Boot(Henry) Plc - AGM Trading Update

TRADING AND OUTLOOK

 

The Group's land promotion and its property investment and development business segments traded well during the first five months of this year. The financial performance of the three businesses within our construction segment together remain in-line with our expectations. Hallam Land has a strong pipeline of sales opportunities which are expected to conclude in the remainder of 2019, although, and as is always the case, there is some uncertainty with regard to the timing of these deals within a particular financial period. Within Henry Boot Developments, we expect to conclude and hand over The Event Complex Aberdeen ('TECA') to Aberdeen City Council on time and in-line with the cost plan.

 

Given the good start we have made in 2019, and anticipating no major changes to the underlying UK economic conditions arising from both BREXIT and wider global political uncertainties, we expect the Group's performance for the current financial year ending 31 December 2019 to be in-line with the Board's existing expectations.

 

KEY EVENTS IN THE PERIOD

 

LAND PROMOTION

 

Hallam Land Management, our strategic land business, has once again made a solid start to the year, as highlighted below, and has a strong pipeline of sale transactions working towards a conclusion during the remainder of the year.

 

During the period:

 

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We have concluded land sales totalling over 1,094 plots on nine sites. In addition, we have exchanged contracts on a further two sites and are in detailed discussions regarding the sales of a further twelve schemes which are expected to complete later in 2019 and 2020.

 

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We have recently obtained planning permission on two sites for 1,100 units and now have 45 sites working through the sale process comprising 16,481 units. We also have 10,730 units on 25 sites which are currently subject to undetermined planning applications or are at appeal.

 

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The total portfolio of land promotion sites is now 186 covering over 14,000 acres with a further 46 sites, across nearly 4,000 acres, much of which we expect to be brought into the portfolio subject to the completion of due diligence and legal agreement.

 

PROPERTY INVESTMENT AND DEVELOPMENT

 

Henry Boot Developments continues to successfully deliver a number of schemes, whilst acquiring new opportunities for the future. Schemes we are working on at present include:

 

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TECA is now almost through the development programme and is on course to be completed in August 2019 and handed over to Aberdeen City Council.

 

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The Company has further strengthened its development pipeline of employment land, following acquisitions at Preston and Wakefield, taking the total amount of employment land across the country under our control to over 900 acres.

 

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In addition to the 539 unit build to rent scheme in Manchester City Centre, which is still on track to complete in Summer 2020, we have a total of 248 private for sale units over four separate development sites and at various stages of planning which we are targeting to be under construction from 2020.

 

 

Our jointly-owned house builder, Stonebridge Homes, is trading well and is targeting sales of over 150 units in 2019. Reservations and sales to date are consistent with achieving this goal, and we expect the average selling price per unit to be slightly higher in 2019 than in 2018.

 

CONSTRUCTION AND PLANT HIRE

 

Our construction business continues to work across a wide range of sectors, including industrial, residential, custodial, health, commercial, education, leisure and civil engineering. We have made a strong start to the year and in 2019 we expect to achieve a higher level of activity than in 2018. We are currently bidding for some larger contracts which, if successful, will begin to underpin the 2020/2021 order books.

 

Our plant hire business, Banner Plant, was slightly down on a like-for-like basis through the first quarter, reflecting slower construction activity across the UK market. While improved weather conditions have seen levels of activity improve slightly, we continue to expect the business to achieve a marginally quieter year than 2018.