Interim Management Statement

RNS Number : 4049S

Boot(Henry) PLC

18 May 2009

 



Henry Boot PLC announces its first Interim Management Statement for the year ending 31 December 2009 covering the period 1 January 2009 to 15 May 2009. 

During the period, the Company has continued to trade profitably in line with market expectations before property revaluation adjustments at the half year.

The tight control of cash and costs continues to be a key focus for management and we are pleased to report that debt levels have been further reduced since the year-end. We have also secured our borrowing facilities for three years through to 2012. This provides us with comfortable levels of headroom and will also enable us to take advantage of opportunities arising in our marketplace.

Key events in the period:

LAND PROMOTION AND DEVELOPMENT

	We submitted a planning application for 150 homes in St Albans. The homes will have from two to five bedrooms, with 35% to be designated as affordable housing.
	A further outline application has also been made at Monmouth for 245 homes on approximately 7.4 hectares.
	We submitted an outline planning application at Bolsover, Derbyshire, for 250 homes in a variety of property designs offering one to four bedrooms, including a significant element of affordable housing.
	Our appeal of the planning refusal for a 1,000 unit scheme at Wragley Way, Derby, was unsuccessful and will result in costs of circa £1.5m being written off during the half year to 30 June 2009. The full details of the write-off were included in Note 17 to the 2008 Financial Statements, which were sent to shareholders in April 2009.
	We expect to exchange contracts shortly to sell a site in Chudleigh, Devon, with planning permission for approximately 100 units. Completion of this transaction is not expected until late 2009 or early 2010.

PROPERTY DEVELOPMENT

	Planning consent has been granted at Westfield One, Cumbernauld, for 83,000 sq ft of light industrial/distribution accommodation units of between 10,000-28,000 sq ft, with the potential for these to be sub-divided if required. Westfield is an established industrial area which is very well placed to access Central Scotland's motorway networks.
	We are on target to complete the first phase of our retail and industrial development in Rotherham by July 2009. This initial phase includes 51,000 sq ft fully pre-let to B&Q and 10,000 sq ft of industrial space. Fully developed, this site will be able to accommodate 100,000 sq ft of retail space and approximately 100,000 sq ft of industrial space.
	We completed the 186,000 sq ft industrial unit for the pharmaceutical division of the Co-operative Group Limited at Meir Park, Stoke on Trent. This unit has been marketed and we have accepted an offer of circa £10m.
	We have also completed a 51,000 sq ft terrace of eight industrial units at Waterloo Court, Markham Vale. These are now being fully marketed and generating decent levels of interest despite the difficult economic environment.

CONSTRUCTION

	Our Construction business continues to trade well, in line with management expectations. We have a strong order book for this year, with some of the Decent Homes and Prison Alliance work being carried forward into 2010 and 2011. There is no doubt that our contracts in centrally funded Frameworks have helped cushion the reduction in private sector work, which has become increasingly scarce in 2009.
	The performance of our Plant Hire business has held up reasonably well in the year to date. Accommodation, compressed air and access equipment have all performed well but we have continued to see weak demand from all sectors for general plant. In recognition of this, we have severely curtailed capital expenditure over the last six months. Notwithstanding the slowdown, Banner Plant is cash generative and is expected to remain so for the rest of the year.
	Road Link A69, our PFI project, continues to trade in line with our expectations. Although we are seeing some decline in traffic using the road, this has not yet affected the activity threshold applicable to our concession and therefore has not adversely impacted the profitability of this project.

OUTLOOK

Market conditions in the property sector remain challenging with the values of land, developments in progress and completed property still under pressure. We do not believe that this backdrop will change significantly for the better during the remainder of 2009. It is still too early to say that the market has bottomed out, however, transactions are being concluded and there are some signs that prices are stabilising.

In these market conditions, we will continue to manage the business tightly, sell completed developments where we see fair value and continue to reduce borrowings. We remain confident that, subject to any unforeseen change in market conditions, the Group will perform in line with market expectations for the financial year ending December 2009.

Enquiries to:

Henry Boot PLC

Jamie Boot, Group Managing Director

John Sutcliffe, Group Finance Director

Tel: [phone] 

 

END

 

 

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