McCarthy & Stone plans stock market return to fund building spree

McCarthy & Stone said it had 70pc of the market for owner-occupied homes designed with pensioners in mind.

After years of rumours, retirement housebuilder McCarthy & Stone finally announced its intention to float on the London Stock Exchange today, an IPO which City A.M. understands could give the company a valuation of £1bn.

With around 3.5 million people interested in buying a retirement property, only 128,000 had been built by April previous year.

McCarthy & Stone is the biggest builder of managed properties for retired babyboomers and has about 70% of the market.

It is expected that admission will take place in november 2015 and that, following admission, company will be eligible for inclusion in ftse uk indices. Existing shareholders will also sell shares to ensure that at least 25 percent of the shares will be actively traded.

It was a public company for nearly 20 years until 2006, when it was taken private in a £1.1 billion deal by a consortium led by Halifax Bank of Scotland, which later became part of Lloyds Banking Group.

Chief executive Clive Fenton and non-executive chairman John White will remain in the same roles.

“We’ve been approached by a number of interested parties over the past year”. The owners considered floating the business in 2012 and the company held talks with potential private-equity buyers including Bridgepoint Capital. The talks didn’t develop.

In the year to 31 August, sales jumped 25% to £485.7 million, underlying pre-tax profit rose 40% to £88.4 million and legal completions rose 15% to 1,923 with a net average selling price of £239,000, up 12%.

The firm said the retirement home market is under-supplied and aims to build 3,000 homes a year.

Crest Nicholson, Foxtons and Countrywide are among the property companies to have joined the stock market in recent years as the real estate market has recovered.

Deutsche Bank is acting as sponsor, joint global co-ordinator and joint-bookrunner for the IPO.