Profits bounce back at property group
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Construction and property development group Henry Boot has seen revenues increase and pre-tax profit more than triple in the six months to 30 June, bouncing back to pre-pandemic levels.
The Sheffield-based business has reported revenues of £129m in its unaudited interim results, with a profit before tax of £23.1m compared to a £7.2m for the same period in 2020, but remained slightly below its £24m figure for the same period in 2019.
This success has been attributed to the strong performance of the industrial market and through the disposal of investment property, revaluation gains and returns from joint ventures.
The strong performance figures come as the business, which includes the property development arm HBD, has invested £54.9m in new opportunities including £11.3m since the end of June. This includes a key site in Manchester’s St Johns district and the purchase of 60,000 sq ft across two buildings in Mabgate, Leeds, with the group stating in April it was looking to increase its investment portfolio towards the target of £150m.
The group’s land promotion business Hallam Land Management is trading well selling 2,288 plots in the period, 288 more than than in the previous 12 months to December 2020, with demand from housebuilders remaining buoyant due to the strong residential market.
The company’s jointly owned housebuilder Stonebridge Homes is also benefitting from the resilience of the housing market, having secured 85% of its 2021 sales targets in the first half of the year, likely benefitting from the soon to end stamp duty holiday as well as low interest rates and good mortgage availability. Looking to the second half of the year it is expected that Stonebridge’s land bank will be increased beyond its current 1,125 plots.
Commenting on the results, Chief Executive Officer Tim Roberts said: “The business has performed well, responding to growing demand within our key markets. Whilst we expect profit to be weighted to the first half, the cadence of our activity will remain high, so we will continue to make excellent progress on our clear strategic targets. This will position us well for sustainable growth in the future.”
Looking ahead to the remainder of the year the group states its main focus will be on “increasing capital employed by over 40% to £500m”.
Roberts added that the business “remains very well placed for future growth” and that the business has taken more than its “fair share of the growth in the construction industry which effectively means HBC’s order book for this and next year is full. We will concentrate on delivering this order book and will be selectively looking for work for 2023.
“Our balance sheet remains rock solid and net debt at £13.0m is low so we have capacity to fund our strategic growth ambitions. We have made a good start to the second half and are well placed to build on the progress made so far this year and on our strategic priorities for the longer term.