Strong step forward for Henry Boot

Sheffield-headquartered construction business, Henry Boot remains confident about in its long-term markets despite feeling the effects of Covid-19 in its full year results to the 31 December 2020.

The firm saw profits fall by 66% to £17.1m, however this was ahead of expectations as a result of land disposals and what it describes as a “resilient performance” in the second half of the year.

In its unaudited results Tim Roberts, chief executive said: “Just over a year into my new role and I find myself very proud of the way our people have responded to the pandemic.”

He explained that having utilised the government’s job retention scheme through to August 2020, when there was an “initial reduction in construction, housebuilding and plant hire activity”, it has since repaid all furlough grants claimed.

Looking at its business areas, Hallam Land Management (HLM) continued to trade well throughout the year, selling 2,000 plots across nine sites and contributed significantly to the Group’s overall profit with the disposal in the second half of the year of “a significant interest in a joint venture site in the Midlands”. The group has invest £10m in its land bank growing it to 16,607 acres with 15,000 plots where planning is secured.

The impact of the pandemic was felt at Henry Boot Developments (HBD) with a slowing of development, however it completed on a total GDV of £58m with all of the schemes either sold, let or retained in its investment portfolio. Towards the end of the financial year the group stated it was increasing its developments to mee the “Growing industrial demand” and has commitments on 206,100 sq ft of industrial and logistics space.

The group has paid £12.6m for both Mabgate in Leeds and St John’s College in Manchester which together comprise 87,000 sq ft of existing buildings.

The group’s development pipeline remains at £1.4bn with over three quarters of this (78%) in the industrial and logistics space.

The group’s jointly owned housebuilder, Stonebridge Homes achieved 115 unit sales over the year and has started 2021 with 69 units sold already. However it highlights that growth of the housebuilder has been hampered by “a slow process of getting planning” on its land bank which is attributed in part to Covid-19.

Revenue at Henry Boot Construction was down 4% on 2019 to £86.2m. However, having secured a £40m contract to deliver a build to rent scheme and started work post year end on a £42.5m mixed use scheme in the “Heart of Sheffield”, the firm has a full construction order book for 2021.

Looking ahead, Roberts added that with the firm’s “public sector bias” it expects to play a part in the Government’s build back better programme.

The firm as also outlined the timescales for it to launch a new ESG strategy, with the first phase launching this month and taking place over the year, building to the second phase launch of a responsible business strategy in January 2022.

Roberts said: “There are reasons to be cautiously optimistic; the successful ongoing national roll out of the vaccine; infection rates falling and the Government’s road map setting out some form of social and economic recovery. Importantly over the last year, we have shown that our business has adjusted and, whilst not immune, still offers a resilient, viable and relevant business model.

“We start the year with strong forward sales and very healthy order books. Land plots pre-sold last year, and sold at the start of this year, total 2,039, our committed developments of £312m are already 88% presold or let, sales have now been agreed on 57% of our housebuilding target for 2021, plus the year’s orderbook for construction is fully secured. Just as importantly with cash on the balance sheet, together with a portfolio rich with opportunity we are ready to respond to signs of increasing demand in our key markets.

“Moreover, our strategy focuses on growth in three long term markets – industrial & logistics, residential and urban development that are driven by long-term trends, which in a post pandemic world, we are confident will endure.”