Milne warns red tape may strangle housing boom

Mile was speaking after the firm reported a 10 per cent increase in home completions. Picture: Getty

The chairman and chief executive of the eponymous Stewart Milne Group was speaking after the firm reported a 10 per cent increase in home completions, but sank to a pre-tax loss due to the cost of winding down its contracting and commercial construction division.

Milne, pictured below, said that the results reflected the firm’s own initiatives to launch more developments, as the up-tick in the housing market had largely been felt since the year-end.

He said: “There’s a concern that, as the economy is moving forward and the building sector is moving forward, local authorities are still going through a period of constraint.

“There are going to have to be a lot of discussions between industry bodies and local government on how to avoid delays.”

The Aberdeen-based group reported turnover of £211 million for the year to 30 June, down from £268.1m a year earlier, as it realigned its operations to focus on its “core business” – homes and timber systems.

The group incurred exceptional one-off costs of £13.8m which, combined with interest charges, resulted in a pre-tax loss of £5.7m.

The firm had made a narrow pre-tax profit in the past two years. Reported operating profit was £6.7m, down from £12.1m. Milne said: “The important thing is we have pretty good operating profits and that’s where our focus is.”

The firm said the “strong underlying performance” in the group’s core businesses and the progression of its exit from construction has provided “a platform for sustainable growth”.

Within the homes divisions, unit numbers for the year were up 10 per cent following new development launches. With a recent improvement in the economy, consumer confidence levels and mortgage approval rates, the firm plans to launch more than 20 further developments in the next 18 months.

It has already strengthened its landholding with 2,500 consented plots to deliver business plans over the next three years and a further 11,000 plots controlled under conditional contracts.

The group reported a strong trading performance since June, with reservations more than 25 per cent ahead of targets.

The group’s timber systems division, which makes frames for houses at factories in Aberdeen and Oxford, has benefited from new methods of building in response to environmental regulations, and saw its sales jump 30 per cent to £27.5m for the year.

The division gives the group, which builds homes mainly in Scotland and the north of England, exposure to the buoyant London area market, where skills shortages in the face of high demand mean other builders are looking for ways to simplify or outsource the building process.