McCarthy & Stone PLC Sale of assets to Waverstone LLP (5707L)

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RNS Number : 5707L

McCarthy & Stone PLC

30 April 2020

30 April 2020

McCarthy & Stone plc

Sale of assets to Waverstone LLP

Notification of Class 2 Transaction

McCarthy & Stone plc (the "Group"), the UK's leading developer and manager of retirement communities, today announces the completion of a portfolio sale of apartments to Waverstone LLP. The transaction follows an initial sale and lease back of sales offices and show flats to Waverstone LLP in October 2019.

This second transaction involves the sale of 135 units with a balance sheet asset value of c.GBP32m for a total consideration of c.GBP35m. This comprises the sale of 41 show flats and sales offices with a subsequent 12-month leaseback, and the sale of 94 finished apartments and apartments under construction in Scotland. The sale of these 94 apartments completes the Group's strategy to exit its development activity from Scotland.

The Group will receive c.GBP13m cash on completion with the remaining c.GBP22m balance expected to be paid over the next three years. The transaction is expected to generate a net profit of c.GBP3m over a three-year period.

This transaction forms part of the COVID-19 cash optimisation measures set out within the Group's announcement on 25 March to ensure that the Group has c.2.5 years of cash cover. The Group continues to maintain a strong balance sheet and, as at the end of March, the Group's available cash balance had increased to c.GBP141m (after drawdown of its GBP200m Revolving Credit Facility).

Waverstone LLP appointed McCarthy & Stone Management Services Limited as a sales and managing agent.

Waverstone LLP is a jointly owned entity between Waverley Investments Limited and McCarthy & Stone Extra Care Living Limited, where McCarthy & Stone Extra Care Living Limited holds a non-controlling 49% equity interest. Waverstone LLP was created to facilitate the purchase, management and disposal of various assets built by the Group.

-ENDS-

For more information, please contact:

McCarthy & Stone plc

Marina Calero, IR Director [e-mail]

Powerscourt, 020 7250 1446 / [e-mail] /

Marina Calero

Justin Griffiths

Nick Dibden

Victoria Heslop

NOTES TO EDITORS:

1. Details of the initial sale transaction to Waverstone LLP (as per page 48 of FY19 Annual Report):

During 2019, the Group completed the sale of a portfolio of 113 show flats and sales offices to Waverstone LLP and subsequent leaseback for a maximum of 12 months. Waverstone LLP is an entity between Waverley Investments Limited and McCarthy & Stone Extra Care Limited, where McCarthy & Stone Extra Care Living Limited holds a non-controlling 49% equity interest and therefore has been treated as an associate in the Group financial statements. Waverstone LLP was created to facilitate the purchase, management and disposal of various assets built by the Group. Waverstone LLP has appointed McCarthy & Stone Management Services Limited a property manager and a sales agent. The transaction resulted in an additional FY19 cash flow for the Group of c.GBP17m with the remaining balance of c.GBP16m expected to be paid over 2 years. FY19 underlying operating profit for the Group includes c.GBP3m profit from the transaction, after taking account of unrealised profit and fair value adjustments in relation to the outstanding receivable balance.

   2.    McCarthy & Stone plc 

McCarthy & Stone is the UK's leading developer and manager of retirement communities, with a significant market share. The Group buys land and then builds, sells and manages high-quality retirement developments. It has built and sold more than 58,000 properties across more than 1,300 retirement developments since 1977 and is renowned for its focus on the needs of those in later life.

McCarthy & Stone has two main product ranges - Retirement Living and Retirement Living PLUS - which provide mainly one and two-bedroom apartments across the country with varying levels of support and care for older people. Retirement Living developments provide independence in private apartments designed specifically for the over-60s, as well as facilities such as communal lounges and guest suites that support companionship. Retirement Living PLUS developments, which are designed specifically for the over-70s, offer all of this plus more on-site facilities such as restaurants, well-being suites and function rooms. Importantly, they also provide on-site flexible care and support packages to assist those needing additional help.

All developments built since 2010 are managed by the company's in-house management services team, providing peace of mind that it will look after customers and their properties over the long term. This is a key part of how McCarthy & Stone seeks to enrich its customers' lives. This commitment to quality and customer service continues to be recognised by residents. In March 2020, the Group received the full five star rating for customer satisfaction from the Home Builders Federation for the fifteenth consecutive year - making it the only UK developer, of any size or type, to achieve this accolade.

For further information, please visit www.mccarthyandstone.co.uk

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April 30, 2020 12:56 ET (16:56 GMT)