Tory election win boosts trading at Henry Boot

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CONSTRUCTION and property firm Henry Boot said it expects a quick return to normal trading following the Conservatives’ outright win at the General Election.

The Sheffield-based group said it saw a short term lack of decision making around the Election, especially within the public sector, which led to a slowdown in concluding transactions in the last couple of months.

“However, the strengthened position of the governing party leads us to expect a quick return to normalised activity levels,” chairman John Brown told shareholders at the AGM on Thursday.

“We therefore remain confident of meeting the board’s expectations for the full year.”

The group said it has seen encouraging trading across all of its businesses since the beginning of 2015.

The firm said the redevelopment of the Terry’s Chocolate Factory in York made significant progress following the submission of detailed planning and listed building consent applications and the exchange of contracts for the conversion of the main listed factory building to provide over 150 luxury apartments.

Planning permission is expected to be secured in the middle of this year, enabling work to start in late 2015, with the first apartments being completed in the first half of 2016.

The firm reported also high activity levels at its Hallam Land operation.

“We are promoting a land portfolio of over 140 sites amounting to over 10,000 acres,” said Mr Brown.

The company concluded two land sales for over 500 units in the first five months of 2015.

“We are in discussion to sell a further 13 sites for over 1,800 consented units, some of which will complete in 2015, others will conclude in 2016,” Mr Brown told shareholders.

The group now has 47 sites with over 12,000 units holding either planning permission or “minded to grant” consent.

At Markham Vale, Henry Boot’s 200 acre business park being developed in partnership with Derbyshire County Council, pre-let agreements have been exchanged with Great Bear Distribution to take a new 480,000 sq ft distribution warehouse. This scheme is expected to be completed by mid-2016.

Analyst Alison Watson at Investec said: “As expected, the General Election saw a slowdown in decision-making particularly in the public sector.

“A quick return to normalised activity levels is now expected and management stated they remain confident of meeting full-year expectations.

“We believe the business remains well positioned given its significant land bank and good visibility on future development profits.”

Analyst Nick Spoliar at WH Ireland added: “All three of Henry Boot’s segments are reported to be trading well. Property Investment & Development in particular has been busy, with a number of material contracts well on track, more than making up for the expected hiatus for the land business around the time of the election.

“Construction is performing well both in scale and price-wise, reflecting a healthy market in the North of England.”