Henry Boot, a UK-based company specialising in land promotion, property investment and development, and construction, has reported its interim financial results for the six months ending 30 June 2024 (H1 2024).
The group's revenue saw a sharp decline of 41.0% to £106.0m ($139.75m) in H1 2024, down from £179.8m in the first half of 2023. This decrease was attributed to lower activity levels in the company's Land Promotion and core Property Development sectors.
Gross profit also fell to £24.7m, compared to £40.8m in the previous year, with the company expecting most of its transactions to occur in the second half of the year.
Despite this, administrative expenses remained on par with the prior period, attributed to continued investment in the company's people, systems, and brand, balanced by targeted savings and efficiencies.
The sale of investment properties did not contribute to profits this period, contrasting with the £0.1m recorded in the first half of 2023.
Operating profit dropped to £5.9m, resulting in an underlying profit before tax of £3.6m, or £3.7m on a statutory basis, a significant decrease from the £23.3m underlying or £25.0m statutory reported in the previous year.
Earnings per share correspondingly decreased to 2.8p from 14.0p in H1 2023.
As of 30 June 2024, the company's net debt stood at £103.9m, an increase from £77.8m at the end of 2023. However, debt levels are expected to reduce in the second half of the year as transactions are completed and assets are converted into cash.
The construction segment of the group, which includes Henry Boot Construction (HBC), Banner Plant, and Road Link (A69), maintained profitability to some degree, with an operating profit of £2.9m, though this was lower than the £4.4m achieved in 2023.
HBC has faced challenges in securing work, with a secured order book of 61% in the first half of 2024, falling short of the medium-term target of 65% set at the start of the year.
Consequently, turnover is anticipated to be lower this year. Nevertheless, HBC's low capital employed minimises the risk to Henry Boot's wider strategic growth objectives.
Banner Plant and Road Link (A69), meanwhile, are performing according to management expectations.
Henry Boot CEO Tim Roberts said: “During the first half of the year we have started to see an improvement in our markets and this together with our focus on prime land and development, plus premium homes has helped us to achieve relatively strong property sales.
“With 81% of budgeted sales already completed, exchanged or reserved, we remain on track to perform in line with market expectations for the full year. Furthermore, we remain confident in our key markets, and have significant latent value in our development and land portfolio which is held at cost, as well as plenty of opportunity to grow in order to meet our stated medium-term targets.”
