Keith Miller announced yesterday he will step down as chief executive of Miller Group, ending 81 years of family leadership at the UK’s biggest privately-owned housebuilder.
The Edinburgh-based company, which has operations across the UK but outside of London, was founded by Miller’s father and his uncles in 1934.
The 65-year-old sailing enthusiast joined the family empire in 1975 after a stint at rival firm Wimpey and took over as chief executive 19 years later.
The company has only once in its history had someone outside of the family at the helm. In 1990, Miller’s cousin James, who was then chairman, hired former Balfour Beatty boss David Cawthra, as chief executive, claiming Miller was not yet ready for the role.
Four years later, the business had slumped into the red and Miller was put in charge to revive in fortunes. Under his watch, the company enjoyed more than 12 years of consecutive growth.
But it became heavily indebted during the financial crisis and underwent a £160m refinancing in 2011 that left private equity firm Blackstone in control with a 55 per cent stake. Royal Bank of Scotland, Lloyds and National Australia Bank also bought a stake of around 30 per cent between them.
Prior to the equity fund raising Miller Group was 60 per cent owned by the Miller family. Miller has retained a minority stake in the business after also participating in the refinancing deal.
Miller said yesterday that with the company in good health, the time was right for him to leave. His post will not be filled after his departure at the end of March. Instead, the chief executives of Miller’s three divisions, Homes, Mining and Development, will report directly to the board.
“The group has experienced tremendous growth over the past three years and the time is right to pass the leadership of our businesses to the respective management teams,” he said.
The company’s profits almost doubled in the first half of the year to 30 June to £8.3m compared with £4m in 2013, while revenues rose 23 per cent to £206.9m.
In October, it shelved plans to float Miller Homes, blaming market volatility. It had plans to raise about £140m to reduce its debt-pile.
FAMILY FIRMS IN A MODERN WORLD
Banco Santander, Fidelity Investments, Walmart, Aldi, Sellar Developments, Associated British Foods and Miller Group: all these family-run or owned firm are examples that blood can be thicker than water when it comes to running a successful company.
Although widely predicted to die out after the Second World War as the economy boomed and companies facing succession issues, sold out to private equity firms or recruited outside talent, family-run empires have held their ground and were even found to be among the fastest growing of all enterprises in the UK last year.
The study by Barclays predicts that these family firms will contribute more than £200bn a year to the UK economy by 2018.
But as more family firms take off, how does their performance compare with traditional companies and which is likely to deliver more value for shareholders?
When thinking about a company’s best interests, family-run or owned businesses can afford to take the long term view that traditional businesses under pressure to meet the demands of investors often cannot. They also tend to have stronger boards, better employee relations and less debt.
There are also obvious disadvantages, for example, family conflicts over money or succession. But without a family member as chief executive, will Miller continue to have the same motivations? It can surely emulate them. And with a stake in the business, Keith Miller is certainly going to make sure that it does.