Construction temporarily slows for Boot but profits soar
Higher land sales and increased property development activity more than compensated for a dip in construction at contractor/developer Henry Boot in the first half of 2016.
Henry Boot has reported interim revenue for the six-months to 30th June 2016 up 35% to £107.3m (2015 H1: £79.2m).
Profit before tax was up 49% to £20.8m (2015 H1: £14.0m). Most of the increase was due to the sale of land at Marston Moretaine near Bedford.
“Whilst construction turnover has been slower than anticipated in the first half of the year we expect this to be recovered through the second half,” said chairman Jamie Boot.
However, the construction order book has grown and Henry Boot has secured its budgeted turnover for 2016 and 50% of 2017’s budgeted turnover – “which, at this time of the year, is slightly ahead of our expectations,” said the chairman.
“We recently completed the £34m Fox Valley retail development for the Stocksbridge Regeneration Company Ltd, which opened in June 2016. We also secured the first phase of the £35m Better Barnsley Town Centre Redevelopment for Barnsley Metropolitan Borough Council, and have commenced the pre-construction works. We are also delivering the Snowhill Retail Park, Wakefield, for Kier.
“Looking to the future, we secured a place on the new YORbuild2 framework. We previously delivered a good number of schemes under the existing YORbuild framework, including two schemes in progress for Leeds City Council; structural repairs to a number of tower blocks and the £7.7m, 45 unit extra care housing development in Yeadon.
“The higher education sector continues to provide good opportunities and we are currently delivering schemes for the University of Sheffield, University of Derby, University of Huddersfield and University of Lancaster. Furthermore, work on the new spa facility at the prestigious Rudding Park Hotel in Harrogate is progressing well.”
He added that “Banner Plant continued to trade well through the first half of the year with turnover and profit slightly ahead of 2015”. Temporary site accommodation and access equipment were strong performers and the new Ossett Power Tool unit that opened a year ago and is already delivering results in line with established tool hire units.
So far, Jamie Boot said, there had been no Brexit fall-out. “Two months after the EU referendum, it is probably a little early to judge how the UK property market will react over the longer term,” he said. “However, our experience is that the trading activity and any deals we had in progress are proceeding as envisaged and the future pipeline is coming to fruition as we would have expected.”
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This article was published on 25 Aug 2016 (last updated on 25 Aug 2016).