Property sales help Henry Boot stay on target

PROPERTY development group Henry Boot said today that its trading performance last year is in line with market expectations thanks to some successful land sales.

The Sheffield-based group, run by chief executive Jamie Boot, said that the economic downturn had seen rising yields hit capital values and there had been further “significant falls” in property valuations in the fourth quarter at its developments in York, Nottingham, Stoke-on-Trent, Bromley and Brombrough and its Ayr shopping centre.

Henry Boot said it has also decided to reassess the value of developments in progress and had made provisions against costs for two sites to reflect anticipated capital values when they complete.

However despite this the group said that it still expects its net asset value per share to increase for 2008.

It said in a statement: “In the short term, we will also manage the balance sheet and reduce gearing to allow the flexibility to take advantage of additional opportunities as they arise.

“It is this careful approach to our portfolio of opportunities, the focus on cash management and the continued net cash generative returns achieved from the construction division which will allow us to manage our progress through these difficult market conditions and then benefit from the recovery as it develops.”

It has reduced its debt levels to a year end gearing level of 26% compared to 39% a year earlier and said it will continue to do that during this year and there is “significant unused headroom” in its banking facilities.

It said the move would allow it to take advantage of any opportunities that arise.

The group is due to announce its results for the year to December 31 on March 25.

It added: “The very well publicised plight of the UK housebuilding sector means that the market for greenfield land with planning consent remains very difficult. We are very pleased to have concluded the deals we did earlier in 2008 and we expect that it will be some considerable time before the market recovers.

“In the meantime, we continue to work aggressively towards achieving as many planning consents as possible on land located largely in Southern England and in Scotland, so that we will be in a position to satisfy housebuilders’ requirements when the market improves.”