Miller profits soar on recovery at housing arm

Keith Miller, chief executive of Miller Group. Picture: TSPL

The Edinburgh-based firm said UK government initiatives such as Help to Buy – which offers loans to allow people to buy new-build homes with a deposit of just 5 per cent – was helping to drive up confidence, while the Bank of England’s Funding for Lending scheme (FLS) has led to a rise in mortgage approvals.

Chief executive Keith Miller said the firm continued to benefit from last year’s £160 million refinancing, which brought in private equity outfit GSO Capital Partners as its majority shareholder, and its net debts reduced to £198m, from £202m at the start of the year.

Pre-tax profits for the six months to 30 June soared to £4m, from just £400,000 a year earlier, as total revenues grew 27 per cent to £361.5m.

Turnover at its housebuilding arm was flat at £125m as the number of units completed held broadly steady at 819, but operating profits leapt 50 per cent to £6.6m as newly-acquired sites generated better margins.

The builder has already secured 92 per cent of its full-year sales target, and average selling prices rose 3 per cent to £175,000 thanks to an increased focus on family houses.

Yesterday’s figures followed a string of upbeat reports in recent weeks from listed rivals such as Barratt, Persimmon and Taylor Wimpey, which have hailed the government’s efforts to stimulate property sales.

Miller said: “We have seen a marked improvement in the housing market during the first six months, assisted by the FLS, with further stimulus provided by the Help to Buy scheme, as well as an improvement in the UK mortgage market.

“The board is confident that the group’s performance will meet its expectations for 2013.”

Although losses at the firm’s construction division widened to £2.4m, from £800,000 a year ago, amid an “extremely competitive” market for new contracts, revenues jumped 70 per cent to £193m on the back of last year’s “strong” order book.