Henry Boot prepares for busy second half of the year amid growing signs of recovery in key markets

The industrial and logistics market remains resilient, supported by rental growth, and housebuilders are selectively buying land, with the group recently selling, and receiving offers for a number of sites, the statement said.

House buyers are returning to the market after a downturn in demand from the fourth quarter of 2022, although the selling season through spring and summer remains important, Henry Boot said.

The group’s Hallam Land Management (HLM) division has begun the year well, selling 1,900 plots.

The statement added: “Following a pause from buying land at the end of 2022, there are signs of housebuilders returning to the market, with selective acquisitions and encouraging levels of interest in HLM's portfolio of prime plots.”

Stonebridge Homes (SH) has already secured 71 per cent of its 2023 delivery target of 250 homes, achieving a sales rate of 0.52 houses per week per outlet in the first 18 weeks of the year, with house prices remaining “relatively firm”. Cost inflation remains a challenge but is beginning to moderate, and there are early signs of an improvement in key trade availability, material delivery lead times and general cost pressures, the statement added.

Tim Roberts, the chief executive, said: "We have started the year well and following the uncertain economic backdrop to the final quarter of 2022, there are growing signs of recovery in our three key markets.

"We expect this to continue, and for us to have a busy second half of the year. We also continue to make progress against our medium-term strategic targets.”

Commenting on outlook, the company said: “There are encouraging signs within our three key markets, particularly within the industrial and logistics and residential markets, where signs of early momentum are building.

"The group remains cautious in light of the current economic environment and expects that activity in 2023 will continue to improve, which will contribute towards 2024 performance and beyond.

“Looking ahead, the group is well placed, supported by a solid balance sheet and a store of opportunities, placing the business in a strong position to achieve its medium-term strategic objectives and growth targets.”

Adrian Kearsey from Panmure Gordon said: “Henry Boot has issued a solid AGM update. The business is making good progress across each of the divisions and across each of the three market verticals (industrial and logistics, residential and urban regeneration).

"While management are mindful of the macro environment, they highlight that ‘markets are showing signs of recovery’.

"Consequently, we are leaving our full year estimates unchanged. With the shares trading on a discount to book value, we see material upside in the share price and reiterate our buy recommendation and 440p target price.”