REG - Boot(Henry) PLC - RESULTS FOR YEAR ENDED 31 DEC 2024
25/03/2025 07:15
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RNS Number : 9840B Boot(Henry) PLC 25 March 2025
25 March 2025
HENRY BOOT PLC
('Henry Boot', the 'company' or the 'group')
Ticker: BOOT.L: Main market premium listing: FTSE: Real Estate Investment and
Services.
Unaudited results for the year ended 31 December 2024
Resilient 2024 performance; Well positioned for market recovery; 5% dividend
increase
Henry Boot PLC, a company engaged in land promotion, property investment and
development, and construction, announces its unaudited results for the year
ended 31 December 2024.
Tim Roberts, Chief Executive Officer, commented:
"As anticipated, after a challenging start to the year we delivered a strong
second half which allowed us to report results in line with expectations. In
particular, demand for our high quality land, prime development and premium
homes has remained resilient. This led to us successfully completing almost
£350 million in land and property sales and continuing to lease up space,
including setting a record office rent in Manchester at our Island
development. Our investment portfolio also recorded another period of
outperformance, with a total return of almost 10% for the year, meaning it has
returned more than double the index over the last five years.
We also continued to shape the business, with the agreed buyout of Stonebridge
Homes, where we are now the majority owner. We will take full ownership of
this premium housebuilder in the coming years, continuing to scale the
business up, and delivering synergies as we integrate it into Henry Boot. At
Hallam Land, we've been quick off the mark in strengthening our team, so we
are well prepared to capitalise on the positive changes to the NPPF, by
increasing our planning applications fourfold to 10,000 plots over the next 12
months. At HBD, we've formed the Origin JV which we believe will help us to
accelerate the delivery of our institutional quality industrial development
pipeline.
All of this, along with our rock-solid balance sheet, the prospect of
recovering markets, and an easier planning environment, means we are well
placed for the future."
Financial highlights
· Total land and property sales of £347m, our share at £224m
(2023: £249m), highlights the continued demand for our high quality land,
prime property development and premium homes
· Revenue marginally lower at £328.4m (2023: £359.4m) due to
reduced turnover in our construction segment, offset by higher sales from
Hallam Land (Hallam)
· Profit before tax in line with market expectations at £30.7m
(2023: £37.3m), with an underlying profit¹ of £29.4m (2023: £36.7m),
supported by our focus on high quality projects in prime locations
· Capital employed increased by 5.4% to £439m (2023: £417m),
continuing our stated growth strategy and progressing towards our medium term
target of £500m
· Return on capital employed (ROCE(2)) was 8.0% (2023: 9.9%). We
remain confident of achieving returns within the Company's target of 10-15% in
the medium term
· The group's Net Asset Value (NAV(3)) per share increased by 3.6%
to 317p (2023: 306p) or 312p (2023: 300p), excluding the defined benefit
pension scheme surplus
· Net debt(4) decreased to £62.7m (2023: £77.8m) after the
completion of major strategic land and property development sales. Gearing at
14.7% (December 2023: 19.0%), in the middle of our optimal range of 10-20%
· 5% increase in proposed final dividend of 4.62p (2023: 4.40p), in
line with our progressive dividend policy and bringing the total dividend for
the year to 7.70p (2023: 7.33p)
Operational highlights
· Post period end in January 2025, we increased our ownership of
premium regional housebuilder Stonebridge Homes (SH) to 62.5%, having
exchanged contracts in December 2024 to acquire the 50% that the group does
not already own in three tranches over the next five years
· Land promotion
o Hallam exceeded its 2024 financial performance expectations with 2,661
plots being sold (2023: 1,944) plus a significant employment land sale in
Coventry
o Hallam successfully secured 10 new sites with the potential to deliver
c.6,500 plots and, therefore, the total land bank has grown by 4% to 104,787
plots (2023: 100,972 plots)
o During the year consents were secured on 2,982 plots (2023: 1,104)
increasing the total plots with planning permission to 8,822 (2023: 8,501),
all held at cost. A further 13,146 plots await planning determination (2023:
13,468)
o Changes to the National Planning Policy Framework (NPPF) are positive and,
in response, the group intends to materially increase new applications to
c.10,000 plots over the next 12 months (2024: 2,660 plots)
· Property investment & development
o Gross development value (GDV) of HBD completed schemes amounted to £331m
(HBD share: £188m GDV), of which 72% have been pre-let or pre-sold
o Launched the Origin JV with Feldberg Capital, to accelerate HBD's
development pipeline, with the aim to deliver c.£1bn of high quality
industrial and logistics (I&L) schemes over the next seven years
o £1.4bn development pipeline (HB share: £1.2bn GDV), 54% of which is
I&L and a committed development programme of £124m GDV (HBD share: £33m)
o Investment portfolio (IP) total property return(5) of 9.9%, well ahead of
the CBRE UK Monthly Index (7.7%), with the market value including our share of
JVs and assets held for sale now £107.4m (2023: £112.9m) after £10.4m of
accretive sales
o SH continued to grow in 2024, despite a subdued market, with completions
up 8% to 270 homes (2023: 251 homes) and the total land bank up to 1,726 plots
(2023: 1,513 plots) as the business continues scaling up in line with our
strategy
· Construction
o The construction segment generated turnover of £80.5m (2023: £99.5m)
with an operating profit of £4.9m (2023: £6.5m)
o A new management team in place in Henry Boot Construction (HBC) focused on
growing and diversifying the order book by developing a balanced portfolio of
private sector projects to complement the existing public sector work. There
are early signs of the pipeline improving
· Responsible business
o The group has made good strategic progress towards our medium term
targets, which we intend to refresh in 2026
NOTES:
(1) Underlying profit is an alternative performance measure (APM) and is
defined as profit before tax excluding revaluation movements on completed
investment properties. Revaluation movement on completed investment properties
includes gains of £1.2m (2023: £0.5m) on wholly owned completed investment
property and a gain of £0.1m (2023: £0.1m) on completed investment property
held in joint ventures. This APM is used as it provides the users with a
measure that excludes specific external factors beyond management's controls
and reflects the group's underlying results. This measure is used in the
business in appraising senior management performance.
(2) Return on Capital Employed is an APM and is defined as operating
profit/capital employed where capital employed is the average of total assets
less current liabilities and pension asset/obligation at the opening and
closing balance sheet dates.
(3) Net Asset Value (NAV) per share is an APM and is defined using the
statutory measures net assets/ordinary share capital.
(4) Net debt is an APM and is reconciled to statutory measures in note 7.
( )
(5) Total property return is a metric that combines capital and income returns
for the investment portfolio. It is calculated as the percentage value change
plus net income accrual, relative to the capital employed and is calculated on
a monthly basis and then indexed in line with the benchmark.
( )
⁶ Total Accounting Return is an APM and is defined as the growth in NAV per
share plus dividends paid, expressed as a percentage of NAV per share at the
beginning of the period.
For further information, please contact:
Henry Boot PLC
Tim Roberts, Chief Executive Officer
Darren Littlewood, Chief Financial Officer
Daniel Boot, Senior Corporate Communications Manager
Tel: 0114 255 5444
www.henryboot.co.uk (http://www.henryboot.co.uk)
Deutsche Numis
Joint Corporate Broker
Ben Stoop/Thomas Philpott
Tel: 020 7260 1000
Peel Hunt LLP
Joint Corporate Broker
Ed Allsopp/Pete Mackie
Tel: 020 7418 8900
FTI Consulting
Financial PR
Giles Barrie/Richard Sunderland
020 3727 1000
henryboot@fticonsulting.com (mailto:henryboot@fticonsulting.com)
A webcast for analysts and investors will be held at 9.30am today and
presentation slides will be available to download via www.henryboot.co.uk
(https://eur01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.henryboot.co.uk%2F&data=04%7C01%7Cdboot%40henryboot.co.uk%7C3047ba2e3e124f89e90508da0c453adc%7C4a6f086a81e542f197c2f8470d12d61d%7C0%7C0%7C637835788744426781%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000&sdata=4sRskhTQwO77WteakjZGIfafow9n1GJw7e1Xwsozt98%3D&reserved=0)
. Details for the live dial-in facility and webcast are as follows:
Participants (UK): Tel: 44 (0) 33 0551 0200
Confirmation code: Quote "Henry Boot FY24"
Webcast link: https://stream.brrmedia.co.uk/broadcast/67b461aa118fdd71342d27aa
(https://stream.brrmedia.co.uk/broadcast/67b461aa118fdd71342d27aa)
About Henry Boot PLC
Henry Boot is one of the UK's leading land, property development, home
building and construction businesses - and we've been transforming land and
spaces since 1886. Listed on the London Stock Exchange since 1919, we're
renowned for quality, expertise, delivery and a partnership approach across
the group, which comprises, Hallam Land, HBD, Stonebridge, Henry Boot
Construction, Banner Plant and Road Link.
Operating across the UK, and employing over 500 people, we focus on three key
markets: industrial and logistics, residential and urban development. Hallam
Land has facilitated 52,000 new homes since 1990, managing one of the top five
largest land portfolios in the country, with the potential to facilitate over
100,000 homes. HBD manages a development pipeline of £1.2bn, the equivalent
of 6m sq ft of developments across our key markets, while maintaining a £107m
investment portfolio, of which 72% of the properties have an EPC rating of 'C'
or higher. Stonebridge, our majority owned premium home building business,
manages a land portfolio capable of delivering 1,700 homes, with an ambition
to deliver up to 600 new homes a year.
Henry Boot Construction has extensive experience in both the public and
private sectors, including major projects such as the £200m regeneration of
Barnsley town centre, and The Cocoa Works, a £57m residential development in
York. For over 65 years, Banner Plant has supplied construction products and
services, operating from seven regional depots in the North of England.
We have also developed an ambitious Responsible Business Strategy to help us
meet our aim of being Net Zero Carbon by 2030, and to deliver, by 2025,
charitable, community and education work valued at £1m.
From land promotion, property development and investment to home building,
construction and plant hire, Henry Boot is where great places start.
Chair's introduction
Henry Boot performed well in 2024, delivering a strong performance in the
second half of last year as expected. Our high quality portfolio benefited
from a gradual improvement in the economy, which translated into a steady
increase in demand in our three key markets: I&L, residential and urban
development. Against this backdrop, our focus on high quality land, prime
property development and premium homes saw the group achieve a profit before
tax (PBT) of £30.7m (December 2023: £37.3m), or on an underlying profit
basis £29.4m (December 2023: £36.7m) excluding revaluation movements on
completed investment property.
The group's NAV per share increased by 3.6% to 317p (December 2023: 306p)
primarily due to retained earnings or to 312p (December 2023: 300p) excluding
the defined benefit pension scheme surplus. Net debt reduced to £62.7m as at
31 December 2024 (December 2023: £77.8m) after the completion of major
strategic land and property development sales. This resulted in gearing
falling to 14.7%, which is comfortably within our stated optimal range of
10-20%.
Throughout 2024, we continued to make good strategic progress toward our
medium-term targets while investing in our long term future. I am pleased to
update you as follows:
· The group exchanged contracts (initial completion in 2025) to
take full ownership of premium regional housebuilder SH through the
acquisition of the 50% it does not already own, across three tranches over the
next five years. HBD formed a JV with Feldberg Capital, with the intention to
deliver c.£1bn of high quality I&L schemes with strong ESG credentials
over the next seven years.
· Following a strategic workforce plan reviewing Hallam's
resources, we are increasing headcount and in house specialisms to support our
ambition to submit more planning applications and to grow our sales.
· We launched a refreshed group brand in June 2024 to reinforce our
values, optimise customer experiences, and be clearly recognised as a modern,
progressive and successful business. Simply stated, Henry Boot is 'Where great
places start'.
· The annual group Employee Engagement Survey, which informs our
aim to continually improve Henry Boot as a place to work, achieved an employee
Net Promoter Score (eNPS) of 30 (December 2023: 30), +22 ahead of our peer
group average. This very good eNPS score is a testament to our people's
commitment to Henry Boot.
· We entered into a new £125m, three year credit facility with
existing lenders Barclays, HSBC and NatWest, with the option to extend for a
further two years to May 2029. The margin payable is 160bps above SONIA. In
addition, the facility includes a £60m accordion.
Our confidence in the business means the Board proposes to pay a final
dividend of 4.62p per share, which together with the 3.08p interim dividend,
gives a total of 7.70p (December 2023: 7.33p), an increase of 5.0% for the
year. Subject to approval at the AGM on 22 May 2025, this will be paid on 30
May 2025 to shareholders on the register at the close of business on 2 May
2025.
Finally, Joanne Lake and Gerald Jennings completed their tenures as Senior
Independent Director and Non-executive Director respectively, at the end of
September 2024. I would like to express my appreciation for their significant
contributions over the past nine years and wish them both success in the
future. In anticipation of their departures, Talita Ferreira joined the Board
in January 2024. We have also recently announced the appointment of Earl
Sibley, the former COO of Vistry Group, the FTSE 250 housebuilder, as an
additional Non-executive Director. Earl will join the Board in April 2025.
On behalf of the Board, I would also like to thank everyone at Henry Boot for
their dedication and hard work. Their skill and expertise continues to deliver
value to all our stakeholders and bring in new opportunities for the future.
Peter Mawson
Chair
CEO's review
As a result of soft market conditions, a subdued economic environment for 2024
and the expected timings of key transactions, at the beginning of the year, we
anticipated that the full year performance would be second half weighted. In
line with that, we saw a strong second half performance and I am pleased to
say we have delivered numbers consistent with market expectations. Demand for
our high-quality land, property development and premium homes remained
resilient. Total sales of land, commercial property and houses for the year
were £347m, with our share at £224m (December 2023: £249m).
The significantly stronger second half was supported by gradual improvements
across our three key markets, although this was not helped by the uncertainty
caused by the Autumn budget and the consequential rise in long term interest
rates. However, the main factor was the timing of a number of significant
transactions. Notably, in the final quarter, we completed on £175m of sales
(our share £101m) of strategic and development land. Against this backdrop,
including the general rising cost of doing business, PBT of £30.7m, an
increased NAV of £425m (December 2023: £410m) on a statutory basis, plus a
TAR⁶ of 6.1%, is a positive result.
Our portfolio is made up of Hallam's 104,787 plot land bank, and HBD's £1.2bn
development pipeline, which holds considerable latent value, and is
conservatively held on our balance sheet at the lower of cost or net
realisable value. This, together with SH's landbank of 1,726 plots, positions
us strongly to realise our growth ambitions. In line with our growth strategy,
our capital employed has also risen to £439m (December 2023: £417m). While
return on capital employed at 8.0% is outside our range, as our markets
recover and we execute on our stated growth strategy, we expect it to be back
within our target range of 10-15%. In terms of strategy, we have taken some
big steps forward, which will contribute to the group's future growth:
· In January 2025, the group increased its ownership in SH to 62.5%
and will take full control of the business over the next five years. The
consideration is performance linked, and the phased structure is designed to
generate strong returns while maintaining gearing within our optimum range of
10-20%. This is an opportunity to increase our investment in both a high
growth business and a residential market, benefiting from supportive
structural and political tailwinds.
· We formed an I&L JV with Feldberg called Origin. It has been
immediately seeded with three sites from our pipeline offering a combined GDV
of c.£100m. The JV will allow the group to accelerate industrial development
from its £1.2bn pipeline and will also pay HBD a development manager fee and
promote over agreed hurdle rates. In January 2025, the JV successfully secured
a £54m development loan from BGO to help fund the development of the seeded
assets.
· Having assessed the changes to the NPPF that were finalised just
before the end of 2024 and concluded they should materially ease planning
policy, we responded quickly by completing a strategic workforce plan within
Hallam. This has involved drawing up and investing in new systems and
processes and adding more resources. In particular, we are well underway in
recruiting an extra ten heads to add to the planners and specialists we
already employ. This will support Hallam in ramping up planning applications
by a further 10,000 plots over the next 12 months with more to come in 2026,
and to ultimately grow plot sales.
Turning to our markets, UK greenfield land values were broadly unchanged in
2024 according to Savills, and volumes over the year were around 20% below the
five year average. Our customers, primarily national housebuilders, were
selective in their acquisitions. Demand for our prime strategic sites remained
resilient, with Hallam selling 2,661 plots, well above the 1,944 in 2023 and
in line with the five year average of 2,696 plots. Total gross sales £183m
(Hallam share £78m) were ahead of our expectations, benefiting from the sale
of £36m (Hallam share £9m) of employment land in Coventry. With the spectre
of the proposed changes to the NPPF overhanging Local Planning Authorities, we
also managed an increase in consents secured to 2,982 plots (December 2023:
1,014). Hallam is in a good position to achieve more consents and sell more
sites over the next three years, putting us on track to meet our medium term
yearly target of 3,500 plots sold.
The commercial property market has stabilised with capital values increasing
by 1.8% and total returns at 7.7% (CBRE UK Monthly Index). Industrial has been
the best performing commercial property sector over the last five years by
some margin, having delivered a total return more than two and a half times
that of all property, and remains the place in which to invest. During 2024
industrial values were up 4.5%, driven by rental growth at 5.0%. The majority
of our completed, committed developments and pipeline are within the
industrial sector. Whilst commercial markets have stabilised, investment
volumes and occupier take up is generally running below long term averages.
I&L take up was up 6% year on year (yoy) in 2024 and is back in line with
the 10 year average - albeit down by around 30% from the average during the
exceptional, Covid demand led period between 2020-22. Overall investment
volumes were up 24% yoy in 2024 but were still 11% below the 10 year average
as transactions are taking time to complete. Despite this, HBD had a very
active year, completing on £331m (HBD share £188m) of development, 72% of
which has been sold or let.
The key letting during the period was a 50% pre-let to Virgin Media O2, at
Island in Manchester city centre, one of the few Net Zero Carbon (NZC) office
buildings to have practically completed (PC) in the North. We achieved a
record office rent for Manchester, and there is strong interest in the
remaining space.
At Setl, our 102 premium apartment building in the centre of Birmingham, which
PC'd in May of last year, we have now secured sales on 69% of the units at the
target selling price, achieving an average reservation rate of 1.0 unit per
week. At Momentum, in Rainham, a 380,000 sq ft NZC I&L scheme held in a
20:80 JV with Barings, the contractor went into administration during the
year, which delayed PC until August, although the building works completed
within budget. We are currently marketing the space to occupiers, with the
construction delay putting back HBD's original letting plan. Our aim is to
have made significant letting progress over the year on this high quality
project.
Last year was not the time to be expanding our committed development
programme, so we have rightly managed it down to £124m (HBD share £33m) -
nearly all of it in I&L. We are, however, encouraged by the pickup in
enquiry levels and, therefore, we expect to increase our committed programme
during 2025, with an emphasis on occupier led and investor funded schemes.
The group's IP has outperformed again, with a total return of 9.9%. Over the
last five years, the total return has averaged 7.1% p.a., compared with the
Index of 3.1% p.a. Our structural weighting, which we have purposefully built
up in industrial, drove this performance. While like for like portfolio
valuations showed an increase, as a result of sales the IP ended the year at
£107.4m (December 2023: £112.9m). We will, as always, be patient in growing
the portfolio to the medium-term target of £150m. This approach has been key
to us successfully delivering performance, notably during the market
correction of 2022/23, and means that, going forward, there is plenty of
opportunity for growth.
It has been a mixed year for the residential market, with the volume of new
homes completed in 2024 down 7% on 2023 according to the National House
Building Council (NHBC), but with house prices stabilising and, according to
Nationwide, growing by 4.7%. In this market, SH performed well, continuing to
grow with sales increasing 8% to 270 homes (December 2023: 251 homes). Despite
the subdued market, we were in fact only marginally below our target due to a
number of protracted chains, which resulted in these sales rolling over into
2025. Our aim is to continue to grow by expanding in the North East region
where this year we will have five sites open, and then into the Midlands,
where we have bought our first site in Bracebridge, Lincoln (281 plots).
As interest rates continue to fall, demand will receive a boost. While supply
responds more slowly, we expect the market to improve noting that, over the
medium term, Savills forecast that house prices will increase by 23% over the
next five years, with the regions in the North and the Midlands where SH
operates, set to outperform. We recognise the subdued market has continued
into 2025 but remain confident in the outlook and so expect an increase of
sales in 2025 of c.10%.
Although unsurprising, as sourcing land is a fundamental strength of Henry
Boot, I am particularly pleased that we have increased the land bank to 1,726
plots (December 2023: 1,513 plots), which is obviously key to helping us meet
our medium term target of 600 homes sold a year. We are confident that we can
scale SH up and, as over time, we fully integrate the business into the group,
we have the opportunity to realise synergies and cost savings. In the medium
term, we expect it to be accretive to group ROCE.
In a challenging market, the group's construction segment was yet again
profitable, but was below our expectations. HBC delivered a turnover of
£49.7m (December 2023: £70.1m), and Banner Plant (BP) performed resiliently.
Road Link traded in line with budget. Under a new management team appointed in
July 2024, with a renewed focus on winning work, HBC starts the new year in a
better position. At the start of 2025, 55% of its order book was contracted,
and a further 16% was secured. This compares well with last year (49%
secured), and also with our target of identifying 65% of our order book at the
beginning of each year.
Strategy
The group set a medium-term strategy in 2021 to grow the size of the business
by increasing capital employed from £365m to £500m, focusing on its three
key markets: I&L, residential and urban development, while maintaining
ROCE within a 10-15% range. Last year, we continued to grow capital employed
to £439m (December 2023: £417m) and we remain on course to realise our
medium term target of £500m.
See below for the progress made in 2024 against our stated medium term
targets:
Measure Medium-term target FY 24 Performance Progress
Capital employed To over £500m £439m as at 31 December 2024 On track to grow capital employed to over £500m
Return on average capital employed 10-15% per annum 8.0% in FY 24 We maintain our aim to be within the target range of 10-15% through the cycle
Land promotion plot sales c.3,500 per annum 2,661 plots in FY 24 FY 24 plot sales in line with five year average of 2,696
Development completions Our share c.£200m per annum Our share: £188m in FY 24 We significantly grew our development completions close to the target
Grow investment portfolio To around £150m £107.4m as at 31 December 2024 Total value reduced after accretive sales in the year. As previously stated,
we will remain disciplined in building up the portfolio
Stonebridge Homes sales Up to 600 units per annum 270 homes completed in FY 24 A 125% increase since 2021, with output expected to rise to 298 homes in
2025
Construction order book secured Minimum of 65% for the following year As at Jan 55% contracted, with 16% secured New senior team hired to drive order book with 70% secured as at 3 March
Responsible business
We launched our Responsible Business Strategy (RBS) in January 2022, with our
primary aim to be NZC by 2030 with respect to Scopes 1 and 2 greenhouse gas
(GHG) emissions. I am pleased with the progress we have made so far against
our 2025 objectives and targets. Our strategy is guided by three principal
objectives:
· To further embed ESG factors into commercial decision making so
that the business adapts, ensuring long term sustainability and value creation
for the group's stakeholders
· To empower and engage our people to deliver long term meaningful
change and impact for the communities and environments Henry Boot works in
· To focus on issues deemed to be most significant and material to
the business and hold ourselves accountable by reporting regularly on progress
3 year performance against our 2025 targets
As we approach the final year of our 2025 Responsible Business targets, the
table below highlights the significant progress we have made. We are pleased
that we are on track to achieve the majority of our goals before we refresh
our RBS in 2026.
Our people Performance Our places Performance
Develop and deliver a group-wide Health and Wellbeing Strategy Delivery is underway, including the launch of a financial wellbeing programme Contribute £1,000,000 of financial (and equivalent) value to our charitable We have contributed (financial and equivalent value of) over £770,000 to our
with Finwell and establishing a network of Mental Health First Aiders partners charitable and community
partners
Increase gender representation in the business, aiming for 30% of our team and Female representation across our workforce has increased to 29% (2023: 28%). Contribute 7,500 volunteering hours to a range of community, charity, and More than 8,000 volunteering hours have been delivered, meaning we have
line managers being female Management gender diversity is 25% (2023: 28%) education projects already exceeded our goal
Our planet Performance Our partners Performance
Reduce Scope 1 and 2 GHG emissions by over 20% to support reaching NZC by 2030 Total direct GHG emissions (Scopes 1 and 2) in 2024 were 2,989 tonnes (2023: Engage key partners to create a more EDI Working group has engaged with organisations including the CBI and BITC to
2,833 tonnes), which equates to a 10% reduction from the 2019 baseline
collaborate with business and supplier partners to review initiatives to
diverse and inclusive built environment improve diversity
sector and form business-led
partnerships to improve EDI
Reduce consumption of avoidable Waste Management Plan due for implementation to enable baselining and Collaborate with all our partners to reduce our environmental impact We continue to engage with membership organisations
reduction in avoidable plastic
plastic by 50% and our supply chain to share knowledge and best practice
Outlook
We continue to make good strategic progress in positioning our business across
our three key conviction markets for the future. These markets benefit from
long term structural trends where demand is likely to outstrip supply and
where, even during this period of high rates and sluggish growth, demand for
our quality projects has remained resilient.
We have a clear focus on growing the group through increasing activity within
Hallam, HBD and SH. Our aim is to create synergies and simplify our investment
case by concentrating on these three core businesses. At Hallam, we are
significantly accelerating planning applications, supported by our Workforce
Plan where we have been strengthening the team so we are best placed to
capitalise on the favourable changes to the planning system. Encouragingly, we
have seen a welcome change in the Inspectorate's and Local Planning
Authorities' approach following recent amendments to the NPPF, which has
already resulted in us winning planning for nearly 3,000 plots over the last
six months, far exceeding our typical run rate.
HBD is looking to grow its committed development programme by drawing on our
pipeline, and through the Origin JV, where we can accelerate delivery while
earning fees as development manager including the potential for performance
fees over agreed hurdle rates. At SH, we agreed a route to taking full
ownership alongside a well-defined strategy to materially grow the business.
We expect the residential market to rebound, supported by the NPPF amendments
and Planning Bill reforms which will provide a positive tailwind to our growth
plans. At Road Link we are approaching the conclusion of a 30-year PFI
contract and will be handing back responsibility to operate and maintain the
A69 to National Highways in the next 12 months.
After recent cuts in interest rates, we have seen improved market sentiment,
and with expectations of a continued downward trajectory throughout this year,
we anticipate that lower rates will stimulate demand within both the
residential and commercial markets, particularly in the industrial sector.
While this is positive for the group, there will be a lag between increased
activity and the timing of key transactions and, as a result, we expect 2025
results will again be heavily second half weighted.
In the meantime, we remain very active and well positioned for recovery,
supported by a rock solid balance sheet and a portfolio rich with opportunity.
We continue to make good progress towards hitting our medium term growth and
return targets.
Tim Roberts
Chief Executive Officer
Business review
Land promotion
Hallam performed well in 2024, achieving an operating profit of £24.3m
(December 2023: £21.4m) from selling 2,661 plots (December 2023: 1,944
plots). Although this was below the target of 3,000 plots for the year, Hallam
exceeded its full year financial target following the employment land sale in
Coventry. The average gross profit per plot was £10,155 (December 2023:
£15,480), which is ahead of the five year average of £9,200.
UK greenfield land values increased by 1.2% in 2024, according to Savills
Research. While there was an overall improvement in confidence and increase in
activity during the year, land sales were around 20% below the five-year
average in 2024, as deals continue to take longer to progress than in the post
Covid bounce back period. The announcement of changes to the NPPF will
increase applications; though, this has not yet been reflected in national
approvals with 25% fewer homes granted planning consent in 2024, compared with
the previous peak in 2021, according to the HBF. Demand for prime deliverable
sites has therefore remained robust.
Against this backdrop, Hallam saw improved demand from housebuilders for its
prime deliverable sites last year, including completing sales on:
· 1,123 residential plots (491 plots to Barratt and 632 plots to
Vistry) at Pickford Gate Coventry and an additional 52 acres of employment
land to Royal London, resulting in total sales at the scheme of £102m (Hallam
share: £36m). Hallam secured a planning promotion agreement (PPA) in 2015
before submitting a planning application in 2018. An outline consent was
secured in 2021 for a total of 2,400 homes, of which 25% are affordable. The
project also involved delivering a new junction on the A45 dual carriageway,
for which Hallam secured funding through the Homes England HIF process. Works
on the junction were successfully completed in April 2024. Hallam retains
1,027 plots for future sale.
· 393 residential plots (phase one) in Swindon to Vistry. Hallam
secured an option to purchase the site over 20 years ago and since then it has
been promoting the land through the planning process. In August 2021, in
collaboration with adjoining landowners, outline planning consent was secured
for a total of 2,380 residential plots across a 400 acre site, of which 1,063
plots relate to Hallam's site. The scheme will also bring several additional
community benefits, including a new primary school, community and sport
buildings, significant woodland planting and green infrastructure. The sale of
the first phase completed (393 plots) in July 2024, and the second phase (366
plots), which exchanged simultaneously, will complete either later in 2025 or
in early 2026. Hallam retains 304 plots for future sale.
· 500 residential plots in Chatteris, Cambridgeshire, to Barratt.
Hallam secured a PPA to promote the site on behalf of British Steel Pension
Fund in 2005. Hallam successfully secured outline planning consent for 1,000
residential plots in 2020 (including c.160 affordable homes). Hallam retains
500 plots for future sale.
Residential land plots
With permission In planning Future Total
b/f granted sold c/f
2024 8,501 2,982 (2,661) 8,822 13,146 82,819 104,787
2023 9,431 1,014 (1,944) 8,501 13,468 79,003 100,972
2022 12,865 435 (3,869) 9,431 12,297 73,976 95,704
2021 15,421 452 (3,008) 12,865 11,259 68,543 92,667
2020 14,713 2,708 (2,000) 15,421 8,312 64,337 88,070
Hallam grew its total land bank by 4% during the year to 104,787 plots as at
31 December 2024 (December 2023: 100,972 plots), securing 10 new sites which
have the potential to deliver c.6,500 plots. The Government's revisions to the
NPPF have shown early signs of improvement to the planning system, and it is
believed this momentum will continue to unlock the delivery of new homes. In
total, Hallam secured consents on 2,982 plots (December 2023: 1,014 plots), of
which 2,186 were achieved between September and December 2024. Last year,
plots with planning permission (or a Resolution to Grant, subject to S106)
increased to 8,822 (December 2023: 8,501). A further 13,146 plots are
currently in the planning system awaiting determination, and as a result of
the changes to the NPPF, Hallam has identified an additional 10,000 plots
(2024: 2,660 plots) for expected submission over the next 12 months.
There is significant latent value in the group's strategic land portfolio,
which is held as inventory at the lower of cost or net realisable value. As
such, no uplift in value is recognised in the balance sheet relating to any of
the 8,822 plots with planning, and any gain will only be recognised on
disposal.
Hallam has begun the year completing on 665 plots and exchanging on a further
612 plots for completion during 2025, as well as having an additional 748
plots under offer. Planning permission has also been achieved for a further
867 plots across 4 sites.
Property investment and development
Property investment and development, which includes HBD and SH, delivered a
combined operating profit of £16.7m (December 2023: £22.2m).
According to the CBRE UK Monthly Index, commercial property values increased
by 1.8% in 2024. Industrial property delivered the strongest capital growth
with values up 4.5% during the year ahead of retail up 3.9%, while office
values declined by 2.9%. This however reflects the polarisation between old
office stock and the in demand newly developed space with strong environmental
credentials. Rental value growth also remains strongest for the industrial
sector with growth of 5.0% in 2024, with yields broadly unchanged over the
period. While I&L take up has slowed from record levels during the
pandemic, occupier demand improved during 2024, with take up marginally ahead
of the 2023 outturn. Manufacturers have driven the recent improvement in
demand, with many looking to de-risk supply chains through nearshoring
operations.
In 2024, HBD completed schemes with a total GDV of £331m (HBD share: £188m
GDV), a significant increase from £126m last year (December 2023: HBD share:
£112m GDV), of which 72% have been pre-let or pre-sold. This includes the
following:
· Island, (HBD Share: £33m GDV), a Net Zero Carbon (NZC) office
building in Manchester city centre in a JV with Greater Manchester Pension
Fund, was completed in November, on time and on budget. In October, a pre-let
was secured for 50% of the space across the top five floors on a 10 year lease
to Virgin Media O2, achieving a record office rent in Manchester. The
remaining space is attracting strong occupier interest.
· Setl, (HBD share: £32m GDV), a 102 unit premium apartment
building in Birmingham, was completed at the end of May last year. As of 3
March 2025, 69% of the units have been sold/reserved at target selling prices,
achieving an average reservation rate of 1.0 unit per week. This includes
c.£17m of sales that have either been completed or unconditionally exchanged.
· With regard to the I&L sector, HBD completed a total of
c.540,000 sq ft, including Rainham, (HBD share: £24m GDV), a four unit NZC
development serving Greater London in a JV with Barings and two units (HBD
share: £20m GDV) at Airport Business Park, Southend. At SPARK Walsall,
specialist remediation works (HBD share: £37m GDV) also completed, allowing
the first phase of this 620,000 sq ft prime development to begin.
· HBD also completed the sale of seven development sites (HBD
share: £32m GDV), which included 8 acres to NewCold and 6 acres to
Aeroservices at Wakefield Hub as well as 4 acres at Skipton. In addition, a
29,000 sq ft TMS car dealership at Melton Road, Leicester (HBD share: £10m
GDV), was completed.
2024 Completed schemes
Scheme GDV HBD share of GDV Commercial Residential size Status
(£m) (£m) ('000 sq ft) (Units)
Industrial & logistics
Rainham, Momentum 120 24 380 - Speculative
Southend, Ipeco2 and Cama, 20 20 156 - Pre-sold
Walsall, SPARK Remediation 37 37 - - Forward funded
177 81 536 -
Urban residential & commercial
Birmingham, Setl 32 32 - 102 Speculative - 69% reserved
Manchester, Island 66 33 91 - Speculative - 50% let
98 65 91 102
Land & other
Aberdeen, Cloverhill 2 2 - - Pre-sold and DM fee
Leicester, TMS 10 10 29 - Pre-sold
Sunderland IAMP 1 1 - - Pre-sold
Manchester, St Ann's 3 3 19 - Pre-sold
Pool, South Crofty 2 2 45 - Pre-sold
Skipton 10 10 25 - Pre-sold
Wakefield Hub, 4C & 7C 28 14 50 - Pre-sold
56 42 168 -
Total for the year 331 188 795 102
In December 2024, HBD formed an I&L JV with Feldberg Capital, known as
Origin. The venture is seeded with an initial portfolio of three sites from
HBD's pipeline with a combined GDV of c.£100m (HBD share: £25m). Work has
now commenced at all three sites for delivery from H2 2025 and comprise:
· Spark, Walsall (phase one), a 13 acre development site just off
the M6, which has full planning consent for two units totalling 270,000 sq ft
(Total GDV: £52m).
· Inter, Welwyn Garden City, a three acre development site on Tewin
Road near Junction 4 of the A1(M). The site has detailed planning consent for
a 71,000 sq ft I&L scheme (Total GDV: £28m).
· Ark, Markham Vale, a six acre development site with planning for
four units totalling 107,000 sq ft (Total GDV: £20m). This marks the next
phase of HBD's 200 acre flagship I&L scheme at Markham Vale.
Going forward the intention, subject to market conditions, is to deliver
c.£1bn of high quality and sustainable I&L schemes across the UK over the
next seven years. In January 2025, the JV secured a £54m development loan
from BGO to fund the acquisition and development of the seed assets.
The group's committed development programme now totals a GDV of £124m (HBD
share: £33m GDV) and is currently 25% pre-let, pre-sold or under offer, with
98% of development costs fixed.
2025 Committed programme
Scheme GDV HBD share of GDV Commercial Residential size Status Completion
(£m) (£m) ('000 sq ft) (Units)
Industrial
Origin, Markham, Ark 20 5 107 - Speculative Q4 25
Origin, Welwyn, Inter 28 7 71 - Speculative Q3 25
Origin, Walsall SPARK 52 13 271 - Speculative Q4 25
Preston, Roman Way 10 5 150 - Pre-sold Q4 25
110 30 599 -
Urban Residential
Aberdeen, Bridge of Don 12 1 - 420 Pre-sold Q3 25
Land & other
Leicester, Melton Road 2 2 20 - Pre-sold Q2 25
Total for the year 124 33 619 420
% sold or pre-let 19% 25%
Following the completion of three significant schemes during 2024, combined
with a more prudent approach to commencing new projects, the committed
development programme has been reduced. Notwithstanding this, HBD also has
optionality on a significant near-term pipeline which includes:
· The flagship £1bn innovation and technology project known as
Golden Valley (HBD share of phase one: £117m GDV), which is located adjacent
to GCHQ in Cheltenham, HBD is working towards receiving two outline planning
consents in H1 25. The consents relate to c.1m sq ft of commercial space and
c.1,000 residential units. Construction is planned to commence in late 2025.
· Neighbourhood, Birmingham (HBD share: £128m GDV) - after
securing planning in March 2023 for a 414-unit BtR development, HBD is seeking
forward funding for the scheme.
· Humber Goole Freeport South, (HBD share: £130m GDV), in
partnership with St Johns College Cambridge, an outline planning consent has
been submitted to develop a 5.5m sq ft high quality, sustainable industrial
and manufacturing park, with buildings ranging from 40,000 sq ft to 1m sq ft.
HBD is working towards receiving an outline planning consent in H1 25.
· Within the future development pipeline there are several I&L
projects which benefit from planning permissions totalling c.3.8m sq ft at
various flagship schemes, including Walsall, Southend, Luton and Preston.
HBD's future total development pipeline stands at £1.4bn GDV (HBD share:
£1.2bn GDV). All these opportunities sit within the Company's three key
markets of I&L (54%), Urban Commercial (23%) and Urban Residential (23%).
Investment portfolio - key stats
Dec 2024 Dec 2023
Market values - inc. share of JV's £107.4m £112.9m
Total area - '000 sq ft 767 795
'Topped-up' net initial yield 5.5% 5.8%
Reversionary yield 6.7% 6.5%
WAULT to expiry¹ 9.7 years 10.8 years
Occupancy² 94% 93%
¹Weighted average unexpired lease term (WAULT) on commercial properties
²As a percentage of completed property portfolio estimated rental value (ERV)
As a result of the successful sales undertaken during the year, the total
value of the IP (including the share of properties held in JVs and assets held
for sale) ended the year at £107.4m (December 2023: £112.9m). On a
like-for-like basis capital values increased by 4.7%, with rental value growth
of 8.4% for the I&L assets which represent 73% of the total portfolio by
value. The total property return of 9.9% was ahead of the total return from
the CBRE UK Monthly Index (7.7%). During the period, occupancy marginally
increased to 94% (December 2023: 93%) with the weighted average unexpired
lease term now 9.7 years (7.8 years to first break).
Currently, 72% of the IP (based on floor area) has an EPC rating of 'C' or
higher, with 42% being rated 'A' or 'B'. The 28% of the portfolio, which does
not have an EPC within the target range is allocated for either redevelopment
or sale in the short to medium term.
Stonebridge Homes
The UK housing market remained relatively subdued during 2024 as homebuyer
demand continued to be impacted by higher mortgage rates. According to
Nationwide, UK house prices increased by 4.7% during 2024, with prices still
just below the all-time high recorded in summer 2022. Northern England
continues to outperform southern England, with prices up 4.9% year-on-year.
According to NHBC statistics, which covers 70%+ of all new homes built in the
UK, the number of new homes completed last year was 7% lower than in 2023,
with a decline of 18% from the 2022 peak.
SH completed 270 homes (195 private/75 affordable) (December 2023: 251 homes),
increasing its output by 8% in a relatively subdued market. Despite
completions for the year being marginally below our target of 275 homes, due
to protracted chains, five homes have continued to progress and have now been
transferred to the sales target for 2025.
The average selling price (ASP) for private units was £402,000 (December
2023: £461,000) as the business expanded its sales outlets into the North
East. Net private reservations per active outlet per week averaged 0.45
(December 2023: 0.45).
Supply chain availability and cost pressures continued to improve, with build
cost inflation moderating at 3% (December 2023: 4%). SH completed a detailed
specification and house type review that has identified further improvements,
which will help to mitigate any future build cost pressures while maintaining
our premium standard of home.
SH total owned and controlled land bank has increased to 1,726 plots (December
2023: 1,513 plots). Last year, SH added a total of 499 plots to its land bank,
including Simpson Park, Nottinghamshire (218 plots) and in line with its
ambitious growth plans, our first site in the Midlands at Bracebridge Heath,
Lincoln (281 plots). After a number of successful planning applications, the
plots with detailed or outline planning now stand at 1,220 plots (December
2023: 923 plots). Land supply, defined as total owned and controlled land bank
plots divided by completions over the last 12 months, now equates to a healthy
6.4 years.
SH's annual sales target for this year will increase to 298 homes, in line
with the strategic objective of growing the business to achieve 600
completions per annum over the medium term which remains on track.
The group exchanged contracts (initial completion in 2025) to take full
ownership of premium regional housebuilder SH through the acquisition of the
50% it does not already own, across three tranches over the next five years.
The total purchase price is linked to the performance of SH over this period
and is in line with the group's strategy to focus on high quality land, prime
property development and premium homes.
The transaction is expected to create significant shareholder value for the
following reasons:
1. Opportunity to increase exposure in the UK residential market, which
benefits from strong structural trends
2. Compelling opportunity to increase ownership of what is a high growth
business
3. Accretive financial returns, with full benefit of operational gearing
as the business grows
The first tranche of the transaction completed in January 2025, resulting in
Henry Boot becoming the majority shareholder with 62.5%.
Construction
The group's construction segment, which includes HBC, BP and Road Link (A69),
achieved an operating profit of £4.9m (December 2023: £6.5m). The businesses
within the construction segment have the lowest capital employed of any
subsidiaries of the group, limiting the risk on Henry Boot's broader strategic
growth plans.
The UK construction market remained challenging during 2024 with the volume of
new work contracting since mid-2023 according to ONS data. Monthly
construction output for new work, on a seasonally adjusted basis, in December
2024, was estimated to be 8.6% below the February 2020 pre-Covid level.
HBC was behind schedule for winning work, which resulted in the business
trading below expectations, delivering a turnover of £49.7m (December 2023:
£70.1m). Two significant contracts were completed last year, the Heart of the
City, Sheffield, Block H, a £44m urban mixed use scheme and the Cocoa Works
in York, a £56m urban residential project. HBC secured a £38m contract to
redevelop Rotherham Markets and an adjacent new library. Work is scheduled for
completion in 2027.
A new management team has been recruited, including a new Managing Director,
Lee Powell, who has joined from GMI Construction. The team's immediate focus
will be on growing and diversifying the order book by developing a balanced
portfolio of private sector projects to complement the existing public sector
work.
HBC has started 2025 in a better position, with 55% of its order book
contracted and a further 16% secured at the time of the group trading update
on 28 January. This includes the company being awarded a £16m contract in
Sheffield with the National Centre for Child Health Technology to deliver a
new world-class research and technology centre for children and young people.
The 2025 order book has continued to progress, with 70% secured as at 3 March.
BP traded below budget, in line with a challenging market for plant hire
businesses, and in response has adjusted its strategy by focusing on costs and
efficiencies.
As HBC and BP review and explore all the options to deal with the current
commercial challenges, the difficult decision has been made to make
operational changes which has resulted in a restructuring within both
businesses. While this is regrettable, it is being carried out to protect the
long term future of HBC and BP.
Road Link (A69) has traded in line with expectations as it enters the final 12
months of the PFI contract.
Financial review
Summary of financial performance
2024 2023 Change
£'m £'m %
Total revenue
Property investment and development 169.9 191.9 -11
Land promotion 78.0 68.0 +15
Construction 80.5 99.5 -19
328.4 359.4 -9
Operating profit/(loss)
Property investment and development 16.7 22.2 -5
Land promotion 24.3 21.4 3
Construction 4.9 6.5 -2
Group overheads (11.7) (9.9) -2
34.2 40.2 -5
Net finance cost and other (3.5) (2.9) -1
Profit before tax 30.7 37.3 -7
The group performed as expected in 2024 with gradual improvements in the
economy translating to a stronger second half performance. Group profit before
tax of £30.7m (2023: £37.3m) or £29.4m on an underlying profit basis(1)
(2023: £36.7m) remains a credible result in the current economic environment.
Our focus on high quality land and development opportunities in prime
locations across our three key markets continues to support this resilience.
Our land promotion business Hallam Land traded well in the year disposing of
2,661 residential plots (2023: 1,944) at an average gross profit per plot of
£10.2k (2023: £15.5k), ahead of the five year average of £9.2k, generating
an operating profit of £24.3m (2023: £21.4m) as demand for well located
premium sites continued.
Property investment and development performed well in the year despite
challenging market conditions. HBD completed schemes with a total GDV of
£331m (HBD share: £188m GDV) and in December formed an I&L JV with
Feldberg Capital, known as Origin, which generated £5.5m initial profit in
the year in HBD. Meanwhile, SH increased its output by 8%, completing 270
homes (2023: 251) in line with its medium term growth target of delivering 600
units per annum. Together this resulted in an operating profit of £16.7m
(2023: £22.2m) from the property investment and development segment.
The construction segment achieved turnover of £80.4m (2023: £99.5m) and
continued to make a positive contribution to the overall group operating
profit.
Consolidated Statement of Comprehensive Income
Revenue decreased 9% to £328.4m (2023: £359.4m), as the land promotion
business completed large transactions at Swindon and Coventry increasing the
segments revenue 15% to £78.0m (2023: £68.0m) and the ongoing growth of SH
(8% increase in output) resulted in a 4% increase in revenue to £100.7m
(2023: £97.2m), offset by reduced construction contract revenue in
construction and property development of £51.4m (2023: £35.9m) as we
experienced delays in securing new work in challenging markets.
Gross profit of the group was broadly consistent with the prior year at
£74.5m (2023: £76.8m), a gross profit margin of 23% (2023: 21%), and
reflects healthy returns across all our operating segments. Administrative
expenses increased by £2.5m (2023: £3.9m) as we continued to invest in our
people and processes to support future growth.
Property revaluation gains amounted to £4.6m (2023: £0.4m), incorporating
£4.5m revaluation gains (2023: £0.3m) on wholly owned investment property
and £0.1m revaluation gains (2023: £0.1m) on our share of investment
property held in joint ventures.
Property revaluation gains/(losses) 2024 2023
£'m
£'m
Wholly owned investment property:
- Completed investment property 1.2 0.5
- Investment property in the course of construction 3.3 (0.2)
4.5 0.3
Joint ventures and associates:
- Completed investment property 0.1 0.1
- Investment property in the course of construction - -
0.1 0.1
4.6 0.4
Profit on sale of investment properties of £0.1m (2023: £0.7m), relates to
the disposal of legacy housing stock and ground rents.
Share of profit of joint ventures and associates of £2.4m (2023: £0.4m)
includes the sale of two industrial units in Wakefield by the property
investment and development segment. Joint ventures continue to be a key part
of our operating model, however the timing of returns will vary.
Overall, operating profits decreased by 14.9% to £34.2m (2023: £40.2m) and,
after adjusting for net finance costs, we delivered a profit before tax of
£30.7m (2023: £37.3m).
The segmental results analysis shows that:
· Property investment and development operating profit decreased to
£16.7m (2023: £22.2m) as development activity slowed, offset by an increase
in Stonebridge housing unit disposals to 270 (2023: 251), and a valuation gain
on wholly owned investment property of £4.5m (2023: £0.3m).
· Land promotion operating profit increased to £24.3m (2023:
£21.4m) as we completed on disposals at eleven sites (2023: seven), average
gross profit per plot in the year normalised to £10.2k (2023: £15.5k) having
disposed of a high margin site in Tonbridge during the prior year.
· Construction segment operating profits decreased to £4.9m (2023:
£6.5m) as our construction business experienced delays in securing new work.
Plant hire and our PFI concession continued to generate healthy contributions
to the segment.
We maintain a significant pipeline of property development and consented
residential plots; the variable timing of the completion of deals in these
areas does give rise to financial results, which can vary depending upon when
contracts are ultimately concluded. We mitigate this through the mix of
businesses within the group and our business model, which, over the longer
term, will ultimately see the blended growth of the group delivered.
Tax
The tax charge for the year was £7.0m (effective rate of tax: 22.9%) (2023:
£8.8m; effective tax rate: 23.5%) and is lower than (2023: in line with) the
standard rate of tax due to prior year adjustments in respect of capital taxes
and allowances and profits from joint ventures and associates reported net of
tax. Current taxation on profit for the year was £5.4m (2023: £6.7m),
deferred tax was a charge of £1.6m (2023: £2.1m).
Earnings per share and dividends
Basic earnings per share decreased 11.7% to 17.4p (2023: 19.7p) in line with
the fall in profits attributable to owners of the Parent Company. Total
dividend for the year increased 5% to 7.70p (2023: 7.33p), with the proposed
final dividend increasing to 4.62p (2023: 4.40p), payable on 30 May 2025 to
shareholders on the register as at 2 May 2025. The ex-dividend date is 1 May
2025.
Return on capital employed(2) ('ROCE')
ROCE(2) decreased in the year to 8.0% (2023: 9.9%). Given the current
challenges in our markets, this is expectedly below the group's target range
of 10-15%, which we believe remains appropriate for our current operating
model and the markets in which we operate.
Finance and gearing
Net finance costs increased to £3.5m (2023: £2.9m) reflecting the increase
in UK interest rates and higher levels of borrowing during the year.
Interest cover, expressed as the ratio of operating profit (excluding the
valuation movement on investment properties, disposal of investment properties
and joint venture profits) to net interest (excluding interest received on
other loans and receivables), was 4 times (2023: 9 times). No interest
incurred in either year has been capitalised into the cost of assets.
The group's banking facilities were renewed on 21 May 2024 at £125.0m. The
facility with Barclays Bank PLC, HSBC UK Bank plc and National Westminster
Bank Plc runs for three years and includes two one-year extensions. The
facility includes an accordion to increase the facility by up to £60.0m,
increasing the overall facility to £185m of which £15m was called and agreed
with lenders on 21 March 2025. The group had drawn £72.5m of the facility at
31 December 2024 (2023: £83.5m).
On 27 June 2024, the group extended a £25.0m receivables purchase agreement
with HSBC Invoice Finance UK Limited (HSBC) that allows it to sell deferred
income receivables to the bank. The risk and rewards of ownership are deemed
to fully transfer to HSBC and, therefore, this agreement is recorded off
balance sheet. The group had sold £15.9m of receivables under the agreement
at 31 December 2024 (2023: £14.7m).
The 2024 year-end net debt(4) was £62.7m (2023: £77.8m) resulting in gearing
of 14.7% (2023: 19.0%) and within our targeted range of 10-20%. Despite
challenging market conditions, we continue to invest in our prime land
portfolio, growing our premium housebuilder and delivering our high quality
committed development programme.
All bank borrowings continue to be from facilities linked to floating rates or
short-term fixed commitments. Throughout the year, we operated within the
facility covenants and continue to do so.
Cash flow summary
2024 2023
£'m
£'m
Operating profit 34.2 40.2
Depreciation and other non-cash items 0.4 (1.1)
Net movement on equipment held for hire (2.6) (2.1)
Movement in working capital 10.5 (31.2)
Cash generated from operations 42.5 5.8
Net capital investments (4.9) (16.4)
Net interest and tax (13.3) (7.4)
Dividends paid (12.1) (12.8)
Dividends received from joint ventures 2.9 0.9
Other - 0.7
Change in net debt 15.1 (29.2)
Net debt brought forward (77.8) (48.6)
Net debt carried forward (62.7) (77.8)
During 2024, the cash inflow from operations amounted to £42.5m (2023:
£5.8m) after net investment in equipment held for hire of £2.6m (2023:
£2.1m), and cash inflows from a net decrease in working capital of £10.5m
(2023: £31.2m outflow). Working capital increased significantly in 2023 from
additional investment in housebuilder inventories and strategic land sales on
deferred terms which has now partially reversed in 2024.
Net capital investment of £4.9m (2023: £16.4m) arose primarily from advances
to joint ventures and associates of £4.0m (2023: £13.5m) and purchase of
property, plant and equipment of £1.4m (2023: £4.1m).
Net dividends, totalled £9.2m (2023: £11.9m), with those paid to equity
shareholders increasing by 7.5% to £10.0m (2023: £9.3m) and dividends to
non-controlling interests of £2.1m (2023: £3.5m), offset by dividends
received from joint ventures during the year of £2.9m (2023: £0.9m).
After net interest and tax of £13.3m (2023: £7.4m), there was an overall
inflow in net cash of £15.1m (2023: £29.2m outflow), resulting in net debt
of £62.7m (2023: £77.8m).
Statement of financial position summary
2024 2023
£'m
£'m
Investment properties and assets classified as held for sale 105.6 100.6
Intangible assets 0.6 2.2
Property, plant and equipment, including right-of-use assets 32.8 33.2
Investment in joint ventures and associates 13.3 10.5
152.3 146.5
Inventories 332.9 297.6
Receivables 111.6 129.3
Payables (111.5) (88.1)
Other (7.3) (5.2)
Net operating assets 478.0 480.2
Net debt (62.7) (77.8)
Retirement benefit asset 9.9 7.7
Net assets 425.2 410.1
Less: Non-current liabilities and pension asset 13.9 6.6
Capital employed 439.1 416.7
Wholly owned investment properties, of which over 70% are industrial and
logistic assets, increased to £105.6m (2023: £100.6m) driven by property
valuation gains of £4.5m (2023: £0.3m). At the year end, two properties are
held for sale with a book value of £9.3m.
Intangible assets reflect the group's investment in Road Link (A69) of £0.6m
(2023: £1.2m). The treatment of the Road Link investment as an intangible
asset is a requirement of IFRIC 12 and arises because the underlying road
asset reverts to National Highways at the end of the concession period in
March 2026. Goodwill in the prior year relating to Road Link (A69) of £0.1m
and Banner Plant depots £0.9m have now been fully written down.
Property, plant and equipment comprises group occupied buildings valued at
£3.6m (2023: £4.7m), leasehold improvements of £2.1m (2023: £2.4m), and
plant, equipment and vehicles with a net book value of £27.1m (2023:
£26.1m), including £4.0m (2023: £1.0m) of right-of-use assets under IFRS
16. Property, plant and equipment, along with right-of-use assets, have
remained broadly consistent as new additions of £5.9m (2023: £8.7m), largely
related to the groups plant hire fleet, are offset by disposals and the
depreciation charge for the year.
Investments in joint ventures and associates increased £2.8m to £13.3m
(2023: £10.5m). This comprised the group's share of profits of £2.4m (2023:
£0.4m) (including fair value increases of £0.1m), additional investment of
£3.0m (2023: £1.0m), less distributions of £2.9m (2023: £0.9m) and other
movements of £0.3m (2023: £nil). We continue to undertake property
development projects with other parties where mutually beneficial.
Inventories were £332.9m (2023: £297.6m). We increased our housebuilder land
and work in progress to £111.6m (2023: £96.2m) as we expand regionally into
the North East and increase annual plot disposals. In our strategic land
business, we continue to invest in owned land and land interests under
promotion agreements at a lower capital cost with total additions amounting to
£97.3m (2023: £42.2m). This was offset by our property and development
inventory, which decreased to £66.6m (2023: £77.4m) as the group recycled
cash from our build to sell scheme Setl in Birmingham, and transferred two
developments into our newly formed JV, Origin, with Feldberg. Inventories are
held at the lower of cost or net realisable value, in accordance with our
accounting policy and, as such, no uplift in value created from securing
planning permission is recognised within our accounts until disposal.
Receivables, including contract assets, decreased £11.3m to £111.6m (2023:
£122.9m) due to the timing of completions and level of deferred payments.
Deferred payment receivables remain a function of the number and size of
strategic land development schemes sold, and levels of construction contract
activity undertaken.
Payables increased to £111.5m (2023: £88.1m) with trade and other payables
increasing to £101.9m (2023: £75.9m) due to two individually significant
deferred land payments, provisions decreasing to £1.9m (2023: £4.4m) as
strategic land provisions unwind and we near the end of our PFI concession
arrangement. Contract liabilities increased to £4.9m (2023: £1.1m), due to
the timing of invoicing on large construction schemes and current tax
liabilities reduced to £2.9m (2023: £6.7m).
Net debt included cash and cash equivalents of £16.8m (2023: £13.0m),
borrowings of £75.5m (2023: £86.5m), including £3.0m other loans (2023:
£3.0m) arising from sale and lease back, and lease liabilities of £3.9m
(2023: £4.3m). In total, net debt was £62.7m (2023: £77.8m).
At 31 December 2024, the IAS 19 pension valuation was a surplus of £9.9m
(2023: £7.7m surplus), as a result of interest on the existing surplus and
rise in corporate bond yields, which has increased the discount rate
assumption and placed a lower value on liabilities. The pension scheme's
assets continue to be invested globally, with high-quality asset managers, in
a broad range of assets. The pension scheme Trustees regularly consider the
merits of both the managers and asset allocations and, along with the company,
review the returns achieved by the asset portfolio against the manager
benchmarks. They then make changes, as the Trustee considers appropriate, in
conjunction with investment advice received.
Overall, the net assets of the group increased by 3.7% to £425.1m (2023:
£410.1m), arising from retained profits less distributions to shareholders
with NAV per share(3) increasing 3.6% to 317p (2023: 306p).
Darren Littlewood
Chief Financial Officer
NOTES:
(1) Underlying profit is an alternative performance measure (APM) and is
defined as profit before tax excluding revaluation movements on completed
investment properties. Revaluation movement on completed investment properties
includes gains of £1.2m (2023: £0.5m) on wholly owned completed investment
property and gain of £0.1m (2023: £0.1m) on completed investment property
held in joint ventures. This APM is used as it provides the users with a
measure that excludes specific external factors beyond management's controls
and reflects the group's underlying results. This measure is used in the
business in appraising senior management performance.
(2) Return on Capital Employed is an APM and is defined as operating
profit/capital employed, where capital employed is the average of total assets
less current liabilities and pension asset/obligation at the opening and
closing balance sheet dates.
(3) Net Asset Value (NAV) per share is an APM and is defined using the
statutory measures net assets/ordinary share capital.
(4) Net debt is an APM and is reconciled to statutory measures in note 7.
UNaudited Consolidated Statement of Comprehensive Income
for the year ended 31 December 2024
2024 2023
£'000 £'000
Revenue 328,379 359,399
Cost of sales (253,836) (282,634)
Gross profit 74,543 76,765
Other income - 4,800
Administrative expenses (47,317) (44,342)
27,226 37,223
Increase in fair value of investment properties 4,464 307
Profit on sale of investment properties 102 733
Profit on sale of assets held for sale - 1,571
Share of profit of joint ventures and associates 2,431 371
Operating profit 34,223 40,205
Finance income 5,115 3,357
Finance costs (8,678) (6,260)
Profit before tax 30,660 37,302
Tax (7,030) (8,759)
Profit for the year from continuing operations 23,630 28,543
Other comprehensive income/(expense) not being reclassified to profit or loss
in subsequent years:
Revaluation of group occupied property 64 (228)
Deferred tax on property revaluations (67) 279
Actuarial gain/(loss) on defined benefit pension scheme 2,196 (3,066)
Deferred tax on actuarial gain/(loss) (549) 767
Total other comprehensive income/(expense) not being reclassified to profit or
loss in subsequent years
1,644 (2,248)
Total comprehensive income for the year 25,274 26,295
Profit for the year attributable to:
Owners of the Parent Company 23,333 26,299
Non-controlling interests 297 2,244
23,630 28,543
Total comprehensive income attributable to:
Owners of the Parent Company 24,977 24,051
Non-controlling interests 297 2,244
25,274 26,295
Basic earnings per ordinary share for the profit attributable to owners of the
Parent Company during the year
17.4p 19.7p
Diluted earnings per ordinary share for the profit attributable to owners of 17.0p 19.3p
the Parent Company during the year
UNaudited Statement of Financial Position
as at 31 December 2024
2024 2023
£'000 £'000
Assets
Non-current assets
Intangible assets 617 2,179
Property, plant and equipment 29,293 29,218
Right-of-use assets 3,460 3,986
Investment properties 96,275 100,602
Investment in joint ventures and associates 13,280 10,484
Retirement benefit asset 9,930 7,725
Trade and other receivables 8,458 39,263
Deferred tax assets 219 213
161,532 193,670
Current assets
Inventories 332,871 297,618
Contract assets 12,693 13,659
Trade and other receivables 90,467 76,416
Cash 16,764 13,034
Assets held for sale 9,315 -
462,110 400,727
Liabilities
Current liabilities
Trade and other payables 89,820 73,477
Contract liabilities 4,882 1,060
Current tax liabilities 2,909 6,677
Borrowings 74,443 84,819
Lease liabilities 895 728
Provisions 1,723 3,221
174,672 169,982
Net Current Assets 287,438 230,745
Non-current liabilities
Trade and other payables 11,991 2,501
Borrowings 1,092 1,699
Lease liabilities 3,017 3,547
Deferred tax liabilities 7,568 5,372
Provisions 154 1,178
23,822 14,297
Net Assets 425,148 410,118
Equity
Share capital 13,801 13,799
Property revaluation reserve 1,008 1,011
Retained earnings 399,791 383,219
Other reserves 8,293 8,248
Cost of shares held by ESOP trust (645) (875)
Equity attributable to owners of the Parent Company 422,248 405,402
Non-controlling interests 2,900 4,716
Total Equity 425,148 410,118
UNaudited Statement of Changes in Equity
for the year ended 31 December 2024
Attributable to owners of the Parent Company
Group Share Property Retained Other Cost of Total Non- Total
capital revaluation earnings reserves shares £'000 controlling equity
£'000 reserve £'000 £'000 held interests £'000
£'000 by ESOP £'000
trust
£'000
At 1 January 2023 13,763 2,352 365,692 7,482 (967) 388,322 5,967 394,289
Profit for the year - - 26,299 - - 26,299 2,244 28,543
Other comprehensive income - 51 (2,299) - - (2,248) - (2,248)
Total comprehensive income - 51 24,000 - - 24,051 2,244 26,295
Transfer between reserves(1) - (1,392) 1,392 - - - - -
Equity dividends - - (9,274) - - (9,274) (3,495) (12,769)
Purchase of treasury shares - - - - (98) (98) - (98)
Proceeds from shares issued 36 - - 766 - 802 - 802
Share-based payments - - 1,409 - 190 1,599 - 1,599
36 (1,392) (6,473) 766 92 (6,971) (3,495) (10,466)
At 31 December 2023 13,799 1,011 383,219 8,248 (875) 405,402 4,716 410,118
Profit for the year - - 23,333 - - 23,333 297 23,630
Other comprehensive income - (3) 1,647 - - 1,644 - 1,644
Total comprehensive income - (3) 24,980 - - 24,977 297 25,274
Equity dividends - - (10,019) - - (10,019) (2,113) (12,132)
Proceeds from shares issued 2 - - 45 - 47 - 47
Share-based payments - - 1,611 - 230 1,841 - 1,841
2 - (8,408) 45 230 (8,131) (2,113) (10,244)
At 31 December 2024 13,801 1,008 399,791 8,293 (645) 422,248 2,900 425,148
(1) Transfer of realised profits on disposal of revalued property
UNaudited Statement of Cash Flows
for the year ended 31 December 2024
2024 2023
£'000 £'000
Cash flows from operating activities
Cash generated from operations 42,573 5,871
Interest paid (7,772) (5,475)
Tax paid (9,235) (3,797)
Net cash flows from operating activities 25,566 (3,401)
Cash flows from investing activities
Purchase of property, plant and equipment (1,391) (4,074)
Purchase of investment property (96) (8,017)
Proceeds on disposal of property, plant and equipment (excluding equipment
held for hire)
272 432
Proceeds on disposal of assets held for sale - 4,713
Proceeds on disposal of investment properties 625 7,764
Advances of loans to joint ventures and associates (17,410) (24,321)
Repayment of loans from joint ventures and associates 13,456 10,868
Interest received 3,695 1,830
Dividends received from joint ventures 2,850 900
Net cash flows from investing activities 2,001 (9,905)
Cash flows from financing activities
Proceeds from shares issued 47 802
Purchase of treasury shares - (98)
Advances from joint ventures and associates - 12
Repayment to joint ventures and associates (75) -
Repayment of borrowings (56,117) (36,510)
Proceeds from borrowings 45,134 58,028
Principal elements of lease payments (694) (526)
Dividends paid - ordinary shares (9,998) (9,253)
- non-controlling interests (2,113) (3,495)
- preference shares (21) (21)
Net cash flows from financing activities (23,837) 8,939
Net increase/(decrease) in cash and cash equivalents 3,730 (4,367)
Net cash and cash equivalents at beginning of year 13,034 17,401
Net cash and cash equivalents at end of year 16,764 13,034
Notes to the Financial Statements
for the year ended 31 December 2024
1. Basis of preparation
These results for the year ended 31 December 2024 are unaudited. The financial
information set out in this announcement does not constitute the group's
statutory accounts for the years ended 31 December 2024 or 31 December 2023,
as defined by Section 434 of the Companies Act 2006.
The results have been prepared in accordance with UK adopted international
accounting standards. They have been prepared on the historic cost basis,
except for financial instruments, investment properties and group occupied
land and buildings, which are measured at fair value.
The financial information for the year ended 31 December 2023 is derived from
the statutory accounts for that year, which have been delivered to the
Registrar of Companies. The current auditor, Ernst & Young LLP, reported
on those accounts and their report was unqualified, did not contain an
emphasis of matter paragraph and did not contain any statement under Section
498 (2) or (3) of the Companies Act 2006.
The statutory accounts for the year ended 31 December 2024 will be finalised
on the basis of the financial information presented by the Directors in these
results and will be delivered to the Registrar of Companies following the AGM
of Henry Boot PLC. The same accounting policies and methods of computation are
followed as in the latest published audited accounts for the year ended 31
December 2023, which are available on the group's website at
www.henryboot.co.uk (http://www.henryboot.co.uk) .
The following standards, amendments and interpretations to existing standards
are effective or mandatory for the first time for the accounting year ended
31 December 2024:
Effective from
IAS 1 (amended 2020) 'Classification of Liabilities as Current or Non-Current' 1 January 2024
IAS 1 (amended 2022) 'Non-current liabilities with covenants' 1 January 2024
IFRS 16 (amended 2022) 'Lease Liability in a Sale and Leaseback' 1 January 2024
IAS 7 and IFRS 7 (amended 2023) 'Supplier Finance Arrangements' 1 January 2024
These standards did not have a material impact on the group's results.
The group did not early adopt any standard or interpretation not yet
mandatory.
Going concern
In undertaking their going concern review, which covers the period to December
2026, the Directors considered the group's principal risk areas that they
consider material to the assessment of going concern.
As the UK economy continues to prove challenging, the Directors have assessed
the groups ability to operate in a more uncertain environment in modelling a
base case scenario. They have also modelled what they consider to be a severe
downside scenario, including further curtailment in activities.
The downside assumes that for 2025:
1) Construction and Development activity only takes place where contracted;
2) Hallam land has no sales unless well progressed or already contracted;
3) Stonebridge Homes has a 10% decline in house prices along with a 25%
reduction in the number of plots sold; and
4) Banner Plant revenue declines by 19%.
The downside assumes that 2026 results will recover.
This downside model assumes that acquisition and development spend is
restricted other than that already committed. This is consistent with previous
experience in recessionary environments, allowing the group to retain and even
improve the cash position in the event of a severe downside scenario, the
impact on the profit and loss account would, however, be unavoidable.
The group meets its day-to-day working capital requirements through a secured
loan facility. The facility with Barclays Bank PLC, HSBC UK Bank plc and
National Westminster Bank Plc runs for three years and includes two one-year
extensions. The facility of £125m in place at 31 December 2024 includes an
accordion to increase the facility by up to £60m, increasing the overall
facility to £185m. The group has extended the facility on 21 March 2025 to
£140m which increases the headroom over the going concern period.
None of the modelling undertaken by the Directors gives rise to any breach of
bank facility covenants. The most sensitive covenant in our facilities relates
to the ratio of EBIT (Earnings Before Interest and Tax) on a 12-month rolling
basis to senior facility finance costs. Our downside modelling, which reflects
a 26% reduction in revenue and a 63% reduction in operating profit from our
base case for 2025, demonstrates headroom over this covenant throughout the
forecast period to the end of December 2026.
The Directors have also performed a break case scenario which sees the EBIT
cover covenant breached. This scenario is considered to be remote.
The Directors expect that the Company and the group will have adequate
resources, liquidity and available bank facilities to continue in operational
existence for the foreseeable future. Accordingly, they continue to adopt the
going concern basis of accounting in preparing the Financial Statements.
2. Segment information
For the purpose of the Board making strategic decisions, the group is
currently organised into three operating segments: Property Investment and
Development; Land Promotion; and Construction. Group overheads are not a
reportable segment; however, information about them is considered by the Board
in conjunction with the reportable segments.
Operations are carried out entirely within the United Kingdom.
Inter-segment sales are charged at prevailing market prices.
The accounting policies of the reportable segments are the same as the group's
Accounting Policies.
Segment profit represents the profit earned by each segment before tax and is
consistent with the measure reported to the group's Board for the purpose of
resource allocation and assessment of segment performance.
2024
Revenue Property Land Construction Group Eliminations Total
Investment Promotion £'000 overheads £'000 £'000
and £'000 £'000
Development
£'000
External sales 169,939 78,036 80,404 - - 328,379
Inter-segment sales 387 - 777 150 (1,314) -
Total revenue 170,326 78,036 81,181 150 (1,314) 328,379
Gross profit/(loss) 26,978 33,747 13,823 4 (9) 74,543
Administrative expenses and pension (17,199) (9,456) (8,935) (11,736) 9 (47,317)
Other operating income 6,997 - - - - 6,997
Operating profit/(loss) 16,776 24,291 4,888 (11,732) - 34,223
Finance income 5,531 1,784 486 36,183 (38,869) 5,115
Finance costs (85) (1,517) (506) (6,891) 321 (8,678)
Profit/(loss) before tax 22,222 24,558 4,868 17,560 (38,548) 30,660
Tax (2,658) (6,482) (1,479) 3,589 - (7,030)
Profit/(loss) for the year 19,564 18,076 3,389 21,149 (38,548) 23,630
2023
Revenue Property Land Construction Group Eliminations Total
Investment Promotion £'000 overheads £'000 £'000
and £'000 £'000
Development
£'000
External sales 191,884 67,992 99,523 - - 359,399
Inter-segment sales 258 - 1,050 271 (1,579) -
Total revenue 192,142 67,992 100,573 271 (1,579) 359,399
Gross profit/(loss) 31,554 29,815 15,177 238 (19) 76,765
Other income 4,800 - - - - 4,800
Administrative expenses and pension (17,172) (8,371) (8,682) (10,136) 19 (44,342)
Other operating income/(expense) 2,989 (7) - - - 2,982
Operating profit/(loss) 22,171 21,437 6,495 (9,898) - 40,205
Finance income 3,273 1,197 458 25,813 (27,384) 3,357
Finance costs (11,596) (615) (480) (5,437) 11,868 (6,260)
Profit/(loss) before tax 13,848 22,019 6,473 10,478 (15,516) 37,302
Tax (5,741) (4,470) (1,686) 3,138 - (8,759)
Profit/(loss) for the year 8,107 17,549 4,787 13,616 (15,516) 28,543
2024 2023
£'000 £'000
Segment assets
Property Investment and Development 367,662 362,737
Land Promotion 183,539 160,690
Construction 37,896 41,635
Group overheads 7,632 8,363
596,729 573,425
Unallocated assets
Deferred tax assets 219 213
Retirement benefit asset 9,930 7,725
Cash and cash equivalents 16,764 13,034
Total assets 623,642 594,397
Segment liabilities
Property Investment and Development 46,818 38,101
Land Promotion 38,767 15,635
Construction 18,082 22,797
Group overheads 4,903 4,904
108,570 81,437
Unallocated liabilities
Current tax liabilities 2,909 6,677
Deferred tax liabilities 7,568 5,372
Current lease liabilities 895 728
Current borrowings 74,443 84,819
Non-current lease liabilities 3,017 3,547
Non-current borrowings 1,092 1,699
Total liabilities 198,494 184,279
Total net assets 425,148 410,118
3. Tax
2024 2023
£'000 £'000
Current tax:
UK corporation tax on profits for the year 6,207 6,745
Adjustment in respect of earlier years (751) (39)
Total current tax 5,456 6,706
Deferred tax:
Origination and reversal of temporary differences 1,574 2,053
Total deferred tax 1,574 2,053
Total tax 7,030 8,759
4. Dividends
2024 2023
£'000 £'000
Amounts recognised as distributions to equity holders in the year:
Preference dividend on cumulative preference shares 21 21
Final dividend for the year ended 31 December 2023 of 4.40p per share (2022: 5,879 5,336
4.00p)
Interim dividend for the year ended 31 December 2024 of 3.08p per share (2023: 4,119 3,917
2.93p)
10,019 9,274
The proposed final dividend for the year ended 31 December 2024 of 4.62p per
share (2023: 4.40p) makes a total dividend for the year of 7.70p (2023:
7.33p).
The proposed final dividend is subject to approval by shareholders at the AGM
and has not been included as a liability in these Financial Statements. The
total estimated dividend to be paid is £6,200,000.
Notice has been received from Moore Street Securities Limited waiving its
right as corporate trustee for the Employee Share Ownership Plan ('ESOP') to
receive all dividends in respect of this and the previous financial year.
5. Investment properties
Fair value measurements recognised in the Statement of Financial Position
The following table provides an analysis of the fair values of investment
properties recognised in the Statement of Financial Position by the degree to
which the fair value is observable:
Level 1 Level 2 Level 3 2024 2023 Increase/
£'000 £'000 £'000 £'000 £'000 (decrease)
in year
Completed investment property
Industrial - - 70,692 70,692 73,820 (3,128)
Leisure - - 5,585 5,585 5,096 489
Residential - - 3,783 3,783 4,359 (576)
Office - - 2,418 2,418 3,139 (721)
Retail - - 13,797 13,797 14,188 (391)
- - 96,275 96,275 100,602 (4,327)
Investment property under construction
Industrial - - - - - -
- - - - - -
Total carrying value - - 96,275 96,275 100,602 (4,327)
The group's policy is to recognise transfers into and out of fair value
hierarchy levels as of the date of the event or change in circumstances that
causes the transfer. The Directors determine the applicable hierarchy that a
property falls into by assessing the level of comparable evidence in the
market, that the asset falls into and the inherent level of activity. As at
the reporting date, and throughout the year, all property was determined to
fall into Level 3, so there were no transfers between hierarchies.
Explanation of the fair value hierarchy:
Level 1 - fair value measurements are those derived from quoted prices
(unadjusted) in active markets for identical assets or liabilities
that the entity can access at the measurement date;
Level 2 - fair value measurements are those derived from the use of a model
with inputs (other than quoted prices included in Level 1)
that are observable from directly or indirectly observable market data; and
Level 3 - fair value measurements are those derived from use of a model with
inputs that are not based on observable market data.
Investment properties have been split into different classes to show the
composition of the investment property portfolio of the group as at the
reporting date. Management has determined that aggregation of the results
would be most appropriate based on the type of use that each property falls
into, which is described below:
Class
Industrial Includes manufacturing and warehousing, which are usually similar in
dimensions and construction method.
Leisure Includes restaurants and gymnasiums or properties in which the main activity
is the provision of entertainment and leisure facilities to the public.
Residential Includes dwellings under assured tenancies.
Office Includes buildings occupied for business activities not involving storage or
processing of physical goods.
Retail Includes any property involved in the sale of goods.
Land Includes land held for future capital appreciation as an investment.
Investment properties under construction are categorised based on the future
anticipated highest and best use of the property.
6. Share capital
Authorised, allotted,
issued and fully paid
2024 2023
£'000 £'000
400,000 5.25% cumulative preference shares of £1 each (2023: 400,000) 400 400
134,010,541 ordinary shares of 10p each (2023: 133,985,763) 13,401 13,399
13,801 13,799
7. Cash generated from operations
2024 2023
£'000 £'000
Profit before tax 30,660 37,302
Adjustments for:
Amortisation of PFI asset 522 551
Goodwill impairment 1,040 203
Depreciation of property, plant and equipment 4,063 4,462
Depreciation of right-of-use assets 857 779
Revaluation increase in investment properties (4,464) (307)
Amortisation of capitalised letting fees 34 54
Share-based payment expense 1,841 1,601
Pension scheme debit/(credit) 338 (4,197)
(Profit)/loss on disposal of property, plant and equipment (151) (341)
Profit on disposal of equipment held for hire (1,156) (1,185)
Gain on disposal of investment properties (102) (733)
Profit on disposal of assets held for sale - (1,571)
Finance income (5,115) (3,357)
Finance costs 8,678 6,260
Share of profit of joint ventures and associates (2,431) (371)
Operating cash flows before movements in equipment held for hire 34,614 39,150
Purchase of equipment held for hire (4,183) (3,497)
Proceeds on disposal of equipment held for hire 1,550 1,423
Operating cash flows before movements in working capital 31,981 37,076
Increase in inventories (35,253) (9,129)
Decrease in receivables 18,791 1,503
Decrease in contract assets 966 5,598
Increase/(decrease) in payables and provisions 22,266 (26,231)
Increase/(decrease) in contract liabilities 3,822 (2,946)
Cash flows from operations 42,573 5,871
2024 2023
£'000 £'000
Analysis of net debt:
Cash and cash equivalents 16,764 13,034
Bank overdrafts - -
Net cash and cash equivalents 16,764 13,034
Bank loans (72,500) (83,500)
Other loans (3,015) (3,018)
Lease liabilities (3,912) (4,275)
Net debt (62,683) (77,759)
8. Events after the balance sheet date
Since the balance sheet date the group has proposed a final dividend for 2024.
Further information can be found in note 4.
In December 2024, terms were agreed to take full ownership of Stonebridge
Homes Group Limited, having exchanged contracts to acquire the 50% share the
group does not already own. The transaction is structured to complete in three
tranches over the next five years. The consideration is performance linked,
and the phased structure is designed to generate strong returns while
maintaining group gearing within our optimum range of 10-20%. This is an
opportunity to increase our investment in both a high growth business, and in
a residential market, benefiting from supportive structural and political
tailwinds. The first tranche of the transaction completed in January 2025,
resulting in Henry Boot becoming the majority shareholder.
There were no other significant events since the balance sheet date that may
have a material effect on the financial position or performance of the group.
9. These results were approved by the Board of Directors and authorised for
issue on 25 March 2025.
10. The 2024 Annual Report and Financial Statements is to be published on the
Company's website at www.henryboot.co.uk (http://www.henryboot.co.uk) and sent
out to those shareholders who have elected to continue to receive paper
communications by no later than 17 April 2025. Copies will be available from
The Company Secretary, Henry Boot PLC, Isaacs Building, 4 Charles Street,
Sheffield S1 2HS.
11. The AGM of the Company is to be held at Double Tree by Hilton Sheffield
City, Bramall Lane Sheffield, Sheffield S2 4SU on Thursday 22 May 2025,
commencing at 12.30pm.
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