Strong balance sheet for listed construction group

Tim Roberts. Credit: British Land

Sheffield-headquartered construction business, Henry Boot, has reported a strong financial position in its trading update for the year ended 31 December 2020.

The company ended the year ahead of Board revised expectations for 2020, due primarily to land disposals and a resilient performance from the development, construction and house building businesses in its target industrial and residential markets.

Henry Boot has recorded a robust balance sheet and net cash of about £27m (2019: £27m).

Its latest update notes: “Despite the ongoing challenges of the pandemic, the Group saw a steady increase in activity.

“Since the beginning of 2021, the Government has confirmed that construction and housebuilding activities should continue during the latest COVID-19 lockdown, allowing Henry Boot to carry on, in line with COVID-secure guidelines.”

Within the Group, Hallam Land Management saw housebuilder demand for land continue in 2020, driven by the housing market recovering in the second half of the year.

The development arm of Henry Boot, HBD, completed on developments with a total Gross Development Value (GDV) of £62m.

The Group is committed to projects with a total GDV of £313m (HBD share £85m), with the bulk of this in the significant BTR Kampus scheme in Manchester which has been forward funded.

The rest comprising 657,000 sq ft of industrial & logistics has been 69% pre-let or pre-sold. Further opportunities have also been secured in the Group’s key markets, notably at Mabgate, Leeds (60,000 sq ft) and St John’s College in Manchester (27,000 sq ft).

Finally, the Group’s Stonebridge Homes company completed the year slightly ahead of target and, due to resilient demand within the housing market, maintained strong sales rates.

In H2, Henry Boot Construction’s productivity increased on sites to 95% of planned activity with growing existing public sector work leading to a strong orderbook for 2021.

Its Glassworks scheme in Barnsley remains on time and budget and a £40m contract has been signed to deliver a BTR scheme, the Kangaroo Works, in the centre of Sheffield.

Tim Roberts, chief executive officer said: “Henry Boot has adjusted well to the unprecedented challenges that have faced everyone in 2020, but with a continued strong financial position, and engaged teams, we have managed the business to focus successfully on our key long term markets which are today, as relevant as ever.

“Whilst the latest lockdown shows significant uncertainties remain, with strong forward sales and a growing store of opportunities, we start the year in good shape.”