Henry Boot makes strong progress despite economic uncertainty

Property developer Henry Boot said it made good strategic progress in 2019 despite the uncertain political and economic background.
Henry Boot recently completed the 44m first phase of The Glass Works, the Barnsley town centre redevelopmentHenry Boot recently completed the 44m first phase of The Glass Works, the Barnsley town centre redevelopment
Henry Boot recently completed the 44m first phase of The Glass Works, the Barnsley town centre redevelopment

The Sheffield-based firm said it is well positioned for the long term although its overall 2019 performance was marginally below the board’s original expectations, driven by the successful disposal of the majority of its retail investments during the second half of the year, which reduced rental income.

However, the firm said the disposals mean the group ended 2019 in a strategically strong position, with higher than expected net cash of £30m and with several opportunities have been identified to re-invest in during 2020.

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The firm's chief executive, Tim Roberts, said: “We had a good year making strategic progress through investing in both our people and our future pipeline, whilst growing NAV (net asset value).

"Looking forward, we have made a good start to the year with a strong balance sheet and further opportunities to add to our property development pipeline and strategic land bank, plus a healthy construction order book.”

Henry Boot said Hallam Land Management performed "exceptionally well", especially given that a large scheme which had been forecast to complete in 2019 did not reach conclusion.

The firm said that as always with these large schemes, there is no certainty that it will conclude in the year ahead, although it has now been moved into the group's forecasts for 2020.

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Analyst Alex Stout at Peel Hunt said: "The outlook remains positive with a pick up in activity in Henry Boot’s end markets following the General Election. Our revised sum

-of-the-parts valuation generates a target price of 360p (from 365p)."

Last year, Henry Boot Developments (HBD) completed The Event Complex Aberdeen (TECA), a £333m scheme for Aberdeen Council, which was delivered on time and on budget.

During the year, delivery of several strategic employment sites started, including Butterfields Business Park in Luton, Airport Business Park Southend and the International Advanced Manufacturing Park in Sunderland.

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The year on year property valuation for the remainder of the portfolio was slightly up on 2018 and the Group benefitted from valuation uplifts relating to investment property under construction completed in the year.

The firm said trading at Henry Boot Construction held up well, especially given the much-publicised challenges facing the construction market.

The group said it has entered 2020 with a strong committed order book with the added opportunity to capitalise on the small foothold established in the partnership homes market through the acquisition of Starfish Commercial.