Miller bounces back with record construction orders

Aaron Morby 11 years ago

Miller Group has returned to profit after a £160m refinancing to clear its debt pile earlier this year.

The construction division has cleared the decks of all troubled contracts and starts the year with a record order book of £1.5bn after 12 months of significant contract and framework wins.

A year of recovery for the group saw pre-tax profits reach £6.6m, after a £30m loss the year before.  Turnover was up 5% at £620m driven mainly by construction growth.

Chief executive Keith Miller said: “The group performed well, with underlying profit before interest up 40% compared to last year.

“Although we are continuing to operate in a demanding economic environment, the group has a strong balance sheet and long term committed bank facilities, which provides us with financial flexibility.

He said: “We have made good progress in improving the margins in our consented land bank and, in addition, we have a valuable strategic land portfolio which will underpin our future land requirements.

“Together with a record construction order book and a high quality commercial property development pipeline, the group is strongly positioned for 2013 and beyond.”

Construction division profits halved to £3.2m due to significant upfront business development costs.

Profit for the year included £6m on the disposal of three mature PFI investments, which helped to offset costs in closing out a number of historical contracts.

Miller added: “2012 was an extremely successful year in terms of strengthening our order book, with over £500m of work won during the year, 50% higher than in 2011. This resulted in a year end order book of £844m.

Existing frameworks promise a further pipeline of £686m over the next five years.

He told the Enquirer: “All the signs are that construction margins have reached their lowest level.

“There is a feeling shared by most firms that sensible pricing is returning, although you always have to be careful to avoid the odd rogue bidder.”

Miller Construction has shifted towards frameworks and two-stage bids and is on panels for the Ministry of Justice, Royal Mail, Procure 21+ and the IESE.

Housing was the main profit driver over the year where new land purchased at current hurdle rates delivered increased margins.

Total sales rose 5%  to 1,831 units at an average selling price, increased 6% to £170,000.

Miller said NewBuy and MI New Home accounted for 9% of reservations in the second half of 2012.

“The return of 95% mortgages in the new build sector is an important step for the industry and allows a large number of people to enter the property market who would otherwise be excluded,” he added.

Miller divisions

Construction: turnover £259m (239m); profit £3.2m (£6.8m)

Housing: turover  £266m (£271m); profit £14.5m (-£35m)

Property: turnover £61m (£47m); profit £5.4m (-£8.8m)

Mining: turnover £34m (£32m); profit £9.2m (£7.5m)

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