McCarthy&Stone announces IPO and multi-billion pound investments

McCarthy&Stone announced its intention to float to help finance its multi-billion pound expansion plans.

The retirement housebuilder was looking to raise £70m in net funds via an initial public offering on the London Stock Exchange in November.

John White, McCarthy & Stone’s chief, highlighted the long-term potential for the market.

"In the UK, approximately 3.5m people are interested in buying a retirement property, but only 128,000 properties had been built as at April 2014,” he said in a statement.

The Bournemouth-based was targeting £2.5bn of investments over the next four financial years, it said in a statement, and to sell over 3,000 units a year over the medium-term.

Between fiscal year 2013 and 2015 McCarthy&Stone achieved a 25% annual compound rate of growth in revenues while boosting its return on capital employed from 12% to 20%.

Management expected the company to have a so-called ‘free float’ of at least 25%.

As of 31 August the firm’s net debt stood at £33.1m, equivalent to a gearing of 6%.