25th Aug 2016 06:56
LONDON (Alliance News) - Henry Boot PLC on Thursday said its pretax profit rose in its first half, noting trading activity and deals in progress were proceeding as expected in spite of the UK's vote to leave the European Union.
The land and property investor and construction company said pretax profit rose 49% to GBP20.8 million for the six months ended June 30 from GBP14.0 million a year earlier, resulting from higher land sales and increased property development activity.
Revenue for the six months rose to GBP107.3 million from GBP79.2 million a year earlier, despite revenue from its construction division coming in lower than expected due to delays. Henry Boot said this was expected to be recovered during the second half.
Henry Boot pointed to the GBP1.1 million decrease in the fair value of its properties compared to the gain of GBP1.1 million a year posted a year earlier. Henry Boot said this was due to a rise in stamp duty land tax and from a development property site which was impacted by the closure of a neighbouring tenant.
The decrease in the fair value would have been greater were it not for a valuation gain on a property which had a fixed value purchase clause which has now expired, Henry Boot said.
Henry Boot declared an 8.7% rise in interim dividend to 2.50 pence per share from 2.3p per share a year eaerlier.
The company said while it might be "a little early to judge how the UK property market will react over the longer term" to the Brexit vote, trading activity and deals are proceeding as envisaged and the future pipeline is coming to fruition as expected.
"The completion of our commercial development pipeline in progress, largely already pre-let and/or pre-sold, is likely to see the group be cash generative over the next two years," Henry Boot said.
"Should the post referendum world prove to be more turbulent than we are experiencing at the moment, these internally generated funds should provide the resources to acquire competitively priced opportunities for the next cyclical growth phase," the company added. Henry Boot said, as such, its expectations for the full year remain unchanged.
By Hannah Boland; [email protected]; @Hannaheboland
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