An acute and growing shortage of retirement homes in the UK has helped revenue grow at a major developer with a significant stake in Gloucestershire.

However, the up-market retirement homes specialist, which is building alongside the Gloucester and Sharpness Canal adjacent to the city's Quays said "headwinds" were making life challenging.

Despite the bigger picture, McCarthy & Stone managed to deliver a two per cent rise in revenue to £672million, helped by a 10 per cent rise in average selling prices to £300,000.

However, underlying operating profit decreased to £68m (FY17: £96m) in the year while profit before tax decreased to £58m (FY17: £92m).

Paul Lester, chairman of the Dorset headquartered business, said: "The last financial year has been challenging for McCarthy & Stone with the current market environment continuing to have an impact on the business.

"A sluggish secondary housing market and lower consumer confidence following the outcome of the 2016 EU referendum have all contributed to this more difficult market backdrop.

"In light of these continuing headwinds, the group began a strategic review of the business in April and announced its new transformation strategy on 25 September 2018."

He added: "This reduction in profitability was mainly driven by the slowdown in sales, reduced margins, build cost increases, increased usage of part-exchange to counteract subdued market conditions, additional marketing activity and an increase in operating costs in support of our previous growth strategy."

John Tonkiss, chief executive, said: "This imbalance is particularly acute in the market for retirement housing where the demand is estimated at 30,000 retirement units per annum and supply in 2018 is likely to be in the region of just 6,000 units across all tenures McCarthy & Stone stands alone among the national housebuilders as the only one that focuses entirely on this market."

The McCarthy & Stone development at Llanthony Wharf alongside the canal was approved by Gloucester City Council planners in December last year for 83 retirement flats.

The scheme will include 55 assisted living apartments and 28 retirement flats off St Ann Way.

It was estimated at time of approval the development would create 18 full-time jobs with up to 80 people expected to work on the construction.

The retirement block is broadly T-shaped and up to three storeys high in sections sitting between St Ann Way and the access road looping down to the north.

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