Miller Group's interim pre-tax profit higher at £36m

Miller Group’s interim results (six months to 30 June) show turnover stronger at £550m (£350m) with pre-tax profit climbing to £36m (£28m).

The group wants to expand its housebuilding capability beyond 4,000 a year through further acquisitions.

Miller’s biggest-ever deal was the £264m acquisition of Fairclough Homes from Centex Corporation in September 2005.

It boosted Miller’s housebuilding capability by around 40%. “At the new size, we have greater buying power on materials,” said Miller, “and it has helped us move our under-weight regions up to critical mass, so we are getting better overhead recovery.

“In the north west of England and in Yorkshire, Fairclough bulked up our existing presence, while in Northern Home Counties it gave us a new region – we weren’t there before.”

Miller says he wants to set up shop in new areas but believes it is more difficult setting up from scratch, so prefers to make acquisitions. Asked what size of war-chest he is carrying under his arm, he said: “There’s no such thing as a war-chest. We’ll pay as much as it takes.”

Miller operates through three divisions: housing, property and construction.

In property, there is a push to undertake more work in Europe. “We’re strong in Portugal, Hungary and Germany,” said Miller, “and now we’re working in Denmark, Romania and Poland. We do everything with a good quality local partner.”

Construction work produced a margin of 1.2%. Margins are no higher in PPP work than in other parts of the construction business. Miller said the advantage was that PPP provides an opportunity to “invest equity and make money”.

“In PPP we have stepped up bidding activity,” said Miller. “It’s not that we’d previously let up our interest, rather that we’ve never taken a shot-gun approach as PPP is very expensive to bid.”

Miller is short-listed on four PPP projects.