“Our performance in 2010 demonstrates the comprehensive strength of the group’s diversity,” the company said in a trading update. “We are soundly financed, have a clear strategy, and possess focussed and experienced teams who will drive the business forward.”
Miller sold 1,915 new houses in 2010, down 7% on 2009, although the average selling price was up 5% to £168,000.
The Construction division was boosted by major framework agreement appointments including:
- NHS Procure 21+ (estimated £28bn spend over 6 years)
- North of Scotland Area Hub (estimated £400m spend over 20 years)
- Royal Mail (estimated £200m spend over 4 years).
The increased focus on partnerships and frameworks has provided a more secure pipeline of projects, the company said.
The Construction business has also been restructured into four regions to capitalise on opportunities in the Southeast and Midlands. Construction activities now delivered through four regional businesses covering Scotland, the North of England, the Midlands and Southwest, and the Southeast. Miller Asset 24 has been established to provide a broader property service to clients, while Miller Defence is targeting framework opportunities in the defence market.
The Miller Group is the UK’s largest privately-owned housebuilding, property development and construction company. It also has mining and property development divisions.
The company said that housing sales volumes started the year encouragingly but market confidence diminished after the General Election and the Government Spending Review, resulting in a disappointing final quarter. Forward sales are lower than this time last year, with around 17% of forecast sales secured for 2011.
“Mortgage availability continues to be the biggest hurdle for our customers, especially for first time buyers”, the company said. “We have countered this by offering shared equity products, however an improvement in industry volumes is dependent on an increased supply of mortgages. We anticipate a fairly steady market in 2011 and conditions will improve as confidence in the economic recovery builds.”
Miller Homes is currently operating from 82 active sites, with 14 new developments opened during 2010. A further eight new site starts are planned in 2011. The landbank stands at 6,300 units (2009: 8,300 units) equivalent to 3.3 year’s supply (2009: 4 years). Miller plans to buy 700 plots in 2011.
The company anticipates achieving planning for around 14,900 plots on 40 sites over the next 5 years. This land will be procured at an average discount to market value of 14% and so will deliver enhanced operating margins.
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