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Summary
- Henry Boot has a strong balance sheet with enough liquidity of £27 million, which the company aims to reinvest in residential, urban, and industrial logistics projects.
- The company was recently awarded a £40 million contract to deliver Kangaroo Works, a residential scheme in the centre of Sheffield.
Despite the challenges thrown by the pandemic, construction and material company Henry Boot Plc (LON:BOOT) has delivered a resilient performance in the FY2020, according to its year-end trading statement released on Tuesday. The company has performed far ahead of its expectations in its industrial and residential markets across development, construction, and house building divisions along with land disposal projects.
Also read: Housing boost: BoE mulls new mortgage impetus for homebuyers
The company has a strong balance sheet with enough liquidity of around £27 million, which it aims to reinvest in residential, urban, and industrial logistics projects in the future. After the end of the first lockdown in June, most construction businesses resumed operations. Despite the ongoing challenges in the economy, the company consistently scaled up its operations.
(Image source: ©Kalkine Group 2020)
Although, the UK has enforced the lockdown restrictions for the third time, the construction and housebuilding activities are allowed. Boot is committed to delivering high quality service to its customers. The company recorded strong order growth for 2021 on the backdrop of growing existing public sector work.
During the second half of FY2020, the company’s productivity on sites increased to 95 per cent of the planned activity. The company was recently awarded a £40-million contract to deliver Kangaroo Works, a residential scheme in the centre of Sheffield. The construction company is committed to delivering the projects such as The Glassworks Scheme in Barnsley in stipulated time.
During the FY2020, Henry Boot Developments completed projects with a total Gross Development Value (GDV) of £62 million. The construction company is committed to delivering projects including the build-to-rent Kampus scheme in Manchester with a total GDV of £313 million.
Driven by the strong recovery in the housing sector in H2 of 2020, the housebuilder anticipates the demand for land to continue in the near term. Therefore, the company’s Hallam Land Management business saw a growth in the land bank of 11.47 per cent to 16,607 acres in 2020 from 14,898 acres in 2019. During the H2 of 2020, the company also benefitted from the disposal of its Midlands site.
The end of ‘help to buy’ scheme and stamp duty holiday could indirectly pose some risks for the company as the housing demand is expected to go down. The company has witnessed a significant growth in the second half of 2020 after a challenging H1. The strong financial position, strong forward sales, and a growing store of opportunities of the company could help it in navigating through the uncertainties posed by the latest lockdown.
Shares of Henry Boot were up by 5.79 per cent, trading at GBX 274 on 19 January at GMT 1:26 PM+1.
