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Miller Homes Reports 32 Percent Growth in Turnover

Miller Homes recently reported a 32 percent turnover growth, making it the third UK housebuilder to release a positive trading update.

By announcing a higher revenue of £229.7m for the first six months of this year, Miller, which is based in Edinburgh, joined Barratt Developments and Cala Group in showcasing encouraging conditions in the housing market.

These results from Miller reflected a 23 percent increase in core completions over the same period in 2014 and an 11 percent increase in average selling price. Almost 300 were in Scotland, which is 23 percent higher than at the same position last year. Profit before tax also reached £23m, a 41 percent increase over the first half of 2014. The operating margin was at 14.3 percent, up from 11.1 percent last year.

Chris Endsor, Miller Homes chief executive, said that the results demonstrate a successful outcome of the company’s strategic plan, which is focused on producing greater volumes of family housing in good quality locations.

With more completions from higher margin land, operating margin and return on capital are also improving. Mr Endsor said that Miller’s current order book is fully one-quarter ahead of 2014, positioning the company for significant future growth.

He added that the traditionally quiet summer period was also busy, with sales performance since the end of June continuing to be strong. The order book for the second half of this year is at £221m.

Miller is presently 93 percent sold for this year and in a good position to see significant improvements this year.

An additional 12 sales outlets are opening in the latter half of 2015, bringing the total outlet count to more than 70 before the year concludes.

Miller confirmed that it continues to utilise the Help to Buy scheme in both England and Scotland, and together they account for 34 percent of the company's private completions.

Miller’s net debt totalled £151m at the end of June, down from £166.7m last year.

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Last year the company cancelled plans for a flotation, citing stormy market conditions.

Cost of sales went up from £139.4m to £180.3m. Land spent in the reporting period increased from £30.6m to £60.8m. Company representatives said that Miller’s strategic landbank increased to 16,629 plots, making it one of the sector's largest relative to current volumes.

The firm also said that it has new financial resources of £210m with current lenders up to 2020, and on much more favourable terms.

Mr Endsor added that the company’s new banking facilities enable it to undertake a substantial increase in the amount of expenditure planned for land, which maximises its strategic landbank. When combined with the growing demand for Miller Homes products, this position provides the basis for growth next year and beyond.

He added that if market conditions remain stable, Miller is in a good position to deliver its projected 18 percent medium-term operating margin as well as the projected 25 percent return on capital employed.


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