Henry Boot ‘cautiously optimistic’ on economy
PROPERTY and construction group Henry Boot has expressed cautious optimism about the economy as it reported improvements in its land, property and plant hire businesses.
In an interim management statement for the four months to May, the group said its plant hire business continued to trade satisfactorily despite the adverse weather conditions in the early part of the year and that to date, turnover is marginally ahead of the same period in 2010.
Its PFI project, Road Link, which maintains the A69 between Newcastle and Carlisle for the Highways Agency, also performed well during the period, remaining open throughout the bad weather.
The company said: “The board remains vigilant with regard to cost control and this, coupled with property and land sales during the period, has resulted in the group having net cash of £16.5m at May 11, compared to net borrowings of £11.4m at December 31 2010.”
Looking ahead, Henry Boot reported stability in the housing land market, with house builders reporting improving results despite the continuing lack of availability of mortgage finance.
The group said: “However, these trends mask the fact that underlying demand for traditional family housing remains buoyant in certain areas of the country.
“Acquisition demand for sites in these areas, with planning permission for this product, are highly sought after as the supply of sites remains very restricted, particularly under the current planning regime.”
The company said that property development is “becoming more attractive again” and that it is pursuing a number of opportunities.
“Overall, trends in our markets give us the confidence to be able to make managed risk investments in the expectation of generating satisfactory returns in due course. That said, the tentative recovery remains fragile and we continue to assume that it will likely be a drawn out and uncertain process.”
In property investment and development, the group saw the practical completion of a 4,000 sq ft Tesco Express foodstore in Bradford and said terms for the sale of the investment have now been agreed.
Pennine Property Partnership, Henry Boot’s partnership with Calderdale & Huddersfield NHS Trust to provide new medical accommodation for the Trust and maximise the value of surplus property assets, has been established.
Work is now starting on the first joint development, 46,000 sq ft of new flexible office and administration space.
Within the housing sector, the group recently completed 27 new homes for Sheffield City Council and continues to work on social housing refurbishment contracts in North Lincolnshire, Manchester, Nottingham and Doncaster.
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Work has continued in the health sector with contracts for Sheffield Primary Care Trust and a major health care facility for a joint venture between Rotherham MBC and the Rotherham Primary Care Trust.
