Last updated 27th April 2022
Henry Boot Plc
Henry Boot is a major quoted property and construction group with strong roots around its base in Sheffield. The group dates back over 125 years and comprises four main operations: property development and investment (Henry Boot Developments), land promotion (Hallam Land Management), construction (Henry Boot Construction) and plant (Banner Plant). The group also has a contract to manage the A69 Road Link which produces strong cash flows.
The group has maintained a solid profit record in recent years and whilst it has recently focused on securing planning permission on its large greenfield land portfolio, it has also maintained a strong order book at its £82 million-turnover construction business. The group also has a strong £1.4bn development pipeline (HB’s share £1.1 bn), much of it in the industrial and logistics sector.
The group has recovered strongly from Covid and today the group is investing in three key markets in industrial & logistics, residential and urban development. In March 2022, chief executive officer Tim Roberts said: “We have also made a very good start to the year, building on the strong momentum across the Group, with high levels of forward sales in land and housebuilding, further leasing of our developments and a full order book in construction.”
Financials
To view the financials for Henry Boot visit Companies House and use Company ID 00160996.
Henry Boot has recovered strongly in the aftermath of Covid. Pre-tax profits in the year to end-December 2021 more than doubled to £35.1m, from £17.1m previously, driven by strong residential land sales, industrial development and property revaluation gains. Turnover rose by 4% to £230.6 million and the group’s net asset value grew by 13.6% to 267p. Meanwhile, the group had net debt of £43.5 million, compared to cash of £27 million previously, leaving gearing at a prudent 12.2%.
Construction
Henry Boot Construction has a strong level of repeat business book and a healthy mix of private and public-sector clients across the building and civils sectors, which should help it manage post-Covid risks. The business turned over £81.6 million 2021, but the group”s total construction turnover stood at £102.6 million and it reported an operating profit of £9 million, up from £6.5 million. Around 68% of its turnover is in the public sector.
Most of the division’s order book for 2022 has fixed price orders in place with its supply chain. Key projects which are underway at the division include the £42m Heart of the City urban development for Sheffield City Council and Queensberry Development Management providing mixed-use space and a seven-storey office building. Boot is also working on the Kangaroo Works in Sheffield, its first build to rent scheme and worth £38.9 million. Other key wins include a £47m urban residential development, the Cocoa Works in York; a seven-storey 279 apartment scheme for Latimer Developments.
Henry Boot Construction sits on ten public sector frameworks including the new four-year DfE Framework and is working on seven schemes through public sector frameworks worth 15m. It has also recently secured places on a P23 NHS Framework for projects up to £20m across Yorkshire, Humberside and East Midlands and the regional YORbuild3 medium value framework for projects between £4-10m.
Meanwhile, Banner Plant is trading ahead of pre-pandemic levels thanks to strong UK housing and construction markets.
Property Investment & Development
Boot’s property investment & development arm generated an operating profit of £18.3 million in 2021, up from £4.9m previously. Today, some 75% of the division’s pipeline is in industrial & logistics schemes and it has a committed programme of 14 schemes with a gross development value of £352m of which the company’s share is some £277m and mostly pre-let or pre-sold. It includes urban residential and commercial schemes.
During 2021, the company also acquired new development opportunities with a total gross development value of £194m – taking its future development pipeline to £1.1 billion – and which include a major build to rent scheme at Summerhill of up to 404 units.
The pipeline involves around 1 million sq ft of industrial & logistics space and major schemes include Phoenix 10, Walsall where planning has been secured on a site which could deliver around 620,000 sq ft and where work is set to start in the second half of 2022. Work is also due to start in the second half at Wakefield Hub, a new 260,000 sq ft unit which has been pre-let to a German pharma company.
Boot”s jointly-owned housebuilder, Stonebridge Homes made 120 completions (90 private/25 affordable) in 2021 at an average selling price for private units of £509k. The division says it is starting 2022 in good shape and has a target to deliver 200 units.
Land Development
Hallam Land Management, the group”s strategic land promotion business, benefitted as housebuilders continue to replenish their land banks. In 2021, it reported a £17.5 m operating profit, up from £14.2 million previously, from selling 3,080 plots at 14 sites. Its land bank increased to 92,667 plots of which 12,865 have planning permission.
Glenigan Data
Henry Boot was ranked 85th in Glengian”s league table of major contractors in the year to March 2022 with 7 major deals – all building – projects and worth a total of £87.9 million.
Glenigan data points to a busy workload at Henry Boot. It shows that Henry Boot Development is the client on a £110 million industrial/warehouse project at Pheonix 10 near the M6 at Walsall where work is due to start in spring 2024 on a project involving 57,575 sq m of space (Project ID: 18142063). Henry Boot is also the client on New Horizon 2, a £35 million industrial project in Nottingham where work is due to start in late spring 2022 and run for 13 months (Project ID: 18285698).
Conclusion: Strong order book with promising land and industrial development portfolio
Boot’s strategy of investing in land, property and development schemes, supported by cash flows from its construction arm is less fashionable among larger quoted contracting groups these days. But having strengthened its balance sheet in recent years and invested for the long term, the group has reaped the rewards as key trends across the industry work in its favour. The group has put in a good performance recently and its emphasis on public sector clients should serve it well as the industry recovers post-Covid. The group”s latest results point to a strong construction order book and 2022 starting well with series of development schemes, particularly in logistics/warehousing which should serve it well in coming years.
Winning work with Henry Boot
Henry Boot Construction procures its materials and subcontract packages through an approved supplier scheme which vets prospective members on grounds of quality, safety and environmental standards and to ensure financial soundness. The firm encourages suppliers to collaborate with it to use efficient and innovative techniques to raise quality and cut waste. It aims to create a culture to promote a team spirit; common standards to ensure consistent quality and open book working. It monitors performance against KPIs for continuous improvement.
Meanwhile, the firm has continued to develop its building information modelling strategy, including engagement with its supply chain to be level 2 compliant.
A section on the supply chain at Henry Boot Construction”s website here gives details on the company”s supply chain selection process and includes an online enquiry form.
Nigel Moran is Project Buyer at Henry Boot Construction
Joanna Batton is Buyer at Henry Boot Construction
Tel: 01246 410111
Other key contacts include:
Dave Totty, Contracts Manager at Henry Boot Construction
01246 410111