Green shoots as Henry Boot sees activity rising

The Sheffield-based firm reported an increase in activity and output throughout all of its operations and the group said it has made strategic progress.

The firm’s chairman, Jamie Boot, said at the group’s AGM: “With a strong balance sheet, cash in the bank and tentative signs of recovery we are positioned to get through this period of economic and social disruption, and to then continue operating in our long term markets.

“Thanks to all my colleagues who have shown tremendous agility and commitment in adjusting their working practices. Particular thanks to John Sutcliffe who after 14 years, four as the CEO, stepped down from the board in May.”

Tim Roberts, chief executive, added: “With adapted working practices and a committed team, we remain determined to progress through this period of uncertainty in a shape which will allow us to play a significant part in our key long-term markets.”

The firm said it remains in a good position following its annual results announcement on May 20. It has resumed activity on all of its sites and its depot sale centres are now open.

“On the back of a robust 2019, we have strong liquidity with a net cash position of £45m as at June 29, allowing us to focus on the long term opportunities that have proved to be so successful for the group for many years,” the firm said.

“During the pandemic, we engaged with subcontractors and suppliers to ensure their interaction with our operations was done in a safe and effective manner.

“It also has been positive to see our employees responded well to new working practises and during the pandemic we have learnt new efficiencies that will evolve the group’s operations for the future.”

The group said its Hallam Land Management division is active in the land market and is making progress on a number of sites.

There are ongoing discussions with various housebuilders on several site disposals and it has received bids at pre-lockdown values.

It said the new homes market has emerged in resilient fashion, but it is still very early days and there is a need to remain cautious. It anticipates a delay in disposals, with sales moving into 2021.

Work started on site at Markham Vale near Sheffield on June 15 to construct a further 297,000 sq ft of space. The scheme, which has been pre-sold to Aver, includes two units of 221,518 sq ft and 75,000 sq ft and is due for completion next March.

The firm said there has been a steady improvement in productivity on construction sites and it is now achieving 85 per cent of planned activity. Whilst an assessment on the new proposed one metre social distancing rule is ongoing, it is hopeful that this recent adjustment can increase activity levels throughout July. It said its construction business is well placed to deal with the uncertainties because of its bias to public sector work.

The group said it is now bringing a significant number of employees off furlough.

Analysts at Peel Hunt said Henry Boot had released a solid AGM statement, demonstrating continued progress in challenging times.

Analyst Sam Cullen at Peel Hunt said: “Despite the difficult circumstances, the group is seeing increasing levels of activity and output through all it operations.

“Unsurprisingly, with the economic backdrop still uncertain, the outlook remains cautious. However, the strong net cash position (£45m at the end of June) provides shorter term comfort and should support the longer term strategy.”

He reiterated his ‘buy’ recommendation on Henry Boot’s shares.