Henry Boot sees full-year profits rise by 37%

Henry Boot says a focus on the long term and a recovering development industry has helped it post a 37% increase in pre-tax profits for 2013 to £18.4m, on the back of a 49% rise in revenue to £153.8m.

The company says unexpectedly quick completions of financial transactions at the end of 2013 has left its performance ahead of expectations at the start of this year.

While in a flat market this may have led to a knock-on lull this year, its long-term investment programme and improving market conditions should help it overcome this.

In construction, the company says that after many months of contraction it is starting to see increases in activity, and so expects a slight rise in tender prices this year.

Its framework with the Ministry of Justice for work across the north of England is starting to pick up after a slow start, and the company expects to see more activity as part of this in the remaining five years of the framework.

Its franchise on the A69 continues to underpin its construction business, and, even with higher lighting costs this year, the company is confident this will continue to perform well this year.

However, while it says that while is has “continued a presence” in the renewable sector, supplying heat pumps to Ampleforth College and Castle Howard, among others, it remains cautious about this part of its business because of the reduction in feed-in tariffs, the slow take-up of the Green Deal and the extension of the Energy Company Obligation (ECO) scheme to 2017.

Chairman John Brown said: “The new financial year has started well and house builders reporting so far in 2014 are painting an encouraging picture of increasing activity, good land availability and slowly rising prices. Add to that a stronger market for new property development and improving construction and plant activity levels and, provided that these trends continue, we remain confident that we can perform well in 2014 and beyond.”

Commenting on the results, Andrew Gibb, an analyst from Investec, said he was keeping his “buy” recommendation for the company’s shares. He said: “With strategic land now standing at 9,273 acres, the group looks to be taking positive momentum into 2014.”

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