McCarthy Stone explained

McCarthy & Stone Limited
Trading Name:McCarthy Stone
Industry:Real estate
Revenue:£725.0 million (2019)[1]
Operating Income:£48.4 million (2019)
Net Income:£34.9 million (2019)
Num Employees:2,433 (2019)
Parent:Lone Star Funds
Foundation:1977
Location:Bournemouth, England, United Kingdom

McCarthy Stone is a developer and manager of retirement communities in the United Kingdom.

History

John McCarthy and Bill Stone became partners in 1961, and in 1977 they built their first retirement housing development in Hampshire. Subsequently, they ceased other building work to concentrate on developing specialist housing for elderly people.[2] [3] The company quickly became the largest developer and manager of retirement communities for private ownership in the UK. By 1982, when the company was floated on the Unlisted Securities Market, the company had completed 15 retirement housing developments and was selling around 200 units per year.[4] Growth was rapid after the flotation, and by 1984 the company operated on a national basis with annual sales approaching 1,000 units. The business was exceptionally profitable around this time due to a rapidly ageing population.[2] Annual sales reached 2,601 units in 1988.[2]

During late 1990, a pre-tax loss of £10.8 million was recorded, resulting in interim dividend payments being reduced.[5] [6] In early 1991, John Gray was appointed as the joint managing director of McCarthy and Stone while John McCarthy retained the chairmanship; several other senior management changes were made around this time.[7] In June of that year, in response to sustained losses and the desire to increase its construction activity and minimise borrowing, the company launched a rights issue aimed at securing £13.3 million.[8] Losses continued to be recorded throughout the early 1990s recession.[9] [10]

By early 1994, it had become clear that McCarthy Stone was heading towards recovery; several of its domestic competitors, in comparison, had gone out of business during the economic downturn.[11] [12] During the mid 1990s, the firm was reportedly the only large player left in the sheltered housing market.[13] Amid a wider economic recovery, the company's sales figures sharply increased during the late 1990s and early 2000s.[14] [15]

In January 2001, the firm's founders sold £8 million worth of stock in McCarthy Stone.[16] During the early 2000s, it took preparatory measures for an economic downturn.[17] In late 2001, the company decided to cease its design-and-build activities as a cost-cutting measure.[18] In 2005, McCarthy & Stone sold 12 of its investment property interests to Owners Provident in exchange for £25 million.[19]

During mid 2006, a bidding war broke out over the ownership of McCarthy Stone.[20] [21] Later that year, following the completion of a takeover bid of over £1 billion from a consortium including David and Simon Reuben and Sir Tom Hunter, the company was de-listed from the London Stock Exchange and became privately owned.[22] [23] At the time, it was the biggest takeover deal of a British housebuilder in history.[24]

In May 2008, the company opted to postpone the start of new construction projects due to a credit crunch.[25] During February 2009, amid the economic effects of the Great Recession, McCarthy Stone was reportedly facing administration as its lenders publicly disagreed on how to address the firm's debt burden of £900m.[26] A debt-for-equity swap was performed later that year, which reduced Lloyds Bank's stake in the firm to 25 per cent.[27]

At one point, McCarthy Stone was reportedly planning to undertake an IPO during 2012, but this did not take place.[27] One year later, the company underwent refinancing and restructuring shortly after the appointment of new leadership.[28] [29] During November 2015, the firm was re-listed on the London Stock Exchange.[30] [31] By late 2016, trade was reportedly growing steadily for the firm.[32] In 2018, McCarthy & Stone's boss announced his departure amid a drop in profits.[33]

During 2020, the business was negatively impacted by the COVID-19 pandemic, which not only delayed building projects but drastically diminished sales for that year.[34] [35] In late 2020, the directors accepted a takeover bid from American investment firm Lone Star Funds.[36] Shareholders approved the takeover offer worth £647m.[37] [38]

In April 2021, the company announced a new investment partnership with Macquarie Group and John Laing Group to finance its new rental portfolio.[39] [40]

The company is the only British developer, of any size or type, to win the full five-star rating in the Home Builders Federation's customer satisfaction awards every year the survey has been run.[41]

Services

The company's in-house Services teams operate its Retirement Living and Retirement Living PLUS (Extra Care) schemes built since 2008.[42] In its Retirement Living PLUS schemes, services include the provision of CQC-regulated care and support. It is the largest provider of new Extra Care developments in the UK.[43]

It remains as the landlord and managing agent on all developments opened since 2008, and hence is legally responsible for the operation of these schemes.[44]

As of 2018, the company provides a choice of tenure including rental and affordable and private shared ownership, as well as an expanded care offering.[45]

It began providing Homes England's Older People's Shared Ownership in 2021, to increase the provision of affordable housing for older people.[46]

It is one of the few developers to use Modern Methods of Construction on its construction sites, through its partnership with Remagin.[47]

Awards

YearAward
2023Property Developer of the Year[48]
2022Great Place to Work Wellbeing List 2022[49]
2021Customer Satisfaction Five Star Award[50]
2020Housing with Care Award[51]
2019Housing for Older People Awards[52]
2019NHBC Health and Safety Awards[53]
2019Customer Satisfaction Five Star Award[54]
2018Housebuilder Awards[55]
2018ARMA ACE Awards[56]
2018NHBC Health & Safety Awards[57]

Charity initiatives

In 2017, the company raised over £250,000 for the Royal Voluntary Service.[58] The company's charity partner for 2019 was Beanstalk, a national learning and literacy charity for young children.[59] The company has also supported several smaller charities.[60]

In 2020, it established the McCarthy Stone Charitable Foundation, which raised £230,000 in its first year.[61]

Notes and References

  1. Web site: Annual Report and Accounts 2019. McCarthy Stone. 3 March 2020.
  2. Wellings, Fred: Dictionary of British Housebuilders (2006) Troubador.
  3. Web site: The money-making revelations of John McCarthy, the founder of McCarthy & Stone . The Leaseholder Association . 4 February 2016.
  4. Company Prospectus (1982)
  5. Web site: 18May90 UK: MCCARTHY AND STONE CHIEF CONFIDENT DESPITE CUT IN INTERIM DIVIDEND PAYMENTS . constructionnews.co.uk . 17 May 1990.
  6. Web site: 21Dec90 UK: MCCARTHY AND STONE TURNS IN THUMPING LOSS OF £10.8 MILLION PRETAX IN YEAR TO AUGUST . constructionnews.co.uk . 20 December 1990.
  7. Web site: 19Apr91 UK: APPOINTMENTS AT MCCARTHY AND STONE . constructionnews.co.uk . 18 April 1991 .
  8. Web site: 07Jun91 UK: MCCARTHY AND STONE TO RAISE £13.3 MILLION THROUGH RIGHTS ISSUE TO REDUCE BORROWINGS . constructionnews.co.uk . 6 June 1991 .
  9. Web site: 07May92 UK: MCCARTHY AND STONE REPORTS PRETAX LOSS OF £6.9M FOR SIX MONTHS TO END FEBRUARY 1992 . constructionnews.co.uk . 7 May 1992.
  10. Web site: 06May93 UK: MCCARTHY LOSS – MCCARTHY AND STONE . constructionnews.co.uk . 6 May 1993 .
  11. Web site: Bottom Line: McCarthy stays up . The Independent . 25 April 1994 .
  12. Web site: 28Apr94 UK: M AND S NEARS BREAK-EVEN – MCCARTHY AND STONE . constructionnews.co.uk . 28 April 1994.
  13. Web site: Firms flee sheltered housing market . constructionnews.co.uk . 10 August 1995.
  14. Web site: Barratt, McCarthy and Tay surge ahead as housing recovery takes hold Autumn sales leap lifts house builders . constructionnews.co.uk . 28 November 1996 . Bill . Fishlock.
  15. Web site: McCarthy rises . constructionnews.co.uk . 24 February 2000 .
  16. Web site: £8m bonanza for McCarthy & Stone founders . citywire.com . 18 January 2001.
  17. Web site: McCarthy & Stone battens down the hatches . building.co.uk . Gordon Jon . Thompson . 23 November 2001.
  18. Web site: McCarthy ditches D&B to curb costs . constructionnews.co.uk . 22 November 2001.
  19. Web site: McCarthy & Stone cash boost . constructionnews.co.uk . 18 July 2005.
  20. Web site: Builder agrees £1bn takeover but rival offer prompts bid war hopes . The Guardian . Marianne . Barriaux . 18 July 2006.
  21. Web site: Barclays pulls out of bid battle for McCarthy & Stone . The Independent . Nic . Fildes . 5 September 2006 .
  22. Web site: McCarthy's demographic push . 10 March 2016 . Shares Magazine.
  23. Web site: HBOS wins battle for McCarthy & Stone . building.co.uk . 8 September 2006.
  24. Web site: Consortium set for McCarthy & Stone acquisition deal . house-builder.co.uk . 5 September 2006.
  25. Web site: McCarthy and Stone hit by credit crunch . bournemouthecho.co.uk . Tim . Saunders . 4 May 2008 .
  26. Web site: Creditors' quarrel may force home builder into early retirement . The Guardian . David . Teather . Elena . Moya . Jill . Treanor . 20 February 2009.
  27. Web site: Will hedge-funders clean up in £500 million McCarthy and Stone float? . leaseholdknowledge.com . 21 July 2014 . Sebastian . O'Kelly.
  28. Web site: New McCarthy & Stone boss wields the axe . Construction Index . 6 March 2014 . 10 February 2016.
  29. Web site: 89 jobs could go as McCarthy & Stone announces plans to restructure . bournemouthecho.co.uk . 6 March 2014.
  30. Web site: McCarthy & Stone prices IPO at 180p per share . Digital Look . 6 November 2015 . 10 February 2016.
  31. Web site: McCarthy and Stone: Stacking grannies in property plays . Matthew . Gwyther . managementtoday.co.uk . 15 October 2015.
  32. Web site: Buyers return to McCarthy & Stone . investorschronicle.co.uk . 12 October 2016 . Jonas . Crosland.
  33. Web site: McCarthy & Stone boss is pensioned off as profits fall . The Times . Tom . Knowles . 20 June 2018.
  34. Web site: McCarthy & Stone warns retirement housing market to remain difficult . standard.co.uk . Joanna . Hodgson . 11 November 2020.
  35. Web site: McCarthy & Stone falls into the red as COVID-19 nearly halves sales . insidehousing.co.uk . 16 July 2020 .
  36. News: McCarthy & Stone board backs US private equity takeover . 23 October 2020 . The Construction Index . 23 October 2020.
  37. News: McCarthy & Stone shareholders vote in favour of £647m takeover deal . 8 December 2020 . Evening Standard . 8 December 2020.
  38. Web site: Gardiner . Joey . 29 January 2021 . Lone Star takeover of McCarthy & Stone to complete today . 26 March 2021 . housingtoday.co.uk.
  39. Web site: John Laing : Macquarie Group Limited - McCarthy Stone's UK retirement living rental portfolio secures finance from John Laing and Macquarie Capital MarketScreener . 4 January 2022 . marketscreener.com . 9 April 2021 . en.
  40. Web site: Travers Smith advises McCarthy Stone on agreement to secure £200m total financing for its UK retirement living rental portfolio . traverssmith.com . 25 May 2021.
  41. Web site: McCarthy & Stone Sheffield team award winners again for 14th consecutive year . 2022-03-17 . thestar.co.uk . en.
  42. Web site: Pamben. Deven. 2019-07-31. McCarthy & Stone to deliver care services directly. 2022-01-04. LaingBuisson News. en-GB.
  43. News: Peart. Lee. 2019-07-31. McCarthy & Stone parts ways with Somerset Care and launches own extra care services. 2022-01-04. Care Home Professional. en-US. 30 March 2023. https://web.archive.org/web/20230330202647/https://www.carehomeprofessional.com/mccarthy-stone-parts-ways-with-somerset-care-and-launches-own-extra-care-services/. dead.
  44. Web site: McCarthy Stone Great Place to Work UK The global authority on workplace culture. . 2022-03-17 . www.greatplacetowork.co.uk . en-GB.
  45. Web site: 2019-05-02. Modular Construction and the Specialist Housing Sector. 2022-01-04. www.housinglin.org.uk. en.
  46. Web site: Pamben . Deven . 2021-09-02 . McCarthy Stone receives funding to deliver 1,500 retirement properties . 2024-10-07 . LaingBuisson News . en-GB.
  47. Web site: UK’s largest retirement home builder commits to 40 new MMC developments . 2024-10-07 . Inside Housing . En.
  48. Web site: ncompass . Previous Years' Winners . 2024-10-07 . LaingBuisson Awards . en-GB.
  49. Web site: UK's Best Workplaces for Wellbeing 2022 . 2022-03-17 . www.greatplacetowork.co.uk . en-GB.
  50. Web site: 2021-03-30 . Record-breaking award for customer satisfaction . 2022-03-17 . Retiremove . en-GB.
  51. Web site: ncompass. LaingBuisson Awards 2020 Book of the Night. 2022-01-04. LaingBuisson Awards. en-GB.
  52. Web site: Regional and National Results. Housing Awards. en-GB. 2019-12-18.
  53. Web site: Archive 2019 NHBC. www.nhbc.co.uk. 2019-12-18.
  54. Web site: CSS Star rating results. www.hbf.co.uk. en. 2019-12-18.
  55. Web site: Housebuilder Awards 2018. www.house-builder.co.uk. 2019-12-18.
  56. Web site: 2018 Winners & Finalists – ARMAAwards. awards.arma.org.uk. 2019-12-18.
  57. Web site: Award-Archive-2018 NHBC. www.nhbc.co.uk. 2019-12-18.
  58. Web site: McCarthy & Stone raises more than £250,000 for RVS. 2018-04-09. PHPD Online. en-US. 2019-12-18.
  59. Web site: McCarthy & Stone 2019 charity partnership. Coram Beanstalk. 24 January 2019 . en. 2019-12-18.
  60. Web site: McCarthy and Stone seeks local charity to support. Hereford Times. 5 July 2019 . en. 2019-12-18.
  61. Web site: 2021-12-16 . Read our 2021 Impact Report . 2022-03-17 . McCarthy Stone Foundation . en.

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