TRADING AND OUTLOOK
Property trading and development activity levels since the beginning of 2017 have been very encouraging and the Group’s three business segments; land promotion, property investment and development and construction are trading strongly. Henry Boot is, fundamentally, a transactions driven business and there is always a degree of uncertainty with regard to the timing of these deals within a particular financial period. We are pleased to report that any uncertainty created by the current UK general election process is not having an impact on our business.
Given the strong start we have made in 2017, and anticipating no major changes to the underlying economic conditions in which we operate, we now anticipate the Group’s performance for the current financial year ending 31 December 2017 will be comfortably ahead of the Board’s existing expectations.
KEY EVENTS IN THE PERIOD
LAND PROMOTION
Hallam Land Management, our strategic land business, has made a very solid start to the year. Transactions expected to complete in 2017 are progressing as anticipated and the UK’s major house builders are reporting slightly higher levels of activity and strong demand for new houses.
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So far this year we have concluded land sales totalling over 900 units on seven sites. In addition, we have unconditionally exchanged on two other sites and are in detailed discussions regarding the sales of a further nine schemes.
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We have also obtained planning permission on six sites for 1,965 units and now have 50 sites for sale comprising over 17,600 units. We have a further 11,000 units on 32 sites which are currently undetermined planning applications or at appeal.
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The total portfolio of land promotion sites is now 163 covering 11,900 acres with a further 28 sites, over 2,100 acres, expected to be brought into the portfolio subject to the completion of due diligence and legal agreement. |
PROPERTY INVESTMENT AND DEVELOPMENT
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The 200-acre business park at Markham Vale will once again see a number of developments delivered in 2017 with over 650,000 sq ft of industrial and distribution space in progress.
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We have been on site at the Aberdeen Exhibition and Conference Centre for almost a year now and construction is progressing to plan, with a target completion date of mid-2019.
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We expect that the remaining 76 of the original 163 apartments within the main factory building at the former Terry’s Chocolate Factory in York will be sold during 2017, completing this phase of work. We will then turn our attention to the smaller Clock Tower redevelopment and the final three-acre site which is likely to be a further residential opportunity, subject to planning.
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In Manchester city centre, the jointly developed and forward funded 539-unit private rented apartment development should see the completion of the strip out and demolition contract by mid-2017, with the main redevelopment beginning on the conclusion of that work.
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Our jointly owned house builder, Stonebridge Projects, is trading well and is targeting sales of 100 units in 2017, up from 70 units in 2016. Reservations and sales at this stage of the year are on track to achieve our targets. |
CONSTRUCTION
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Our construction business continues to work across a wide range of sectors, including industrial, residential, custodial, health, commercial, education, leisure and civil engineering. We have made a good start to the year and expect to achieve targeted activity in 2017, whilst also building our 2018 order book. The level of contract opportunities coming to the market is similar to the previous two years and we continue to win work at broadly the same rate.
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Our plant hire business, Banner Plant, completed the acquisition of Premier Plant Tool Hire & Sales Limited in Leicester for £2.8m in the period; taking our activities a little further south down the M1 motorway corridor. The integration of the new business is progressing well and both the existing and new depots are trading in line with our expectations.
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Road Link (A69) Limited, our PFI contract, continues to trade well and in line with previous years and management expectations. |