Later living specialist Lifestory Group has secured a major refinancing from owner Oaktree Capital Management, and a string of loans and company restructuring to tackle financial struggles in the wake of failed sales.
The group formed in 2019 through the merger of retirement housing specialists Pegasus and Renaissance, with housing developer Anthology.
Lifestory has struggled with mounting losses in the wake of the pandemic, with its customers particularly affected by Covid-19 and concerns for their safety.
The developer has backtracked on development resulting in a reduction in GDVs, cost overruns, and reductions in expectations of sales pricing.
According to results for the year ended June 30 2020 (filed July 21 2021), Lifestory made an operating loss of £56.9m for the year – almost double the loss of £33.7m a year earlier.
As a result of changes in the market, Lifestory has significantly expanded its rental offerings. Last summer, Lifestory brought a portfolio of retirement rental homes to the market for sale, but is understood to have failed to tempt any investors amid nervousness post-pandemic.
Lifestory’s results outline further actions to “reset the business for growth and profitability”. After a full review of operations, the company has restructured and reduced headcount with 78 jobs cut. The review saw Lifestory shrink its landbank from 55 sites to 50, with six sites in its strategic landbank identified for sale. At the time of the report it had completed one sale, with two further sites in contract.
The company results detail a number of loans after the end of the financial year. Lifestory secured a £294.9m refinance from Oaktree CM in return for new shares at the end of January this year.
In March another of the group’s companies, Hackwood Homes – which focused on developing homes for Pegasus – fell into administration. According to the administrator’s report from Quantuma Advisory, Hackwood Homes had attempted to broaden to developing homes for housing associations, but Pegasus’s contract limited this venture to 20% of its turnover.
The report says “relations broke down between the company” and Pegasus stopped making payments to Hackwood. Administrator filings for the company show Hackwood owed £4.2m in March.
However, during this period the housing business Anthology has continued to pursue new sites and regional expansion, after agreeing a £52m refinance for unsold flats in London from CBRE GI at the end of last year.
In March Anthology agreed a £35m loan to the parent company Lifestory, which was later increased to £42m in June. The loan is unsecured and repayable on 9 March 2024.
Finally, the group entered into another loan facility of £9.5m with Daiwa Capital Markets Europe Limited, also in June. This is a 15-month facility secured against certain land within the group, with an interest of 6.75% paid annually.
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