Henry Boot reports a strong recovery as profits treble

Property developer Henry Boot has reported a strong performance in the first six months of 2021 and said it has secured attractive opportunities for future growth in its three key markets of industrial and logistics, residential and urban development.

Henry Boot has been working on The Glass Works, the Barnsley town centre redevelopment
Henry Boot has been working on The Glass Works, the Barnsley town centre redevelopment

The Sheffield-based firm said pre-tax profits more than trebled to £23m in the six months to June 30, up from £7m the previous year, supported by a recovery in demand across its operations.

Henry Boot' s chief executive, Tim Roberts, said: "We've had a good first half and the half is pretty well as good as we've had in first halves before, but because we slowed down investment last year, it takes us some time to increase our investment and restore our P and L (profit and loss account)

"We've got a firm plan and we've been open with the market about what our targets are and we've made great progress on those targets.

"It still feels as though we've got to get through the pandemic. I'm sure there are going to be continued social and economic consequences flowing from the pandemic. We haven't put it behind us, but we're definitely operating in it and I think we're doing a good job."

The land promotion business sold 2,288 plots, up from 2,000 last December. The land bank has now increased to 92,253 plots, including 13,273 plots with planning permission.

The Stonebridge Homes division is on track with its annual sales target, securing 85 per cent of the annual target in the first half, supported by a buoyant housing market. The total owned and controlled land bank is now 1,125 units.

Mr Roberts said: "Stonebridge really covers the Yorkshire region. They sell premium houses, so the average sales price is nearly £500,000. In Yorkshire, you get a lot of bricks and mortar for £500.000.

"Demand there has been very strong. People are more concentrated on wanting to have a great environment to live in. People are more prepared to trade up.

"All our houses have gardens. People are interested in outdoor space, but it doesn't feel as though they want bigger outdoor space. They don't want acres of it."

Profits were ahead of management expectations and were driven by strong demand from both investors and occupiers in the industrial and logistics market.

Henry Boot has actively invested in its key markets, with a total of £55m invested, in line with its strategic ambitions.

Mr Roberts said: "Everybody knows that the demand for ecommerce is phenomenal. A lot of retailers want to increase their logistics.

"It has also been driven by some of the big businesses like Amazon. Businesses are more concerned about supply lines."

Revenue rose 19 per cent to £129m, as demand increased across its three key markets

The group has declared a 2.42p interim dividend, an increase of 10 per cent, which it said reflects its strong operational performance.

Henry Boot said its construction business is performing ahead of expectations, securing over 100 per cent of its 2021 order book (68 per cent in the public sector) in the first half.

Mr Roberts said: "God bless the construction industry. It has coped well with the pandemic. Construction has worked onsite nearly wholly through the pandemic.

"There has been a big uptick in demand from public sector clients. It feels like the Government is prepared to invest in the regions.

"The construction market is strong."

The firm reported a good start to the second half, with a full order book and forward sales in land, development and housebuilding, as well as, launching its Net Zero Carbon Framework and establishing a Responsible Business Committee.