Half-year profits more than doubled at Edinburgh housebuilder Miller Group, as the company prepares plans to build hundreds of new homes at two sites in Fife.
The group revealed it is working with an unnamed partner on a joint venture for around 400 new properties at sites in Markinch and Kirkcaldy.
It is thought a first phase at Markinch’s Sappi Road could accommodate some 250 houses, while the former Nairn Linoleum Works site has the potential for a further 100 units though planning hurdles are yet to be cleared.
The firm said it had benefited from “continued improvements” in the housing market, with completions rising more than a quarter on the back of a strong order book and an 11.5% increase in reservations from private buyers.
Turnover jumped more than 40% to £206.9 million during the six months to the end of July, boosted by an increase in volumes, a 12% hike in the average selling price, and better margins from new developments.
Miller said the rise in prices came as it focused on larger and higher value homes in suburban areas, with price inflation a more “modest” contributor.
Tougher checks on mortgage lending had not affected the business, it said.
But profits were pulled down by exceptional charges which included write-backs on the value of less promising housing land and interest payments.
First-half losses of £6.2m in the group’s major projects Construction arm, since sold to Galliford Try in a complex deal which saw Miller effectively pay £6.5m for the unit to be taken off its hands, also dragged down returns.
The sale, which completed in early July and was described as an effort to focus on the improving housebuilding and commercial property sectors, will be booked in full-year accounts due early next year.
But the interim figures confirmed how losses had deepened from the £2.4m reverse booked by the division for the same period last time around.
Chief executive Keith Miller said: “Miller Homes is showing strong margin growth and a substantial improvement in return on capital, principally driven by higher volumes and the increased contribution from new sites.
“In Miller Homes, trading continues to be robust across all of our regions in the UK, increasing our confidence in our ability to deliver improved margins and return on capital through enhancing the quality of the landbank and product mix, growing volumes with limited additional overheads and increasing the conversion of strategic land.”
He said the firm hoped to realise the sale of 2,750 homes per annum in the medium term. A total of 855 were sold in the first half of this year.
Miller’s commercial property arm was profitable, but up against a tough comparator with income “heavily weighted to the second half”.
The group said good progress had been made on projects in Birmingham and Warrington, at its D2 Business Park in Dyce, Aberdeen’s North Dee Business Quarter and other office developments.
Meanwhile, the company’s coal mining and land reclamation joint venture at Ffos-y-fran in South Wales saw production fall 13% during poor weather conditions early in the period.