Stuart McGregor, chief operating officer, Stewart Milne Group
Stewart Milne Group wants to see more long-term relationships with major UK housebuilders as it seeks to grow its timber systems business, which manufactures homes offsite.
Speaking as the company unveiled a £40m group-wide increase in revenue to £279.2m for the year to June 2018, chief executive Glenn Allison said demand for offsite construction was growing. The housebuilder and timber systems manufacturer also saw its operating profit double from around £7m to £14m.
However, it said that because of the adverse weather conditions which affected the UK construction sector in March 2018, the full impact of the increased sales coming from strategic customers would not be felt until the next financial year.
The business supplies its systems to major contractors and housebuilders including Crest Nicholson, Barratt Homes, Balfour Beatty, Kier and Laing O’Rourke for projects including housing developments, hospitals and schools.
The housebuilding business delivered 833 units in the year across its three homes divisions and grew turnover by £39m to £228m. Turnover at its timber systems business grew from £59.5m in 2017 to £60.7m in 2018.
Exceptional charges in relation to the disposal of non-core assets resulted in an overall pre-tax loss of £3.9m, (compared to a loss of £13.7m in the previous financial year) but the group has agreed amendments to its main banking facility which will result in the reversal of amounts previously accrued of £4.7m.
The impact of this reversal will be reflected in the year ended June 2019. Underlying profit for the year to June 2018 was £2.7m.
Allison said: “Building on last year’s improvements, our strong trading performance shows an even greater growth in profitability. We’re now three years into our five year strategy and returning to an underlying profit position for the year vindicates the strategy we have adopted. These results underline the success of the bold decisions we made to invest in broadening our portfolio and footprint in parts of the country where demand continues to rise.”
Chief operating officer, Stuart MacGregor added: “The housing markets in Central Scotland and North West England continue to out-perform the UK national average and we continue to increase investment in these areas to drive further profitable growth for the group. We doubled our homes activity in England in the year to June 2017 and, this year, we have entered into an agreement with Homes England to deliver a further six developments of award winning homes.
“Our homes business in Central Scotland continues to grow and we are bringing an increasing number of new developments to the market in the months and years to come. The five-year outlook for both areas is particularly favourable and we are now very well placed to exploit these strong market conditions.”
“While there are stronger signs of economic recovery in Aberdeen, previously Stewart Milne Homes’ largest market, consumer confidence remains cautious and the new homes market remains slow. Until the market recovers, we continue to focus on delivering on two- and three-bedroom homes along with affordable housing which remain in high demand.”
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