Miller Homes hails market conditions for ‘strong’ performance in 2018
Based in Edinburgh Miller Houses remains on track to meet its 2021 target of 4,000 homes per year after its annual accounts revealed strong financial performance in 2018, increased headcount and increased forward sales.
The homebuilder’s operating profit rose 15% to £ 151.1million in 2018, with inflation pushing the average sale price up by £ 10,000 to £ 249,000.
Operating margin exceeded the company’s 20% target for the first time and was ‘ahead of plan’, up from 19.5% in 2017, while revenues were 11% higher at 747 million pounds sterling.
However, net profit fell to £ 82.9million from £ 87.7million as finance costs more than doubled to £ 51.1million due to a change in structure of the company’s debt effective October 2017.
Other highlights of the accounts include:
- A 14% increase in the total number of completions to 3,170 units (2017: 2,775 units)
- Return on underlying capital employed (ROCE) of 33.4% (2017: 33.0%)
- Around 3,900 plots acquired over the last 12 months
- Forward sales of £ 292million and 6% ahead of last year
- A 10% increase in the land reserve owned to 9,174 plots (2017: 8,364 plots) supported by 3,350 controlled plots (2017: 5,374 plots)
- A 5% increase in the strategic land reserve to 17,331 plots (2017: 16,561 plots)
The homebuilder also reported an 11% increase in headcount, to around 970.
Managing Director Chris Endsor said, “I am delighted to report an excellent 2018 result package for Miller Homes with improvements in all key metrics. Of particular note is the 15% increase in operating income to £ 151m which allowed us to achieve an operating margin of 20% for the first time and ahead of plan. The land investment was 12% ahead of 2017 at £ 204million and at the same time the company generated £ 82million in free cash.
“Demand for mid-range housing continues to be strong, supported by low interest rates and government support with the purchase assistance extended until 2023. We continue to have confidence in the resilience of the UK regional housing markets in which we operate and remain committed to our strategy of incremental volume growth to 4,000 units. Market conditions are continuously monitored with the optionality of our business planning, which allows us to tailor the purchase of land according to demand and opportunities.