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Miller profits rise as firm considers flotation option

MILLER Group's long-serving chief executive has confirmed the company is mulling a possible stock market flotation as he unveiled a near 58% hike in profits.

SOLID FOUNDATIONS: Boss Keith Miller said the firm's strategic options were 'many and varied'. Picture: Stewart Attwood
SOLID FOUNDATIONS: Boss Keith Miller said the firm's strategic options were 'many and varied'. Picture: Stewart Attwood

Keith Miller, who has been in the top job since 1994, admitted the Edinburgh business is considering a range of options although he declined to be more specific on what those were or the timescale of any possible initial public offering (IPO).

He said: "You would expect a business of our complexity and size to be reviewing our strategic options. They are many and varied.

"We can confirm that one of those options would be a flotation, an IPO."

Private equity firm Blackstone will be likely to have a say in any stock market listing having acquired a majority stake in Miller Group through its GSO Capital Partners arm in 2011.

Royal Bank of Scotland, Bank of Scotland and National Australia Bank also swapped debt for equity in the major refinancing while Noble Grossart, management and Miller family members are also shareholders.

Yesterday, Miller Group said it had recorded a 31.8% hike in annual revenue for 2013 from £619.9 million to £817.3m thanks mainly to growth in its housing and construction arms.

Pre-tax profits rose from £6.6m to £10.8m with Miller also shaving £33.2m from its net debt to end the year at £168.8m.

Home completions were up 12.1% from 1831 to 2053 with a market pick-up in demand in the second half of the year.

Average prices increased from £170,000 to £181,000 with total turnover from the division 24.2% ahead at £330m, from £265.7m in 2012.

The company signalled its faith in the housing markets where Miller operates, mainly the Midlands and south of England and central belt of Scotland, will continue to be popular as it invested £92m in buying land, greater than the £56m spent in 2012.

The construction arm saw turnover rise 57.6% from £259.4m to £408.7m and had a record order book of £1.8 billion.

However, write-downs on a small number of contracts pushed the division into an operating loss of £4.6m.

Mr Miller said those were one-off costs and the group now only entered construction contracts with long-term clients where commercially viable margins can be maintained.

The construction arm secured new framework agreements with SSE and the Ministry of Defence as well as repeat business from the likes of Network Rail.

The developments division posted a 56% increase in operating profit from £5.4m to £8.4m in spite of a fall in revenue from £60.6m to £52.4m.

Mr Miller said there was no update on the company's development activity on its 100-acre site adjacent to Aberdeen Airport but it remained committed to commercial property in the city.

He said there were no plans for the group to move into house building in Aberdeen.

The group's Welsh coal mining division saw a lower operating profit of £4.5m, from £9.2m in 2012, as a result of an historic fixed price contract coming to an end.

The company has applied for planning permission to mine a seam of around six million tonnes of coal near to its existing site at Ffos-y-fran, near Merthyr Tydfil.

Asked whether the group was expecting any effect on its Scottish operations by events such as the Glasgow Commonwealth Games, Ryder Cup or the independence referendum, Mr Miller said: "I don't think we are factoring any of those things into our thinking at all.

"We are seeing strong market fundamentals for housing and construction. I think it is going to be an interesting year for Scotland but we will crack on regardless."

Mr Miller indicated the Scottish housing market was performing well and further benefits from the government-backed Help to Buy support scheme, which only launched here in September last year, were expected.

He said: "The south of England and the Midlands is strong but Scotland has remained remarkably strong throughout the period."

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