IPO for retirement home builder
McCarthy & Stone heading to stock market to raise £70m
It will raise £70 million to invest in further projects and the IPO effectively signals the end of talks with private equity firm Bridgepoint which had offered to buy the company.
It already has a 70% market share of the owner-occupied retirement home market and a land bank of 10,087 plots.
The company pioneered the concept of owner-occupied retirement housing in 1977 and has since sold 50,000 homes at more than 1,000 developments. It redeveloped the former Barnton Hotel in Edinburgh (pictured) which was derelict for several years.
It wants to invest £2.5 billion in land and building projects over the next four financial years and says it remains on track to deliver its target of selling more than 3,000 homes per year over the medium term,
In the year to the end of August underlying profit before tax( increased by 40% to £88.4m.
Clive Fenton, chief executive, 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.”
The company is targeting to invest £2.5 billion in land and build over the next four financial years in order to grow the business.
It has a target of selling more than 3,000 units a year over the medium term.
The company was acquired for £1.1 billion by HBOS in a consortium with Sir Tom Hunter’s West Coast Capital and the Reuben Brothers at the height of the property boom in 2006 and was put on the market just five months later.
Three years later Hunter was forced to write off the £88 million he paid for an 8% stake as a debt-for-equity deal saw the firm’s main lenders take control of the business.