Henry Boot sees revenue grow but profits decline in uncertain housing market
- Revenue up by 24.5% year-on-year to £179.8m in first half results
- But underlying profits were down to £23.3m over the same time period
Construction group Henry Boot saw profits decline in the first half of the year despite a growth in revenue, as uncertainty in the housing market increased.
The business saw a 24.5 per cent increase in revenue year-on-year to £179.8million, in the six months to 30 June.
However, underlying profit fell to £23.3million from £37.8million over the same time period, with the group saying that ‘uncertainty in our markets has increased’.
The business saw a 24.5 per cent increase in revenue year-to-year to £179.8million for the first six months to 30 June
The Sheffield-based company’s revenue growth was partly boosted by strong property sales of £129.3million which was led by land promotion, development and housebuilding business, despite weakening markets.
Tim Roberts, its chief executive officer, said: ‘The first half of the year has seen our markets slow as interest rates have continued to rise, but, as these results show, our focus on prime strategic sites, high quality development and premium homes has provided us with a degree of resilience.
‘This has helped us to report a very respectable underlying profit before tax of £23.3m, an increase in NAV of 3 per cent, plus the confidence to grow our interim dividend by 10 per cent.’
Sentiment on housebuilders has been hit as rising interest rates have significantly impacted the housing market, with City forecasters saying the Bank of England’s base rate could peak as high as 6.25 per cent as it tries to bring inflation to heel.
Roberts added: ‘Whilst uncertainty in our markets has increased, we believe we have enough momentum to carry us through the year, although the outlook for 2024 for the time being is not so clear.
‘However, we have conviction in our three markets which are driven by structural trends and I am pleased to report that we remain on track to hit our strategic growth and return targets over the medium term.’
Earlier this month, Britain’s largest home builder Barratt Developments revealed a slump in demand driven by the mortgage crunch, with new home reservations sliding by a third.
The housebuilder’s annual results revealed an increase in its pre-tax profits and revenue but it flagged that new home reservations had tumbled since July from an average of 0.6 homes per week to 0.42 homes per week.
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