Aberdeen-based Stewart Milne Group is selling its timber-systems operation, which has an annual turnover of around £100 million and employs about 400 people, to focus on investing in expanding its homes business across Scotland and north-west England.
The independent housebuilder and manufacturer of timber-frame for offsite construction says it is “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”.
Stewart Milne Group highlighted its investment in its timber-systems operation’s “product and manufacturing innovation”.
It flagged its investment in capacity at timber-frame factories in Aberdeen and Witney in Oxfordshire “to keep up with the extremely strong demand”, noting that increased volumes had led to the creation of a third production facility in central Scotland, at Falkirk.
Stewart Milne Group’s chief executive, Stuart MacGregor, said: “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.”
Mr MacGregor declared that the current buoyancy of the homes market did, however, mean that land prices in Scotland and north-west England were increasing rapidly.
Explaining the strategy, he 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.”
Stewart Milne Group claimed its timber-systems business had “become the undisputed market leader”. It put the UK market share of its timber-frame business at around 20 per cent.
The group said: “Stewart Milne Timber Systems (SMTS) has experienced stellar growth in the last five years with a current order book of close to £300m. This growth is attributed to a combination of technical and manufacturing excellence with strong customer relationships with the UK’s leading housebuilders, including Barratt, Taylor Wimpey and CALA.”
It added: “Demand for timber-frame has been rising rapidly and its use is anticipated to double in the next five years to meet government housing targets. As housebuilders tackle the dual challenge of achieving net-zero carbon targets and dealing with acute skills shortages, they are increasingly turning to modern methods of construction using renewable sources.”
The sales process is being led by Alex Goodfellow, managing director with responsibility for strategic development at Stewart Milne Group.
Mr Goodfellow said: “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.”