Contractor predicts 'patchy' recovery following £22.4m writedown on land

Listed builder and developer Henry Boot slumped to a pre-tax loss of £11.9m after it took a further £22.4m hit on the value of its land, in end of year results announced today.

The loss compares to a profit of £19.3m in 2008, and was achieved on turnover also down 40% to £116.5m. The firm also saw operating profits fall by three quarters to just £11.5m

However, the firm managed to reduce its net debt to £32.1m over the year, down from £49.3m in 2008. the firm said it would start work on a 26,500 sq ft retail scheme in Warminster, previously on hold.

Henry Boot chair, John Reis, said he was optimistic about recovery in the market, but the focus of the firm nevertheless remained on reducing debt and preserving asset values.

In addition he admitted that much of the work of the construction division, which accounts for two thirds of turnover, was from the public sector, “and therefore potentially at risk given the likelihood of public spending cuts following the forthcoming General Election.”

He said: “I believe that the recovery will be patchy and relatively long drawn out. Therefore, the prudent strategy outlined above is the correct one until we can see clear evidence of a sustained recovery.”

“We retain significant headroom in our three-year debt facilities and this, along with the support of our long term banking partners, will allow us to gear up again as the recovery takes hold.”