Miller buys Fairclough Homes for £264m

The acquisition makes Miller the seventh biggest housebuilder in the UK by volume, with an output of more than 4000 units a year.

The firm said the rationale behind the acquisition was to increase earnings and to gain a more significant presence in the North-west, Yorkshire, the West Midlands and the South.

The deal has provided Miller with a base in St Albans from which it can enter the northern Home Counties, a market it had not expected to enter before next year.

Keith Miller, the group’s chief executive, said this week that he could not rule out job losses.

He said: “Miller is adding a new ninth region at St Albans, and is significantly increasing output in the Midlands, North-west and Yorkshire. There may be some job losses and we will be consulting with employee representatives and individuals over the coming weeks.”

Miller completed 2505 homes and generated a £394m turnover last year, compared with 1563 completions for Fairclough Homes and a £270m turnover. Miller is expecting to increase its earnings immediately, and is forecasting that the addition of Fairclough will raise housing turnover to about £700m and group turnover to £1.1bn.

No decisions have yet been made about the Fairclough management, although Miller said: “We have monitored Fairclough Homes for some time. It is a good strategic and geographic fit and has a strong management.”

Stewart Baseley, chairman and chief executive of Fairclough and chairman of the Home Builders Federation, is not expected to stay on at the company.

Miller said the outlook for UK housebuilding generally was positive, and added: “Going forward, we expect the industry to experience further consolidation and we will continue to play a leading part in that process.”

Centex, which was the first US housebuilder to move into the UK market, put Fairclough on the market in June. According to analysts it failed to be the springboard to expansion into the UK market that Centex had originally hoped for.