Last updated 25th March 2021
Henry Boot Plc
Henry Boot is a major quoted property and construction group with strong roots around its base in Sheffield. The group dates back over 125 years and comprises four main operations: property (Henry Boot Developments), land (Hallam Land Management), construction (Henry Boot Construction) and plant (Banner Plant). The group also has a contract to manage the A69 Road Link with five years remaining and where the process of returning the management to Highways England is starting soon.
The group has maintained a solid profit record in recent years and whilst it has recently focused on securing planning permission on its large greenfield land portfolio, it has also maintained a strong order book at its £86 million-turnover construction business. The group also has a strong £1.4bn development pipeline, much of it in the industrial and logistics sector.
Although its pre-tax profits inevitably dipped in 2020 in the wake of Covid, in March 2021, the company said it had seen encouraging demand led by public sector customers and it had a full order book and its land, development and housebuilding business were performing ahead of expectations. Chief executive officer Tim Roberts said: “There have been encouraging signs of recovery in our key markets, with momentum carrying over, so we have made a good start to the year.”
Financials
To view the financials for Henry Boot visit Companies House and use Company ID 00160996.
The returns across Henry Boot’s key development, housebuilding and construction markets were inevitably impacted by Covid in 2020. Pre-tax profits in the year to end-December 2020 dipped to £17.1 million from £49.1 million previously and were better than expected thanks to land disposals and a resilient performance in the second half. Turnover fell to £222.4 million, down from £379.7 million. Meanwhile, the group had a healthy blance sheet with net cash of £38.5 million as at February 2021. The group’s strategic land bank now stands at 16, 607 acres and its net asset value per share dipped to 235p from 239p.
Construction
Henry Boot Construction has a strong level of repeat business book and a healthy mix of private and public-sector clients across the building and civils sectors, which should help it manage post-Covid risks. The division turned over £86.2 million in 2020, down from £89.7 million previously and reported an operating profit of £6.5 million down from £9 million.
Today, the division has a full construction order book for 2021 and with a public sector bias it hopes to benefit from the government’s Build Back Better campaign. The group is aiming to focus mainly on public sector projects in its existing regional markets with an emphasis on repeat work which produce above-industry margins and a target to start each financial year with at least two thirds of its order book secured.
Work is continuing on its major £88m urban development scheme at The Glass Works, Barnsley, which is set to handover in summer 2021 and on its £12.3m contract on the Opera North facilities in Leeds. Meanwhile, in Sheffield, the company has signed a £40 million contract for the Kangaroo Works, a 364-unit buy to rent scheme and has started work on a works on a £42.5m mixed-use urban development project, Heart of Sheffield, Block H. An affordable housing business, Starfish Commercial, was hit by Covid and put into creditors’ voluntary liquidation.
The division has been active on public sector frameworks, completing three schemes worth £8.2m, and working on a further six schemes worth £35.5m. The division has won its first project through the PAGABO framework and has won a place on the new Crown Commercial Services framework in the North of England for projects up to £30.0m. It has also secured a place on the NHS shared business services framework for projects up to £15 m across its area.
Boot is also set to start the process of returning to Highways England the management of the A69 Road Link where the company’s contract has five years to run.
Property Investment & Development
Boot’s property investment & development arm generated an operating profit of £4.9m in 2020, down from £17.8m previously, as Covid took its toll. Today, the division has a committed development pipeline of nine schemes with a gross development value of £312m (of which the group’s share is £85m) and involving some 2,611,000 sq ft, of mainly pre-let or sold space.
New sites it has acquired recently include Mabgate in Leeds and St John’s College in Manchester for a combined price of £12.6m and which offer redevelopment opportunities and 83 acres of land at Todwick just off jct. 31 of the M1, with potential for over 1,000,000 sq ft of industrial/logistics space.The group also has a short to medium term development pipeline wworth £1.4 billion (of which the group’s share is £1.1bn).
A priority for Boot is to start work at Phoenix 10, Walsall, involving 620,000 sq ft of industrial space and construction on its 95-unit build for sale residential scheme in Birmingham, Cornwall House.
At Wakefield Hub, the group has jointly submitted plans for a 2,000,000 sq ft unit where work is due start in the autumn this year. It also plans to develop a 260,000 sq. ft. unit for a German pharmaceutical company where work is set to start in the second half of 2021.
Boot’s jointly owned housebuilder, Stonebridge Homes made 115 completions (90 private/25 affordable) in 2020 at an average selling price for private units of £368k. The division says it is starting 2021 in good shape and has a target to deliver 120 plots (75 private/44 affordable).
Land Development
Hallam Land Management, the group’s strategic land promotion business, benefitted as housebuilders continue to replenish their land banks. In 2020, it reported a £14.2 m operating profit, down from £31 million previously, from selling 2,000 plots at an average selling price of £6,456 per plot. During the year it secured new planning consents for 2,708 plots, increasing its consented portfolio to 15,421 plots.
Glenigan Data
Glenigan data points to a busy workload at Henry Boot. It shows that Henry Boot and Yorkcourt have recently secured a deal for a £30m industrial unit in Wakefield at Newmarket Lane where GF Tomlinson & Sons is the main contractor and work is set to start in autumn 2021 and run for 12 months (Project ID: 21036894). Meanwhile, on the huge £100 million Phoenix 10 industrial/warehouse project in Walsall, Glenigan data shows that tenders have been returned and work is set to start in early 2023 and continue for almost 50 months (Project ID: 18142063).
Henry Boot was ranked 81st in Glengian’s league table of major contractors in the year to Sept 2020 with 5 major deals worth a total of £77.6 million.
Conclusion:
Strong order book with promising land and industrial development portfolio
Boot’s strategy of investing in land, property and development schemes, supported by cash flows from its construction arm is less fashionable among larger quoted contracting groups these days. But having strengthened its balance sheet in recent years and invested for the long term, the group has reaped the rewards as key trends across the industry work in its favour. The group has put in a resilient performance recently and its emphasis on public sector clients should help it take advantage of the post-Covid upturn in government spending across the sector. The group’s latest results point to a strong construction order book and 2021 starting well with series of development schemes, particularly in logistics/warehousing which should serve it well in coming years.
Winning work with Henry Boot
Henry Boot Construction procures its materials and subcontract packages through an approved supplier scheme which vets prospective members on grounds of quality, safety and environmental standards and to ensure financial soundness. The firm encourages suppliers to collaborate with it to use efficient and innovative techniques to raise quality and cut waste. It aims to create a culture to promote a team spirit; common standards to ensure consistent quality and open book working. It monitors performance against KPIs for continuous improvement.
Meanwhile, the firm has continued to develop its building information modelling strategy, including engagement with its supply chain to be level 2 compliant.
A section on the supply chain at Henry Boot Construction’s website here gives details on the company’s supply chain selection process and includes an online enquiry form.
Nigel Moran is Project Buyer at Henry Boot Construction
or
Joanna Batton is Buyer at Henry Boot Construction
Tel: 01246 410111
Other key contacts include:
Dave Totty, Contracts Manager at Henry Boot Construction
01246 410111
Steve Allen, Business Development.
Tel: 01206 410111