Henry Boot warns of patchy recovery

In 2009, the group recorded a loss before tax of 11.9m, compared to a profit of 19.3m the year before.

Turnover was 116.5m, down from 193.7m the year before, due to fewer land transactions and reduced development activity.

John Reis, the company's chairman, said: "Our strategic focus during this recessionary period has been to preserve our asset values and reduce our debt.

"I am pleased to report a further solid set of results for the year ended December 31 2009, particularly given the difficult market conditions in the UK property market during the period. The first half of 2009 was characterised by decreasing investment yields, however, the second half has seen some stabilisation, with yields even firming up slightly towards the end of the year.

"We continue to operate through our UK-wide network of offices, creating future land, planning and development opportunities in a cost effective way and as prudent cash management allows. The construction and property investment income streams provide steady profits and cashflows, which underpin our performance, despite the reduction in the more cyclical development and land profits

"Whilst the general economic background and the property market, in particular, remains tough, I believe that the market is beginning to recover from its low point. I also believe, however, that the recovery will be patchy and relatively long drawn out. Therefore, our prudent strategy is the correct one until we can see clear evidence of a sustained recovery.

"We retain significant headroom in our three year debt facilities and this, along with the support of our long term banking partners, will allow us to gear up again as the recovery takes hold, using the potential we already have in our portfolio to generate healthy shareholder returns once again."

Henry Boot said its construction division had another good year, as the company completed the Decent Homes programme in Sheffield and continued work on the Rotherham and Doncaster programmes.

In a statement, the company added: "We recognise that much of the construction division's work is centrally funded by Government and therefore potentially at risk given the likelihood of public spending cuts following the forthcoming General Election.

"As expected, activity levels at our plant hire business were adversely affected by the contraction in housebuilding but we cut our capital expenditure accordingly, downsized the fleet size and generated over 2m in cash from the business during the year."