Profits were down at the half-year stage for Henry Boot mainly because the group's land trading arm, Hallam Land Management, didn't make any significant sales in the first half. However, there are a significant number of strategic land sites working through the planning process, and a number of sales are currently in progress. Moreover, the construction side reported operating profits up 29 per cent to £3.51m and the business has already secured revenue targeted for the whole year. So, trading at a 20 per cent discount to Investec's sum-of-the-parts valuation, the shares retain their attraction.
The bulk of Henry Boot's income came from its investment property portfolio, where profits rose sharply from £0.38m to £4m thanks to a positive £1.78m revaluation compared with a £1.73m devaluation the previous year. And while operating profits were reduced to a trickle, Hallam, which buys land, obtains planning consent and sells it on to housebuilders, bought 700 acres of land in the first half, taking the total of land owned or under option up to 8,761 acres, and boosting the inventory value from £58.8m at the end of last year to £68.1m.
Investec forecasts full-year normalised pre-tax profits of £12.8m, EPS of 5.9p and a dividend of 4.6p (from £16.1m, 8.9p and 4.3p in 2011).
| HENRY BOOT (BHY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 126p | MARKET VALUE: | £165m | |
| TOUCH: | 125-129p | 12-MONTH HIGH: | 145p | LOW: 108p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 134p | NET DEBT: | 12% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 66.9 | 9.10 | 4.10 | 1.65 |
| 2012 | 43.3 | 5.81 | 2.40 | 1.80 |
| % change | -35 | -36 | -41 | +9 |
Ex-div: 3 Oct Payment: 26 Oct | ||||
