A strong first quarter from Henry Boot’s (BOOT) land promotion business partially offset the pain of a halt in construction and development activity during the first half. That meant that although pre-tax profits were down by almost three-quarters, they came in ahead of management’s expectations, prompting it to recommend an interim payment, albeit a reduced one.
The level of bids being received by the land promotion business have not been noticeably impacted by the pandemic, said chief executive Tim Roberts, although they would not contribute to profits until 2021. “These are bids that will take some time to materialise into contracts, there’s a lot of due diligence,” he said.
The property investment and development segment suffered a £0.8m loss due to a £2.1m fall in the value of the portfolio and delays in the completion of schemes, including the build-to-rent and retail and leisure Kampus project in Manchester, which is expected next year. Similarly, the construction division swung to a £0.7m loss, although site productivity is now back at 90 per cent of pre-pandemic levels. However, while it has signed some deals, including a £40m build-to-rent scheme in Sheffield, management is anticipating a reduction in private sector opportunities later in the year, which may lead to a risk of tightening margins.
House broker Peel Hunt expects to upgrade its forecasts for 2020 adjusted pre-tax profits by £1m-£2m to around £14.5m.
| HENRY BOOT (BOOT) | ||||
| ORD PRICE: | 270p | MARKET VALUE: | £ 360m | |
| TOUCH: | 266-279p | 12-MONTH HIGH: | 351p | LOW: 180p |
| DIVIDEND YIELD: | 1.3% | TRADING PROP: | nil | |
| PREMIUM TO NAV: | 16% | |||
| INVESTMENT PROP: | £76.6m* | NET CASH: | £42m | |
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 239 | 24.1 | 14.2 | 3.7 |
| 2020 | 232 | 7.18 | 4.1 | 2.2 |
| % change | -3 | -70 | -71 | -41 |
| Ex-div: | 17 Sep | |||
| Payment: | 16 Oct | |||
| *Includes investments in joint ventures | ||||
