Construction accounts for less than half of Henry Boot’s turnover; land promotion, property investment and development are where the big profits are made.
The 12% increase in half-year revenue was driven by land disposals and by property development completions in the house-building business Stonebridge. The 68% leap in profit before tax was down to land sales and industrial development activity.
However, in the six months to 30th June, the construction segment achieved turnover of growth of 22% to £66.5m (2021 H1: £54.7m) and an operating profit of £6.3m (2021 H1: £4.3m).
Henry Boot Construction is working on the £38.9m build-to-rent Kangaroo Works residential scheme in Sheffield, which is on track to be completed in Spring 2023. Good progress has also been made on the £47m urban residential development, Cocoa Works, in York, with the seven-storey 279 apartment scheme due for completion at the end of 2023, the company said.
Work on Block H at the Cambridge Street Collective, a £42m urban development contract in Sheffield, has experienced archaeology and supply issues, pushing the target completion date back by three months to spring 2023.
Henry Boot Construction is also on 11 public sector frameworks, including the P23 NHS framework for projects up to £20m and the new regional YORbuild3 medium value framework for projects between £4m and £10m.
The land promotion business, Hallam Land Management (HLM), sold 3,447 plots in the first half of 2022 (2021 H1: 2,288), including 2,170 at Didcot to Taylor Wimpey and Persimmon. The land bank has been maintained at 92,981 plots (December 2021: 92,677).
Chief executive Tim Roberts said: “We have had one of our best ever first half years with materially rising profits and good progress achieved against our strategic targets. Taking advantage of our three key markets we have made significant sales whilst being selective on purchases. This has allowed us to keep gearing low, despite continued investment in our high-quality committed development programme and our growing housebuilder, and at the same time increase our interim dividend by 10%. We have worked hard to do our best to adjust to supply restrictions, inflation and an increasingly complex planning system. This work, together with our committed team of people and the relatively high level of forward sales for 2023, see us well placed as we enter what seems yet another period of economic uncertainty.”
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