Henry Boot sees sales growth but profit decline in uncertain real estate market
Henry Boot sees sales growth but profit decline in uncertain real estate market
- Sales rose 24.5% year-on-year to £179.8m in the first half
- However, over the same period underlying profits fell to £23.3m
Construction group Henry Boot reported a fall in profits in the first half of the year despite growing sales as uncertainty increased in the property market.
The company reported a 24.5 percent year-on-year rise in sales to £179.8 million in the six months to June 30.
However, underlying profit fell to £23.3m from £37.8m in the same period, with the group saying “uncertainty has increased in our markets”.
The company reported a 24.5 percent year-on-year increase in sales to £179.8 million in the first six months to June 30
The Sheffield-based company’s revenue growth was partly boosted by strong property sales of £129.3 million, led by land development, development and housebuilding despite weaker markets.
Tim Roberts, chief executive, said: “In the first half of the year our markets slowed as interest rates continued to rise, but as these results show, our focus on prime strategic locations, quality development and premium homes has given us one conferred a certain degree of resilience.
“This helped us report a very respectable underlying profit before tax of £23.3m, a 3 per cent increase in net asset value and the confidence to increase our interim dividend by 10 per cent.”
Sentiment towards homebuilders has been hit as rising interest rates have had a significant impact on the property market. City forecasters say the Bank of England’s key interest rate could peak as high as 6.25 percent as it tries to curb inflation.
Roberts added: “Although uncertainty has increased in our markets, we believe we have enough momentum to carry us through the year, even if the outlook for 2024 is not as clear for now.”
“However, we remain confident in our three markets, which are driven by structural trends, and I am pleased to report that we remain on track to achieve our strategic growth and return objectives over the medium term.”
Earlier this month, Barratt Developments, Britain’s largest housebuilder, reported a fall in demand caused by the mortgage crisis, with the number of new home reservations falling by a third.
The housebuilder’s annual results showed a rise in its pre-tax profit and sales, but showed that reservations of new homes had fallen from an average of 0.6 homes a week to 0.42 homes a week since July.
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