Housing boosts Miller's profit

The Miller Group's housing division enjoyed a surge in profit in the first half of 2005 and helped the privately-owned Scottish group to a record interim profit.

Miller Group's financial fortune was carried firmly on the back of its housebuilding division, where pre-tax profit surged to 37m, well ahead of the 27m achieved in the same period last year.

Miller's housing completions might have been 19% down at 1,060, but the average selling price rose from 171,000 to 195,000. In the full year, completions are likely to run to 2,800.

At group level, turnover of 350m (350m) produced a pre-tax profit of 39m (24m).

Chief executive Keith Miller said the housing division made a better margin, up to 20% from 13% in last year's period, because new regions were expanding and provided better recovery of overheads. Two of the newer regions, Yorkshire and West Midlands, had expanded particularly well.

Asked if senior employees had benefited from the surge in profit, Miller said: "We look after our people throughout the business. There are a range of incentives, from an annual bonus to long-term bonuses."

Margins in Miller's construction division continued to tread water at 1.3% as a turnover of 120m resulted in a pre-tax profit of 1.6m.
"I'm reasonably comfortable with construction," Miller said. "The margin will get to 2% in the full year. Construction is cash-positive, so it puts funds into the group pot."

During the period, Miller was selected as preferred bidder for the 218m Fife Schools PPP.

Going forward, Miller said it is evaluating its involvement in the government's Building Schools for the Future programme. So might it pull out? "No," said Miller. "It just means that we have to be selective."