Miller watches the margins to double profits in a year

A turnround in Miller's construction division helped the group to double its profit before tax last year to œ11 million.

James Miller, chairman, said operating margins had doubled during 1996. "This was achieved by declining to take on work with insufficient margins."

During the 12 months to December, Miller sold its Miller Homes Southern business for œ16 million and bought Wimpey Mining for an undisclosed sum.

Keith Miller, chief executive, complained about the competition from rival contractors in open-market tendering.

"The industry trading environment has continued to prove testing," he said, "with no shortage of companies prepared to price tenders for work or land at unrealistic levels in the misguided view that either a litigious approach or inflation will lead to satisfactory returns.

"The unrealistic firms are mostly at the bottom end of the market, and predominantly in smaller contracts. We are moving away from that area."

Miller is preferred bidder on five PFI projects in the health sector, one of which has already commenced at Stonehaven. Miller is also bidding for several water projects in Scotland in joint venture with Scottish Power.

The construction division returned to better times, turning a œ4.4 million loss into a profit of œ4.9 million.

Total construction turnover was 23 per cent down, though the workload from non-standard opportunities was almost 50 per cent ahead.

During April, Miller's three construction businesses were merged into two, based in Edinburgh and Winchester respectively. Miller has more employees than a year ago, the tally having risen from 1,950 to 2,200.