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Henry Boot-iful

Bringing land through the planning process for housebuilders is just one of the three profitable arms that Henry Boot operates
June 23, 2016

While shares in Henry Boot (BHY), a company that specialises in bringing land through the planning process and selling it on to hungry builders, have been battered about by referendum jitters, we think the stock is a winner which ever way the vote goes. Indeed, even in the supposedly uncertain pre-referendum conditions, the company has been selling more land than expected at better-than-expected prices, fuelling earnings forecast upgrades. We would not expect a Brexit vote to derail this and a Remain vote may even improve already buoyant market conditions.

IC TIP: Buy at 209p
Tip style
Growth
Risk rating
Low
Timescale
Long Term
Bull points
  • Strong land sales
  • Record pipeline of land schemes
  • Shares modestly rated
  • Low gearing
Bear points
  • High plant hire renewal costs
  • Planning constraints remain

Demand for Boot's 'oven-ready' land is pretty broadly based, and includes space for warehouses, offices and leisure as well as homes. And while the revenue stream can be a little lumpy, depending on when sales are completed, the underlying picture suggests that conditions in its end markets are strong.

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