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Miller gets HBOS backing

Miller has been forced to open up part of the company to non-family ownership after bringing in Bank of Scotland to help fund a buyout of family shareholders.

The deal was completed last Friday and is the first time that a significant stake by someone other than the Miller family has been held in the house builder and contractor since it was formed back in 1934.

Chief executive Keith Miller declined to say how much Uberior Investments, part of the BoS, now owned and whether the banking group had a seat on the nine-strong board.

Mr Miller added: “The details are being kept private but Bank of Scotland is an experienced institutional investor in the sector.

“They’re well used to supporting companies like ours and they understand our business extremely well.”

Mr Miller refused to say which members of the rebel shareholders – the Aligned Shareholders Group led by his cousin James Miller – had decided to cash in their shares.

The HBOS owned bank was one of a number of firms sounded out late last year by accountant Ernst & Young which was drafted in by the rebels to see who would be interested in buying their stake.

Mr Miller said it began talking to the bank at the end of January and of the dispute with ASG, which held a 63 per cent stake in the business, he added: “It should never have been made public because it’s been a distraction.

“The shareholders who wanted to go have gone and we’re looking forward with settled shareholders to the future. It is undeniably a good result for everyone.”

The news comes as the firm said that 13 years of increased pre-tax profits had come to an end with the figure dropping 7 per cent to £81.2 million last year. Operating profits were up, though, by 8 per cent to £122 million. Group turnover was up six per cent to £1.3 billion.

Mr Miller said problems in the housing market had caused the slide and said conditions in the north of England, the Midlands and south were still tough.

But he said Scotland was bearing up and that its exposure to the flats market was less than that of its rivals. He added: “The problem with premium city centre, two-bed apartments is that too many of them have been built compared to demand.”

Operating profits at its contracting arm increased by nearly half to £10.1 million and Mr Miller said the negative sentiment surrounding housing was not hitting its construction clients.

Cutting subcontractors' rates 'not sensible'

Mr Miller had some tough words for those house builders who chose to ride out the housing downturn by cutting subcontractors’ rates.

A storm of protest greeted moves earlier this year which saw some firms, notably Taylor Wimpey, ask suppliers to knock money off previously submitted bills.

Describing that sort of action as “not terribly sensible” he said: “We don’t approach our subcontractors like that and never have done. We should aim to get costs down by improving efficiency.

“The relationship with suppliers has to be one of mutual respect and partnership.”