He may no longer be the carefree youth who proposed to his wife a week after they met, but Keith Miller’s more considered approach to business looks set to see the Miller Group pass the £1bn-turnover mark.
One week after his first date with Lee, a former Miss Scotland, Keith Miller asked her to marry him. It was in a bar in Glasgow. She said yes, and they were married six months later. “Ah,” he smiles, “the things you do when you’re young …”
Thirty years later, and still happily married to the same woman, the chief executive of the Miller Group does not strike you as a spontaneous man, ready to throw caution to the wind. As head of the family firm, his achievements have been made through quiet determination, an adherence to the presbyterian work ethic and astute business decisions taken at the right time – for example, the purchase Fairclough Homes for £264m in September this year. That move surprised the market, which had expected Gladedale or Redrow to pounce, but Miller had been quietly eyeing the company for two years, just waiting for the right moment.
Understandably, given his recent success, Miller looks comfortable in his spacious and impeccably neat office. On the wall is a framed photograph of one of his racing yachts, a reminder that the Miller family fortune is estimated at £498m. He may look at ease, but his cautious, buttoned-up approach is in evidence as he talks about the highs and lows of the company, the process of integrating Fairclough and his determination to keep the family firm private.
The Miller Group was founded by his father and two uncles in 1934. It was a contractor with a coal mining and civil engineering business, but by the time Miller joined the firm in 1975, the company was exposed to high-risk large-scale roads projects. He took over as chief executive in 1994, when 85% of turnover was generated by large-scale construction contracts and the company was haemorrhaging money. “I became aware that we couldn’t go on with that model,” he says. “So, we bought four housebuilding companies and a number of large commercial property portfolios, and sold our coal mining and civil engineering businesses.”
Miller scaled down the construction side of the business and diversified into housebuilding, today the biggest part of the business besides commercial development. The Fairclough acquisition – equal to about two-and-a-half years of organic growth in terms of size – turned Miller into a top 10 housebuilders. This immediately gave the company the ability to complete 4000 homes a year, compared with 2500 in pre-Fairclough days. The firm is now forecasting a £1bn turnover for 2005.
I think we got Fairclough at a reasonable price. The state of the market was an advantage because better prices were available
However, some questioned the rationale of the expansion at a time when demand for houses is slowing. Miller says it was exactly the right time and that he did not overpay. “I think we got it at a reasonable price. The state of the market was an advantage because better prices were available.”
He says financing such a big acquisition was less difficult for Miller as a private company because it did not have to explain itself to the City. “Fairclough was easier for us because the market is averse to taking on debt, and I don’t think that’s very clever.”
The idea of taking the business public is not on the agenda: “If anything, the Fairclough acquisition has put it back, not forward.” He also insists that, contrary to rumours, Miller has no need to access more capital to continue on the acquisition trail, because that too is not high on the agenda. “We don’t need acquisitions because we can grow the business organically,” he says. He has a point – the company has grown year-on-year for the past 12 years. But like most ambitious chief executives, he will never rule out acquisitions “if the right opportunity comes along”.It is still early days after the acquisition – Fairclough and Miller Group only became a single entity six weeks ago. Miller has handed the integration process to the management at Miller Homes. The priority at the moment is to combine where there is regional overlap, and by the end of the year, the Fairclough brand will be dropped. CDC 2020, Fairclough’s southern operation, is being closed and integrated within Miller’s St Albans office.
The acquisition aside, one of Miller’s biggest concerns is, like all good housebuilders, the planning system. “The planning process in this country has just become so politicised. Retaining the green belt to the extent that we are is actually damaging to the environment because people forced to live 20 miles away from where they work are choking up the roads by driving.”
With such views on freeing up land, Miller must be all the more pleased that his company’s landbank has almost doubled through Fairclough.
I am not necessarily the last of the Millers. We have plans in place like all good businesses
And Miller clearly prides himself on staying one step ahead of the market: “Anyone going off the rails in this sector has not anticipated changes in the market. Look at us; we could have just stayed as a contractor. It’s not just by accident; we have been bloody careful,” he says. Care is something he clearly prides himself on: “A lot of contractors do things they shouldn’t have because they haven’t assessed risk. Within some companies there is almost an acceptance that you’ll make mistakes, and that is something that we would not subscribe to.”
Although he comes across as a perfectionist, Miller is not afraid to delegate and has always encouraged staff autonomy. “You have to have people who are not scared to challenge the views of those above them. It’s like running a ship. As captain you don’t have to touch the wheel all the time, just give it a slight adjustment now and then.”
At the age of 56, being a meticulous planner, and being the only person from the founding family left at the company, you would expect Miller to be thinking about succession. And of course he is, but he doesn’t want to talk about it, insisting he is still a “youngster”. In the past he has said he does not mind that his three daughters decided not to join the business. So it’s a surprise that when pushed on the subject he hints that family members may take a role in the business after he leaves: “I am not necessarily the last of the Millers. We have plans in place like all good businesses.”
Despite the best of planning, there have still been problems for Miller. In 2004, it lost out on a £400m portfolio of surplus NHS Estates properties, despite a lengthy and costly bidding process that led to the company being named preferred bidder, only for the deal to collapse because of a change of policy by central government. Miller rolls his eyes at the mention of the deal, but will not comment.
He is much brighter and relaxed as the conversation turns to his personal life. He is immensely proud of his CBE, which he received in this year’s New Year’s honours. He jumps up to point to a photograph on the shelf behind his desk of him with his wife and daughters at Buckingham Palace on the big day: “It was a huge thing for me,” he says. “A great thing to receive.” And with the emotion in these words, Miller suddenly gives a brief glimpse into what unites the young man impatient in love and the older man who has spent his working life transforming his family’s business into one of the biggest housebuilders in the UK.