McCarthy & Stone halts building and cuts top pay

McCarthy & Stone has stopped building and cut its top people's pay by 20% to conserve more than £200m of cash and strengthen its finances against the impact of the Covid-19 crisis.

The retirement home operator said all building had been put on hold apart from certain sites that are nearly finished. It has stopped buying land, postponed marketing activity and shut sales offices.

The FTSE 250 company said all members of its board and wider leadership team would take a 20% pay cut from 1 April until further notice. In total the steps will save about £230m of cash compared to plans before the coronavirus crisis took off.

McCarthy & Stone said all its cash measures meant it could operate with no sales income for about two and a half years.

The company also set out plans to protect its residents, who are among the most vulnerable to the effects of the virus. These include strict hygiene practices, asking homeowners to limit visitors and keep their distance and a rapid response operation for suspected Covid-19 cases.

Chief Executive John Tonkiss said the company was talking to the government in an effort to secure the personal protective equipment its staff need to care for old and vulnerable people during the crisis.

The company said it has no long-term debt and had drawn on its £200m revolving debt facility giving it available cash of £127m. It has already postponed its final dividend.

"As a board we feel it is imperative to take the right steps as soon as is practicable to ensure the long-term strength of the business," Tonkiss said. "We have a strong balance sheet and are now focusing on conserving cash while balancing the long-terms needs of the business.

"We continue to make every effort we can to reduce the risk of infection across our developments and have called upon government to ensure that our front-line care staff have access to sufficient personal protective equipment."