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Tue November 24 2020

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Restructuring costs push Stewart Milne into the red

21 Nov 13 Stewart Milne Group made a pre-tax loss of £5.7m in the year to 30 June 2013 on the back of further restructuring costs.

The group saw turnover drop 21% to £211m (2012: £268.1m) as it continued to realign its operations to focus on its core businesses of homes and timber systems.

Operating profit before exceptional items was £20.5m.

In its 2012 results, Stewart Milne took a £6.9m one-off hit on the closure of its construction contracting business, sold to Kier in April 2012 for £1m. It also had £1.3m of other one-off restructuring costs that year.

In the latest full year, a further £13.8m of one-off restructuring costs have been charged.

However, the board said that the core business remained strong and bank debt had been reduced by £23m during the year.

Earlier this month, Stewart Milne Group secured a £225m finance facility with Bank of Scotland that is expected to support the erection of more than 5,000 new homes in the UK over the next few years.

Within the homes divisions, unit numbers for the year were up 10% following new development launches.  The company plans to open 20 new developments in the next 18 months. The landholding was also strengthened with 2,500 consented plots to deliver business plans over the next three years and a further 11,000 plots controlled under conditional contracts.

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The timber systems division recorded a 30% increase in turnover to £27.5m for the year, achieved through a combination of increased levels of new business and higher volumes from existing customers.

Chairman and chief executive Stewart Milne said: “We are pleased with our trading performance. It demonstrates the benefit of us remaining independent, driving the business forward, designing homes and creating products to meet customers’ needs. We are financially robust and with the improving market conditions we are well positioned to capitalise on growth opportunities throughout 2014 and beyond with a strong balance sheet and renewed bank facilities.

“We have experienced and talented teams in place across the group and will continue to focus on our customers as we bring new housing developments on stream in Scotland and England and develop our innovative timber systems products to meet market demand.”

Group managing director Glenn Allison added: “Our homes division is well placed to capitalise on the demand for new homes in both Scotland and the northwest of England. We have finance in place to realise our plans and we are planning to launch over 20 new developments in the next 18 months to meet consumer demand. Government help to buy schemes in England and Scotland are improving consumers’ ability to move and we will continue to build on our strong working relationships with mortgage lenders. Our focus on customer satisfaction is delivering consistently high feedback with 98% of our customers happy to recommend us.

“Our timber systems business is benefitting from a significant number of house builders and contractors adopting timber frame as the favoured option to support their growth plans and we are continuing to look at new ways to help customers meet their needs, including through the development of new products. Innovation is a key element of our forward plan for this division. We continue to see a steady stream of new contracts, including for the athletes’ village for the Commonwealth Games, and Hatfield University’s new student village.

“We believe that the overall outlook for the sector is positive and that we will achieve our strategic plan over the next five plus years.”

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