Change of plan
Stewart Milne to offload £100m timber frame arm
Stewart Milne has seen ‘stellar’ growth of its timber business
Housebuilder Stewart Milne is selling its £100m-turnover timber systems business to capitalise on its strong growth and invest in land for new homes.
Stewart Milne Timber Systems’ (SMTS) said it has experienced “stellar” growth in the last five years, with a soaring order book of £300m and a 20% market share.
The business has strong customer relationships with blue chip builders such as Barratt, Cala and Taylor Wimpey.
The group added that demand for timber frame construction has been rising rapidly, with its use anticipated to double in the next five years to meet government housing targets.
“As housebuilders tackle the dual challenge of achieving net-zero carbon targets and dealing with acute skills shortages, they are increasingly turning to modern methods of construction using renewable sources,” said the group.
Alex Goodfellow, Stewart Milne Group MD of strategic development, who is leading the sale process, said: “With the scale of the opportunity in the growing timber frame market, SMTS presents a highly compelling investment proposition.
“We anticipate attracting a high level of interest from potential buyers who will invest in order to capitalise on that opportunity.”
The group has been investing in SMTS’s product and manufacturing innovation and capacity at its factories in Aberdeen and Witney in Oxfordshire to keep up with demand.
Increased volumes have led to the creation of a third production facility in Uddingston, near Glasgow.
Group chief executive Stuart MacGregor added: “To keep pace with demand, it’s clear that further investment in production capacity in both Scotland and England will be required. As a privately run, independent company, we need to prioritise where we invest in the future.
“Since reopening last summer, after the initial Covid lockdown, we’ve seen record levels of activity in the UK housing sector.
“The strength of our business with its award-winning developments, new homes range and record sales has enabled us to capitalise on these favourable market conditions and positioned us superbly for future growth.
“We have therefore chosen to divest our successful timber systems business and will focus on increasing investment in additional sites for Stewart Milne Homes.
“Using our considerable land buying experience to take advantage of the development opportunities, we will invest in land in the short term and concentrate on growing our homes business in the longer term.”
The group said in May that it was targeting £550 million in revenues with the rollout of a new range of homes to meet the “changing needs of buyers”.