Construction division slightly ahead at Henry Boot

The lack of land sales resulted in a dip in half-year revenue and profits at property developer Henry Boot, but the group said it is picking up lots of good sites on the cheap.

Profit before tax in the six months to the end of June fell to £5.8m from £9.1m the year before. The group enjoyed a £1.78m uplift from the increase in the fair value of investment properties, versus a £1.73m downwards adjustment last year. Despite this, trading profit, which is essentially operating profit plus adjustments for sales of assets and changes in the value of investment properties, more than halved to £4.1m from £11.0m.

Nevertheless, company Chairman John Brown said it was "another solid set of results," given the difficult conditions in which the company operates. The board's expectations for the full-year remain unchanged, Brown added, with trading conditions set to remain challenging.

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Revenue fell to £43.3m from £66.9m in the first half of 2011, largely as a result of the low level of sales activity within the Hallam Land division, where no sales of consequence were concluded in the first half of the year.

Half-year earnings per share were down to 2.4p from 4.1p the year before, while net asset value (NAV) per share at the end of June had subsided to 135p from a NAV per share of 146p at the end of 2011.

Net debt at the end of June had widened to £22.0m from £2.3m at the end of 2011. Despite this, Brown said the company's balance sheet strength and untapped banking facilities is resulting in a significant uplift in competitively priced opportunities arising.

"These sites will serve to increase our profit generation capability through the next few years but more so if markets improve more quickly than we currently anticipate," Brown opined.

Hallam Land Management, the group's strategic land company, succeeded in significantly increasing its land acreage and made "very good progress" with planning on a number of sites during the reporting period.

The construction division, meanwhile, has enough orders to hit budgeted turnover for 2012 and is starting to take orders for 2013, leaving it slightly ahead of expectations, although the firm cautioned against two carried away, given the public spending cutbacks announced by the UK government.

On the developments and investments side, yield and asset values have "remained reasonably stable for well-let, good quality property in the UK this year."

The interim dividend has been bumped up to 1.80p from 1.65p.

JH