Development group Henry Boot has hit at the Government’s failure to reform the “dysfunctional” planning system as it said it expected a “lag” in performance in the current year.
The Sheffield-based firm has released results for 2023 in which revenues rose 5% to £359.4m. The company saw big increases in its income from property development and land promotion, but a 23% fall in construction revenues.
The company’s profit before tax fell 18% to £37.3m but it said it had performed “relatively well” against a slowing economy and particular issues in the construction sector. It has announced a 10% rise in dividends and said it is on track to meet medium term growth targets.
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Chief executive Tim Roberts said: “Our focus on high quality land, commercial property development and housebuilding in prime locations meant that demand for our premium products remained resilient and allowed Henry Boot to perform relatively well against a backdrop of a slowing economy, rising interest rates, high inflation and decreasing volumes in our key markets.
“While constraining our ability to bring forward developments in one respect, the Government’s consistent failure to make much needed reforms to an increasingly dysfunctional planning system does play to the strengths of our land promotion business while helping underpin demand from national housebuilders, who are still actively acquiring prime strategic sites to shore up their future pipelines. This alongside some well timed development disposals and Stonebridge Homes increasing house sales by 43%, helped deliver a resilient performance.
“We are not immune from the challenges that the UK economy presents to the near-term trading environment and as previously reported, we expect a lag in performance in the year ahead. However, the outlook for both inflation and interest rates is improving and it’s beginning to feel as though the UK economy has turned a corner, with recent reductions in mortgage rates also pointing towards a hopefully brighter future. With this in mind, and given the group’s continued strong financial position, we remain confident in achieving our medium term growth and return targets, as reflected in the 10% dividend increase we have announced today.”
In its results, Henry Boot highlighted a rise in land and property sales to £248.5m, which it said came “despite a challenging economy and slower market conditions”. And while the number of plots sold by its land promotion division almost halved to 1,944, the sale of land at Tonbridge in Kent means a big increase in profit per plot that more than offset the volume reduction.
Mr Roberts said he felt the economy had turned a corner and demand was likely to pick up this year, but planning delays and the likely General Election would impact on the business and he expected 2024 performance to weighted to the second half of the year.
Original artice – https://business-live.co.uk/all-about/yorkshire-humber
