Scottish firm posts pre-tax profit of £52.5m, a rise of 31%, with housing division performing best
The Miller Group was in a bullish mood this week after it revealed a strong set of results for 2004.
The Scottish construction, housing and development firm said that pre-tax profit had risen 31% to £52.5m.
Profit rose in all three divisions. Chief executive Keith Miller said it was driven by a fairly strong market, a more efficient way of working, better procurement methods and improved on-site working processes that had improved margins. In the past five years, group profit has trebled and dividends and shareholders’ funds have doubled.
The housing arm, Miller Homes, was the best performing part of the business: margins rose from 12% to 15%. Miller Homes aims to sell 3500 houses a year by 2007.
The group overall invested £500m in land for housing and commercial property in 2004.
Miller said construction was a key part of the business, though it was concerned about margins. Miller said: “It is a perennial problem: we believe margins are too thin in construction. But we are cash positive and margins moved up last year.” He said the group was achieving margins of just above 2%, and although it had no specific target, there was scope for improvement.
Miller said the company was keen to pursue opportunities in PFI but sounded a note of caution because costly bid processes had made Miller selective about which projects to bid for. It reached financial close on £300m of LIFT projects at Barking and Havering, and Leeds.
“We have concerns about the levels of government expenditure long term,” he added.
All Miller’s construction work was procured on a negotiated basis and clients included repeat customers like Sainsbury’s and Morrisons.
Of the commercial property market Miller said: “We have had a good run on the investment side of the business, the retail market has been strong and there are some signs of life in the office market.”
Miller would like to make another acquisition to expand the business in the south. Last year it spent £50m on buying land in the area, from its office in Basingstoke, Hampshire.
Last year the firm was increasingly focused on international work, in Hungary, Portugal and Denmark.