Last updated 14 April 2023
Miller Homes
Miller Homes was founded by the Miller family, who sold out in 2017 and since then the group has been owned by a succession of private equity groups.
In 2022, Miller sold nearly 4,000 homes annually and turned over £1.1 billion.
Financials
The downturn in the housing market and the then austere environment for construction generally proved challenging for the then larger Miller Group, but a slimmed down Miller Homes bounced back strongly from the worst of Covid-19.
Turnover has continued to surpass pre-pandemic levels and in 2022 reached £1,169 million (2021: £1,045.8 million). Proforma profits at an operating level hit £216.1 million (2021: £203.6 million) after exceptional items fell back to £174.9 million (2021: £192.7 million). Before tax, proforma profits slipped to £144.4 million (2021: £145.2 million).
To view the financials for Miller Homes, visit Companies House and use Company ID SC255429.
Operations
Miller had steadfastly operated a hybrid construction model with interests ranging from property and housebuilding to contracting, but after a period of considerable turmoil leading up to the acquisition of a majority stake in the business by the controversial US private equity group Blackstone brought a cash-injection of £160 million.
In summer 2014, the construction business was sold and in January 2016 a 50% stake in the Ffos-y-fran Reclamation Scheme was sold to Miller’s partner, Argent. These sales left the group as a focused housebuilding company and Miller Homes is now among the UK’s top 10 housebuilders by most measures.
The group operates three regions, Scotland, North of England and Midlands & South, which work from a network of 10 regional offices.
In 2022, completions at Miller rose 3% to 3,970 units (2021: 3,849 units) and the average selling price (ASP) rose 4% to £286,000 (2021: £275,000). The consented landbank fell back to 13,914 units (2021: 15,169 plots).
Glenigan Data
In the 2022 calendar year, Miller applied to build 4,345 homes in detailed applications (2021: 4,424 units). After dropping out of the top 10 in Glenigan’s ranking of housebuilders by planning activity, Miller returned to this upper echelon in 2016 and in 2021 was ranked in eighth place (2021: Ninth).
Conclusion: Contraction ahead?
Revenue has easily surpassed pre-pandemic years in the last two years of trading but growth slowed in the latest year and a retreat seems likely, given the wider economic problems with the cost of living and interest rate rises. Another indicator can be found in the group’s landbank, which was trimmed by 8%.
A dip in sales looks most likely in the Midlands & South, which in the latest year enjoyed the strongest trading with completions up 7% to 1,633 units, but the number of active sites was cut by 15% to 22 and the landbank by 17% to 5,943 plots. The group’s native Scotland produced a disappointing result with completions down % to 863 units and the landbank has been slashed by 26% to 1,787 plots.
In contrast, the landbank was grown by 10% in the North, where completions rose slower at 3% to 1,474 units. Major developments expected to start in this region in 2023 include 299 homes at Consett in County Durham (Project ID: 19283809).
Overall in 2022, the operating margin slipped back to 18.5% (2021: 19.5%) prior to exceptional items including a £20.6 million fire safety charge (2021: £5.5 million) and a £21.1 million charge (2021: £5.4 million) for costs associated with 2022 acquisition by private equity group Apollo. At a proforma level, return on capital investment (ROCE) rose to 35.2% (2021: 34.4%), which will please the new owners.
Since 2017, Miller has been owned by a string of private equity groups, which always leave questions over their exit. US private equity group Blackstone bought out the Miller family then sold to Bridgepoint, which in January 2022 sold out to a fund managed by Apollo. Over this period, the group has grown and after the construction and mining interests were sold, Miller substantially raised its target to a figure of 4,000 completions by 2021, but has fallen short then and in the latest year.
The planning programme subsequently grew and the landbank swelled, but ambitions were tempered before the COVID-19 pandemic, which had had a significant impact on the overall economy including the housebuilding sector and completions.
Despite the pandemic, the extension of Help to Buy to March 2021 and a stamp duty holiday created buoyant conditions for housebuilders and in 2021 Miller was selling from 70 sites as completions surged by 47%. Given the hiatus created by the pandemic, narrowly missing that target of 4,000 sales should not be seen as a negative but Glenigan’s data shows planning activity is slow. In 2021, there was a 42% slump in the number of units in detailed planning applications submitted by Miller. The latest year brought another fall, albeit much smaller, and the planning pipeline remains well short of pre-pandemic levels.
The group is looking to build bigger developments with a greater emphasis on family-friendly homes but some apartments are moving into the mix. In 2022, the average planning application submitted by Miller contained 189 units (2021: 123 units). Of this total, 87% were some form of house and the balance comprised apartments (2020: 99% houses/1% flats).
Miller has acquired Wallace Land & Investment, which brought 17,145 plots to the landbank and is bringing a number of major parcels of land through the planning process such as plans for 170 homes at Gilmerton Station Road in Edinburgh (Project ID: 21543874). Miller also acquired timber frame manufacturer Wallace Timber and both should help the group sustain production.
The ongoing uncertainty created by Brexit and the pandemic diminished the likelihood of a float in the near term and Miller once again found new private equity owners, but like their two predecessors Apollo will also want an exit sooner or later.
Winning Work With Miller Homes
Suppliers to Miller Group must agree to work to a code of conduct, while products are sourced responsibly. Timber, for example, must be certified by the Forest Stewardship Council or the Programme for Endorsement of Forest Certification.
In October 2013, Miller announced that the group would look to set up a ‘more structured relationship’ with regional builders’ merchants, where the group spends around £30 million a year. As part of this plan, the Builders Merchants Federation (BMF) ran a four-phase tendering process and in September 2014, companies that were pre-qualified against Miller Homes’ supplier code of conduct were invited onto a new panel and provided with details of procurement reviews for existing national products to the end of 2015 and also with details of new areas of spend where Miller is seeking to introduce some form of national agreement.
For more information on procurement at Miller Homes including the company’s Supplier Working Together Brochure, please contact – mh.procurement@miller.co.uk
Key Miller Homes procurement contacts include:
Production director – Michael Jackson, tel: 0870-336-4800
Group quality director – Garry McDonald, tel: 0870-336-4800