The profit fall in 2012 for construction and land developer Henry Boot (BHY) mainly reflected the fact that it was a fairy quiet period for selling consented land - profits at Hallam Land Management fell from £11.1m to £2m. However, demand for land with planning permission secured is expected to grow this year and, to meet this, the group brought a significant number of sites through the planning process.
Net debt rose from £2.3m to £21.9m and is expected to grow this year, too, as more working capital is required to pay for the planning process and also to bankroll builders buying land on deferred terms. To meet the increase in demand for consented land Hallam has built a land bank of 9,011 acres with an inventory value of £75.9m. However, the development value is significantly higher.
Henry Boots also has a property portfolio where, thanks to a revaluation surplus of £1.4m, disposal profits of £1m and higher rental income, operating profits rose from £0.3m to £7.4m. While, on the construction side, greater emphasis on refurbishment work helped offset weakness in pure construction, so operating profit here grew 8 per cent to £7.9m. And by end-March, the group had already secured its projected construction revenue target for the full year.
Investec Securities expects 2013 adjusted pre-tax profit of £16.3m, giving EPS of 8.2p. (From £13.9m/7.3p in 2012).
| HENRY BOOT (BHY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 165p | MARKET VALUE: | £216m | |
| TOUCH: | 157-165p | 12-MONTH HIGH: | 175p | LOW: 115p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 138p | NET DEBT: | 12% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 194 | 19.3 | 10.8 | 5.00 |
| 2009 | 117 | -11.9 | -5.70 | 2.50 |
| 2010 | 132 | 18.9 | 9.10 | 3.50 |
| 2011 | 115 | 16.1 | 6.90 | 4.25 |
| 2012 | 103 | 13.9 | 7.30 | 4.70 |
| % change | -10 | -14 | +6 | +11 |
Ex-div: 1 May Payment: 31 May | ||||
