No recovery until 2010 says Henry Boot

PROPERTY development group Henry Boot said that it is performing in line with expectations but it does not expect to see a recovery in the property market before 2010.

The Sheffield-based group said in a interim management statement that it comfortably satisfies all covenants and has “significant unutilised headroom within agreed facilities.”

Since its last update in August the group said it had acquired the former County Court Buildings on Deansgate in Manchester with the intention to refurbish it to create a mixed-use scheme incorporating office and leisure facilities.

The group said it had also completed a number of sales, including an office block in Glasgow for £1.2m and the sale of the Vanguard Trading Estate in Chesterfield for £2.55m.

Looking forward the group said that the very recent financial turmoil and the Bank of England’s assessment that Britain is entering a prolonged recession make it very difficult to predict when market activity levels will recover.

Group managing director Jamie Boot said: “In this uncertain environment where debt is no longer readily available and effective total borrowing costs are still high, despite the recent falls in Base Rates, we are being very selective in the acquisition of opportunities and the authorisation of capital for property developments. However, there are a significant number of interesting prospects arising as a result of the aforementioned turmoil and we continue to invest where we are able to identify the opportunity to achieve excellent long term returns.”

In August the group saw trading profits increase to £30.2m for the six months ended June 30 compared to £10m over the same period last year.

Turnover was up from £47.1m to £119.3m. Pre-tax profits slumped slightly from £21.9m to £20.4m.