Sheffield’s Henry Boot shuns post-Brexit fears as revenue hits £107m

Henry Boot PLC, the Sheffield-based property developer, has reported a strong performance in the half-yearly results for the period ending 30 June 2016.

Revenue for the first six months of the year rose to £107.3m, compared to £79.5m during the same period last year. This Increase is a result of higher land sales and additional property development activity.

Henry Boot also saw an increase in operating profits of 59% at £21.1m (2015: £13.3m) with the contribution from the land disposal at Marston Moretaine being the single largest explanatory factor.

Net finance costs were £700k (2015: nil) compared with last year, which benefitted from returns on investments that were not repeated this year. This, together with the lower share of joint venture investment property valuation gains of £400k (2015: £0.7m), resulted in a 49% increase in pre-tax profit of £20.8m (2015: £14.0m).

A key driving force behind the company’s strong financial performance was its strategic land and planning promotion arm, Hallam Land.

Hallam Land completed six residential land sales before the EU referendum vote and exchanged on a further three sites which will complete in the second half of the year, including a six acre parcel of employment land in the Midlands.

At 30 June 2016 Hallam held interests in 11,416 acres (December 2015: 11,061 acres), 1,740 acres owned, 2,606 acres under option and 7,070 under planning promotion agreements.

Chairman Jamie Boot said: “I am very pleased to report that Henry Boot has performed strongly in the first half of 2016, concluding on some valuable strategic land sales in the period, and to see the larger commercial development schemes we have been preparing for some time are now finally on site.

“As announced on 8 June 2016, earlier than anticipated land sales, combined with continued progress on our commercial property developments meant that the Board concluded that profit before tax for the year ending 31 December 2016 would be comfortably ahead of market expectations at that time.

“The result of the EU referendum in June 2016 gave rise to widespread cautious predictions regarding future activity levels within the UK focused property and construction sectors. However, two months after the vote, the Board’s expectations detailed in the Company’s trading update on 8 June 2016 remain unchanged.

“Henry Boot PLC is inextricably connected to the UK property market, whether that be housebuilding, commercial development, construction or plant hire. Two months after the EU referendum, it is probably a little early to judge how the UK property market will react over the longer term, however, our experience is that the trading activity and any deals we had in progress are proceeding as envisaged and the future pipeline is coming to fruition as we would have expected.

“The completion of our commercial development pipeline in progress, largely already pre-let and/or pre-sold is likely to see the Group be cash generative over the next two years and, should the post referendum world prove to be more turbulent than we are experiencing at the moment, these internally generated funds should provide the resources to acquire competitively priced opportunities for the next cyclical growth phase.”