Miller set for ‘significant’ growth as profits jump

Miller Homes saw first-half profits jump 80%

The Edinburgh-based company also highlighted its order book as currently 25 per cent ahead of last year, at £221 million.

Pre-tax profit excluding exceptional items jumped by 80 per cent year-on-year to reach £23m, as the housebuilder’s average selling price grew by 11 per cent to hit £218,800.

That helped boost its revenues by 32 per cent to reach £229.7m, with the latter also helped by legal completions jumping from 845 units to 1,040.

Miller said it continues to use the Help to Buy scheme in both Scotland and England, and together they contributed 34 per cent of its private completions, down from 44 per cent in the year-ago period.

Chief executive Chris Endsor said the results “demonstrate the successful execution of our strategic plan based on a considered approach to increasing volumes in good quality locations concentrating on family housing”.

The profit growth comes as other big names in the housebuilding sector, which was hit hard by the credit crunch, have recently reported a jump in profits, including Barratt Developments.

Endsor added: “As completions from higher-margin land increase, we continue to see significant improvements in operating margin and return on capital.”

Operating margin in fact increased to 14.3 per cent from 11.1 per cent, and amounts for both pre-tax profit and operating margin in the first half of last year exclude an exceptional profit of £3.5m recognised in the results for that period.

The company’s net debt amounted to £151m at 30 June, down from £166.7m 12 months previously.

Last year, the firm shelved plans for a flotation, attributing the decision to turbulent market conditions.

Cost of sales grew to £180.3m from £139.4m.

Looking to the rest of the year, Endsor said Miller Homes expects to launch a further 12 sales outlets, bringing overall outlet numbers to more than 70 by year-end.

Land spend in the period reached £60.8m, up from £30.6m the year before. Miller said its strategic landbank of 16,629 plots, up from 16,553, is one of the biggest in the sector relative to current volumes.

Additionally the firm said it has new bank facilities of £210m with existing lenders through to 2020 and on better terms.

Endsor added: “Our new banking facilities support a significant increase in planned land expenditure and enable us to maximise our high quality strategic landbank. Combined with high demand for our product range, this provides the platform for growth in 2016 and beyond.”

He added that assuming stable market conditions, the company is well-positioned to deliver its targeted medium-term operating margin of 18 per cent and return on capital employed of 25 per cent.