Miller cements plans to hive-off homes arm

Miller Homes: Set for flotation. Picture: TSPL
Miller Homes: Set for flotation. Picture: TSPL
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HOUSEBUILDER Miller Homes kicked off its long-anticipated flotation yesterday with plans to raise £140 million through a listing that will propel the firm into the FTSE 250.

Edinburgh-based parent Miller Group had paved the way to an initial public offering (IPO) by divesting its loss-making construction arm earlier this year, but waited until after the independence referendum to set out its stall.

The homes division, which employs more than 600 people UK-wide, forms the core business of the group and is expected to be valued at more than £450m when it makes its stock market debut next month.

That would propel it into the ranks of Scotland’s largest listed firms, but it is not clear whether the newly independent Miller Homes will keep its headquarters in Edinburgh.

A spokesman for the company said: “At the moment nothing has been confirmed and the headquarters will remain where they are, but we are not saying that will always be the case.”

He said a majority of the firm’s house building activity was in the Midlands and the south of England, although it retains an important presence north of the Border.

The proceeds of the flotation will be used to pay down some of the company’s debts. Private equity shareholders including Blackstone and Royal Bank of Scotland are expected to sell part of their stakes in the IPO, which will leave a free float of at least 40 per cent of the firm’s total share capital.

Lloyds Banking Group and Noble Grossart Investments also have significant stakes, but the Miller family, who controlled the group for most of its 80-year history, are now thought to own only a relatively small stake.

Group chief executive Keith Miller relinquished control in a 2012 refinancing deal that saw some of the company’s £730m debts converted into equity. No individuals are listed among those holding at least 3 per cent of the company.

Miller Group’s refinancing took place later than many of its rivals who were also hit by the financial crisis. The company says that gives it more scope for growth at this stage.

Miller Homes chief executive Chris Endsor said: “Our distinctive focus and deep knowledge of the regions in which we operate, together with our large and well-located strategic land bank, position Miller Homes to drive strong and sustainable growth and to benefit from the continued recovery in these regional markets.

“It is an excellent time to be operating in the house building sector, with demand for new housing continuing to grow supported by improving macroeconomic conditions and mortgage market and a more favourable planning environment.

“We are proud of what we have achieved so far and look forward to developing our business and creating value for our new stakeholders as a publicly listed company.”

Miller Homes will get a new set of non-executive directors, with former Cable & Wireless Communications boss Tony Rice as chairman. Miller Group will be left with its smaller development and coal mining divisions, and will keep its existing ownership structure.