Henry Boot’s construction business has recorded an almost 50 per cent increase in its operating profits.
In its half-year results for the year to 30 June 2022, the construction arm of the group reported an operating profit of £6.3m, compared with £4.3m for the previous comparable period. It also marked a significant increase from its 2020 interim results, when operating profits were at £0.8m.
The performance of the division, whose trading was labelled “strong”, remains “in line with expectations”, and listed considerable ongoing projects, including a £39.m Build to Rent (BtR) residential scheme, Kangaroo Works, in Sheffield, which is set for completion next spring.
It added that “good progress” was being made on a £47m urban residential development in York. But the company admitted that work on a £42m urban development contract in Sheffield had hit a snag owing to “archaeology and supply issues”. The completion date for this project has now been pushed back by three months, the company said.
Another concern within its mid-term results related to the construction division’s order book, which is currently behind target. The company has a medium-term target of securing 65 per cent of the pipeline ahead of each year, but the segment has locked in just 52 per cent of its order book for 2023. This was compared with 80 per cent in its 2021 interim results.
It is targeting public sector work as a “key focus” for its 2023 construction order book, with the construction arm currently sitting on 11 frameworks.
The report highlighted that Henry Boot Construction has already secured a place on both the ProCure23 (P23) NHS Framework for projects up to £20m and the new regional YORbuild3 medium-value framework for projects between £4m and £10m.
Revenue for the construction segment at the contractor increased, rising by 22 per cent from £54.7m in 2021, to £66.5m this year.
According to the company, 96 per cent of this year’s construction order book has “fixed-price orders placed or contractual inflation clauses”.
Looking at the whole group, which also deals in property development and investment, the contractor’s CEO, Tim Roberts, praised one of its “best-ever first-half-years” as it saw its profits rise substantially.
Pre-tax profits grew by 68 per cent to £38.8m in the first half of 2022, up from £23.1m for the previous comparable period. Its revenue also saw an increase – growing from £129m to £144.4m.
Roberts said the company’s work around managing rising inflation was giving him optimism for the months ahead.
He said: “We have worked hard to do our best to adjust to supply restrictions, inflation and an increasingly complex planning system. This work, together with our committed team of people and the relatively high level of forward sales for 2023, see us well placed as we enter what seems yet another period of economic uncertainty.”