LSE:MCS

Stock Analysis Report

Executive Summary

McCarthy & Stone plc, together with its subsidiaries, operates in the retirement housing market in the United Kingdom.


Snowflake Analysis

Flawless balance sheet and fair value.


Similar Companies

Share Price & News

How has McCarthy & Stone's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MCS has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.7%

MCS

0.8%

GB Consumer Durables

-0.5%

GB Market


1 Year Return

19.1%

MCS

40.8%

GB Consumer Durables

6.0%

GB Market

Return vs Industry: MCS underperformed the UK Consumer Durables industry which returned 40.8% over the past year.

Return vs Market: MCS exceeded the UK Market which returned 6% over the past year.


Shareholder returns

MCSIndustryMarket
7 Day-4.7%0.8%-0.5%
30 Day-4.7%4.7%-1.8%
90 Day7.1%25.0%2.4%
1 Year20.9%19.1%50.9%40.8%11.5%6.0%
3 Year-15.3%-22.4%86.5%55.6%18.2%3.5%
5 Yearn/a138.4%79.1%34.3%3.5%

Price Volatility Vs. Market

How volatile is McCarthy & Stone's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is McCarthy & Stone undervalued compared to its fair value and its price relative to the market?

44.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MCS (£1.57) is trading below our estimate of fair value (£2.68)

Significantly Below Fair Value: MCS is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: MCS is poor value based on its PE Ratio (27.9x) compared to the Consumer Durables industry average (13.3x).

PE vs Market: MCS is poor value based on its PE Ratio (27.9x) compared to the UK market (18.6x).


Price to Earnings Growth Ratio

PEG Ratio: MCS is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: MCS is good value based on its PB Ratio (1.1x) compared to the GB Consumer Durables industry average (1.8x).


Next Steps

Future Growth

How is McCarthy & Stone forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

20.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MCS's forecast earnings growth (20.7% per year) is above the savings rate (0.5%).

Earnings vs Market: MCS's earnings (20.7% per year) are forecast to grow faster than the UK market (13.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: MCS's revenue (2.1% per year) is forecast to grow slower than the UK market (3.8% per year).

High Growth Revenue: MCS's revenue (2.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MCS's Return on Equity is forecast to be low in 3 years time (9%).


Next Steps

Past Performance

How has McCarthy & Stone performed over the past 5 years?

-6.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MCS has a large one-off loss of £10.0M impacting its October 31 2019 financial results.

Growing Profit Margin: MCS's current net profit margins (4.8%) are lower than last year (6.5%).


Past Earnings Growth Analysis

Earnings Trend: MCS's earnings have declined by -6.5% per year over the past 5 years.

Accelerating Growth: MCS's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: MCS had negative earnings growth (-32.3%) over the past year, making it difficult to compare to the Consumer Durables industry average (3.1%).


Return on Equity

High ROE: MCS's Return on Equity (3.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is McCarthy & Stone's financial position?


Financial Position Analysis

Short Term Liabilities: MCS's short term assets (£774.5M) exceed its short term liabilities (£132.4M).

Long Term Liabilities: MCS's short term assets (£774.5M) exceed its long term liabilities (£12.2M).


Debt to Equity History and Analysis

Debt Level: MCS's debt to equity ratio (1.2%) is considered satisfactory.

Reducing Debt: MCS's debt to equity ratio has reduced from 27.7% to 1.2% over the past 5 years.

Debt Coverage: MCS's debt is well covered by operating cash flow (726.8%).

Interest Coverage: MCS's interest payments on its debt are well covered by EBIT (16.4x coverage).


Balance Sheet

Inventory Level: MCS has a high level of physical assets or inventory.

Debt Coverage by Assets: MCS's debt is covered by short term assets (assets are 80.7x debt).


Next Steps

Dividend

What is McCarthy & Stone's current dividend yield, its reliability and sustainability?

3.63%

Current Dividend Yield


Upcoming Dividend Payment

Purchase McCarthy & Stone before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company3.6%marketbottom25%1.8%markettop25%5.0%industryaverage4.8%forecastin3Years4.1%

Current dividend yield vs market & industry

Notable Dividend: MCS's dividend (3.45%) is higher than the bottom 25% of dividend payers in the UK market (1.8%).

High Dividend: MCS's dividend (3.45%) is low compared to the top 25% of dividend payers in the UK market (5.03%).


Stability and Growth of Payments

Stable Dividend: MCS has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: MCS's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (82.7%), MCS's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MCS's dividends in 3 years are forecast to be covered by earnings (50.4% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.3yrs

Average management tenure


CEO

John Tonkiss (51yo)

1.4yrs

Tenure

UK£580,715

Compensation

Mr. John M. Tonkiss had served as Interim Chief Executive Officer of McCarthy & Stone Plc from September 1, 2018 to September 25, 2018. He has been the Chief Executive Officer at McCarthy & Stone Plc since ...


CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD750.65K) is below average for companies of similar size in the UK market ($USD1.18M).

Compensation vs Earnings: John's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
John Tonkiss
CEO & Executive Director1.4yrsUK£580.72k0.11% £876.7k
Rowan Baker
CFO & Executive Director0yrsUK£406.98k0.0036% £28.5k
Nigel Turner
COO of Build & Director1.1yrsUK£512.86kno data
Mike Lloyd
COO of Services & Customers and Director1.1yrsUK£524.53kno data
Marina Calero
Director of Investor Relations0yrsno datano data
Adam Batty
Group General Counsel & Company Secretary0.08yrsno datano data
Paula Jordan
Human Resources Director0yrsno datano data
Brendon O'Neill
Divisional Managing Director - South2.1yrsno datano data
Scott Brooker
Deputy Group Company Secretary0yrsno datano data

1.3yrs

Average Tenure

48.5yo

Average Age

Experienced Management: MCS's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
John Tonkiss
CEO & Executive Director1.4yrsUK£580.72k0.11% £876.7k
Rowan Baker
CFO & Executive Director0yrsUK£406.98k0.0036% £28.5k
Nigel Turner
COO of Build & Director1.1yrsUK£512.86kno data
Mike Lloyd
COO of Services & Customers and Director1.1yrsUK£524.53kno data
Frank Nelson
Senior Independent Non-Executive Director0yrsUK£87.03k0.032% £258.0k
John Carter
Independent Non-Executive Director2.3yrsUK£65.92kno data
Paul Lester
Group Non-Executive Chairman2.1yrsUK£268.33k0.012% £99.1k
Gill Barr
Independent Non-Executive Director0.8yrsUK£36.34kno data
Geeta Nanda
Independent Non-Executive Director4.8yrsUK£63.70kno data
Arun Nagwaney
Non-Independent Non-Executive Director1.8yrsno datano data

1.9yrs

Average Tenure

56yo

Average Age

Experienced Board: MCS's board of directors are not considered experienced ( 1.9 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

McCarthy & Stone plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: McCarthy & Stone plc
  • Ticker: MCS
  • Exchange: LSE
  • Founded: 1977
  • Industry: Homebuilding
  • Sector: Consumer Durables
  • Market Cap: UK£800.148m
  • Shares outstanding: 537.37m
  • Website: https://www.mccarthyandstonegroup.co.uk

Number of Employees


Location

  • McCarthy & Stone plc
  • 100 Holdenhurst Road
  • 4th Floor
  • Bournemouth
  • Dorset
  • BH8 8AQ
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MCSLSE (London Stock Exchange)YesOrdinary SharesGBGBPNov 2015
MCMDB (Deutsche Boerse AG)YesOrdinary SharesDEEURNov 2015
MCSLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPNov 2015

Biography

McCarthy & Stone plc, together with its subsidiaries, operates in the retirement housing market in the United Kingdom. The company designs, builds, manages, and sells retirement developments. It offers retirement living developments, which provide apartments for customers aged 60 and over; and retirement living plus developments, which are designed for customers aged 70 and over, as well as offers retirement properties with management services, domestic assistance, personal care, and additional support. McCarthy & Stone plc was founded in 1977 and is headquartered in Bournemouth, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/25 23:08
End of Day Share Price2020/02/25 00:00
Earnings2019/10/31
Annual Earnings2019/10/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.