Last updated 2nd December 2022
McCarthy & Stone
McCarthy & Stone is the country’s largest developer and manager of retirement homes. The company operates some 475 retirement homes across the UK which it manages in-house and which accommodate more than 20,000 elderly people.
Founded in 1977 by John McCarthy and Bill Stone, the group has pioneered the concept of marketing managed retirement homes to serve a growing elderly and affluent population. The group legally completed 1 013 units in its last financial year, up from 832 units previously, at an average selling price of £315,000 and generating a turnover of £335.5 million.
The company has been publicly-listed at various stages and in 2020 it was taken over by a US private equity investment firm, Lone Star Funds, in a £647 million deal.
Today, the group’s strategy is to become the UK’s leading developer, manager and owner of retirement developments in a market facing an estimated demand for 30,000 properties annually. The new-build market is significant with 8,000 new retirement homes constructed in a recent year and the demographics are favourable, with the population of people aged over 65 – currently around 12.2 million – set to grow by 43 per cent over the next 20 years.
As part of a ‘mult-tenure’ strategy, the group is also providing rental apartments – currently 18% of its completions – and in 2021, it secured an investment partnership with Macquarie and John Laing to finance a new £200 million rental portfolio. The group has also formed a partnership with Anchor Hanover to provide an ‘affordable for all’ range of developments, starting with five large sites.
McC & S’s developments are typically on town centre brownfield sites which are close to key amenities for elderly people and the group employs around 2,500 people.
Financials
To see the financials for McCarthy & Stone Ltd. go to Companies House and use company id 06622199
Covid has inevitably taken a heavy toll on McCarthy & Stone’s results in recent years. Trading rebounded in the year to October 2021 when group revenues rose by 70% to £335.5 million, from £197.3 million previously, but the group reported an underlying operating loss of £2.5 million, down from a loss of £56.5 million previously. However, the group reported a loss before tax of £37.5 million down from a loss of £152.6 million last time. Meanwhile, the group has reduced its net debt to £42.8 million from £62.8 million previously.
Operations
McCarthy & Stone, operates two main products: Retirement Living developments (mainly involving one and two bed flats for the over 60s with some support and care and common areas) and Retirement Living Plus developments (mainly for the over 70s with more facilities such as restaurants and flexible care packages).
In August 2022, Anchor and McCarthy Stone won a resolution to grant planning permission for plans to redevelop the former Royal Works site in Sutton Coldfield; the £40 million scheme will involve around 137 apartments of which around 85 will be social rent or shared ownership.
Also in late summer 2022, McCarthy Stone, appointed Katie Fisher as its new divisional managing director for the Midlands, a region the firm has targeted for growth. Across an area from East Anglia to mid Wales, the firm has 26 schemes selling and a further 26 sites in development and an annual land and construction budget of around £100 million.
Glenigan data
Glenigan data points to a busy development programme in hand at McCarthy & Stone. In Sandhurst in Surrey, the group has submitted detailed plans for a £8.1 million development of retirement living units where work is set to start in late 2023 and run for 25 months (Project ID: 22425279). Meanwhile at Petersfield in Hampshire, McC & S has submitted detailed plans for a £20 million assisted living scheme at Southdowns View where work is set to start in autumn 2023 and run for 12 months (Project ID: 17015318).
Conclusion: a significant force in a sector where the demographics remain positive
As a market leader in a sector focused on selling homes to elderly purchasers, McCarthy & Stone was in the front line when Covid struck. But the group appears to be well on the way to recovery and has ambitious plans to expand across its Midlands region, which stretches across much of the centre of the country. In the past, the retirement sector has been susceptible to downturns in the general housing market as older homeowners struggle to sell their properties to move. But McCarthy & Stone’s recent shift towards multi-tenure development involving more rental properties and a larger social housing element should provide resilience if the general market slows. Either way, McCarthy & Stone is set to remain a significant force in a sector which – thanks to the demographics – is likely to continue to offer good opportunities for the construction industry.
How to win work with McCarthy & Stone
McCarthy & Stone puts an emphasis on its strong in-house planning team and reputation with local authorities as well as high quality construction, its specialist sales teams and property management skills. In all, the company works with some 6,000 sub-contractors and suppliers.
The group is a member of the Supply Chain Sustainability School, a major UK contractors initiative to adopt best practice in areas including carbon reduction, enhancing biodiversity, reducing waste and resourcing responsibly. In 2022, a series of the company’s site managers won NHBC Pride in the Job Awards for various developments.
Key contacts
Christian Beckwith, Head of Procurement at McCarthy & Stone
Telephone 01202 292480
Email: Christian.beckwith@mccarthyandstone.co.uk
Tom Freeman, Category Manager
Email: tom.freeman@mccarthyandstone.co.uk
Telephone 01202 292480