23rd Jan 2014 12:24
LONDON (Alliance News) - Property and construction company Henry Boot PLC Thursday said it expects pretax profit for the full year ended December 31, 2103 to be around 10% ahead of management expectations after concluding "certain land sales" earlier than expected.
The company which constructs homes and retail buildings across the UK said it had completed a number of deals in December rather an January as it benefited from an "appetite to get things done", Finance Director John Sutcliffe said in a telephone interview.
Despite completing these sales ahead of forecast, the firm said it was not "robbing Peter to pay Paul", Sutcliffe said, and remains comfortable with expectations for the year ending December 31, 2014.
"Things like our plant hire business and the recovery in the house building that have been beneficial for our business and we expect that to continue this year," Sutcliffe told Alliance News. "There are undoubtedly improvements in the construction market. We're not pulling trees but there is a definite improvement."
In a pre-close trading update ahead of its full-year results, the South Yorkshire firm said revenue for the year just ended was approximately GBP150 million with some GBP20 million related to one-off property sales. At the end of 2012, the group reported revenue of GBP103.1 million.
Sutcliffe also rebuffed concerns by some large housebuilders that competition for land is getting harder outside London and the South East.
"They [housebuilders] are not short of land," he said. "I think anyone who is saying they are short of land needs to sharpen their pencils. There is plenty of supply of new planning permissions on the market for the housebuilders to acquire. I don't think there is constraint."
Sutcliffe added: "The constraint for me would still be the level of demand of new housing and the level of funding and to that extend the government's Help to Buy scheme is definitely helping."
Although the firm expects to report a strong performance in March, Sutcliffe said there would not be a jump in dividends.
"We've stated of the past few years that our aspirations is to get back to at least two times dividend cover before we start making any sort of move forward," he said.
"I'm not saying we wont increase our dividend slightly this year - to the order of 5% is where I'd be coming from. But any significant increase in the dividend paid would only come forward as a result of higher levels of earnings per share which would take us over a two times dividend cover," he added.
Henry Boot said its balance sheet remains robust with gearing at the year end of around 20%, compared with 12% in 2012, although the firm said the figure has "reduced in January 2014 after deferred payments for land sales were received as due."
The firm also said its land management, property development and construction businesses have strong opportunity portfolios for 2014.
The group will publish its full-year results on March 27.
The stock was trading at 235.25 pence Thursday afternoon, up 5.25 pence or 2.3%.
By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews
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