Interim Management Statement

RNS Number : 8282Q

Boot(Henry) PLC

12 November 2012

Henry Boot PLC

('the Company' or 'the Group')

Interim Management Statement

Henry Boot PLC (LSE: BHY), a company engaged in land promotion, property development and investment, construction and plant hire, releases this Interim Management Statement in respect of the period 1 July 2012 to the date of this announcement, as required by the UK Listing Authority's Disclosure and Transparency Rules, together with a Group trading update for the year ending 31 December 2012.

Trading and outlook

Trading conditions within our markets continue to be challenging but relatively stable. The Group continues to trade in line with management expectations and our operational management teams continue to be very busy bringing forward land, construction and development opportunities. There have been no material events or transactions during the period covered by this statement.

Hallam Land, our strategic land promotion business, has had a very successful period in terms of planning success. We now have a record number of consented sites available for disposal at Banbury, Mansfield, Bishopbriggs, Kilmarnock, Torrance, Edinburgh, Desford, Tillicoultry, Long Buckby, Kegworth, Highbridge, Winsford and Stratford-upon-Avon. All of these sites are being, or are about to be marketed, and a number of them are already the subject of agreed terms. In addition, we have large strategic sites at Bridgwater and Exeter where already consented land will be sold over a longer time frame.

KEY EVENTS IN THE PERIOD

LAND PROMOTION AND DEVELOPMENT

·	Two relatively small land sale transactions at Mansfield and Peterborough were concluded during the period.
·	New sites were acquired into the portfolio at Abingdon, East Thame and Cambusbarron and we have a number of further site acquisitions in the pipeline.
·	Planning permissions or 'minded to grant' approvals were achieved at Selby (12.5MW wind farm, granted on appeal), Kegworth (110 plots), Long Buckby (132 plots granted on appeal), Stratford on Avon (200 plots granted on appeal), Winsford (180 plots), Torrance (9 plots) and Rugby (183 plots).
·	Other applications which are currently at appeal are Bradford (292 plots), Cam (71 plots), and Grimsargh (200 plots).
·	We have further undetermined applications at Aylesbury (120 plots), Bedford (resubmission, 495 plots), Blaby (1,593 plots), Burton Upon Trent (950 plots), Chatteris (1,000 plots), Irthlingborough (700 plots), Market Harborough (500 plots), Marston Moretaine (125 plots), Monmouth (145 plots), Retford (8 plots), Ripley (180 plots), Rolleston (83 plots) and Winsick (160 plots). Nuneaton (324 plots) has permission although it is the subject of a village green appeal which should be determined in 2013.
·	Additionally, we have recently submitted new applications at Chellaston (56 plots), Desborough (165 plots), Dunbar (100 plots), Oulton Leeds (40 plots), Rothwell, Leeds (40 plots), Blackburn, West Lothian (140 plots), East Leake (160 plots) and Abingdon (160 plots).
·	As a result of the land trading in the period the current strategic land portfolio has increased to 9,069 acres. Of this, 1,833 acres are owned, 3,513 acres are held under option and 3,723 acres are held under agency agreements. Of this total acreage, 21.4% has either planning permissions or planning allocations.

PROPERTY DEVELOPMENT & INVESTMENT

·	At Markham Vale, the 200 acre business park on junction 29A of the M1 Motorway being developed in partnership with Derbyshire County Council, we have completed two pre-let developments, a 100,000 sq ft national distribution centre for automotive parts distributor Andrew Page Ltd and a drive thru restaurant pre-let to McDonalds. Contracts have also been exchanged for the sale of the Andrew Page unit and this transaction is expected to complete before the year end. These projects follow the completion of a 41,000 sq ft manufacturing and warehouse unit, pre-sold to an owner occupier earlier in the year; we remain in detailed negotiations with a number of potential occupiers to take further space on the business park during 2013.
·	The development site with planning consent that we have in partnership with Royal Bank of Scotland at Thorne, Doncaster, has taken a major step forward with the exchange of contracts with Tesco who will acquire a site to develop a 36,000 sq ft foodstore. Once again we are currently in detailed negotiations with a number of other occupiers to take space on adjoining plots which will see construction work commence in the first half of 2013.
·	A building contract has been let and contractors are on site, converting the listed former County Court House on Deansgate, Manchester, to office, retail and leisure use. Only 6,800 sq ft of the 31,000 sq ft development remains to be let; final completion is expected to be achieved in late 2013.
·	The first development project in the joint venture with Calderdale & Huddersfield NHS Foundation Trust is close to commencement, following the grant of detailed planning permission and listed building consent for the conversion of a 56,000 sq ft listed mill. The scheme will provide new outpatient and clinical facilities and offices, all of which have been pre-let to the Trust on a 25 year lease. Construction work is expected to start next month with the project completing in 2014.
·	During the period agreements were exchanged with Lloyds TSB Bank plc on a six acre site in Chesterfield which has considerable development potential for a range of uses. Negotiations have already commenced with a number of potential occupiers prior to taking the site through the planning process.

CONSTRUCTION DIVISION

·	Despite depressed general construction activity, Henry Boot Construction expects to marginally exceed budgeted turnover for 2012 and it is hopeful of securing approximately 60% of budgeted turnover for 2013 by the end of 2012. Whilst this is in line with expectations in the current competitive construction market, we remain cautious regarding the availability of traditional construction work, at an acceptable margin.
·	The social housing sector continues to provide a steady workflow under long-term Frameworks in Scunthorpe, Manchester, and Doncaster. We have recently been appointed to deliver two new schemes in Hull and Wakefield under the EN Procure Framework and won our second scheme under the Yorkshire Housing Framework.
·	We have completed industrial schemes for Tata Steel Limited and London & Scandinavian Metallurgical Co Limited, and have just started major schemes that will carry forward into 2013 for Bifrangi UK Ltd in Lincoln and Lytag Limited at the Drax Power Station site.
·	In the Health Sector, work continues under a Framework Agreement for the Sheffield Teaching Hospitals at both the Northern General and Hallamshire Hospitals in Sheffield and also at the Medical School for the University of Sheffield.
·	Following the Framework award for the Ministry of Justice Strategic Alliance Agreement we have received an encouraging number of opportunities for new-build and refurbishment schemes for HM Prison Service, HM Court and Tribunals Service, National Probation Service and Forensic Science Service in the North of England, which will continue over the next six years.
·	Civil engineering opportunities are starting to flow from our supply chain agreement on the 25 year Amey Sheffield Highways PFI scheme. Seven relatively small contracts are currently being undertaken and it is hoped this agreement will lead to more opportunities in future. In addition, we have commenced our first project funded by the Football Association at Barwell and we anticipate further opportunities from this source in the future.
·	Road Link (A69), our PFI contract, continues to trade in line with the Board's expectations. Traffic volumes remain slightly lower than last year however, due to careful cost management, this has not had an impact on profitability levels.
·	Banner Plant has seen a slow recovery in activity levels after a relatively subdued start to the year. Contract count and turnover are now in line with our expectations while costs and capital expenditure remain tightly controlled awaiting a sustained improvement in UK construction activity.