Property and construction firm reverses last year’s £20m loss but not without cuts
Henry Boot has reduced its cost base to return to a £9m profit despite the difficult market.
In a report on the first half of 2010, the firm revealed that its revenue was down to £55m (2009: £67m), which it blamed on reduced property income and construction activity.
But it managed a pre-tax profit of £9m, following a loss of £20m in the same period last year. The statement said that the construction division performed well, but not without cuts.
John Reis, chairman of Henry Boot, said: “We are still seeing opportunities within both the private and public sectors, although it is anticipated that margins will have to be tight to win that work.
“In anticipation of this, we have acted quickly to reduce our cost base and are confident that we can trade through these anticipated challenges satisfactorily.”
The firms net debt at 30 June was £25m, compared with £32m the previous year. Gearing is 14.1%, a reduction from 18.2%. And its land was written up in value by £1.7m, compared with a drop of £23.6m the previous year.
However, the firm was cutting back after the governments planning shake-up, in which decisions are to be localised.
The statement said: “Until the new system is formally introduced and bedded in, which will take some time, there is likely to be uncertainty with regard to the number of new sites successfully brought through the planning system.
“We have already seen Regional Spatial Strategies abandoned, resulting in many local authorities questioning whether they need to continue with their Local Development Framework preparations or, at the very least, consider reducing the amount of land to be allocated for housing.
It remains to be seen whether local planning authorities will be sufficiently resolute to deliver the significant amounts of land which are required by the housebuilding industry to fulfil the country’s long-term needs.”