Cautious optimism for property group after challenging year

Property investor and developer, Henry Boot, says it managed a resilient performance in 2023, despite a difficult market environment.

In a trading update for the year ended 31 December 2023, the Sheffield-headquartered business said it expects profit before tax for the year to be in line with current market consensus of £37.2m.

But in its outlook, the company warns it expects profitability for 2024 to be “significantly below” current market consensus – which is also £37.2m.

Tim Roberts, chief executive officer, said: “We have maintained a strong financial position and continued to invest in the business to ensure we are well placed as our markets begin to recover. 

“While the housebuilding sector has seen slowing sales rates, our land business is experiencing continued demand for strategic sites with planning in premium locations.

“Our development business has performed ahead of expectations, while the investment portfolio is on track to outperform the wider market.

“With a path to lower inflation and improved interest rates, whilst there will undoubtedly be bumps along the way, the economy and our markets have turned a corner, but we expect our results for 2024 to be impacted by these factors.”

Henry Boot says that during 2023, activity reduced in its three key markets of Industrial & Logistics, Residential and Urban Development.

But it explains its focus on high quality land and development in prime locations meant the business still performed robustly.

The firm adds it is now more conservative with its estimates of building completions for 2024 and anticipates the impact from a recovery in residential sales will be more weighted to 2025.

But it notes that despite this, the company remains well placed to achieve its medium term growth and return objectives.