First-half results show £20m loss driven by property devalution, but construction revenue holds up
Henry Boot swung into the red in the first half of 2009, it revealed today in results for the six months ended 30 June, with a loss of £20.3m following a profit of £20.4m a year earlier.
The construction, development and plant hire firm posted a turnover down by 44% to £67.0m compared with £119.3m in the first half of 2008.
The loss was partly driven by a £23.6m revaluation deficit on investment properties. The firm also cited “substantially reduced land sales” but said this was offset by higher property trading income and a “good contribution” from the construction sector.
Construction revenue fell only slightly, from £51.1m to £49.8m, while income from the property division rose from £11.3m to £12.7m and land development revenue plunged from £57.8m to £1.6m compared with the first half of 2008. Group operating profit fell 88% from £30.2m to £3.7m.
Net debt rose slightly to £53.3m during the half year, up from £49.3m at 31 December 2008. However, a reduction in net debt of around £20m has been achieved since the half-year point.
John Reis, chairman of Henry Boot, said: "Looking ahead, our banking facilities have been put onto a three-year term and asset sales achieved after the period end have reduced net debt by some £20m.
“In the short term, we will maximise returns in this difficult market whilst carefully managing debt levels, cash flow and our net asset position. In the longer term, as economic recovery takes hold, Henry Boot has a good mix of property-related businesses, which are well funded and possess opportunities that are capable of generating excellent profits as conditions in our markets improve.”
The net asset value per share fell to 129p, from 146p at the end of 2008, and the interim divident was maintained at 1.25p.