retirement communities
A retirement community is a residential community or housing complex designed for older adults who are generally able to care for themselves. Assistance from home care agencies is allowed in some communities, and activities and socialization opp ...
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
Hampshire (, ; abbreviated to Hants.) is a Ceremonial counties of England, ceremonial county in South East England. It is bordered by Berkshire to the north, Surrey and West Sussex to the east, the Isle of Wight across the Solent to the south, ...
. Subsequently, they ceased other building work to concentrate on developing specialist housing for elderly people.Wellings, Fred: ''Dictionary of British Housebuilders'' (2006) Troubador. 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 Unlisted Securities Market (USM), which ran from 1980 to 1996, was a stock exchange set up by the London Stock Exchange to cater for companies too small to qualify for a full listing.
The USM allowed companies to be traded which did not have ...
, the company had completed 15 retirement housing developments and was selling around 200 units per year. 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. Annual sales reached 2,601 units in 1988.
During late 1990, a pre-tax loss of £10.8 million was recorded, resulting in interim
dividend
A dividend is a distribution of profits by a corporation to its shareholders, after which the stock exchange decreases the price of the stock by the dividend to remove volatility. The market has no control over the stock price on open on the ex ...
payments being reduced. 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. 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
A rights issue or rights offer is a dividend of subscription rights to buy additional securities in a company made to the company's existing security holders. When the rights are for equity securities, such as shares, in a public company, it can ...
aimed at securing £13.3 million. Losses continued to be recorded throughout the
early 1990s recession
The early 1990s recession describes the period of economic downturn affecting much of the Western world in the early 1990s. The impacts of the recession contributed in part to the 1992 U.S. presidential election victory of Bill Clinton over incum ...
.
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. During the mid 1990s, the firm was reportedly the only large player left in the sheltered housing market. Amid a wider economic recovery, the company's sales figures sharply increased during the late 1990s and early 2000s.
In January 2001, the firm's founders sold £8 million worth of stock in McCarthy Stone. During the early 2000s, it took preparatory measures for an economic downturn. In late 2001, the company decided to cease its design-and-build activities as a cost-cutting measure. In 2005, McCarthy & Stone sold 12 of its investment property interests to Owners Provident in exchange for £25 million.
During mid 2006, a bidding war broke out over the ownership of McCarthy Stone. Later that year, following the completion of a takeover bid of over £1 billion from a consortium including
David and Simon Reuben
David Reuben (born 1941) and Simon Reuben (born 1944) are British businessmen. In 2024, they were named the third-richest family in the UK by the '' Sunday Times Rich List'', with a net worth of £24.9 billion.
Early life and background
Th ...
London Stock Exchange
The London Stock Exchange (LSE) is a stock exchange based in London, England. the total market value of all companies trading on the LSE stood at US$3.42 trillion. Its current premises are situated in Paternoster Square close to St Paul's Cath ...
and became privately owned. At the time, it was the biggest takeover deal of a British housebuilder in history.
In May 2008, the company opted to postpone the start of new construction projects due to a
credit crunch
A credit crunch (a credit squeeze, credit tightening or credit crisis) is a sudden reduction in the general availability of loans (or credit) or a sudden tightening of the conditions required to obtain a loan from banks. A credit crunch generally ...
. During February 2009, amid the economic effects of the
Great Recession
The Great Recession was a period of market decline in economies around the world that occurred from late 2007 to mid-2009.
, McCarthy Stone was reportedly facing
administration
Administration may refer to:
Management of organizations
* Management, the act of directing people towards accomplishing a goal: the process of dealing with or controlling things or people.
** Administrative assistant, traditionally known as a se ...
as its lenders publicly disagreed on how to address the firm's debt burden of £900m. A
debt-for-equity swap
Debt restructuring is a process that allows a private or public company or a sovereign entity facing cash flow problems and financial distress to reduce and renegotiate its delinquent debts to improve or restore liquidity so that it can continue ...
was performed later that year, which reduced
Lloyds Bank
Lloyds Bank plc is a major British retail banking, retail and commercial bank with a significant presence across England and Wales. It has traditionally been regarded one of the "Big Four (banking)#England and Wales, Big Four" clearing house ...
's stake in the firm to 25 per cent.
At one point, McCarthy Stone was reportedly planning to undertake an IPO during 2012, but this did not take place. One year later, the company underwent refinancing and restructuring shortly after the appointment of new leadership. During November 2015, the firm was re-listed on the London Stock Exchange. By late 2016, trade was reportedly growing steadily for the firm. In 2018, McCarthy & Stone's boss announced his departure amid a drop in profits.
During 2020, the business was negatively impacted by the
COVID-19 pandemic
The COVID-19 pandemic (also known as the coronavirus pandemic and COVID pandemic), caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), began with an disease outbreak, outbreak of COVID-19 in Wuhan, China, in December ...
, which not only delayed building projects but drastically diminished sales for that year. In late 2020, the directors accepted a takeover bid from American investment firm
Lone Star Funds
Lone Star Funds, legal name of main entity Lone Star Global Acquisitions, Ltd. is a global private equity firm that invests in corporate equity, real estate, credit, and other financial assets. The founder of Lone Star established its first fu ...
. Shareholders approved the takeover offer worth £647m.
In April 2021, the company announced a new investment partnership with
Macquarie Group
Macquarie Group Limited (), more commonly known as Macquarie Bank, is an Australian multinational investment banking and financial services group headquartered in Sydney and listed on the ASX ().
Macquarie's investment banking division is Au ...
and
John Laing Group
John Laing Group is a British investor, developer and operator of privately financed, public sector infrastructure projects such as roads, railways, hospitals and schools through public-private partnership (PPP) and private finance initiative (PF ...
to finance its new rental portfolio.
The company is the only British developer, of any size or type, to win the full five-star rating in the
Home Builders Federation
The Home Builders Federation (HBF) is a British trade association representing private sector homebuilders in England and Wales. As of 2016, its members delivered around 80% of new homes built each year.CQC-regulated care and support. It is the largest provider of new Extra Care developments in the UK.
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.
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.
It began providing
Homes England
Homes England is the non-departmental public body that funds new affordable housing in England. It was founded on 1 January 2018 to replace the Homes and Communities Agency (HCA).
HCA in turn was established by the Housing and Regeneration Act ...
's Older People's Shared Ownership in 2021, to increase the provision of affordable housing for older people.
It is one of the few developers to use
modern methods of construction
Modern methods of construction (MMC) is a term used mainly in the UK construction industry to refer to "smart construction" processes designed to improve upon traditional design and construction approaches by focusing on (among other things) comp ...
on its construction sites, through its partnership with Remagin.
Awards
Charity initiatives
In 2017, the company raised over £250,000 for the Royal Voluntary Service. The company's charity partner for 2019 was Beanstalk, a national learning and literacy charity for young children. The company has also supported several smaller charities.
In 2020, it established the McCarthy Stone Charitable Foundation, which raised £230,000 in its first year.