Interim Results

BOOT (HENRY) PLC 11 October 1999 INTERIM RESULTS Henry Boot PLC, the Sheffield based construction, housebuilding and property group, announces its Interim Results for the half year ended 30th June 1999. HIGHLIGHTS UPWARD TREND CONTINUES - Operating profit UP 14.8% - Pre-tax profit UP 8% - Earnings per share UP 12.9% - Interim dividend UP 8% Enquiries: Jamie Boot, Group Managing Director - Tel: 0114 255 5444 CHAIRMAN'S STATEMENT You will be delighted to hear that your company has maintained steady pre-tax profit growth for a fourteenth successive year. Whilst some of our more traditional markets, notably Construction, remain extremely competitive, Housebuilding, Property Development and Land Trading offer significant opportunities that your company continues to exploit and profit from. Overall, TURNOVER at £66.4m was marginally down on 1998, though this to some extent masks the prevailing policy of selectivity within Construction. Every advantage is being taken of the present buoyant housing and property markets and their associated margins. The decline in Construction turnover is likely to continue into the second half of the year. The OPERATING PROFIT of £3.7m is a 14.8% increase over the equivalent period for the previous year and on turnover yields a margin of 5.6% compared with 4.8%. Net interest receivable of £41,000 compares with £242,000 for 1998 and reflects the significantly increased investment in housing, land holdings and property development. The associated increase in borrowings is anticipated to be largely reversed by the year end, with two recently completed schemes being sold on terms already agreed. We nevertheless expect to make additional investment in the Group's property businesses and, as a consequence, have secured specific borrowing facilities at advantageous rates to meet these aims. PRE-TAX PROFIT of £3.8m contrasts with £3.5m for 1998, an increase of 8%. HOUSEBUILDING returns are, as anticipated, up on previous years. Many of our competitors have benefited from their presence in the South and the much hyped housing boom currently being experienced there. The increased profitability associated with our Housebuilding activities is, however, founded more securely upon the company's expansion programme. The newly implemented regional structures, combined with local knowledge of regional markets, promise further growth and efficiencies. Orders remained strong as we moved into the second half of the year. The PROPERTY INVESTMENT AND DEVELOPMENT activities continued where they left off at the end of 1998, with current yields and demand promoting commensurate returns. This is particularly so in the retail park sector. Strong demand for out of town retail consents augurs well for our schemes at Fylde, Sunderland and Hailsham, whilst those at Birkenhead, Bridlington, Selby, Manchester and Wigan have attracted keen investor interest. The LAND MANAGEMENT operations have achieved a successful repeat performance, despite the difficulties presented by the current planning regime. Hallam Land Management Limited is a nationally recognised specialist in land promotion and the company's reputation and performance goes from strength to strength. CONSTRUCTION endures the spectre of low margins, high risk, competitiveness and a poor payment record which continue to dog the industry. However, a number of highlights were recorded in the first half year as this activity became more focused on selected work and repeat client business. This showed itself particularly in the waste water treatment, hospital, leisure, hotel and education fields. Meanwhile, further successes were reported in our Fast Track, Management Contracting and Facilities Management activities which continued to contribute to overall Group profitability. Our PLANT HIRE business was strengthened at the beginning of June with the successful acquisition of Quicklift (UK) Limited, a company specialising in the powered access equipment hire business. Whilst it is not anticipated that Quicklift will contribute to overall Group profitability until the latter half of the financial year, it offers considerable scope for our Plant Hire activities to extend their markets. The TRAINING company continued to pursue the Construction Apprenticeship Scheme in response to the industry's demand for an increase in skilled manpower, and new clients in the private training market. With GROUP EARNINGS PER SHARE rising to 10.5p (1998: 9.3p), a healthy Balance Sheet showing an increase in NET ASSETS PER SHARE of 8.0p to 241.0p per ordinary share and a moderate level of gearing (36%, inclusive of HP and finance leases), the overall outlook for the year end appears promising. Consequently, your Board intends to distribute an INTERIM DIVIDEND of 2.7p, an increase of 8% over 1998. 11th October 1999 JOHN S REIS Chairman Enquiries: Jamie Boot, Group Managing Director - Tel: 0114 255 5444 The UNAUDITED results of the Group include: Half year Half year Year ended ended ended 30th June 30th June 31st December 1999 1998 1998 £'000 £'000 £'000 ------ ------ ------- TURNOVER - continuing operations 66,444 67,422 172,120 ------ ------ ------- Operating profit 3,716 3,238 10,010 Interest 41 242 582 ------ ------ ------- PROFIT ON ORDINARY ACTIVITIES BEFORE TAX 3,757 3,480 10,592 Tax on profit on ordinary activities 1,102 1,044 2,966 ------ ------ ------- Profit for the period 2,655 2,436 7,626 ------ ------ ------- Dealt with as follows: DIVIDENDS: Cumulative preference shares (non-equity) 11 11 21 Proposed interim of 2.7p (1998 2.5p) 697 656 2,306 Profit retained 1,947 1,769 5,299 ------ ------ ------- 2,655 2,436 7,626 ------ ------ ------- EARNINGS PER ORDINARY SHARE 10.5p 9.3p 29.1p ------ ------ ------- DILUTED EARNINGS PER ORDINARY SHARE 10.1p 9.0p 28.0p ------ ------ ------- SUMMARISED GROUP BALANCE SHEET AT 30TH JUNE 1999 30th June 31st December 30th June 1999 1998 1998 Unaudited Audited Unaudited £'000 £'000 £'000 ------ ------ ------ FIXED ASSETS Goodwill 1,500 - - Tangible assets 26,088 23,225 30,146 Investments 1,539 1,534 1,587 ------ ------ ------ 29,127 24,759 31,733 ------ ------ ------ CURRENT ASSETS Stocks 94,090 71,889 70,239 Debtors 18,466 13,022 21,470 Cash at bank and in hand 854 8,401 1,256 Creditors: amounts falling due within one year (75,346) (52,976) (50,980) ------ ------ ------ NET CURRENT ASSETS 38,064 40,336 41,985 ------ ------ ------ TOTAL ASSETS LESS CURRENT LIABILITIES 67,191 65,095 73,718 Creditors: amounts falling due after more than one year (2,110) (280) (6,787) Provisions for liabilities and charges (1,701) (2,382) (4,808) ------ ------ ------ 63,380 62,433 62,123 ------ ------ ------ CAPITAL AND RESERVES Called up share capital 3,011 3,061 3,111 Capital redemption reserve 195 145 95 Share premium account 1,107 1,105 1,105 Property revaluation reserve 9,431 9,616 11,984 Profit and loss account 49,112 47,982 45,316 Other reserves 524 524 512 ------ ------ ------ 63,380 62,433 62,123 ------ ------ ------ BEING: Non-equity shareholders' funds 400 400 400 Equity shareholders' funds 62,980 62,033 61,723 ------ ------ ------ 63,380 62,433 62,123 ------ ------ ------ GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Half year Half year Year ended ended ended 30th June 30th June 31st December 1999 1998 1998 Unaudited Unaudited Audited £'000 £'000 £'000 ------ ------ ------ Profit for the financial period 2,655 2,436 7,626 Cost of own shares purchased (824) - (907) Unrealised surplus on property revaluation - - 419 Elimination of revaluation surplus on transfer of properties to stocks (178) (209) (2,953) Foreign currency translation differences - - 12 ------ ------ ------ Total recognised gains and losses for the period 1,653 2,227 4,197 ------ ------ ------ SUMMARISED GROUP CASH FLOW STATEMENT Half year Half year Year ended ended ended 30th June 30th June 31st December 1999 1998 1998 Unaudited Unaudited Audited £'000 £'000 £'000 ------ ------ ------ Net cash (outflow) inflow from operating activities (23,067) (10,894) 6,355 Returns on investment and servicing of finance 111 347 574 Taxation (595) (303) (2,748) Capital expenditure and financial investment (2,031) (2,057) (2,990) Acquisition (1,609) - - Equity dividends paid (1,678) (1,626) (2,279) ------ ------ ------ Cash (outflow) before use of liquid resources and financing (28,869) (14,533) (1,088) Financing (822) - (907) ------ ------ ------ (Decrease)in cash (29,691) (14,533) (1,995) ------ ------ ------ NOTES TO GROUP CASH FLOW STATEMENT Half year Half year Year ended ended ended 30th June 30th June 31st December 1999 1998 1998 Unaudited Unaudited Audited £'000 £'000 £'000 ------ ------ ------ RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS (Decrease) in cash in period (29,691) (14,533) (1,995) Hire purchase and finance leases acquired with subsidiary (1,799) - - Net funds at 31st December 1998 8,401 10,396 10,396 ------ ------ ------ Net funds at 30th June 1999 (23,089) (4,137) 8,401 ------ ------ ------ RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOW Operating profit 3,716 3,238 10,010 Depreciation charge and amortisation of goodwill 1,356 1,306 2,619 Profit on tangible fixed assets (63) (137) (241) (Increase) in stocks (22,198) (15,850) (13,131) (Increase) decrease in debtors (4,398) 6,847 15,312 (Decrease) in creditors and provisions (1,480) (6,298) (8,214) ------ ------ ------ Net cash (outflow) inflow from operating activities (23,067) (10,894) 6,355 ------ ------ ------ ANALYSIS OF NET FUNDS Cash at bank and in hand 854 1,256 8,401 Bank overdraft (17,144) - - Bank loan (5,000) (5,393) - Hire purchase and finance leases due after one year (1,194) - - Hire purchase and finance leases due within one year (605) - - ------ ------ ------ Net funds at 30th June 1999 (23,089) (4,137) 8,401 ------ ------ ------ NOTES 1. The 1998 year-end results are an abridged version of the unqualified audited accounts filed with the Registrar of Companies. The financial information set out above does not comprise statutory accounts within the meaning of Section 240 Companies Act 1985. 2. Earnings per ordinary share are calculated on the weighted average number of shares in issue. 3. The interim dividend amounting to £697,118 (1998 £656,510) will be paid on 18th November 1999 to shareholders whose names are on the register at the close of business on 22nd October 1999. 4. At the Board meeting on 8th October 1999 the Directors formally approved the issue of these statements which have not been reviewed by the auditors. 5. The interim financial information has been prepared using accounting policies consistent with those adopted by the Group in its accounts for the year ended 31st December 1998. 6. Property valuations have been brought forward without amendment from the previous annual accounts. 7. On 4th June 1999 the Group acquired Quicklift (UK) Limited for a total maximum consideration of £3,180,000 including deferred consideration of £250,000 which may be payable in respect of each of the two years ending 4th June 2001, providing Quicklift meets prescribed pre-tax profit targets in each of those years. The provisional capitalised goodwill on the acquisition, based on the completion balance sheet yet to be finalised, is £1,517,000 and this will be amortised in the profit and loss account over its estimated economic life. CHANGE OF NAME On 1st June 1999 the name of the Company was changed from Henry Boot & Sons PLC to Henry Boot PLC consequent upon the special resolution passed at the AGM of the Company held on 28th May 1999. YEAR 2000 The Group's programmes to identify and mitigate risks associated with the potential year 2000 problems have been largely completed and at this stage no material costs have been incurred. The Board will continue to monitor progress both prior to, and following, the millennium date change.

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