Shares of Henry Boot, the Sheffield-based land promotion and property investment group, fell as much as 10% after it published a trading update for the year ended December 31, 2023, saying it “now expects profitability for 2024 to be significantly below current market consensus.”

Company compiled market consensus for 2024 profit before tax is £37.2 million, comprising the average of three forecasts from Deutsche Numis, Peel Hunt and Panmure Gordon.

In its outlook, Henry Boot said: “The group is well positioned to benefit when our end markets recover, however we expect there will be a lag in performance due to the time it takes for projects and sales to complete.

“Whilst it is encouraging that sales rates have improved within SH (Stonebridge Homes), and we expect this trend to continue, we are now more conservative with our estimates of completions for 2024 and anticipate the impact from a recovery in residential sales will be more weighted to 2025.

“Due to extended payment profiles with major housebuilders on strategic land sales, we anticipate gearing to remain towards the upper end of our optimum range of 10-20% through 2024, and given the higher interest rate environment, we anticipate this will also impact profit for the year ahead.

“Taking these factors into consideration, the board now expects profitability for 2024 to be significantly below current market consensus.

“Notwithstanding this the board continue to believe that Henry Boot remains well placed to achieve its medium term growth and return objectives.”

On 2023, the company said: “Henry Boot has performed well against the backdrop of a slowing economy, and higher interest rates, generating robust sales within its property development and strategic land businesses.

“Despite activity reducing in our three key markets of Industrial & Logistics, Residential and Urban Development, our focus on high quality land and development in prime locations has meant the business has performed resiliently.

“Consequently, the Group expects profit before tax for the year ended 31 December 2023 to be in line with current market consensus.”

Company compiled market consensus for 2023 profit before tax is £37.2 million, comprising the average of three forecasts from Deutsche Numis, Peel Hunt and Panmure Gordon.