FINANCE: Miller Group, the UK’s biggest privately owned house builder, has reported a doubling of pretax profit to £8.3m in its interim results.
The Scottish group revealed the profit rise for the six months to 30 June on the back of a 23% rise in revenue to £206.9m across the group.
Net cash inflow from operating activities of £800,000 was £10.3m lower than last year, largely reflecting a net working capital outflow in its loss-making Miller Construction arm, which was sold to Galliford Try in July.
The group’s net assets stood at £261.5m at the end of the period – up by 8.6% – while net debt was £170m.
Reporting on its house building division, Miller Homes, the group said completions were 28.2% higher at 855 units, driven by a strong opening order book and an 11.5% increase in private reservation rates.
Turnover increased by 40.2% to £175.4m through increased volumes and an 11.9% improvement in the average selling price to £198,000.
ASP growth reflected the change in portfolio mix, with an increased focus on land investment for larger houses in quality suburban locations, together with modest price inflation.
Profit before interest and exceptional items was up by 189.4% to £19.1m alongside a significant improvement in reported operating margin to 10.9% from 5.3%.
Miller Homes’ consented land bank increased to 8,987 plots, equivalent to five years’ supply, and it said it was making strong progress on conversion of strategic land interests, with 32% of owned land sourced from strategic sites.
Miller Developments by contrast posted a sharp fall in profit before interest and exceptional items of £100,000, down from £8.4m, but said current year profits were heavily weighted to the H2 of the year whereas 2013 saw a strong first half.
Its mining division, Miller Mining, also saw profit before interest drop to £900,000 from £2.4m.
Group chief executive Keith Miller CBE said: “Miller Homes is showing strong margin growth and a substantial improvement in return on capital driven principally by higher volumes and an increased contribution from new sites.
“Miller Developments is experiencing positive occupier demand for its key strategic property assets. The disposal of Miller Construction in July allows the group to focus on the housing and commercial property markets, which are showing strong signs of growth.
“In Miller Homes, trading continues to be robust across all of our regions in the UK, increasing our confidence in our ability to deliver improved margins and return on capital through enhancing the quality of the land bank and product mix, growing volumes with limited additional overheads and increasing the conversion of strategic land.
“We are targeting annual completions of 2,750 units in the medium term.”
bridget.oconnell@estatesgazette.com
