MCS.L Regulatory News (MCS)

31 JULY 2019

McCarthy & Stone reaches significant milestone in the development of its care services business

McCarthy & Stone (the Group), the UK's leading developer and manager of retirement communities, is pleased to announce the achievement of a significant milestone in the delivery of its new strategy to transition the business from a housebuilder to the UK's leading developer, manager and owner of retirement communities and create deeper and longer relationships with its customers.

All regulated care, domestic support and property management services provided in the Group's 92 Retirement Living PLUS (Extra Care) developments will now be delivered directly by McCarthy & Stone after the Group agreed a consensual conclusion to its partnership with Somerset Care. The partnership, YourLife Management Services Limited (YLMS), has provided these services in all Retirement Living PLUS developments to date and will now become a wholly-owned subsidiary of the Group. 

John Tonkiss, Chief Executive of McCarthy & Stone, said:

"Our partnership with Somerset Care has been hugely successful and has made a profound difference to the quality of life of thousands of older people. It has helped us to become one of the largest operators in the housing with care sector and we deliver more new dwellings of this form of housing each year than any other organisation. We are also the largest private operator by far. We have developed considerable expertise in providing care and the long-term running of our developments and I would like to thank everyone at Somerset Care for being such an excellent organisation to work with.

"Now our care service is at significant scale and the partnership with Somerset Care has concluded, we have an exciting opportunity to develop the next generation of products and services in line with our new strategy. The growth of our care and service business is integral to this approach and it is essential that these services are delivered wholly by McCarthy & Stone. This announcement is a critical step towards our vision of creating even deeper and longer relationships with our customers."

The full ownership of YLMS will assist McCarthy & Stone in rolling out several new services across its developments, including smart technology, electric car clubs, an expanded care offering, including providing care into the Group's 293 Retirement Living developments, and increasing catering options. The Group is also launching a range of multi-tenure options, including rental and part rent, part buy offerings.

These new products and services will complement the current work of YLMS and its c.1,200 employees. Care services and most back-office functions for YLMS have already transitioned to McCarthy & Stone following the establishment of the joint venture in 2010, and there will be no reduction to existing service delivery for homeowners. 

Gary Ridewood, Chief Financial Officer and Interim CEO of Somerset Care, said: 

"Somerset Care are proud of the strong partnership that we have built with McCarthy & Stone. The high level of care that we have provided over the years has enabled thousands of YLMS customers to enjoy life, while continuing to live independently. During the nine years of the partnership, both of our organisations have developed considerably, and this decision marks the beginning of a new phase for Somerset Care's home care provision which continues to grow, supporting customers in their own homes as well as in retirement communities nationwide."

McCarthy & Stone will open c.17 new Retirement Living PLUS developments in FY19 and will first occupy its 100th Retirement Living PLUS scheme in early 2020. 

McCarthy & Stone Management Services will continue to operate the Group's 293 Retirement Living developments.

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For more information, please contact:

Powerscourt, 020 7250 1446 / mccarthy-stone@powerscourt-group.com

Justin Griffiths

Nick Dibden

Notes to Editors

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 56,000 properties across more than 1,200 retirement developments since 1977 and is renowned for its focus on the needs of those in later life.

There is growing demand for retirement communities. There are currently 11.8 million people aged 65 or over, rising to 17.3m by 2037, representing a 47% increase1. For those aged 85 or over, the increase will be larger, from 1.6m to 3.0m, representing an 87.5% increase. One in four over-60s are interested in retirement living2, yet only c.162,000 units of specialist retirement housing for homeowners have been built3.

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 homeowners. Retirement Living developments provide independence in private apartments designed specifically for the over-60s, as well as facilities such as shared 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 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 homeowners. In March 2019, the Group received the full Five Star rating for customer satisfaction from the Home Builders Federation for the fourteenth consecutive year - making it the only UK housebuilder, of any size or type, to achieve this accolade.

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

1 ONS household projections: 2016-based (2018)

2 ONS (2017, 2014 based figures)

3 Knight Frank, Retirement Housing (2018)