Henry Boot sees revenue growing but profits falling in uncertain property market
- Revenue rose 24.5% year-on-year to £179.8m in first half results
- But underlying profits fell by £23.3m over the same period.
Construction group Henry Boot saw its profits fall in the first half of the year despite revenue growth, as uncertainty in the property market increased.
The company saw revenue rise 24.5 per cent year-on-year to £179.8m, in the six months to June 30.
However, underlying profit fell to £23.3m from £37.8m over the same period, with the group saying “uncertainty in our markets has increased”.
The company saw a 24.5 per cent increase in revenue year-on-year to £179.8m for the first six months to June 30.
The Sheffield-based company’s revenue growth was partly driven by strong property sales of £129.3 million, led by the land development, development and housebuilding business, despite weakening markets.
Tim Roberts, its 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 sites, high-end developments quality and premium housing has given us a certain degree of resilience.
“This has helped us deliver a very respectable underlying pre-tax profit of £23.3m, a net asset value increase of 3 per cent, plus the confidence to increase our interim dividend by 10 per cent.” .
Sentiment on housebuilders has taken a hit as rising interest rates have significantly impacted the housing market, with City forecasters saying the Bank of England base rate could peak as high as 6.25 percent while trying to control inflation.
Roberts added: “While uncertainty in our markets has increased, we believe we have enough momentum to continue through the year, although the outlook for 2024 is not as clear at the moment.”
“However, we have conviction in all three of our markets, which are driven by structural trends, and I am pleased to report that we remain on track to achieve our strategic medium-term growth and profitability objectives.”
Earlier this month, Barratt Developments, Britain’s biggest housebuilder, revealed a slump in demand driven by the mortgage crisis, with new housing stock falling by a third.
The housebuilder’s annual results revealed a rise in its pre-tax profits and income, but noted that new home bookings had fallen since July from an average of 0.6 homes per week to 0.42 homes per week.
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