23 May 2024
HENRY
BOOT PLC
('Henry
Boot' or 'the Group')
AGM TRADING
UPDATE
Henry Boot, a Company engaged in land
promotion, property investment and development, and construction,
provides a trading update in advance of its AGM which will take
place at 12:30pm today.
Tim
Roberts, Chief Executive Officer, commented:
"We have begun the year well, trading in line with
market expectations* and continuing to crystalise profits from both
land sales and delivering prime development and premium homes. We
have started to see signs that the economy has turned a corner,
with inflation falling and interest rates likely to fall, which has
improved sentiment in our three key markets. Whilst we expect our
performance to be heavily weighted to H2 24, as flagged at our
results in March, our focus on high quality land and development in
prime locations, along with a renewed banking facility, leaves the
Group in a position to deliver full year performance as
expected."
Trading update
Hallam Land has begun the year well,
completing the sale of 776 plots across four sites and exchanging
on a further 792 for completion during 2024-2026, with another
1,626 under offer. Whilst activity has not recovered to the heights
of 2022, land prices have remained stable in Q1 24, with
housebuilders showing encouraging levels of bidding for sites in
Hallam's prime portfolio. A good example of this is at Pickford
Gate, our significant 2,400 plot site in Coventry, where having
disposed of 250 plots to Vistry last year, Hallam now has a further
491 plots under offer to another major housebuilder. The sale is
expected to exchange in H1 24 and complete in H2 24, at which
point, with all our land held at cost, we will convert the value
our team has created into profit.
At 101,251 plots, Hallam's total land
bank has remained stable of which 7,452 plots have planning
permission and a further 13,490 plots are awaiting planning
determination. With the UK planning system experiencing ongoing
delays, Hallam continues to use its expertise in unlocking the
planning system and is currently working up several applications
and appeals to increase the number of consented sites.
HBD remains focused on delivering its
committed programme of high quality developments, which currently
has a £154m Gross Development Value (GDV). At Airport Business
Park, Southend, a 27,600 sq ft I&L unit has been successfully
completed (£5m GDV) for CAMA Asset Store. Setl (£32m GDV), the 102
premium apartment building in Birmingham, completion launch is on
course for the end of May and already 36% of the units are presold
in line with target selling prices. HBD has secured planning for a
72-home retirement scheme at The Chocolate Works, York, on a site
which it has agreed a conditional sale to McCarthy Stone and are
now working to discharge the final remaining contractual condition,
which is anticipated to complete in Q4 24. This will be the final
phase of HBD's award-winning 27 acre development.
At other key projects, marketing has
now commenced resulting in several enquiries for our NZC schemes
Momentum, Rainham (80:20 JV with Barings), a £24m GDV (our share)
I&L development and Island, Manchester (50:50 JV with GMPF), a
£33m GDV (our share) prime office building. Both schemes remain on
course for completion in Q2 24 and Q4 24 respectively.
Within HBD's £1.3bn
development pipeline, there are c.£200m near-term, occupier led
schemes which have the potential to be added to the committed
programme within the next twelve months. This includes Spark,
Walsall (£110m GDV), where extensive remediation works are set to
be completed in Q3 24. A planning application has been submitted
for the first three units totalling 464,000 sq
ft with the aim to begin construction on the first unit in Q4 24
(c.£40m GDV) for occupation by mid 2025. Any commitment to develop
will be occupier led.
The commercial property
market remains broadly stable, with values decreasing by 0.4%
during the first four months of 2024 according to the CBRE UK
Monthly Index. Industrial property, which represents c.70%
of HBD's investment portfolio, continues to outperform with capital
values up 0.4%.
Stonebridge Homes (SH) has already
secured reservations for 66% of its 2024 delivery target of 275
homes. In April 2024, SH grew its private sales rate to 0.59 houses
per active outlet per week (April 2023: 0.46), operating from 9
sales outlets. The housing market in Yorkshire and the Northeast
continues to show some early signs of improvement, supported by
improved mortgage availability as well as improving affordability
and sentiment.
Henry Boot Construction continues to
experience challenging trading conditions but remains focused on
building up its order book. This is now 60% secured for 2024, after
being appointed by Rotherham Council on a £36m contract for the
redevelopment of the town centre outdoor market. Banner Plant and
Road Link (A69) are both trading in line with management
expectations.
In order to support the continued
growth of the business, the Group has agreed terms with existing
lenders comprising Barclays, HSBC and NatWest for a new £125m,
three year facility, with the option to extend for a further two
years to May 2029. The margin payable under
the new facility is 1.6% above SONIA. In addition, the facility
includes a £60m accordion. This replaces a £105m committed facility
which had a scheduled maturity in January 2025.
Finally, the Group published its
annual Responsible Business Strategy update earlier this year,
reporting on the good progress made against its objectives,
including reducing the business's direct greenhouse gas emissions
by 14% lower than the set 2019 baseline. In addition, next month
the Group will launch a refreshed brand value proposition, which
focuses on an improved brand identity and customer experience and
will introduce a new employer value proposition, which enhances the
business's offering to our people alongside
remuneration.
Outlook
Henry Boot is making good progress on
a number of key transactions in both land promotion and
development, and the business continues to expect full year results
to be heavily H2 24 weighted.
Looking ahead, despite remaining
cautious on the current trading environment, the Group remains well
placed, supported by a solid balance sheet and a store of high
quality opportunities in prime locations across all three of our
key markets. This puts the business in a strong position to deliver
a full year performance in line with market expectations* and to
achieve our medium term strategic objectives.
*Market expectations being the average
of current analyst consensus of £30.7m profit before tax,
comprising three forecasts from Deutsche
Numis, Peel Hunt and Panmure Gordon.
For further information, please
contact:
Enquiries:
Henry Boot
PLC
Tim Roberts, Chief Executive
Officer
Darren Littlewood, Chief Financial
Officer
Daniel Boot, Senior Corporate
Communications Manager
Tel: 0114 255 5444
www.henryboot.co.uk
Deutsche Numis
Joint Corporate Broker
Ben Stoop / Thomas
Philpott
Tel: 020 7260 1000
Peel Hunt LLP
Joint Corporate Broker
Ed Allsopp / Pete Mackie
Tel: 020 7418 8900
FTI Consulting
Financial PR
Giles Barrie/ Richard
Sunderland
020 3727 1000
henryboot@fticonsulting.com
About Henry Boot PLC
Henry Boot PLC (BOOT.L) was
established over 135 years ago and is one of the UK's leading
and long-standing property investment and development, land
promotion and construction companies. Based in Sheffield, the Group
is comprised of the following three segments:
Land Promotion:
Hallam Land Management Limited
Property Investment and
Development:
HBD (Henry Boot
Developments Limited), Stonebridge
Homes Limited
Construction:
Henry Boot Construction Limited,
Banner
Plant Limited, Road
Link (A69) Limited
The Group possess a high-quality
strategic land portfolio, an enviable reputation in the property
development market backed by a substantial investment property
portfolio and an expanding, jointly owned, housebuilding business.
It has a construction specialism in both the public and private
sectors, a long-standing plant hire business, and generates strong
cash flows from its PFI contract through Road Link (A69)
Limited.
www.henryboot.co.uk