McCarthy to raise pounds 15.5m: Funds will be used to buy land and expand operations

Click to follow
The Independent Online
McCARTHY & Stone, the retirement home developer that has not made a profit since 1989, is raising pounds 15.5m to buy land and expand its operations.

The company also said yesterday that it plans to offer preference shareholders a scrip issue of new shares to compensate for unpaid dividends. It forecast a much-reduced loss for the six months to February.

John McCarthy, chairman, said demand for the company's retirement flats had improved. He said average selling prices had increased by 14 per cent to pounds 64,500.

As a result of higher sales, McCarthy's stock of unsold flats fell by 23 per cent over the past year to 921. The proceeds of the two-for-five rights issue, priced at 58p, will be used to buy land, mainly in the South-east, where house prices had risen fastest.

Mr McCarthy, whose stake in the company falls to 18 per cent from 25 per cent following the issue, forecast an interim loss of no more than pounds 1.3m. In the six months to February 1993 the company lost pounds 5.7m.

In the past three years aggregate losses have amounted to more than pounds 50m. The shares, which peaked at 400p in 1988, closed 1p higher at 73p.

(Photograph omitted)