Interim Management Statement

RNS Number : 1663D

Boot(Henry) PLC

14 May 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 January 2012 to 11 May 2012, together with a trading update for the year ending 31 December 2012.

Trading and outlook

In a period, in which trading conditions have continued to remain challenging though relatively stable, the Group has traded in line with the Board's expectations. While no material sale transactions arose in the period covered by this statement, our teams remain very busy bringing forward land and development opportunities.

Key Events in the period

LAND PROMOTION AND DEVELOPMENT

·	Approvals have been obtained on sites at Edinburgh (100 plots), Evesham (70 plots), Highbridge (minded to grant 550 plots) and Nuneaton (326 plots), although the latter site is now the subject of a Town and Village Green application by local residents.
·	Applications which are at appeal are Long Buckby (132 plots), Bradford (292 plots), Stratford (200 plots), Cam (71 plots) and Selby (Wind Farm).
·	We have undetermined applications at Market Harborough (500 plots), Blaby (1,593 plots), Irthlingborough (700 plots), Chatteris (1,000 plots), Monmouth (145 plots), Rugby (183 plots), Bedford (495 plots), Torrance (9 plots), Grimsargh (200 plots) and Marston Moretaine (125 plots).
·	In addition we have recently submitted new applications at Burton-on-Trent (950 plots), Winsford (180 plots), Peterborough (25 plots), Ripley (180 plots), Winswick (160 plots), Kegworth (160 plots), Aylesbury (120 plots) and Rolleston (23 plots).
·	New sites have been signed up at Rotherham, Sutton in Ashfield, Handcross, East Leake, Leeds and Melksham and we have increased our share of the Lubbesthorpe site at Leicester from 25.0% to 37.5% and purchased our previously optioned site at Bathgate. Incorporating these sites into our strategic land portfolio has resulted in an increased strategic land holding of 8,760 acres.
·	We have consented sites available for disposal in Mansfield, Bridgwater, Bolsover, Kilmarnock, Edinburgh, Desford and Tillicoultry, and these are currently being marketed.
·	The housing market has slowly improved over the last twelve months and indications are that housebuilding volumes are beginning to increase albeit from a very low base, particularly in the South and South East of England. The recently introduced NewBuy scheme should assist first time buyers with the key constraint of mortgage deposit funding, however its success will be dependent on the UK mortgage providers supporting the scheme at competitive rates of interest.

PROPERTY DEVELOPMENT & INVESTMENT

·	We completed the development of the 23,000 sq ft food store in Warminster let to Waitrose. We are now actively marketing the 5,800 sq ft of ancillary retail space adjacent to the store which was completed at the same time. Furthermore, we concluded the refurbishment and letting of an 18,000 sq ft retail unit at Clifton Moor, York, to Great Outdoors. Both of these properties will be externally valued at the half year.
·	At Markham Vale, our long-term regeneration development in conjunction with Derbyshire County Council, we completed the sale of the last speculatively built small industrial unit and a 40,000 sq ft design and build industrial unit for Squadron Medical Limited. We also commenced construction of a 100,000 sq ft pre-let distribution warehouse for Andrew Page Limited, a national car parts distributor, and signed an agreement for lease and commenced construction of a McDonalds restaurant, both of which are expected to be completed this year.
·	At Deansgate, Manchester, we exchanged sale agreements for all of the first and second floor office space within this mixed use scheme and concluded lease agreements on all the basement leisure space. Shortly we expect to exchange agreements on one of the two ground floor retail units, leaving only 6,000 sq ft of the 31,000 sq ft of space within this development to let. Having received detailed planning and listed building consent, initial development work has commenced. It is anticipated that we will retain a long leasehold interest in the retail and leisure space following completion of the development in mid 2013.
·	We have exchanged an agreement with Calderdale & Huddersfield NHS Foundation Trust for them to lease the 56,000 sq ft refurbished Acre Mill on a 25 year term and we anticipate that this fit-out contract will commence later this year. This is the first transaction undertaken by the Pennine Property Partnership LLP.
·	The sale of the 10,000 sq ft industrial investment at Rotherham was completed at a value ahead of that originally forecast.
·	We have been selected by South Somerset District Council as preferred development partner to undertake a foodstore led regeneration scheme in the town centre of Chard.

CONSTRUCTION DIVISION

·	We have now secured 95% of our budgeted turnover for 2012 and are starting to take orders for 2013. Whilst this is in line with our expectations, we remain cautious regarding the amount of traditional construction work, at acceptable margins, that will arise in 2013 and beyond.
·	The social housing sector continues to provide a steady flow of work under long-term frameworks in Scunthorpe, Manchester, Leicester and Doncaster. In addition, we are also undertaking major schemes for Eastlands Homes and Southway Housing and have been appointed to the EN Procure, Fusion 21 and Yorkshire Housing frameworks.
·	In the Health Sector, the major healthcare facility for the joint venture between Rotherham MBC and Rotherham Primary Care Trust was completed earlier this year and we are currently undertaking three schemes for the Sheffield Teaching Hospitals.
·	We have been awarded a major new framework for the Ministry of Justice Strategic Alliance Agreement. This follows on from the successful completion of our existing Ministry of Justice refurbishment framework and will provide new-build and refurbishment opportunities for HM Prison Service, HM Court and Tribunals Service, National Probation Service and Forensic Science Service in the North of England and Scotland over the next six years.
·	Civil engineering opportunities have also received a boost with our inclusion as a supply chain partner on the 25 year Amey PFI Sheffield Highways scheme. The YORcivils Framework has also started to generate opportunities with works currently being undertaken for East Yorkshire County Council.
·	Banner Plant Limited got off to a rather slow start to the year and though recent indications are that activity is recovering, trading remains marginally below our internal forecasts after the first four months.
·	However, Road Link (A69), our PFI contract, continues to trade in line with the Board's expectations.