Property investor Henry Boot (BOOT) has released another set of strong numbers, with "higher levels of activity across all business segments". This, combined with the growing use of pre-funded development projects – which serve to inflate the top line – pushed revenue up 82 per cent (see table). Such projects are lower risk but also less profitable, so while the group's operating profit has grown 8.1 per cent year on year to £22.8m, the margin has shrunk from 19.6 per cent to 11.6 per cent.
In the development division, Henry Boot has now sold 155 of the 163 apartments in its residential conversion project for the Terry’s chocolate factory. The remaining units are contracted to sell in the second half of this year, bringing the process to an end in 12 months instead of the three years originally targeted by the group. In the land business, eight sites were sold in the first half comprising 960 housing plots, and the equivalent of 1,008 further plots were sold after the period-end.
Net debt increased to £62.2m at the period-end from £56.2m a year before, as Henry Boot invested in its pipeline. It has increased its borrowing facilities by £12m to accommodate the extra spend, but management has predicted that debt levels will decrease towards the end of the year as land and property receipts come in.
Analysts at Numis are forecasting adjusted pre tax profit of £45m, giving EPS of 25.2p in 2017 (up from £39.5m and 21.3p in 2016).
| HENRY BOOT (BOOT) | ||||
| ORD PRICE: | 304p | MARKET VALUE: | £401m | |
| TOUCH: | 301-310p | 12-MONTH HIGH: | 310p | LOW: 190p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 183p | NET DEBT: | 26% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 107 | 20.8 | 11.9 | 2.5 |
| 2017 | 195 | 22.6 | 13.1 | 2.8 |
| % change | +82 | +9 | +10 | +12 |
| Ex-div: | 21 Sep | |||
| Payment: | 20 Oct |
