Miller Group issues profit warning in trading update

UK property and construction company Miller Group warned that 'a challenging second half' would impact on full year profits for 2007 which are expected to be 'slightly behind last year'. The company issued a trading update ahead of its final results for the year to December 2007, which will be released in March 2008.

The warning is likely to bring to a head the long-running family row as to whether the company should be broken up or sold. According to reports, a splinter group of shareholders at the Miller Group has engaged Ernst & Young to find a buyer for their stakes.

'Looking forward, we expect consumer and investor demand to remain subdued in the short term. However, the group is in strong financial health and these challenging times will present opportunities, especially for private companies that have greater flexibility to act counter cyclically,' said CEO Keith Miller.

According to the company statement, housing reservations were down 18% on last year, with a more pronounced reduction of 29% taking place in the second half of 2007. The property business had a very active year selling approximately 120,774 m².

Miller Construction enjoyed a successful year with further turnover growth to around £400 mln (EUR 534 mln). The company said that high levels of government spending and a strong private sector client base meant that the construction business had not experienced the same slowdown in demand as the property and housing. The company's order book had in excess of £600 mln, with the majority of work already secured for 2008.