Henry Boot reports signs of improving market

Developer and land trader Henry Boot has reported pre-tax profit of £45.6m for the 2022 calendar year, lower than originally expected, but said there were signs market conditions were improving.

Reporting full year results, the firm said it had delivered its “best ever” underlying profit in 2022 despite market turbulence following the September mini Budget, and successfully sold a record number of plots to housebuilders.

The firm reported pre-tax profit of 45.6m, up 30%, on turnover of £341m, up 48%. Analysts had previously expected its full year pre-tax profit to be higher but in January the firm guided that a re-valuation of its investment properties would impact upon the results.

Henry Boot confirmed its housebuilding arm, Stonebridge Homes (SBH), had missed its target to build 200 homes in the year, completing just 175, but nevertheless had managed to meet profit targets given higher than expected sales values. It added the firm was targeting completion of 250 homes this year and remained on track to meet a medium term target to build 600 homes annually.

The firm said that while the outlook was uncertain, a number of indicators now suggested that the economic slowdown will not be as severe previously expected, with signs that supply restrictions were lifting and cost pressures easing.

It added: “There are early signs that our markets are improving. […] housebuilders generally and SBH specifically, have seen a partial recovery in home buyer interest this year from the lows experienced in the final quarter of 2022.”

Tim Roberts, Henry Boot chief executive officer, said: “Whilst we remain cautious about the near-term trading climate, expecting 2023 to be a tougher year [than 2022], our rock solid balance sheet offers resilience to both weather any further economic uncertainty and to take advantage of any opportunities that arise from it.

“With early encouraging indicators already evident across certain markets we have the capacity to buy land, maintain and potentially expand our committed development programme as well as to continue to grow our JV housebuilder as soon as we feel economic recovery is on the way. We therefore have confidence in our ability to achieve our medium-term growth and return targets.”