Strong sales, a prime portfolio and an improving outlook underpin increased dividend
Henry Boot PLC, a Company engaged in land promotion, property investment and development, and construction, announces its unaudited interim results for the six months ended 30 June 2024.
Tim Roberts, Chief Executive Officer, commented:
‘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. The lower forward sales with which we started the year has affected our first half financial performance and as flagged at the time of our 2023 results, we expect 2024 to be heavily weighted towards the second half. 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. This together with our rock solid balance sheet underpins our decision to raise the interim dividend by 5%.’
Financial highlights
- Completed and exchanged on total land and property sales of £150.8m (H1 23: £129.3m), reflecting growing demand for our prime projects and buildings as sentiment in our markets begins to improve
- A lower starting forward sales position resulting in revenue of £106.0m (H1 23: £179.8m) and a profit before tax of £3.7m (H1 23: £25.0m) or an underlying profit1 of £3.6m (H1 23: £23.3m)
- 81% of budgeted sales for 2024 completed, exchanged or reserved, with the remaining deals either under offer or in detailed negotiations
- 5% increase in interim dividend to 3.08p, consistent with our progressive dividend policy and our confidence in achieving full year performance in line with market expectations and in the group’s future prospects
- Capital employed has increased by 1.7% to £424m (December 2023: £417m) continuing our stated growth strategy and progressing toward our medium term target of £500m
- Return on capital employed (ROCE2) was 1.4% (H1 23: 6.3%) but is expected to finish the year only marginally below the Company’s target of 10%–15%. We remain confident of achieving returns within the target range in the medium term
- The group’s Net Asset Value (NAV3) per share remained broadly flat at 305p (December 2023: 306p) or 299p (December 2023: 300p), excluding the defined benefit pension scheme surplus
- Net debt4 increased to £103.9m (December 2023: £77.8m) as we continued to fund infrastructure works to unlock our prime strategic land sites and build out our high-quality committed development programme. Gearing at 25.5% (December 2023: 19.0%), has already reduced to c.18% as of 16 September, and is back within our optimal range of 10–20%
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Operational highlights
- Land promotion
- 843 plots sold (H1 23: 1,900); a further 1,695 plots have exchanged, of which 1,246 plots are due to complete by year end. With 1,070 plots under offer we are on target to sell 3,000 plots this year (December 2023: 1,944)
- The total land bank has marginally grown to 101,491 plots (December 2023: 100,972 plots)
- 7,990 plots with planning permission (December 2023: 8,501), all held at cost and 13,392 submitted for planning (December 2023: 13,468)
- Following the welcomed publication of the draft amendments to the NPPF we aim to advance new applications on c.8,500 plots over 2025
- Property investment & development
- High quality committed development programme with Gross Development Value (GDV) of £264m (HBD share: £119m) with 64% pre-sold or pre-let
- £1.5bn development pipeline (HB share: £1.3bn GDV), 57% of which is focused on Industrial & Logistics markets
- The market value of the investment portfolio including our share of JVs increased marginally by 0.3% to £113.2m (December 2023: £112.9m) with a total property return5 of 2.7% in the six month period, very marginally below the CBRE UK Monthly Index (2.9%)
- Stonebridge Homes (SH) has secured 95% of its 2024 delivery target of 275 units (2023: 251 units) with a total owned and controlled land bank of 1,407 plots (December 2023: 1,513 plots), in line with growth targets
- Construction
- The construction segment achieved turnover of £43.5m (H1 23: £56.2m) with an operating profit of £2.9m (H1 23: £4.4m)
- Responsible business
- Making good progress against our Responsible Business Strategy targets set in January 2022, and on course to achieve our 2025 objectives and targets
Click here to view the full 2024 Interim Results Announcement.
Notes:
1 Underlying profit before tax is an alternative performance measure (APM) and is defined as profit before tax excluding revaluation movements on completed investment properties. Revaluation movement on completed investment properties includes gains of £nil (2023: £1.4m gain) on wholly owned completed investment property and gains of £0.1m (2023: £0.3m gains) on completed investment property held in joint ventures. This APM provides the users with a measure that excludes specific external factors beyond management's controls and reflects the group’s underlying results. This measure is used in the business in appraising senior management performance.
2 Return on Capital Employed (ROCE) is an APM and is defined as operating profit/average of total assets less current liabilities (excluding DB pension surplus) at the opening and closing balance sheet dates.
3 Net Asset Value (NAV) per share is an APM and is defined using the statutory measures net assets/ordinary share capital.
4 Net (debt)/cash is an APM and is reconciled to statutory measures in note 14.
5 Total property return is a metric that combines capital and income returns for the investment portfolio. It is calculated as the percentage value change plus net income accrual, relative to the capital employed and is calculated on a monthly basis and then indexed in line with the benchmark.
For further information, please contact:
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: 0207 260 1000
Peel Hunt LLP
Joint Corporate Broker
Ed Allsopp/Pete Mackie
Tel: 0207 418 8900
FTI Consulting
Financial PR
Giles Barrie/Richard Sunderland
Tel: 020 3727 1000
henryboot@fticonsulting.com
A webcast for analysts and investors will be held at 9.30am today and presentation slides will be available to download via www.henryboot.co.uk. Details for the live dial-in facility and webcast are as follows:
Participants (UK): 033 0551 0200
Password: Henry Boot HY24
Webcast link: https://stream.brrmedia.co.uk/broadcast/669f94a4c038806f14b0b30a
