”

The details were contained in the company’s half-year results to February 28 2019.

Delivering a new strategy and a more streamlined business incurred £14m of exceptional costs during the period.

That included “restructuring and redundancy” costs and consultancy fees.

Pre-tax profits for the six months fell to £3.6m from £10.5m on an increased turnover of £280.5m from £239.6m.

John Tonkiss, Chief Executive Officer said: “During the first reporting period of our transformation strategy and against the backdrop of continuing uncertainty and challenging market conditions, we delivered encouraging results.

“We are making significant progress across our strategic objectives, which focus on optimising our operations to deliver strong financial performance and increasing our return on capital employed, margins and cash generation over the next three years.

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