Subsidiary of Stewart Milne Group follows parent into administration

William Tait and Keri Holland of BDO were appointed joint administrators of the Manchester-based firm on January 16. 

This latest development follows the collapse of major Scottish housebuilder Stewart Milne Group earlier in the month, with administrators at Teneo laying off more than 200 Group staff.

Subsidiary Stewart Milne Homes North West England (Developments) operated live development sites in North West England.

Its most recent financial statements reveal the subsidiary had a turnover for the year ended October 31, 2022 of £45.1m (2021: £61m), with a pre-tax profit of £7m (2021: £10.2m.

The wider Stewart Milne Group, involving seven companies, was placed in administration earlier in January in a development described by the Scottish Government as “concerning”.

The collapse followed a failure to find a buyer for the firm.

The seven companies, which operate sites across north-east and central Scotland and the north-west England, ceased trading with immediate effect and no further construction is being completed.

“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 Ltd and some of its subsidiaries into administration, regretfully with some immediate redundancies,” said Adele MacLeod, joint administrator Adele MacLeod of Teneo.

Stewart Milne Group had already sold its timber frame division in 2021 to Donaldson Group to reduce its debt burden.

In the year to October 31, 2022, it latest filed accounts, the group turned over £172m and made a pre-tax profit of £16.5m. Turnover was down £50m on the previous year because of the sale of the Stewart Milne Timber Systems to Donaldson.

Chairman Stewart Milne, who founded the company in 1975, had put the business up for sale in 2022. He is said to be devastated by developments.

Begbies Traynor’s latest Red Flag Alert report shows the number of construction industry companies in critical financial distress has grown by 32.6%.