North-east housebuilder Stewart Milne Group (SMG) has put efforts to sell the business on hold.
The decision comes amid signs parts of the UK housing market are suffering an adverse impact from higher interest rates, inflation and other cost-of-living pressures.
Some recent data indicates a drop in house prices, with experts predicting further declines to come as higher mortgage rates force potential buyers out of the market.
Even so, SMG is reporting “strong” interest across all its sites in recent months.
The group revealed plans for a sale of the business in April, when founder and multimillionaire majority shareholder Stewart Milne announced his intention to retire.
Mr Milne – a director and former chairman of Aberdeen Football Club – said he planned to spend more time with family and friends, splitting his time in homes in the Granite City, Perthshire, Turkey and Florida, after nearly 50 years at the helm.
Bosses then embarked on a sale process to identify a buyer for the Westhill-headquartered group.
At the time of SMG’s last annual results, in May, the group said it was in good shape for a sale, with soaring fuel bills a major factor in record forward sales as a growing number of people looked to move to modern new, energy-efficient homes.
The sale process attracted “strong” interest, according to SMG, whose potential suitors are thought to have included Derbyshire-based Avant Homes.
We remain optimistic about future prospects and will continue to carefully evaluate, along with the group’s key stakeholders, what is best for the business as market conditions settle.”
Stuart MacGregor, chief executive, Stewart Milne Group.
But the cost of living crisis has worsened in recent months, with higher inflation and interest rates forcing many people to tighten their belts.
Announcing SMG’s change of tack in the much weaker trading climate, a spokeswoman for the company said bosses were involved in “fruitful discussions” with a number of potential bidders.
Sale talks ‘on hold for now’
She added: “This interest was underpinned by the company’s strong forward sales position and by the positive momentum in the housing sector across the UK at the time.
“However, the recent shift in the dynamics of the UK economy, with higher inflation and an increase in interest rates, amongst other factors, have led the directors of the company to put the discussions with the current interested parties on hold for now.
“The directors’ decision to suspend the sale process, for the time being, is fully supported by the group’s secured lenders.”
Further explaining the decision, SMG chief executive Stuart MacGregor said: “When we took the decision to sell the business in early 2022, market conditions were very different from those we are facing today.
“It has been gratifying to witness the level of interest in our business from potential buyers and we have been involved in a number of very rewarding discussions with potential buyers.
“However, given the current uncertainty in the market, we do not think it to be in the group’s best interests to continue to pursue a sale of the company with the current bidders at this time.”
Mr MacGregor added: “We remain optimistic about future prospects and will continue to carefully evaluate, along with the group’s key stakeholders, what is best for the business as market conditions settle.
“For now, we will focus on acquiring new sites for development and delivering high quality, family homes across Scotland and north-west England.
“Sales interest has been strong across all our sites in recent months.
“The unique nature of many of our developments mean they are well-placed to attract homeowners, even in the current market conditions.”
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