Britain’s biggest developer of retirement accommodation has announced plans to return to the stock market in a move that could value it at as much as £1 billion.
The listing plans of McCarthy & Stone come nearly ten years after it was taken private and narrowly avoided falling into administration.
The developer, which was set up in the late 1970s and is one of a number of firms hoping to capitalise on the UK’s ageing population, is planning to raise £70 million in net proceeds from its initial public offering. McCarthy & Stone, which is promoted by the former Strictly Come Dancing judge Arlene Phillips, is to list on the London stock exchange by selling at least 25 per cent of equity in the company to new investors.
McCarthy & Stone was a public company for 22 years until 2006, and Clive Fenton, its chief executive, said that it “belongs” on the stock market.
He stressed, however, that it was too early in the process to talk about a valuation after the listing, which it hopes will go ahead next month.
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A consortium led by HBOS that included the Scottish businessman Sir Tom Hunter and the billionaire Reuben brothers took McCarthy & Stone private in 2006 in a £1 billion deal, but the builder was left laden with about £900 million of debt when the financial crisis hit a year later.
A debt-for-equity swap in 2009 gave Lloyds Banking Group, HBOS’s new owner, a 25 per cent stake. It then offloaded its share to a consortium of hedge funds and private equity firms including Goldman Sachs, TPG and Anchorage Capital, with a further capital injection soon afterwards.
A return to the stock exchange has long been rumoured, alongside a possible takeover by private investors — Bridgepoint Capital, the private equity firm, was recently linked with the company, although Mr Fenton said that talks “didn’t develop”.
McCarthy & Stone reported a rise in pre-tax profit from £57.1 million to £80.9 million in the year to the end of August, while revenue was 25 per cent higher at £485.7 million. This was driven by a 15 per cent rise in completions to 1,923, with the net average selling price up 12 per cent at £239,000.
The housebuilder, which has sold 50,000 homes since 1977, said that it was on track to double the size of the business to more than 3,000 unit sales a year over the medium term, as it increases its spending on land and building by £500 million to £2.5 billion over the next four years.
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Figures this year from the National House Building Council showed that 2,337 homes designed for older people were registered in the first six months of the year — more than for the whole of last year.
At the time, McCarthy & Stone said that there was a chronic undersupply of retirement housing in Britain and that more had to be done to address the needs of last-time buyers.
The number of people aged 85 and older is expected to rise from 1.5 million to 3.5 million between 2014 and 2033.