Henry Boot reports resilient full-year performance

(Sharecast News) - Henry Boot reported a resilient performance for the year ended 31 December on Tuesday, with results in line with market expectations and a solid foundation laid for future growth. The London-listed land, property development, home building, and construction business said group revenue declined to £328.4m from £359.4m, primarily due to a lower contribution from the construction division, although that was partially offset by stronger sales at Hallam Land.

Profit before tax was £30.7m, compared to £37.3m in 2023, with underlying profit at £29.4m.

The company increased capital employed by 5.4% to £439m, progressing toward its medium-term target of £500m.

Return on capital employed stood at 8%, down from 9.9%, but Henry Boot said it was confident in achieving its 10% to 15% target range over the medium term.

Net asset value per share rose 3.6% to 317p, while net debt declined to £62.7m from £77.8m, reducing gearing to 14.7%.

The board proposed a 5% increase in the final dividend to 4.62p, bringing the total dividend for the year to 7.70p.

Hallam Land exceeded expectations with 2,661 plot sales and secured consents for 2,982 plots, lifting the total with planning permission to 8,822.

The land bank increased by 4% to 104,787 plots.

Following favourable changes to the National Planning Policy Framework, the group said it was planning to materially increase applications to around 10,000 plots in 2025.

In property development, HBD completed schemes with a gross development value of £331m, 72% of which were pre-let or pre-sold.

The group also launched a joint venture with Feldberg Capital to deliver around £1bn of industrial and logistics developments over the next seven years.

Henry Boot said its investment portfolio delivered a 9.9% total return, outperforming the CBRE UK Monthly Index.

In housebuilding, Stonebridge Homes increased completions by 8% to 270 units and expanded its land bank to 1,726 plots.

Post year-end, Henry Boot increased its ownership of Stonebridge to 62.5%, with the remaining stake to be acquired in tranches over the next five years.

The construction division recorded lower turnover at £80.5m and operating profit of £4.9m.

A new management team at Henry Boot Construction was reportedly focussed on diversifying the order book, with early signs of improvement said to be emerging.

The company also highlighted continued progress on its responsible business strategy, with a refresh of medium-term targets expected in 2026.

"As anticipated, after a challenging start to the year we delivered a strong second half which allowed us to report results in line with expectations," said chief executive officer Tim Roberts.

"In particular, demand for our high quality land, prime development and premium homes has remained resilient.

"This led to us successfully completing almost £350m in land and property sales and continuing to lease up space, including setting a record office rent in Manchester at our Island development."

Roberts said the company's investment portfolio also recorded another period of outperformance, with a total return of almost 10% for the year, meaning it had returned more than double the index over the last five years.

"We also continued to shape the business, with the agreed buyout of Stonebridge Homes, where we are now the majority owner.

"We will take full ownership of this premium housebuilder in the coming years, continuing to scale the business up, and delivering synergies as we integrate it into Henry Boot.

"At Hallam Land, we've been quick off the mark in strengthening our team, so we are well prepared to capitalise on the positive changes to the NPPF, by increasing our planning applications fourfold to 10,000 plots over the next 12 months."

At HBD, Tim Roberts noted that the company had formed the Origin joint venture, which it believed would help it to accelerate the delivery of its institutional quality industrial development pipeline.

"All of this, along with our rock-solid balance sheet, the prospect of recovering markets, and an easier planning environment, means we are well placed for the future."

At 0848 GMT, shares in Henry Boot were down 0.47% at 211p.

Reporting by Josh White for Sharecast.com.