黑洞社区

Stewart Milne has put its timber frame subsidiary up for sale as part of an ongoing restructuring and refinancing process at the Scottish housebuilder.

The business said it was looking to sell Stewart Milne Timber Systems, which it says is on course to turn over 拢100m in the current financial year, in order to cash in on current market enthusiasm for off-site manufacturing and modern methods of construction.

The firm said the 400-person timber systems business, which had income of 拢65m in the year to October 2020, currently had an order book of more than 拢300m, with sales to the likes of Barratt, Taylor Wimpey and Cala.

The sale comes as the 拢270m turnover housebuilder undergoes a 鈥渃omprehensive refinancing鈥� following the Aberdeen-based developer reporting .

黑洞社区鈥檚 sister title Housing Today that auditors of its 2020 accounts had noted a 鈥渕aterial uncertainty鈥� in the group鈥檚 ability to continue as a going concern, given that discussions regarding a 拢175m loan to the business, currently due to be repaid in March next year, had not been concluded.

The loan鈥檚 repayment date has already been pushed back twice and is now wrapped into a discussion about the refinancing with Stewart Milne鈥檚 lenders.

A spokesperson for Stewart Milne admitted that the sale of the timber systems business was part of the restructuring and refinancing process.

Stewart Milne says the business is the 鈥渦ndisputed market leader鈥� in supplying timber frame housing, with around a fifth of the UK market. It has two established factories, in Aberdeen and in Witney, Oxfordshire, and has just invested in a third production facility in central Scotland.

Alex Goodfellow, Stewart Milne鈥檚 group managing director for strategic development, who is leading the sale process, said he was anticipating 鈥渁 high level of interest from potential buyers鈥�.

The chief executive of Stewart Milne Group, Stuart MacGregor, said it had become clear that for the timber systems business to meet demand, it would require even more investment but the group needed to 鈥減rioritise鈥� where it put its cash.

鈥淲e have therefore chosen to divest our successful timber systems business and focus on increasing investment in additional sites for Stewart Milne Homes.

鈥淯sing our considerable land buying experience to take advantage of the development opportunities, we will invest in land in the short term and concentrate on growing our homes business in the longer term.鈥�

The last five years has seen Stewart Milne鈥檚 housebuilding business hit hard by the collapse in the economy in its Aberdeenshire heartland with the firm鈥檚 拢72m 2020 loss including a 拢43m writedown in the value of its land holdings.

MacGregor told Housing Today in August that the business鈥檚 new strategy, combined with the post covid-rebound in the market meant it was currently trading 鈥渟ignificantly ahead of expectations鈥� and that the forward trading position was 鈥渢he best we鈥檝e ever seen鈥�.