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Miller Homes joins rush to stock market

Miller Group has announced plans today to float its homes division in a long-anticipated move that helps confirm the robust health of the housing market.

A flotation of one of Scotland’s biggest private companies has been on the cards since the private equity company Blackstone acquired a 55% stake in the company. The company launched a review of its business in March but it was the sale of Miller Construction to Galliford Try in July that cleared the decks in preparation for floating the homes business.

An estimated price tag of £400 million was put on Edinburgh-based Miller last year and as the housing market has continued to recover there should be no shortage of demand. Miller has been expected to join the rush of house builders to market.

At its housebuilding arm, underlying profits almost trebled at the half year stage. Profits before interest and one-off items surged 189 per cent to £19.1m following a “significant” improvement in margins and an increase in average selling prices, which rose 11.9 per cent to £198,000.

As of 30 June, Miller Homes had forward sales for the second half of £124 million (641 units), compared to £92 million (518 units) last year.

Miller Homes is a top ten national housebuilder by volume of completions in selected regional locations in the United Kingdom, in particular in central Southern England, the Midlands, the North of England and central Scotland. Miller Homes has no operations in the London housing market. The Group was founded in Edinburgh in 1934 and initially focused on house building in and around Edinburgh, expanding into England in the late 1940s.

In the late 1990s and 2000s the homes business grew through acquisitions of smaller housebuilders. This included the acquisition of Cussins Homes in 1999, Birch Homes and the Yorkshire region of Crest Nicholson both in 2000, and the purchase of Fairclough Homes in 2005.

Chris Endsor, chief executive of Miller Homes 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.”

New chairman, Tony Rice, said: “I am delighted to have been appointed at such an exciting time in the company’s development. We have a highly experienced and capable executive team and have recruited a strong board. Miller Homes is well positioned to take advantage of the opportunities for growth and the creation of shareholder value in the future.”

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