Profits up 48% at Henry Boot as it brushes off Brexit fears

“UNCERTAINTY is the real killer in the property market,” said John Sutcliffe, chief executive officer at Henry Boot.

But the Sheffield-based engineering and construction business has countered the potential Brexit fallout and built a strong first half with pre-tax profits up 48% following the completion and sale of major projects.

Pre-tax profits increased to £20.8m for the half year to 30 June 2016, from £14.0m the same period the year before, a marked departure from the anticipated decline following the Brexit decision. Henry Boot was amongst several other prominent Yorkshire construction companies to suffer a short term share price drop.

Revenues also spiked to £107.3m up from £79.2m due in large part to the sale of owned land at Marston Moretaine in Bedfordshire.

Its property development arm saw “positive contributions” from its Markham Vale site, the 200 acre business park which has seen work on a 225,000 sq ft warehouse for German automotive parts supplier, Bilstein, start on site, and the completion of the pre-let and pre-funded 480,000 sq ft Great Bear Distribution warehouse.

The company said that good progress is being made at the former Terry’s Chocolate factory in York where the conversion of 170,000 sq ft of former multi-storey factory space to apartments, in partnership with a specialist residential developer, is well underway.

Although Mr Sutcliffe said the Brexit decision came as a shock, in the short term he said it has been better than expected.

“So far, none of the deals we agreed before Brexit have fallen over, and all transactions for future are on track. At this point in time I’m surprisingly upbeat.”

But, he said: “It’s early days still, we’ve made this momentous decision and the outcomes that result from that decision are not necessarily happening yet.

“The biggest risk about Brexit is a lack of confidence in how successful the country is. If you have confidence you will buy that house, invest in that warehouse. If you are not confident you will hang on, see how the situation is at a later date which slows everything down.”

Mr Sutcliffe continued: “A lot of opportunities you gather over a number of years, they take time. We’ve been talking to Aberdeen for five years for example,and these projects tend to be the fruition of lot of hard work over a long period of time.

“We are not a short term business. There is a lot of work going on in the background that you don’t see.”