Yorkshire property company Henry Boot Plc says it still plans to invest into prime opportunities despite continuing uncertainty in the market.
The Sheffield land promotion, property investment and development, and construction group has posted results for the six months ended June 30, showing a 24.5% increase in revenue to £179.8m, driven by land disposals and housing completions. However, underlying pre-tax profit dropped to £23.3m from £37.8m. Net debt has risen from £48.6m recorded in December, to £70.8m, which it said reflected continued investment in committed developments and a decision to limit further acquisitions.
The firm said: “Despite low economic growth and slowing markets, we have maintained our strategic ambition to grow and are still looking to invest into prime opportunities. Rightly, we have been cautious during H1 23 towards acquisitions, with our main focus on investment in building out HBD (Henry Boot Developments) committed development programme.”
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Operational highlights included £129.3m of property sales led by its land promotion, development and housebuilding businesses, despite weakening markets. Within land promotion it sold 1,990 plots, down from 3,447, but increased its profit per plot to £11,400, up from the December 2022 figure of £6,066, due to the significant sale at Tonbridge, offsetting the volume reduction. Its total land bank has now grown to 97,095 plots.
Within its construction division, the group said trading had been below expectations, with operating profit falling to £4.4m from £6.3m, having experienced difficult operating conditions in line with the Ƶ construction market. It said all new work decreased by 2.1% with the most significant reduction of 6.7% for private housing.
The division has secured only 72% of its turnover for 2023 and it has experienced several delays on pre-construction services agreements (PCSAs). However, it said there is a healthy pipeline of opportunities that it is actively pursuing.
Tim Roberts, chief executive officer, said: “The first half of the year has seen our markets slow as interest rates have continued to rise, but, as these results show, our focus on prime strategic sites, high quality development and premium homes has provided us with a degree of resilience. This has helped us to report a very respectable underlying profit before tax of £23.3m, an increase in NAV of 3%, plus the confidence to grow our interim dividend by 10%.
“Whilst uncertainty in our markets has increased, we believe we have enough momentum to carry us through the year, although the outlook for 2024 for the time being is not so clear. However, we have conviction in our three markets which are driven by structural trends and I am pleased to report that we remain on track to hit our strategic growth and return targets over the medium term.”
