Construction firm Henry Boot, whose development arm HBD is building projects such as the £250m Kampus mixed-use scheme in Manchester, reported a slight rise in pre-tax profits for the full year 2019.
Profit before tax rose to £49.1m from £48.6m the previous year, mainly due to strong performance by the group’s land promotion business Hallam Land, Henry Boot said in a stock exchange filing.
Hallam Land sold more than 3,400 plots on 22 UK sites in the year ended 31 December 2019 and increased its site portfolio to more than 14,800 acres.
Full-year revenues were down 4% to £379.7m, mainly due to the focus on completing a £333m event complex in Aberdeen, the filing said.
Net cash stood at £27m, against net debt of £18.4m for 2018, following the sale of £67.1m of primarily mixed-use retail-focused investments. “This means we have a strong cash-positive balance sheet to withstand the impacts of the Covid-19 pandemic we are all now experiencing,” the statement said.
The company is “strongly positioned” for the future, it added, with a potential development pipeline of £1.3bn, mainly in manufacturing and logistics as well as urban office and residential development.
“Currently, we are committed to deliver 763,000 sq ft of manufacturing and logistics accommodation and 717 residential units, all of which have either been pre-sold or pre-let,” the filing said.
The majority of pre-sold or pre-let residential units are within the Kampus scheme in Manchester city centre, which property and development arm HBD is co-developing with Capital & Centric, according to the filing. HBD saw pre-tax profit down to £13.4m from £15.9m in 2018, attributed to the market slowing impact of Covid-19.
Dean Thompson, director of HBD in Manchester, said: “This is another very positive set of results for the Henry Boot Group of companies, with a consistently strong performance from HBD.
“While our business is not immune to the effects of Covid-19, we benefit from a strong financial position and a secure financial base that means we’re positioned well for growth.
“In Manchester, we have continued to invest heavily in city centre projects, including Kampus, our Island scheme and the regeneration of Deansgate station, and we look forward to growing our development pipeline further in the coming months.”
HBD is also building The Silk Works, a redevelopment of Invicta House in Manchester, and last year acquired an 18-acre site in Preston to bring forward an industrial scheme.
Meanwhile, the group reported a solid performance for its contracting arm Henry Boot Construction, with revenue up 26% to £89.7m for the year, following the acquisition of Starfish Commercial in 2019.
Henry Boot chief executive Tim Roberts said: “There is no doubt that Covid-19 has caused significant economic and social disruption, and as such is materially affecting the group’s near-term trading.
“However, with no debt, cash in the bank, and our business cutting out unnecessary expenditure, coupled with reducing activity, we have a clear and effective plan to get through these uncertain times.”