The great thing about Henry Boot (BOOT) is that there is so little to say about it. That makes the Sheffield-based property developer a neat example of an unwritten rule of investment – that the quality of a company exists in inverse proportion to the amount written about it. Let’s explore that proposition, starting with Boot.
Given the nature of what it does, there will always be a struggle to conjure up exciting things to say about Boot. There are no whizzy technologies or innovative products to shout about. Buying land, taking it through the planning process, selling it on or sometimes developing it – either in house or via its housebuilding joint venture – is both low tech and cyclical. But it won’t go away and has served the Boot family well for approaching 150 years, and outside shareholders for almost 50 (Boot went public in 1974).
That is reflected in Boot’s ability to produce acceptable results even in lousy periods, as 2020’s figures illustrate well enough. Sure, revenue and operating profit were hacked to pieces, down on the year 41 per cent and 65 per cent respectively. But cash flow from operating activities rose from £11.7m to £13.8m, due chiefly to managing working capital. As a result, the group’s net cash barely changed between the start and end of the year at £27m.