Last updated 2nd December 2022
Stewart Milne Group
Founded by businessman Stewart Milne in 1975, the Aberdeen-based group ranks as one of the largest privately-owned UK housebuilders, operating across core markets in Scotland and the North West.
The group has offices in Aberdeen (hq), Edinburgh, Glasgow and Manchester and completed around 830 units in its latest financial year, generating a housebuilding turnover of around £200 million. It has around 20 developments underway across Scotland and the North West of England and had a direct workforce of around 890 as at late 2021, down from around 1000 a year earlier.
In spring 2022 the group announced that its core housebuilding business was up for sale ahead of the planned retirement of 71-year old chairman Stewart Milne.
At the same time, the group pointed to major steps having been taken recently to improve efficiency and profitability and to ‘reposition the business for future growth.’ To realise its growth ambitions, the group said significant investment was needed – particularly in its strategic land bank – to create future, high-margin developments. EY has been appointed to advise on the sale. Earlier in 2021, the group sold its £100 million-turnover timber systems business to focus on housebuilding in its core markets.
After its financial results were marred by a £70 million ‘impairment’ on its land bank in over the previous two years – mainly due to a housing market slump around Aberdeen linked to the troubled oil & gas sector – the group’s annual report published in May 2022 pointed to a ‘highly encouraging’ outlook for the business after a balance sheet restructuring, transformation in its product range and with strong forward sales.
Financials
To see the financials for Stewart Milne Group Holdings Ltd. go to Companies House and use company no. SC 558821
Stewart Milne Group enjoyed mixed fortunes in the year to end-October 2021. Turnover at the group rose by 16% to £305.5 million and gross margins rose to 16% from 13% whilst operating profit before exceptionals rose to £13.5 million from £0.8 million previously. The group reported a profit before tax and exceptionals of £0.6 million against a loss of £12.3 million previously. However the firm faced exceptional charges of £8.7 million, against charges of £59.2 million last time and which included restructuring costs and write downs. This left the group nursing a pre-tax loss of £8 million compared to a loss of £71.5 million last time.
The group has been hard-hit by the downturn in the North East Scotland housing market linked to the oil & gas sector slump which left its assets ‘impaired’ by £70 million. But following the sale of the timber business in 2021, the group has returned to a positive net asset position and in May 2022, the group had 70% of current year sales secured. Following the December 2021 sale of the timber business, the group had repaid £61 million of a debt facility to Bank of Scotland, leaving it with a debt facility of £114 million.
Operations
The group operates through three divisions covering Central Scotland with offices in Glasgow and Edinburgh, North Scotland, based in Aberdeen and North West England, based in Manchester.
In the year to October 2021, the group sold a total of 828 units (668 private, 160 affordable), compared to 836 in the previous year (601 private, 235 affordable). At the year end, the group’s stocks were valued at £229 million of which £117.8 million was raw materials, including land banks and £108.2 million was work in progress.
In late spring 2021, the group unveiled a comprehensive re-design of its homes range which aimed to meet increasing demand from buyers – and particularly families, post-lockdown – for flexible space, indoors and outdoors and which it said would generate sales of £300 million with a further £250million in the pipeline over the next two years.
In spring 2021, the Stewart Milne Homes was seeking to buy land in Tayside after a new site in Dundee became of its fastest-selling developments
Glenigan data
The housebuilding business might be up for sale but Glenigan data points to a busy development programme underway at Stewart Milne Group. Detailed plans have been submitted for a £15.5 million scheme of 112 homes by the company at Johnstone in Strathclyde where work is due to start in spring 2023 and run for six months (Project ID: 22124901). Meanwhile, at Stockport in Lancashire, a pre-planning ‘scoping request’ has been made for a £28.44 million Stewart Milne scheme of 180 homes at Offerton Quarry, where work is due to start in early 2024 and run for 10 months (Project ID: 22315614).
Conclusion: sharp focus and regional strengths should serve it well in volatile times.
Stewart Milne has faced some turbulent times recently, particularly as the housing market in its core territories around Aberdeen slowed as the oil & gas sector slumped in the years up to 2021. Today, the oil & gas sector has re-bounded and house prices have been rising in North East Scotland but higher interest rates and the slowing national housing market will not make the job of selling the group any easier. Whoever emerges as the new owner, Stewart Milne Group is set to remain a major player in the new housing markets in Scotland and the North West and its sharper focus as a pure housebuilding and a refreshed product range should serve it well during a volatile time for the sector.
How to win work with Stewart Milne Group
The group puts a premium on innovation and it has been closely involved in projects such as AIMCH – a collaborative initiative on off-site -construction. It also has a track record of working on government-backed and R&D innovation projects across areas such as low energy building fabric, net zero homes, digital working, BIM and other modern methods of construction. The company AIMC4 system won the Housebuilder HBF 2020 Product Award for ‘best building fabric product’.
Key contacts
Stuart Macgregor, Chief Executive Officer
Tel: 01224 747000
Email: Enquiries@StewartMilne.com
Stewart Dalgarno, Innovation and Sustainability Director
Stuart Macgregor, Chief Executive Officer
Tel: 01224 747000
Email: Enquiries@StewartMilne.com