That’s because we are still able to buy the shares at little more than the price on the day the company issued its major earnings beats on 9 December 2014 and 22 January 2015. Following a 12 per cent earnings upgrade in mid-December, analyst Nick Spoliar at broking house W.H. Ireland upgraded his numbers again by around 19 per cent late last month and now anticipates Henry Boot will report pre-tax profits of £28m on revenues of £161m for fiscal 2014, up from £18.4m and £153m, respectively, in 2013. On this basis, EPS soars by more than two thirds to 14.8p which easily supports the 10 per cent forecast hike in the pay-out to 5.5p a share. The forthcoming results will undoubtedly make for an impressive read.
I think it’s only fair to point out that Henry Boot is a company I know all too well, having first advised buying the shares when they were around the 140p level (‘A bootiful investment’, 13 June 2011). I last assessed the investment case a little over two years ago when the price offered a fantastic buying opportunity at 124p (‘Re-rating beckons’, 12 November 2012). It proved the right call in hindsight as the shares doubled in value over the subsequent 14 months, hitting a high of 249p in January last year. Since then the price has gone sideways, but I feel that a return to those highs could well be on the cards now especially when investors become fully aware of the progress the company has been making, something that will be blatantly clear when Henry Boot’s board releases its full-year results at the end of next month. The recent trading updates were pretty vague as to the nature of the upgrades, something I have been trying to determine. On this score, the news is rather good.