Developer Henry Boot’s profit hit by property write down

Henry Boot will post pre-tax profit slightly below expectations due to a fall in the value of its investment properties, it has said.

In a trading update today, the construction, housebuilding and land assembly firm said its pre-tax profit for the 2022 calendar year will be below the average of £48.1m previously forecast for the firm by analysts.

This is despite unspecified “record levels” of underlying profit excluding property valuation, Henry Boot said. The value of the group’s investment portfolio fell from £126m to £106m due in part to property valuation losses, it said.

The firm said its housebuilding arm Stonebridge Homes sold 175 homes in the year, up from 120 the previous year.

This was below its target of 200 homes, but Henry Boot said this was offset by stronger selling prices, meaning it is on track to hit its budget targets. Henry Boot said it is on course to grow Stonebridge’s activity to 600 homes a year.

Its construction arm traded in line with expectations and has delivered 68% of its order book for next year. It said its plant hire business has seen “record levels of trading activity” and its Road Link business has performed well.

Henry Boot said its Hallam Land Management business exceeded its target of selling 3,500 plots in the year, helped by the sale of 2,170 plots to Taylor Wimpey and Persimmon Homes on a site in Didcot, Oxfordshire.

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It said it has increased its total land portfolio from 92,667 to 95,407 plots year-on-year.

Henry Boot said it expects this year to be “more challenging” than 2022, but said pre-sales for both land and homes have been “encouraging,”

It said: “The planning environment is becoming increasingly challenging which supports demand for the 9,325 approved plots in Hallam Land Management’s portfolio.

“Demand for Stonebridge Homes, while reducing from the record levels experienced in the middle of last year, has also proven resilient since year end.

“While the investment market has slowed, occupational demand continues to hold up with the group experiencing robust appetite for high-quality industrial space.