Interim Management Statement

RNS Number : 6093S

Boot(Henry) PLC

11 November 2013

Henry Boot PLC

('the Company' or 'the Group')

Interim Management Statement

Henry Boot PLC (LSE: BHY), a company engaged in land development, property investment and development, construction and plant hire, releases this Interim Management Statement in respect of the period 1 July 2013 to 11 November 2013, as required by the UK Listing Authority's Disclosure and Transparency Rules, together with a Group trading update for the year ending 31 December 2013.

Trading and outlook

Trading throughout the period has been in line with our expectations and reflects the slow improvement we are seeing throughout our UK property markets. While we have a number of agreed land sales which are currently working to completion, the timing of which is always difficult to predict, our expectations for the year ending 31 December 2013 remain unchanged.

KEY EVENTS IN THE PERIOD

LAND DEVELOPMENT

The Government's initiative to assist home buyers to gain access to the mortgage market appears to be having a significant impact and, coupled with the general improvement in the economy, is lifting the confidence of the national house builders. As a consequence, we anticipate the new homes land market is likely to continue to strengthen moving forward. The streamlining of planning regulations continues to produce a more certain and consistent decision-making process which is a marked improvement on the earlier system.

·	We have completed two disposals at Mansfield and Nuneaton during the period. Furthermore, we have agreed terms to sell a further seven sites, a number of which should conclude before the year end.
·	Seven new sites were acquired in the period and our total land holdings now equate to over 9,700 acres.
·	Planning permissions or 'minded to grant' approvals were achieved on eight sites for 1,735 plots during the period.
·	Eight applications totalling 2,440 plots are currently at appeals.
·	Furthermore, we have undetermined applications on 24 sites totalling 6,131 plots.
·	Finally, we have 32 consented sites available for disposal totalling 8,887 plots. Two of the sites, for 1,021 plots, are subject to judicial reviews. These sites are throughout the country and it is likely that larger sites will be disposed of over a number of years.

PROPERTY INVESTMENT AND DEVELOPMENT

·	At Markham Vale, our 200 acre business park on junction 29A of the M1, being developed in partnership with Derbyshire County Council, contracts have gone unconditional and work has commenced on site for a 34,000 sq ft food processing unit, a petrol station and drive-thru Starbucks. Unconditional contracts are expected to be exchanged shortly on a further 20,000 sq ft manufacturing unit, which will also commence on site immediately. Terms have now been agreed for a further 50,000 sq ft manufacturing facility and a pub/restaurant with both these developments expected to commence in early 2014.
·	Our mixed-use development on Deansgate in Manchester city centre has taken our contractor longer to complete than originally forecast; however it is expected to reach practical completion around the end of the year. Following the forward sale of the office element, we have now agreed terms for the letting of all the retail/leisure space within the scheme.
·	The first phase of the redevelopment of a listed former wire mill, in partnership with Calderdale & Huddersfield NHS Foundation Trust, is now substantially complete and the specialist fit out work to create a new dedicated 50,000 sq ft office and out-patients facility, pre-let to the Trust, will commence on site early in 2014 and take about a year to complete.
·	The lorry park extension on our multi-let motorway service area in Kent was completed on schedule and is fully open and trades at full capacity most week days.
·	Planning permission was secured for a change of use in parallel with securing a surrender of the existing lease on our 18,000 sq ft retail warehouse unit in Clifton Moor, York; a new longer lease on higher rental has been granted to Pure Gym, a health and fitness operator.
·	Planning permission was successfully granted at appeal for a 78 bed budget hotel, pre-let to Travelodge in Richmond upon Thames town centre, with development expected to commence on site early next year.
·	Pre-let agreements have been exchanged with a number of retail and leisure operators at our Beeston town centre redevelopment scheme in Nottingham which is also expected to commence early in 2014.
·	In Bromley, Kent we have completed the purchase of an existing vacant office building and simultaneously pre-let the entire building to an international software company who was previously a tenant in our mixed-use scheme in Bromley.
·	Following the purchase of the listed former Terry's chocolate factory in York earlier in the year, planning permission for a range of residential, office and leisure uses has been secured; we are in detailed negotiations with a number of different operators to take the 400,000 sq ft development forward.
·	In Chesterfield, the six acre site being developed in joint venture with Lloyds Bank is now the subject of agreed terms with a number of operators who in the main will be acquiring sites for development.
·	Stonebridge Homes, our joint venture house builder, has had a successful second half year and expects to conclude circa 25 sales by the end of the year at an average selling price of £248k. Furthermore, we have secured sufficient sites to achieve further growth in activity next year.

CONSTRUCTION DIVISION

·	We maintain a very strong presence in the social housing sector with long-term frameworks in Doncaster, North East Lincolnshire, Manchester, Sheffield, Barnsley and Leicester. We also continue to undertake construction projects across a wide range of sectors including industrial, health, commercial, education and leisure. Notably, and mirroring improvements in the economy generally, we have recently seen an increase in commercial and industrial opportunities. The markets in which we are operating offer excellent opportunities in the short to medium term.
·	After carrying a good order book into 2013, our Construction business anticipates that it will marginally exceed targeted turnover and is confident that it will achieve targeted profit levels for the year. We are already starting to build turnover for next year and, as normal, expect to have secured approximately 60% of the budgeted turnover for 2014 by the end of this year. Encouragingly, we are starting to see improvements in construction activity and hope that finally, this will lead to some improvement in future pricing levels.
·	We have recently secured a further five projects on our ongoing framework with the Ministry of Justice Strategic Alliance Agreement 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, and expect opportunities to continue over the remaining five years of the six year framework.
·	Civil engineering opportunities are continuing to flow from our supply chain agreement on the 25 year Amey Sheffield Highways 'Streets Ahead' PFI scheme and the YorCivils framework. In addition to this, we have recently commenced a waste water treatment works for Byzak Limited.
·	Road Link (A69) Limited ('Road Link'), our PFI contract, now in the 18th year of the 30 year franchise, continues to trade in line with expectations.
·	Banner Plant Limited has traded well throughout the year and will achieve a good result for 2013.