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Mon March 01 2021

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Miller Homes to float

23 Sep 14 Top 10 house-builder Miller Homes is seeking a stock market listing.

The company said that it aims to raise £140m to reduce debt and increase operational flexibility to take advantage of growth opportunities.

Miller is one of a raft of businesses widely reported to have been waiting for the Scottish referendum to be out of the way before announcing an initial public offering (IPO).

There has long been speculation about Miller’s plans. In December 2011 private equity group Blackstone Group took over 55% of Miller Group, through its GSO Capital Partners arm, for £160m. Other main shareholders are Royal Bank of Scotland, Lloyds Banking Group and Noble Grossart.

Following the offer, the free float is expected to be a minimum of 40% of the issued share capital of Miller Homes.

Miller lost £152m in 2010 and £86.6m in 2011. It returned to profit in 2012, making £6.6m before tax, and £10.4m profit before tax in 2013.

In June 2014 Miller Group sold its construction business to Galliford Try for £16.6m.

Chief executive Chris Endsor said: “Our distinctive focus and deep knowledge of the regions in which we operate, together with our large and well-located strategic land bank, position Miller Homes to drive strong and sustainable growth and to benefit from the continued recovery in these regional markets. It is an excellent time to be operating in the housebuilding sector, with demand for new housing continuing to grow supported by improving macroeconomic conditions and mortgage market and a more favourable planning environment. We are proud of what we have achieved so far and look forward to developing our business and creating value for our new stakeholders as a publicly listed company.”

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It is expected that the offer will complete in October 2014 and that, following admission, Miller Homes will be eligible for inclusion in the FTSE UK Indices.

There will be no members of the Miller family on the board of the publicy-listed Miller Homes, althouth they will retain control of the rump Miller Group as a property development business with a mining joint venture.

Miller Homes – key financials

Core completions grew from 1,515 units in 2012 at an overall average selling price (ASP) of £170,000 to 1,684 units in 2013 at an overall ASP9 of £181,000 and 845 units in the six months to 30 June 2014 (30 June 2013: 660) at an overall ASP of £198,000 (30 June 2013: £177,000).

Revenue increased by 40.8% to £173.6m in the first half of 2014 (H1 2013: £123.3m).

Adjusted operating margin increased to 11.5% in the six months to June 2014 (H1 2013: 4.6%).

Return on capital employed (ROCE) increased to 9.3% (H1 2013: 4.0%).

As at 30 June 2014, Miller Homes had forward sales for H2 2014 of £124m (641 units), compared to £92m (518 units) as at 30 June 2013.

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