Stewart Milne Group faces administration amidst economic challenges

Stewart Milne's company is facing administration due to economic problems.

STEWART MILNE GROUP, a prominent housebuilder, has entered administration, resulting in the immediate redundancy of over 200 employees. The company, grappling with “significant challenges” since the onset of the pandemic, took this step after two bids for its business, including one from former chairman Stewart Milne, were rejected by the firm’s bank.

Administrator Teneo has confirmed the impact on 217 jobs, with six of the company’s subsidiaries also placed into administration. The collapse has the potential to affect hundreds of sub-contractor roles, adding further complexity to the situation. Teneo expressed that the company is actively exploring its options and is seeking collaboration with other developers to complete unfinished sites.

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The decision to enter administration follows a suspension of the sale process initiated in December 2022, attributed to “economic uncertainty” and challenging market conditions. The house builder, which has been developing sites across the North East of Scotland, Central Scotland, and North West England, was founded in 1975 by former Aberdeen Football Club chairman Stewart Milne.

Despite reporting a boost in profits for the 2021/2022 financial year, the company faced a decline in turnover by £48.7 million to £172.4 million, accompanied by a nearly 30% reduction in house sales to 583. Stewart Milne, who had postponed his retirement in an effort to secure the firm’s future, expressed his devastation at the unexpected outcome.

In a statement to the BBC, Milne revealed, “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, sub-contractors, suppliers, and customers.” He further explained that, despite significant interest and two submitted bids, the bank rejected both offers and withdrew its funding.

“I tried everything I could to find a way to achieve a better outcome for the business and the people who depend on it,” Milne stated. “I believe one of the bids could have delivered a comparable financial return to administration and, crucially, allowed the business to continue to operate, safeguarding hundreds of jobs and protecting livelihoods.”

The situation remains fluid as administrators assess options for the group’s Scottish development sites and encourage interested parties to come forward. Buyers and current residents are expected to be contacted by administrators regarding the status of their properties and any ongoing works. The fallout from this administration has highlighted the fragility of businesses in the current economic climate, prompting reflection on the broader challenges faced by the construction industry.

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