Miller Homes increases completions target after profit jump

Edinburgh-based Miller Homes has raised its projections to 3,000 homes a year after posting strong profit growth for 2014.

The housing division of Miller Group saw its turnover rise 19 per cent to £391.9 million in 2014 following a 12 per cent jump in annual completions to 1,918 homes, with the average selling price improving 10 per cent to £200,000.

Profit before interest and exceptional items increased by 94 per cent to £44.3m.

The growth in average selling price reflected an increased focus of land investment towards larger houses in quality suburban locations, together with modest price inflation.

Consented landbank increased to 10,012 plots, equivalent to five years’ supply. Planning applications were made on 2,677 plots from its strategic land portfolio. The forward order book at the year-end was 33 per cent higher than last year at £114m, representing 576 units.

Miller Group, which sold off its construction arm last year for £15m, trebled pre-tax profits to £35m on turnover ahead 19 per cent at £484m.

After allowing for losses at the construction arm, the group said it recorded a net gain of £8.8m on the disposal deal.

Group chief executive, Keith Miller CBE, said: “Miller Homes delivered a strong performance in 2014 benefiting particularly from continued improvements in the housing market. The business achieved significant growth in operating margins and return on capital driven by higher volumes and the increased contribution from newly acquired sites. Miller Homes also made an encouraging start to 2015. Private reservations to date are 18 per cent higher than the prior year.

“Land supply and housing demand across our regional markets remain healthy. We are focused on the delivery of increased margins and an enhanced return on capital. This is being achieved by a disciplined approach to land investment, growing volumes with limited additional overheads and increasing the conversion of strategic land. Our target is to deliver annual completions of 2,750-3,000 units in the medium term.

“In the rest of the group, Miller Developments experienced strong occupier and investor demand on its key long-term developments whilst Miller Mining continued to deliver profits and positive cash flow in a difficult market.”