Interim Management Statement

RNS Number : 8798G

Boot(Henry) PLC

13 May 2014

Henry Boot PLC

('the Company' or 'the Group')

Interim Management Statement

Henry Boot PLC (LSE: BHY) is releasing the following Interim Management Statement in respect of the period 1 January 2014 to 12 May 2014.

Trading and outlook

Trading since the beginning of 2014 has been encouraging across all the Group businesses and providing these trends continue, we remain confident of meeting the Board's expectations for the full year. Our portfolio of sites has great potential in the recovering property market although navigating the planning process expediently continues to prove challenging.

KEY EVENTS IN THE PERIOD

LAND DEVELOPMENT

·	The steady improvement in the housing market has continued into 2014 helped by improving mortgage availability which we do not expect to be adversely affected by the tighter lending criteria recently announced.
·	During the period we completed five site disposals covering 435 units, with values achieved as expected.
·	Our land portfolio currently stands at 9,560 acres, marginally down on the end of 2013 total, as a result of the aforementioned land sales. We continue to be very active acquiring further sites and expect to add to the portfolio as and when purchase agreements are concluded.
·	Planning approvals (including minded to grant approvals) were achieved at nine sites for 1,040 housing units and 145 extra care plots. We are also awaiting the outcome of the Legal Challenge to the signed Section 106 agreement connected to the permission already granted on the 1,593 plot site at Blaby.
·	We have a further nine sites either at appeal or awaiting an appeal application for around 3,000 units in total.
·	New planning applications have been submitted in the period on six sites for 2,420 plots.
·	We currently have 36 consented sites which are in various stages of the disposal process. The disposal of our larger schemes will take place over a number of years, however, we are in advanced discussions for the sale of a number of other sites which we hope to report on further as this year progresses.

PROPERTY INVESTMENT AND DEVELOPMENT

·	At our 200 acre business park at Markham Vale we completed development of a petrol filling station, small convenience store and drive-thru Starbucks. Contracts have also exchanged to pre-let a 50,000 sq ft industrial unit for development in the second half of the year. Furthermore, a £14.2m grant award in the period should assist the delivery of further industrial developments later in the year and into 2015.
·	The design and planning phase of a new 400,000 sq ft exhibition and conference centre in partnership with Aberdeen City Council is progressing well with the initial scheme proposal out to public consultation ahead of the submission of a planning application.
·	At Westlake's Science Park in Cumbria contracts have been exchanged to acquire a 1.2 acre site for a 21,000 sq ft office development, pre-let to W S Atkins PLC. Detailed planning permission and grant funding has been awarded for the scheme which will start later in the year and complete in the first half of 2015.
·	Construction work on our mixed-use leisure and office development on Deansgate, in Manchester completed early in 2014 and agreed terms for the final letting are expected to be exchanged soon.
·	At Thorne, we completed the site sale for a 36,000 sq ft supermarket to Tesco and enabling infrastructure works have now commenced.
·	In Stoke our tenant, Recticel Limited, who currently occupy 123,000 sq ft of industrial space manufacturing rigid foam board insulation, has committed to take a 69,000 sq ft warehouse and office extension, with a new 20 year lease on the enlarged unit. Work has commenced on site and is expected to be completed by October 2014.
·	The redevelopment and refurbishment of our retail scheme in Beeston town centre, near Nottingham, has commenced, following the exchange of a number of agreed lettings. The scheme is expected to be completed by the end of 2014.
·	Having completed the shell and core works early in 2014, we have now commenced the extensive fit-out works for the 50,000 sq ft office and outpatients centre, pre-let to Calderdale & Huddersfield NHS Foundation Trust with completion expected early 2015.
·	We are currently in detailed discussions with both residential developers and hotel operators in connection with the former Chocolate Factory in York. Provided these discussions conclude successfully and planning permission is achieved as expected; we hope to begin delivering the scheme in 2015 taking several years to complete it.

CONSTRUCTION DIVISION

·	Our Construction business carried a strong order book into 2014 and has continued to win work such that we expect to achieve targeted activity in 2014 and are already building a 2015 order book. Although construction contract pricing is still tight and some inflationary pressure is just beginning to feed through, it is pleasing to report that the contracting opportunities available to us are at the highest levels for several years.
·	Road Link (A69) Limited, our PFI contract, continues to trade in line with the Board's expectations. We benefited from a relatively mild winter and traffic volumes have risen slightly for the first time in several years as the general economic recovery takes hold.
·	Banner Plant Limited has seen further improvements in activity and utilisation so far this year. Provided this continues through the summer months when 2013 comparatives were strong, we should achieve a solid result for the year.