Henry Boot first-half revenue up 19% to £129m

Sheffield-based property investment and construction group Henry Boot plc said on Monday its first-half revenue rose 18.7% to £129 million and profit before tax rose 220.8% to £23.1 million in the six months to June 30.

Henry Boot said the profit was ahead of board expectations “driven by the industrial property market performing strongly and delivering positive capital returns through disposal of investment property, revaluation gains and returns from joint ventures contributing a combined £5.8 million.”

The company declared a 2.42p interim dividend, an increase of 10.0%, “reflecting the group’s strong operational performance and in line with our progressive dividend policy.”

Henry Boot reported a good start to the second half “with a full order book and forward sales in land, development and housebuilding.”

Henry Boot CEO Tim Roberts said: “The business has performed well, responding to growing demand within our key markets. 

“Whilst we expect profit to be weighted to the first half, the cadence of our activity will remain high, so we will continue to make excellent progress on our clear strategic targets.

“This will position us well for sustainable growth in the future.”              

In his outlook, Roberts said: “Our focus during H1 has been to meet the growing demand in the industrial & logistics, and residential markets.

“It is these two, of our three key markets, which have driven the strength of results in the period.

“The outlook for these markets, both in the short and long-term is very encouraging.

That is why we continue to grow our land bank within HLM (Hallam Land Management) – now with a potential of 92,253 plots – and are in a good position to convert the 13,273 plots with planning into sales.

“HLM is now concentrating on building up sales for 2022, and with demand from housebuilders strong, and our portfolio prime, not surprisingly with 1,311 plots unconditionally secured, they have made a good start.

Similarly, HBD (Henry Boot Developments) has materially increased industrial development so we are committed to over 1 million sq ft, 70% of which is pre-let or pre-sold with high levels of occupier interest in the rest.

“As we let more, we will look to draw down projects from our predominantly industrial development pipeline.

“We are also seeing early signs of a recovery in urban development, driven more by the major provincial cities than London.

“We shall remain selective on urban developments and in the short term are focused on quality BTR and build to sell schemes, but in the medium term we will continue to promote office schemes in targeted centres such as Manchester, as we believe cities will adjust to what will become a more hybrid and agile working environment.

“Our aim over H2, and into next year, is to expand our committed pipeline all the time managing risk by a blend of pre-lets, forward sales and JVs.

“We have taken more than our fair share of the growth in the construction industry which effectively means HBC’s (Henry Boot Construction) order book for this and next year is full.

“We will concentrate on delivering this order book and will be selectively looking for work for 2023.

“The group’s operations have seen an increase in build cost and a shortage of materials in the UK construction industry, which has resulted in longer lead times.

“To mitigate our exposure to this situation, we have implemented measures such as securing supplies at an early stage and adding protective clauses in construction contracts.

“With the added advantage of sale prices increasing, we have currently been able to deal with the situation effectively but are alert to the challenges we could face in the future.

Finally, our balance sheet remains rock solid and net debt at £13.0m is low so we have capacity to fund our strategic growth ambitions, and whilst we are not immune to the heightened competition for talented people in our industry, our team have shown high levels of engagement during this challenging period.

“I want to thank them all for their remarkable efforts, but also, I am confident that they are up for the next stage of our journey.

“We have made a good start to the second half and are well placed to build on the progress made so far this year and on our strategic priorities for the longer term.”