Debt slashed at Henry Boot

CONSTRUCTION group Henry Boot has slashed debt by £12m since the end of June but the company has warned of the effects of economic uncertainty and changes to the planning system.

The firm said caution had become “the order of the day” in a stock market update this morning with new-build housing market output around half its typical level and concern about shortages of sites with planning consent when the market improves.

However, the company expressed optimism that its existing schemes put it in a position to capitalise on land shortfalls and development opportunities were becoming available that did not force businesses to take on high debt levels.

Henry Boot’s land promotion division recently entered into an option agreement with Tesco to acquire 14 acres in Sheffield for a new store while the property development side of the firm has exchanged a joint development agreement with Royal Bank of Scotland for a mixed use scheme on a 26 acre site at Thorne, near Doncaster.

The company said demand from the public sector had held up well although opportunities are expected to be reduced in the wake of Government spending cuts. Its construction division has secured new contracts including for a school extension with Calderdale Council and environmental works for Barnsley Council.

Its PFI contract to maintain the A69 provides the firm with a steady income stream and was described as the “cornerstone” of the construction division’s profitability.