McCarthy & Stone to float on London Stock Exchange

McCarthy & Stone Limited, the UK-based retirement housebuilder, has announced it will go head with its intention to float on the London stock exchange.

The company will apply for admission of its ordinary shares to the premium listing segment of the Official List of the FCA and to trading on the main market for listed securities of the London Stock Exchange.

An initial public offering of shares will raise £70m for further investment in land and building projects.

McCarthy & Stone currently has approximately a 70% market share of the owner-occupied market. The company buys land, secures planning consent and then designs, builds, sells and manages a range of specialist, high-quality retirement developments.

In addition, McCarthy & Stone spearheaded the concept of owner-occupied retirement housing in 1977, and has since sold approximately 50,000 units across more than 1,000 developments in the UK.

Between 201 and 2015, the company achieved 25% compound annual growth rate in revenue (FY13: £311m; FY15: £486m), a 45% compound annual growth rate in underlying operating profit over the same period (FY13: £45m; FY15: £95m) and a 510bps increase in underlying operating profit margin to 20% between FY13 and FY15.

Net asset value has also increased from £358m on 31 August 2013 to £469m as of 31 August 2015.

McCarthy & Stone is aiming to invest £2.5bn in land and build over the next four financial years as part of its growth strategy.

The company, which currently has a land bank of 10,087 units, is expected to deliver its target of selling more than 3,000 units per annum over the medium term, mainly by capitalising on the ongoing need for specialised housing for older people in the UK.

Clive Fenton, Chief Executive Officer of McCarthy & Stone, said: “This is an incredibly exciting time in the Company’s evolution. There is a structural under-supply of specialist retirement housing in the UK and McCarthy & Stone has the expertise, track record and financial strength to address this need. We have a proven business model with high barriers to entry and a strong brand that resonates with our target customers supported by an industry-leading record for customer satisfaction.

“Listing on the London Stock Exchange will provide the ideal foundation for the Group to move to the next stage of its development and the Board and I will continue to work hard to deliver on our ambitious growth plans.”

John White, Non-Executive Chairman of McCarthy & Stone, added: “In the UK, approximately 3.5 million people are interested in buying a retirement property, but only 128,000 properties had been built as at April 2014. As the industry leader, McCarthy & Stone is in a unique position to address the unprecedented market opportunity we see before us.

“McCarthy & Stone comes to the market with a strong track record of growth in revenues, profits and cashflow, an outstanding management team and a clear strategy to deliver sustainable growth. I am delighted to be chairing the business at this important moment in its development.”

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