Stewart Milne Group puts timber frame division up for sale
Tue, 12 Oct 2021 | DIVISION SALE
Stewart Milne Group has announced that it has put its timber frame division, Stewart Milne Timber Systems (SMTS), up for sale. The sale will seek to capitalise on the division’s strong growth and enable the wider group to focus on investing in its core home-building business.
SMTS generates annual turnover of around £100 million and has experienced extremely strong growth over the past five years, with a 20 per cent market share and an order book of close to £300 million. In addition, the business has built strong relationships with customers including Taylor Wimpey, Barratt and Cara.
Stewart Milne Group said it is selling the division amid soaring demand for timber frame construction, with the use of timber forecast to double over the next five years, driven by government housing targets.
The group said it was “capitalising on Stewart Milne Timber Systems’ position…by putting the business up for sale at a time when the market is set to grow exponentially”. The firm highlighted how strong demand had prompted investment at its Aberdeen and Oxfordshire timber facilities, as well as the opening of a third production site in Falkirk.
The proceeds of the divestment will also enable the group to invest in land for the growth of its home-building operation in Scotland and North West England, with the growth of the housing market having the knock-on effect of land prices increasing sharply.
Stewart Milne Group CEO Stuart MacGregor commented: “To keep pace with demand, it’s clear that further investment in production capacity in both Scotland and England will be required. As a privately run, independent company, we need to prioritise where we invest in the future.”
“Since reopening last summer, after the initial COVID lockdown, we’ve seen record levels of activity in the UK housing sector. The strength of our business, with its award-winning developments, new homes range and record sales, has enabled us to capitalise on these favourable market conditions and positioned us superbly for future growth.”
MacGregor added: “We have therefore chosen to divest our successful timber systems business and will focus on increasing investment in additional sites for Stewart Milne Homes. Using 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.”
The sale process will be led by the group’s MD of Strategic Development, Alex Goodfellow, who commented: “With the scale of the opportunity in the growing timber frame market, SMTS presents a highly compelling investment proposition. We anticipate attracting a high level of interest from potential buyers who will invest in order to capitalise on that opportunity.”
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