HENRY BOOT PLC
(‘Henry Boot’, the ‘company’ or the ‘group’)
Ticker: BOOT.L: Main market premium listing: FTSE: Real Estate Investment and Services.
Unaudited results for the year ended 31 December 2024
Resilient 2024 performance; Well positioned for market recovery; 5% dividend increase
Henry Boot PLC, a company engaged in land promotion, property investment and development, and construction, announces its unaudited results for the year ended 31 December 2024.
Tim Roberts, Chief Executive Officer, commented:
“As anticipated, after a challenging start to the year we delivered a strong second half which allowed us to report results in line with expectations. In particular, demand for our high quality land, prime development and premium homes has remained resilient. This led to us successfully completing almost £350 million in land and property sales and continuing to lease up space, including setting a record office rent in Manchester at our Island development. Our investment portfolio also recorded another period of outperformance, with a total return of almost 10% for the year, meaning it has returned more than double the index over the last five years.
We also continued to shape the business, with the agreed buyout of Stonebridge Homes, where we are now the majority owner. We will take full ownership of this premium housebuilder in the coming years, continuing to scale the business up, and delivering synergies as we integrate it into Henry Boot. At Hallam Land, we’ve been quick off the mark in strengthening our team, so we are well prepared to capitalise on the positive changes to the NPPF, by increasing our planning applications fourfold to 10,000 plots over the next 12 months. At HBD, we’ve formed the Origin JV which we believe will help us to accelerate the delivery of our institutional quality industrial development pipeline.
All of this, along with our rock-solid balance sheet, the prospect of recovering markets, and an easier planning environment, means we are well placed for the future.”
Financial highlights
- Total land and property sales of £347m, our share at £224m (2023: £249m), highlights the continued demand for our high quality land, prime property development and premium homes.
- Revenue marginally lower at £328.4m (2023: £359.4m) due to reduced turnover in our construction segment, offset by higher sales from Hallam Land (Hallam).
- Profit before tax in line with market expectations at £30.7m (2023: £37.3m), with an underlying profit¹ of £29.4m (2023: £36.7m), supported by our focus on high quality projects in prime locations.
- Capital employed increased by 5.4% to £439m (2023: £417m), continuing our stated growth strategy and progressing towards our medium term target of £500m.
- Return on capital employed (ROCE2) was 8.0% (2023: 9.9%). We remain confident of achieving returns within the Company’s target of 10-15% in the medium term.
- The group’s Net Asset Value (NAV3) per share increased by 3.6% to 317p (2023: 306p) or 312p (2023: 300p), excluding the defined benefit pension scheme surplus.
- Net debt4 decreased to £62.7m (2023: £77.8m) after the completion of major strategic land and property development sales. Gearing at 14.7% (December 2023: 19.0%), in the middle of our optimal range of 10-20%.
- 5% increase in proposed final dividend of 4.62p (2023: 4.40p), in line with our progressive dividend policy and bringing the total dividend for the year to 7.70p (2023: 7.33p).
Operational highlights
- Post period end in January 2025, we increased our ownership of premium regional housebuilder Stonebridge Homes (SH) to 62.5%, having exchanged contracts in December 2024 to acquire the 50% that the group does not already own in three tranches over the next five years.
- Land promotion
- Hallam exceeded its 2024 financial performance expectations with 2,661 plots being sold (2023: 1,944) plus a significant employment land sale in Coventry.
- Hallam successfully secured 10 new sites with the potential to deliver c.6,500 plots and, therefore, the total land bank has grown by 4% to 104,787 plots (2023: 100,972 plots).
- During the year consents were secured on 2,982 plots (2023: 1,104) increasing the total plots with planning permission to 8,822 (2023: 8,501), all held at cost. A further 13,146 plots await planning determination (2023: 13,468).
- Changes to the National Planning Policy Framework (NPPF) are positive and, in response, the group intends to materially increase new applications to c.10,000 plots over the next 12 months (2024: 2,660 plots).
- Property investment & development
- Gross development value (GDV) of HBD completed schemes amounted to £331m (HBD share: £188m GDV), of which 72% have been pre-let or pre-sold.
- Launched the Origin JV with Feldberg Capital, to accelerate HBD’s development pipeline, with the aim to deliver c.£1bn of high quality industrial and logistics (I&L) schemes over the next seven years.
- £1.4bn development pipeline (HB share: £1.2bn GDV), 54% of which is I&L and a committed development programme of £124m GDV (HBD share: £33m).
- Investment portfolio (IP) total property return5 of 9.9%, well ahead of the CBRE UK Monthly Index (7.7%), with the market value including our share of JVs and assets held for sale now £107.4m (2023: £112.9m) after £10.4m of accretive sales.
- SH continued to grow in 2024, despite a subdued market, with completions up 8% to 270 homes (2023: 251 homes) and the total land bank up to 1,726 plots (2023: 1,513 plots) as the business continues scaling up in line with our strategy.
- Construction
- The construction segment generated turnover of £80.5m (2023: £99.5m) with an operating profit of £4.9m (2023: £6.5m).
- A new management team in place in Henry Boot Construction (HBC) focused on growing and diversifying the order book by developing a balanced portfolio of private sector projects to complement the existing public sector work. There are early signs of the pipeline improving.
- Responsible business
- The group has made good strategic progress towards our medium term targets, which we intend to refresh in 2026.
NOTES:
1 Underlying profit 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 £1.2m (2023: £0.5m) on wholly owned completed investment property and a gain of £0.1m (2023: £0.1m) on completed investment property held in joint ventures. This APM is used as it 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 is an APM and is defined as operating profit/capital employed where capital employed is the average of total assets less current liabilities and pension asset/obligation 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 is an APM and is reconciled to statutory measures in note 7.
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.