Housebuilding blow

Jobs lost as Stewart Milne falls into administration

Stewart Milne - housing and housebuilding
Stewart Milne is still seeking a buyer

Housebuilder Stewart Milne Group has plunged into administration with the immediate loss of more than 200 jobs.

The Aberdeen-based construction firm said it had faced “significant challenges” since Covid. It has been put up for sale twice but has not been able to secure a buyer.

Administrator Teneo said 217 jobs will be directly affected with hundreds of other sub-contractor roles also expected to be impacted.

Six of the company’s subsidiaries have also been placed into administration. Daily Business reported problems at the company earlier today.

The whole group was put up for sale in April 2022 when its founder and main shareholder Stewart Milne decided to retire after nearly 50 years at the helm.

But later that year the sale process was put on a pause amid the economic turmoil that followed the mini-budget introduced during Liz Truss’s brief reign as prime minister.

The company confirmed last year that it was again seeking a buyer after posting group results for the year showing a £16.5m pre-tax profit from turnover of £172.3m.

The results include £48m pocketed from the sale of Stewart Milne’s timber frame business to Donaldson Group in 2021. A further gain of £11m was recorded from the liquidation of its subsidiary, Countesswells Development. The combined £59m offset operating losses of £34m, the firm said.

Stewart Milne has offices in a number of locations including Aberdeen, Edinburgh, Glasgow and Manchester.

Development sites include Shawfair in Midlothian and Letham Heights in Haddington, East Lothian; Brackenhill Park in Hamilton; Monarch’s Rise in Arbroath; Dargavel Village in Bishopton; and Charleston at Cove, Aberdeenshire.

Founder Stewart Milne, a former chairman of Aberdeen Football Club who also put his £7.5 million mansion on the market, said it was “devastating” that the business was faced with “no option” but to appoint administrators.

Stewart Milne
Stewart Milne: devastating

He said in a statement: “I am devastated by this totally unexpected outcome of the sale process and struggling to accept it, given the profound impact it will have on employees, sub-contractors, suppliers and customers.

“Stewart Milne Group was up for sale and, following significant interest, two bids were submitted. The bank has not accepted either bid and withdrawn its funding which left the directors with no option but to appoint administrators.

“I tried everything I could to find a way to achieve a better outcome for the business and the people who depend on it. I believe one of the bids could have delivered a comparable, financial return to administration and, crucially, allowed the business to continue to operate, safe-guarding hundreds of jobs and protecting livelihoods.”

Adele MacLeod, from Teneo, said: “The downturn in the UK housing market combined with an extensive sales process not resulting in any viable offers has ultimately led to the need for the directors to place Stewart Milne Group Limited and some of its subsidiaries into administration, regretfully with some immediate redundancies.

“We continue to assess all the options in respect of the group’s Scottish development sites and encourage any party with an interest to get in touch.”

A spokesman for Lloyds Banking Group, the parent of Bank of Scotland, said: “When a company experiences financial difficulties, we will always try to find a solution that places the business onto a sounder financial footing without the need for any insolvency process.

“Unfortunately, despite several years of support and forbearance, including multiple maturity extensions to the borrowing, this has not been possible in this instance. We will now work with the administrators, as they consider the best options for the business.”

9 Jan: Glasgow-headquartered housebuilder Merchant Homes Partnerships has ceased trading, and 22 employees have been redundant by liquidators Mark Harper and Steven John Parker from Opus Restructuring & Insolvency.

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