Edinburgh-based Miller Group, the UK’s biggest privately-owned construction group, has sold its civil engineering business for £20 million as it seeks to focus more on core areas and make acquisitions.
The company will now concentrate on housebuilding, property and construction.
London-based Morgan Sindall is to buy Miller Civil Engineering Services, which Miller had identified as non-core. MCES consists of tunnelling and infrastructure services. Clients include West of Scotland Water.
In January, Miller sold its mining operation to Scottish Coal. The latest disposal "completes the restructuring of Miller’s construction services businesses," said the company.
Chief executive Keith Miller said MCES "was the one business which had no complementary cross-overs with the others. It was fairly specialised."
MCES employs 350 people, based in Rugby, in the Midlands. Turnover last year was 130 million, with pre-tax profit of 3.7 million.
Miller, 93 per cent family-owned, will grow its turnover this year, despite selling off MCES. The company said yesterday it was projecting a record turnover of 600 million for 2001, up 7.8 per cent on 2000. Miller said: "It just shows how fast we’re growing in the other areas."
Miller was in Birmingham yesterday for the BBC Good Homes Show at the NEC, where one of the company’s houses is on show. He said the firm was looking to expand in the Midlands.
The company made three acquisitions during the year, worth a total of 66 million. Miller bought John Lynch, a housebuilder based in the west of Scotland, and housebuilders Birch and Crest Nicholson.
The disposal reduces Miller’s headcount to about 1,850. It will also help reduce the company’s gearing, which had risen to 129 per cent at the end of the year as a result of acquisitions. However, Miller said this was not the reason for the deal and said the company could afford more acquisitions. "We’re looking at a number of things, although there’s nothing imminent," he said.
The company reported an operating profit to 29.4 million for the year to 31 December 2000, compared with 19.7 million in 1999.
In July, a consortium headed by Miller was awarded the 1.2 billion contract for Glasgow schools Public-Private Partnership. The 30-year deal, the biggest PPP so far, will see Miller maintain Glasgow’s 29 secondary schools. Miller has a 25 per cent stake in the consortium. The company has also landed a 39 million contract to build the Centre West shopping centre at East Kilbride.
Morgan Sindall shares rose 18p to 398p.