Stewart Milne Group has gone into administration after attempts to sell the business failed, with more than 200 people made redundant.
The Aberdeen-headquartered housebuilder and developer appointed consultants to help find a buyer in several rounds since April 2022 as chair and founder Stewart Milne planned his retirement.
According to a statement from Milne today (8 January), bids have been rejected and the company will no longer be able to operate.
He said: “I am devastated by this totally unexpected outcome of the sale process and struggling to accept it, given the profound impact it will have on employees, subcontractors, suppliers and customers.
“Stewart Milne Group was up for sale and, following significant interest, two bids were submitted. The bank [Lloyds Banking Group] has not accepted either bid and withdrawn its funding which left the directors with no option but to appoint administrators.
“I tried everything I could to find a way to achieve a better outcome for the business and the people who depend on it. I believe one of the bids could have delivered a comparable, financial return to administration and, crucially, allowed the business to continue to operate, safe-guarding hundreds of jobs and protecting livelihoods.”
A spokesperson for Lloyds Banking Group responded: “When a company experiences financial difficulties, we will always try to find a solution that places the business onto a sounder financial footing without the need for any insolvency process.
“Unfortunately, despite several years of support and forbearance, including multiple maturity extensions to the borrowing, this has not been possible in this instance. We will now work with the administrators, as they consider the best options for the business.”
A statement from insolvency practitioner Teneo said its focus will be on pursuing an orderly wind-down of the business and 217 employees have already been made redundant. So far, 54 have been retained to help with the closure, and 58 with ongoing development operations in North-West England.
The firm’s development sites in North West England are held by Stewart Milne Homes North West England (Developments) Ltd, which has a separate funding structure and has not been placed into administration.
Founded in the 1975, the business had a turnover of £172.4m in the year to 31 October 2022, posting a pre-tax profit of £16.5m.
The results were a turnaround from successive loss-making years that included a £13.1m pre-tax loss in 2021, a £71.5m loss in 2020 and a £48.5m loss in 2019.
The company sold its timber frame-making business to Donaldson Group in 2021 as part of a bid to focus more on housebuilding.
At the time of its last published accounts, the company owed creditors more than £178m, including £23.8m to trade creditors and £114.3m to banks. It had 418 employees at the time, less than half the number it had prior to the sale of its timber-frame business.
Adele MacLeod of Teneo said: “The downturn in the UK housing market combined with an extensive sales process not resulting in any viable offers has ultimately led to the need for the directors to place Stewart Milne Group Limited and some of its subsidiaries into administration, regretfully with some immediate redundancies.
“We continue to assess all the options in respect of the group’s Scottish development sites and encourage any party with an interest to get in touch.”
The Teneo statement also blamed rising interest rates, increasing cost pressure and an associated reduction in consumer confidence for the firm’s collapse.
The entities in administration are: Stewart Milne Homes Central Scotland Limited, Stewart Milne Homes Central Scotland (Developments) Limited, Stewart Milne Homes (Arbroath) Limited, Stewart Milne Homes (Auchterarder) Limited, Stewart Milne Homes (Kirkston) Limited and Stewart Milne Homes North West England Limited.
Last month, Construction News reported that Stewart Milne was being sued by L&G for £20m over alleged defects at its flagship Union Plaza building in Aberdeen.