Miller Group in the red to the tune of £170m

Miller Group has announced a pre-tax loss for 2008 running to £170m.

Even without exceptional items running to a total of £136m it would still have ended up logging a £34m loss.

Turnover of £1.0bn was down on the previous figure of £1.3bn.

The latest figures cover the 12 months to the 31 December 2008.

The elements to the £136m hit include:

• £86m write-down in the value of the housing land bank
• £20m housing goodwill impairment charge
• £16m property write-down
• £15m restructuring costs

The bright spark amongst the gloom was the performance of Miller’s construction division where a turnover of £620m generated a profit before interest of £14m. The group said that the operating margin of 2.2% was “in line with the best performers in the sector”.

It was a “record result” for construction. Despite a slowdown in the economy in the second half of 2008, there is still a record forward order-book running to more than £700m.

By contrast, Miller’s housing division was in a right old pickle.

On top of an operating loss of £15m there was an exceptional charge of £110m which took the operation into the red to the tune of £125m.

But that figure fails to include is any allocation of Miller group’s debt costs which ran to a total of £52m. Presuming the group’s construction business to be cash-positive, that £52m debt charge would all have been the result of borrowings taken on to build up Miller’s house-building capability.

By contrast, Miller’s property division was free from major surprise.

Having taken “decisive action” from the middle of 2007 to reduce its commercial property exposure, there had been over £200m-worth of disposals in the second half of 2007 and the first quarter of 2008.

“Property values are beginning to look attractive” said a statement by the group, “and it is likely that during 2009 investment opportunities will arise which we intend to selectively pursue.”

During 2008 there was a net cash outflow from the business of £160m – a contrast with the £60m inflow during 2007.

Miller’s net assets fell from £340m to £80m.

The net pension fund liability grew from £500,000 to £7.8m.