Tough year ahead says Henry Boot


Henry Boot’s construction division has remained profitable despite decreased revenue amid challenging market conditions. 

Henry Boot
Credit: Henry Boot.

The group reported a 3 per cent increase in revenue to £359.4 million, compared to £341.4 million in the prior period (FY2022), generating a pre-tax profit of £37.3 million, down from £45.6 million the year before. 

It said the results, driven by land disposals, property development and housing completions, were in line with market expectations. 

The construction business posted turnover of £99.5 million, down from £128.6 million in FY2022, generating an operating profit of £6.5 million (FY2022: £12.1 million). 

The company also restated that, due to challenging trading conditions, it expects a lag in performance in the year ahead. 

Capital employed by the group in the last financial period increased by 4.5 per cent to £417 million, compared to £399 million the year prior, as it strives to hit its medium-term target of £500 million.  

However, return on capital employed (ROCE) was down from 12 per cent in FY2022 to 9.9 per cent in FY2023, below its medium-term target of 10–15 per cent.  

Henry Boot also reported net debt of £77.8 million, compared to £48.6 million in the previous financial period, owing to investment in developments and acquisitions, as well as a 10 per cent dividend increase. 

A word from the top 

“Our focus on high quality land, commercial property development and housebuilding in prime locations meant that demand for our premium products remained resilient and allowed Henry Boot to perform relatively well against a backdrop of a slowing economy, rising interest rates, high inflation and decreasing volumes in our key markets,” said CEO, Tim Roberts 

“While constraining our ability to bring forward developments in one respect, the government’s consistent failure to make much needed reforms to an increasingly dysfunctional planning system does play to the strengths of our land promotion business while helping underpin demand from national housebuilders, who are still actively acquiring prime strategic sites to shore up their future pipelines.  

“This alongside some well timed development disposals and Stonebridge Homes increasing house sales by 43 per cent, helped deliver a resilient performance. 

Optimistic outlook 

“We are not immune from the challenges that the UK economy presents to the near-term trading environment and as previously reported, we expect a lag in performance in the year ahead.  

“However, the outlook for both inflation and interest rates are improving and it’s beginning to feel as though the UK economy has turned a corner, with recent reductions in mortgage rates also pointing towards a hopefully brighter future.  

“With this in mind, and given the group’s continued strong financial position, we remain confident in achieving our medium-term growth and return targets, as reflected in the 10 per cent dividend increase we have announced today.” 

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