Boot shines with record profits up 40%

Aaron Morby 6 years ago
Share

Henry Boot’s mixed model of development, land sales and construction delivered record results last year.

Boot says broadly based operating model will deliver steady growth
Boot says broadly based operating model will deliver steady growth

Revenue exceeded £400m in the year, up more than a third and now more than double that achieved two years ago. This fed through to a 40% rise in pre-tax profit to £55m driven by property development and land sales to house builders.

Overall group operating margins rose to 13.7%.

The firm’s development projects at the new Aberdeen Exhibition and Conference Centre, the residential conversion of the former Terry’s Chocolate Factory and the extension of its Markham Vale industrial scheme drove profits.

Boot also sold 15 strategic land sites, delivered over £60m of construction work, £17m of plant hire sales and almost £25m of new house sales through its joint venture house builder, Stonebridge Homes.

Chairman Jamie Boot said: “We have made a good start to the 2018 financial year, having already concluded a number of land sales.

“In addition, we have a strong pipeline of construction work, commercial development projects and strategic land sites working through the marketing process, on which to capitalise through the year.

“Our focus consequently continues to be on the profitable delivery of these schemes and the value they will create for all our stakeholders. I look forward to reporting on our success in doing this through 2018 and beyond.”

He added that in the longer term the commercial development scheme pipeline now exceeded £1bn for the first time.

“Our strategic land acreage increased by over 10% to more than 13,000 acres, after taking account of the acreage sold during the year.

“We also added some 2,200 plots to our inventory of plots to sell, having obtained planning permission on some 4,500 plots during the year.

“The scale and number of these sites and schemes, held as inventory, are once again at record levels, giving us confidence that we can continue to deliver sustainable returns to our stakeholders well into the future.”

Henry Boot Construction started 2018 with the healthiest order book seen in recent years. But the firm said it remained cautious, particularly in the medium to long term, regarding the possible reduction in construction activity due to market uncertainty associated with exiting the EU, price pressures on imported materials associated with exchange rate volatility and other labour and supply chain price pressures.

Construction operating profits decreased slightly to £9.6m after improved results from plant hire, following the acquisition of the Leicester depots, and Road Link were offset by lower construction returns due to delayed starts.

 

Henry Boot trading division
Division Operating profit Revenue
2017 2016 2017 2016
Construction £9.6m £10.3m £89m £84m
Development £30.4m £15.1m £251m £176m
Land £23.2m £18.6m £76m £51m

Property investment and development produced a significantly improved operating profit of £30.4m (2016: £15.1m) arising from a full year’s activity on the Aberdeen Exhibition and Conference Centre, final residential sales from the York Chocolate Factory conversion and continuing contributions from our Markham Vale industrial development.

Land promotion operating profit also showed a strong performance, increasing to £23.2m (2016: £18.6m) as Boot disposed of 2,169 residential plots during the year (2016: 1,609).

Boot said that the movements within the group’s mix of business streams demonstrated the nature of deal-driven property and land promotion businesses, dependent upon demand from the major house builders but combined with the relatively stable returns from construction.

This continues to demonstrate the benefits of our broadly based operating model, working together to the benefit of our group, he added.

 

Latest news

Plan in for £3bn Lincolnshire mega data centre

3.3m sq ft Humber Tech Park will be one of Europe's largest data centres
2 days ago

Green light for Digbeth 1,300 homes scheme

Warner’s Fields scheme to start with excavation and landscaping of the River Rea
2 days ago

Flagship biodiversity net gain scheme flawed

NAO warns Government's flagship green development scheme at risk of failure
2 days ago

£210m M3 Junction 9 upgrade gains consent

VolkerFitzpatrick to start work in early 2025 on Winnall roundabout, near Winchester
2 days ago

United Living wins 14-year L&Q homes repairs deal

Trafford housing upkeep deal worth £205m
2 days ago

£400m Lewisham resi-led scheme advances

Land deal paves way for Amro Partners' 1,000-home London scheme
2 days ago

McLaren gets go-ahead for Grade II listed Leeds student scheme

Springfield House to be revamped and two new wings added
2 days ago

Piling giant to fit people alarms on all rigs

Cementation Skanska upgrades site safety systems
2 days ago

Vistry to make £800m profit after subcontractor cost cuts

House builder bullish about shareholder returns after asking suppliers for discounts
3 days ago

Shareholders approve £2.5bn Barratt and Redrow merger

Final hurdle is for the competition regulator to approve the deal.
3 days ago

Green light for £80m Leith waterfront revamp

Build-to-rent homes and student accommodation scheme to be built
3 days ago

Tilbury Douglas clears Interserve legacy jobs to return to profit

Revenue tops £500m in first year as standalone contractor
4 days ago

Land deal paves way for Manchester civil service office hub

Government buys five acres at former Central Retail Park
3 days ago

Speller Metcalfe wins Wolverhampton library upgrade

Full works are due to start in the autumn
3 days ago

Skills shortage puts big infrastructure projects at risk

Government failing as an intelligent client and now over-reliant on consultancies
4 days ago

Contractors face further insulation board price hikes

Cost of PIR insulation boards set to rise another 10%
4 days ago

Henry Boot wins £36m Rotherham Markets job

Project involves upgrading existing market and building a new library
4 days ago

Keltbray hires new head of infrastructure procurement

Lukasz Olszewski will oversee rail, energy and highways business units
4 days ago

Tunnel fit out robot to revolutionise civils work

Costain and VVB Engineering part of innovative consortium
4 days ago

Funding deal for £86m wind turbine test centre

Latest investment at National Renewable Energy Centre in Blyth
5 days ago

Plan in for Manchester ‘upside-down’ 18-storey tower

Landmark cantilevered NXQ building plan for city Northern Quarter
5 days ago

London 25km Super Sewer hooked up for commissioning

Tideway completes connection to existing Lee Tunnel sewer system
5 days ago

£200m Lincoln ring-road approved

North Hykeham Relief Road granted planning permission
5 days ago

£1bn Manchester Airport City plan rebooted as new sci-tech hub

Plan pivots from offices to science and manufacturing campus, called MIX Manchester
6 days ago

Record results at maintenance specialist Renew

Infrastructure maintenance work continues to pay off for contractor
5 days ago

Barhale lands £21m shaft scheme for Thames Water

Civils specialist bags latest upgrade deal on Thames Water Ring Main
5 days ago

Caddick names new north east director

Former Laing O'Rourke project lead joins Yorkshire contractor
5 days ago

Mount Anvil wins London Camden estate rebuild

Deverloper wins £133m Bacton Phase 2 development in Gospel Oak
6 days ago

London Met Uni seeks firm for £280m estate upgrade

A single partner contractor will deliver 10-year building upgrade plan
6 days ago

Top 30 M&E contractors set for growth – ranking

Growth in data centres and commercial refits creates optimism for year ahead
6 days ago

Contractor services