LONDON, UK: Henry Boot PLC, a prominent player in land promotion, property investment and development, and construction, has released its unaudited results for the fiscal year ending December 31, 2023. Despite a tough economic climate, the company has reported a commendable increase in revenue and continued strategic growth.

Financial Performance Highlights:

• The company’s revenue saw a 5.3% increase to £359.4 million, up from £341.4 million in 2022. This growth was primarily fueled by strategic land disposals, robust property development, and a steady stream of housing completions.
• Pre-tax profits were reported at £37.3 million, a decrease from the previous year’s £45.6 million. However, the underlying profit stood at £36.7 million, aligning with market expectations and reflecting the company’s focus on high-quality land and prime location developments.
• Capital employed rose by 4.5% to £417 million, edging closer to the medium-term target of £500 million, showcasing the company’s commitment to growth.
• The Return on Capital Employed (ROCE) was 9.9%, slightly below the 12.0% of 2022 but within the medium-term target range of 10-15%.
• Net Asset Value (NAV) per share increased by 3.7% to 306p, attributed to the company’s resilient operational performance. Excluding the defined benefit pension scheme surplus, the NAV per share saw an underlying rise of 3.4% to 300p.
• The balance sheet remains robust, with net debt at £77.8 million and gearing at 19.0%, reflecting ongoing investments in development projects and selective acquisitions.

Operational Milestones:

• Land and property sales amounted to £248.5 million, led by the company’s land promotion, development, and housebuilding sectors.
• The land promotion division sold 1,944 plots, with a significant freehold sale at Tonbridge contributing to a higher gross profit per plot.
• The property investment and development arm reported a Gross Development Value of completed schemes at £126 million, with a strong focus on industrial development.
• The construction segment remained profitable, achieving a turnover of £99.5 million and an operating profit of £6.5 million.

Commitment to Responsible Business:

• Henry Boot PLC continues to advance its Responsible Business Strategy, setting interim targets for 2025, launching health and wellbeing initiatives, and progressing towards its goal of reaching Net Zero Carbon by 2030.

The company remains optimistic about achieving its medium-term growth and return targets, underpinned by a proposed final dividend increase of 10.0%, reflecting a progressive dividend policy.

Tim Roberts, Chief Executive Officer, commented: “Our focus on high quality land, commercial property development and housebuilding in prime locations meant that demand for our premium products remained resilient and allowed Henry Boot to perform relatively well against a backdrop of a slowing economy, rising interest rates, high inflation and decreasing volumes in our key markets.

While constraining our ability to bring forward developments in one respect, the government’s consistent failure to make much needed reforms to an increasingly dysfunctional planning system does play to the strengths of our land promotion business while helping underpin demand from national housebuilders, who are still actively acquiring prime strategic sites to shore up their future pipelines. This alongside some well timed development disposals and Stonebridge Homes increasing house sales by 43%, helped deliver a resilient performance.

We are not immune from the challenges that the UK economy presents to the near-term trading environment and as previously reported, we expect a lag in performance in the year ahead. However, the outlook for both inflation and interest rates is improving and it’s beginning to feel as though the UK economy has turned a corner, with recent reductions in mortgage rates also pointing towards a hopefully brighter future. With this in mind, and given the Group’s continued strong financial position, we remain confident in achieving our medium term growth and return targets, as reflected in the 10% dividend increase we have announced today.”

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