Henry Boot saw a fall in job recruitment in the first six months of its current financial year, despite overall group revenue rising.
The west London-based developer and builder posted turnover of £179.8m in the six months to June 2023, a 24.5% increase on the same period a year earlier, driven by the ‘alienation of land and the completion of housing.
Its pre-tax profit stood at £25m after six months of trading, down from £38.8m a year earlier. The profit was helped by “resilient performance” in residential land sales and industrial development activity, the group said.
But its construction segment posted turnover of £56.2m, down from £66.5m reported in the same period last year, due to a “challenging market”. It made an operating profit of £4.4m, compared to £6.3m the previous year. The company does not report on the statutory pre-tax profit figures in its interim results.
The group said Henry Boot Construction (HBC) “remains focused on delivering its current projects with 72% of its target 2023 order book secured following delays in bringing activity to site as clients proceed cautiously “.
The earnings statement added: “HBC is trading below management’s expectations, having experienced challenging operating conditions in line with the UK construction market.
“The UK construction slowdown has meant that HBC has only achieved 72% of its 2023 turnover (94% of its costs have fixed-price orders or contract inflation clauses) and has experienced several delays in pre-construction service agreements (PCSA).
“However, there is a good portfolio of opportunities that HBC is actively pursuing, with a target of £85m [for] PCSA through urban development and residential opportunities.”
Despite delays, subcontractors and material availability issues, Kangaroo Works, a £47 million build-to-hire programme, was completed in August 2023. Meanwhile, the Heart of the City, Block H, a plan to £42 million urban development in Sheffield, took place. to be completed in phases between August and October 2023. The Cocoa Works, a £47m residential development in York, remains on time and on budget.
Henry Boot chief executive Tim Roberts said: “The first half of the year has seen our markets slow as interest rates have continued to rise, but as these results show, our focus on prime strategic locations, high-quality development and premium housing has provided us with a degree of resilience.
“Although uncertainty in our markets has increased, we believe we have enough momentum to see us through the year, although the outlook for 2024 is not as clear at the moment. However, we have conviction in our three markets, driven by structural trends, and I am pleased to report that we remain on track to achieve our medium-term strategic growth and profitability objectives.”
