(Alliance News) - McCarthy & Stone PLC on Thursday said it has sold a portfolio of apartments to Waverstone LLP for GBP35 million, as part of the company's strategy to exit its development activity from Scotland.
The retirement homes developer sold 135 units with a balance sheet asset value of GBP32 million. 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.
McCarthy & Stone expects to receive GBP13 million cash on completion with the remaining GBP22 million balance expected to be paid over the next three years.
The transaction is expected to generate a net profit of GBP3 million over a three-year period, it said.
"This transaction forms part of the Covid-19 cash optimisation measures set out within the group's announcement on March 25 to ensure that the group has 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 GBP41 million," McCarthy & Stone said.
The latest transaction follows an initial sale and lease back of sales offices and show flats to Waverstone in October 2019.
Waverstone was created to facilitate the purchase, management and disposal of various assets built by McCarthy & Stone. It is a jointly owned entity between Waverley Investments Ltd and McCarthy & Stone Extra Care Living Ltd, in which McCarthy & Stone Extra Care Living holds a non-controlling 49% equity interest.
Shares in McCarthy & Stone closed 1.7% lower at 70.80 pence each in London on Thursday.
By Tapan Panchal; tapanpanchal@alliancenews.com
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