The experience of a number of property-focused companies has been at odds with the easy assumption that fears over Brexit would automatically translate into poor performance. But if you still need convincing, just take a look at half-year numbers from Henry Boot (BHY). The group turned in a strong start to the year, including six residential land sales prior to the vote. These sales offset delayed construction turnover, though the latter segment is expected to recover in the second half of the year as several projects commence work, while three further land sites are expected to exchange and complete sale contracts before the year-end, too.
Despite the outcome of the referendum, management is confident that any deals it currently has in the works will proceed as envisaged, though it is obviously still too early to assess the long-term implications stemming from the vote. However, should the post-referendum environment turn hostile, the group believes its cash generation - derived mainly from the commercial property pipeline which has already been largely pre-let or pre-sold - should see it through the next couple of years. Chief executive John Sutcliffe thinks the future hinges on economic confidence, although even if that falls, "that's where opportunities tend to present themselves" as asset purchases become cheaper and competition less fierce.
Analysts at Numis expect pre-tax profits of £38m for the year ending December 2016, giving EPS of 21.4p, compared with £32.4m and 17.3p in 2015.
| HENRY BOOT (BHY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 206p | MARKET VALUE: | £272m | |
| TOUCH: | 206-208p | 12-MONTH HIGH: | 240p | LOW: 163p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 170p | NET DEBT: | 25% | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 79.2 | 14 | 7.8 | 2.30 |
| 2016 | 107.3 | 21 | 11.9 | 2.50 |
| % change | +35 | +49 | +53 | +9 |
Ex-div: 22 Sep Payment: 21 Oct | ||||
