Miller Homes half-year profit up 66% to £38.2m

Chris Endsor

Edinburgh-based Miller Homes said its profit before tax surged 66% to £38.2 million on revenue up 11% to £256.1 million in the six months to June 30 and declared it had “no plans currently” to change its “substantial land investment programme” despite the Brexit vote.

Miller said its order book for the second half of 2016 stands at £275 million, 24% ahead of last year, and that it is well positioned for significant improvements in its full year results.

Chris Endsor, chief executive, said: “Market conditions were buoyant throughout the first half of the year with no discernible impact in the run up to the EU referendum.

“This has continued with our sales rate in the second half of the year being over 20% ahead of the same period last year.

“It is too early to evaluate fully the implications of the EU referendum decision, although it is evident that regional housing market conditions and sentiment continue to be strong.

“There remains high underlying demand for quality family homes in our selected regional locations which are outside of London and the South East underpinned by supportive mortgage lenders in a low interest rate environment.

“Whilst we will remain vigilant for any negative signs arising from the EU referendum decision, we have no plans currently to alter our substantial land investment programme and are confident in our continued strong future performance.”

Miller said its strong revenue reflected a combination of a 6% increase in core completions to 1,104 units, a 1% increase in average selling price to £221,500, and an increase in land sales and management fees to £11.5 million, reflecting the part disposal of a large strategic site.

The firm said it continued to utilise the Help to Buy schemes in both England and Scotland, “and combined they represented 32% of private completions.”

Miller said its defined benefit pension scheme, which was closed to new entrants in 1997 and to future accrual in 2010, saw its deficit soar to £40.5 million from £29.7 million on Dec 31, 2015, despite company contributions of £2 million in the period.

“The scheme’s assets and liabilities were adversely impacted by declines in bond yields in the period,” said Miller.

“The investment strategy is being reviewed with a view to reducing volatility by increasing the scheme’s liability hedge ratio.”

Net debt fell to £123.6 million from £140.2 million at the end of last year, “notwithstanding an increase in land spend during the period.”

“The core debt figure at the period end was £95.5 million resulting in significant headroom in the £210 million bank facility which is committed through to 2020,” said Miller.