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Miller Homes plans initial public offering on London stock exchange

Miller Homes has announced plans to launch an initial public offering on the London stock exchange next month.

The housebuilder said it had a clear strategy to increase its margin and return on capital employed, with targeted hurdle rates of 22 per cent and 25 per cent respectively for all new sites acquired since mid-2013.

Miller will increase its volume output to 2,750 homes a year in the medium term, from 1,684 for the year ended 31 December 2013.

In the six months to 30 June 2014, the group delivered 257 units in the Midlands and the South, 359 units in the North and 229 units in Scotland.

But the targeted volume growth of 2,750 homes a year is still below the group’s peak volume level of 3,960 delivered in 2006.

The Miller Homes board said this increase in volume could be achieved with the group’s existing capacity, with “limited” extra overheads through the addition of up to 20 new sales outlets across its operating division.

Miller Homes is managed and controlled through four divisions: three operating divisions in the Midlands and the South, the North and Scotland, plus a strategic land division.

The Midlands and South, North and Scotland divisions are responsible for the acquisition of all sites, securing planning for development, building out the sites, the marketing and sales of completed units and customer service.

The strategic land division is responsible for identifying and securing the supply of strategic land for all operating divisions.

Miller Homes chief executive Chris Endsor said the group’s “distinctive” focus and knowledge of the regions in which it operates put Miller Homes in a strong position moving forward.

“It is an excellent time to be operating in the housebuilding sector, with demand for new housing continuing to grow supported by improving macroeconomic conditions and a more favourable planning environment.”

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