RNS Number:0941Q
Boot(Henry) PLC
24 September 2003
HENRY BOOT PLC
INTERIM RESULTS
Henry Boot PLC, the construction and property group, announces its Interim
Results for the half-year ended 30th June 2003.
HIGHLIGHTS
PRE-TAX PROFIT #25.9M* - UP 408%
PRE-TAX PROFIT #10.1M** - UP 98%
EARNINGS PER ORDINARY SHARE 90.7p* - UP 526%
EARNINGS PER ORDINARY SHARE 28.4p** - UP 96%
DIVIDEND PER ORDINARY SHARE 4.0p - UP 11%
NET ASSETS EMPLOYED #115.9M - UP 23%
NET ASSET VALUE PER ORDINARY SHARE 444p - UP 23%
* Inclusive of sale of discontinued operations
** Exclusive of sale of discontinued operations
Enquiries: Jamie Boot, Group Managing Director - Tel: 0114 255 5444
CHAIRMAN'S STATEMENT
I am delighted to report that the first half of 2003 has delivered a record
profit before tax of #25.9m (2002 #5.1m). This substantial increase of #20.8m
is most unlikely to be achieved again in the near future and needs to be viewed
in the context of events in the first six months of this year.
Following the successful disposal of its Specialist Construction activity in
2002, your company went on to sell both the Housebuilding and the Scottish
Construction activities in April of this year. Details of the former sale were
fully communicated to shareholders in the Circular dated 1st April 2003 and
approved at the subsequent EGM, whilst the latter sale warranted no formal
announcement due to the small size of the transaction and the negligible impact
on the group's financial position.
These two sales contributed, net of all costs, #15.8m of pre-tax profit.
Furthermore, as noted in the Circular, the sale of the Housebuilding company
crystallised additional profit of some #5.7m within Hallam Land Management
Limited, resulting in a group operating profit of #10.3m (2002 #5.4m) for the
period. Profit for the Housebuilding operation up to the point of sale was
approximately #1.1m (to the half year 2002 #3.8m). However, with no further
contribution from this activity and due to the deferred nature of the
consideration receivable, reinvestment of the proceeds in our Property
Development and Land Trading businesses will take a little longer to show a
comparable return.
A further transaction, not reflected in the figures presented, took place in
August with the disposal of the group's Training company to a management
buy-out. This sale was also small in size and had minimal effect on the group's
financial position.
The programme to reduce risk and exit non-core activities is now complete,
allowing reinvestment in Property Development and Land Trading. Net assets
increased by 23% to #116m, marking a significant milestone in the company's
history. As anticipated, for the reasons referred to above, turnover was lower
at #61.4m (2002 #92.5m).
Property Development
The period under review saw the major disposal of an edge of town retail scheme
at Hailsham, and a number of smaller completions on our ongoing schemes at
Wentworth Park, Sheffield; Priory Park, Hull and Whitehills Park, Blackpool.
Substantial further progress was made with our retail schemes in Ayr, Blackburn,
Beeston, South Shields, Walthamstow and Bromley. In addition, Henry Boot
Developments Limited was chosen by Derbyshire County Council as preferred bidder
for the development of a business park on the 230 acre employment growth zone on
the former Markham Colliery site between M1 junctions 29 and 30.
Overall, the portfolio of schemes that we currently have underway embraces
offices, warehousing/industrial, retail and leisure. This ensures that we are
not reliant upon any one particular sector and, at the same time, enables us to
take advantage of the relative strengths of occupier and investor demand.
Land Management
Hallam Land Management Limited currently has interests in excess of 5,500 acres,
either through direct ownership, options or agency agreements.
In addition to the profit crystallising on the sale of Henry Boot Homes Limited,
further land sales at Lutterworth, Blackpool and Sheffield also contributed to
an exceptional half-year performance. It is unlikely, however, that this will
be improved upon during the second six months as the accelerated realisation of
profits referred to above would otherwise have been earned throughout the year
as external house plot sales through Henry Boot Homes Limited.
Despite signs of some weakening in house prices in certain parts of the country,
notably London, housing land prices generally appear to be holding firm.
Employment sites are being taken up to relocate businesses and this is releasing
further sites for the housing market. Retail and leisure interests show some
evidence of softening and concerns remain regarding the planning system
generally, with the likelihood of Royal Assent to the Planning and Compulsory
Purchase Bill being delayed until the summer of 2004. Revisions are also
anticipated in respect of Circular 6/98 Affordable Housing and PPG3.
Construction
Continuing on from the improved results achieved in the previous year, Henry
Boot Construction (UK) Limited secured a satisfactory volume of work for the
first half of 2003. In addition to winning its share of the tender
opportunities available, a significant partnering agreement was made with Weaver
Vale Housing Trust for residential refurbishment in Cheshire.
Other partnering schemes are currently being pursued in selected sectors, and
new traditional contracts recently started include a visitor and business centre
for North Lincolnshire Council and an in-patient facility for Doncaster & South
Humber Healthcare NHS Trust. A favourable out-turn to the year is expected.
Plant Hire
Banner Plant Limited continued to expand its tool hire operation in pursuit of
the revised strategy adopted last year and, with utilisation levels and turnover
exceeding expectations, the overall trading position further improved.
Accommodation hire remains strong and achieved an excellent start to the year.
Access equipment hire still struggled against the background of excess capacity
within the industry, but this was more than compensated for by focussing on the
new business strategy. The company also benefited from a tighter credit control
system introduced to reduce the level of bad debts. A good year-end result is
expected.
Earnings, Dividend, Outlook
Earnings per ordinary share, excluding profit on the sale of discontinued
operations, have climbed sharply from 14.5p to 28.4p and are explained by the
comments above. The Balance Sheet remains strong, with the net asset value per
share standing at 444p and net gearing levels conspicuously low at approximately
2%.
Our markets are holding up well, but it is likely that due to the size and
incidence of ongoing property and land sales, the timing of which is not always
within your Directors' control, the future profitability of the group will be
more volatile than hitherto experienced, and consequently less predictable. The
Board therefore considers that fuller particulars of certain schemes or
prospective transactions may be warranted in the Annual Report, and hopes to
clearly communicate its confidence in the immediate financial prospects through
a progressive dividend policy. Accordingly, whilst the operating profit for
this full year (excluding profit on the sale of discontinued businesses) may not
reach the same level as last year, the overall outlook for the business remains
buoyant and an 11% increase in the interim dividend is proposed, which at 4.0p
compares with 3.6p for the equivalent period last year.
John S Reis
Chairman
24th September 2003
THE UNAUDITED RESULTS OF THE GROUP INCLUDE:
Half year Year
Half year ended ended
ended 30th June 31st December
30th June 2002 2002
2003 as restated as restated
#'000 #'000 #'000
Turnover - continuing operations
Group and share of associates 49,680 36,271 90,334
Less: share of associates 1,501 1,471 3,416
-------- -------- --------
48,179 34,800 86,918
Discontinued operations 13,221 57,662 130,409
-------- -------- --------
Group turnover 61,400 92,462 217,327
-------- -------- --------
Operating profit:
Continuing operations 8,345 1,077 4,081
Discontinued operations 1,114 3,589 9,822
-------- -------- --------
9,459 4,666 13,903
Share of associates' operating profits 867 700 1,445
-------- -------- --------
Group operating profit 10,326 5,366 15,348
Profit on sale of discontinued operations 15,783 - 2,039
Interest (85) (94) 56
Interest - share of associates (147) (152) (303)
-------- -------- --------
Profit on ordinary activities before tax 25,877 5,120 17,140
Tax on profit on ordinary activities (2,903) (1,457) (4,256)
-------- -------- --------
Profit for the period 22,974 3,663 12,884
-------- -------- --------
Dealt with as follows:
Dividends:
Cumulative preference shares (non-equity) 11 11 21
Interim of 4.0p (2002 3.6p) 1,024 915 3,395
Profit retained 21,939 2,737 9,468
-------- -------- --------
22,974 3,663 12,884
-------- -------- --------
Basic earnings per ordinary share 90.7p 14.5p 51.0p
-------- -------- --------
Diluted earnings per ordinary share 88.6p 14.1p 49.7p
-------- -------- --------
Basic earnings per ordinary share
excluding profit on sale of
discontinued operations 28.4p - 43.0p
-------- -------- --------
SUMMARISED GROUP BALANCE SHEET AT 30TH JUNE 2003
30th June 31st December 30th June
2003 2002 2002
Unaudited Audited Unaudited
#'000 #'000 #'000
Fixed assets
Tangible assets 31,734 33,003 31,361
Investments 2,404 2,286 2,463
-------- -------- --------
34,138 35,289 33,824
-------- -------- --------
Current assets
Stocks 75,028 99,473 106,883
Debtors 53,690 17,883 14,178
Cash at bank and in hand 9,653 14,030 7,364
Creditors: amounts falling due
within one year (45,227) (59,438) (62,997)
-------- -------- --------
Net current assets 93,144 71,948 65,428
Total assets less current liabilities 127,282 107,237 99,252
Creditors: amounts falling due after
more than one year (10,897) (11,442) (12,055)
Provisions for liabilities and charges (506) (1,898) (2,527)
-------- -------- --------
115,879 93,897 84,670
-------- -------- --------
Capital and reserves
Called up share capital 2,998 2,989 2,989
Capital redemption reserve fund 271 271 271
Share premium account 2,389 2,158 2,159
Property revaluation reserve 13,936 14,136 11,810
Profit and loss account 95,590 73,648 66,915
Other reserves 695 695 526
-------- -------- --------
115,879 93,897 84,670
-------- -------- --------
Being:
Non-equity shareholders' funds 400 400 400
Equity shareholders' funds 115,479 93,497 84,270
-------- -------- --------
115,879 93,897 84,670
-------- -------- --------
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Half year Half year Year
ended ended ended
30th June 30th June 31st December
2003 2002 2002
Unaudited Unaudited Audited
#'000 #'000 #'000
Profit for the financial period 22,974 3,663 12,884
Unrealised surplus on property revaluation - - 2,471
Elimination of revaluation surplus (197) (196) (339)
-------- -------- --------
Total recognised gains and losses for
the period 22,777 3,467 15,016
-------- -------- --------
SUMMARISED GROUP CASH FLOW STATEMENT
Net cash inflow (outflow) from
operating activities 3,523 (6,840) 12,347
Dividends received from associates 309 231 695
Returns on investment and servicing
of finance (96) (268) (34)
Taxation (2,900) (1,405) (3,809)
Capital expenditure and financial
investment (1,165) (1,757) (3,678)
Acquisitions and disposals (1,246) - (6,335)
Equity dividends paid (2,488) (2,221) (3,130)
-------- -------- --------
Cash outflow before use of
liquid resources and financing (4,063) (12,260) (3,944)
Financing (355) (108) (679)
-------- -------- --------
Decrease in cash (4,418) (12,368) (4,623)
-------- -------- --------
NOTES TO GROUP CASH FLOW STATEMENT
Half year Half year Year
ended ended ended
30th June 30th June 31st December
2003 2002 2002
Unaudited Unaudited Audited
#'000 #'000 #'000
Reconciliation of net cash flow to
movement in net funds
Decrease in cash (4,418) (12,368) (4,623)
Cash outflow from decrease in
debt and lease financing 595 590 1,160
New finance leases - - -
-------- -------- --------
Change in net funds (3,823) (11,778) (3,463)
Net funds at 31st December 2002 1,535 4,998 4,998
-------- -------- --------
Net (debt) funds at 30th June 2003 (2,288) (6,780) 1,535
-------- -------- --------
Reconciliation of operation profit
to operating cash flow
Operating profit 9,459 4,666 13,903
Depreciation and amortisation 1,998 2,104 4,224
Profit on sale of tangible fixed assets (164) (100) (208)
(Increase) in stocks (13,282) (12,458) (5,048)
(Increase) decrease in debtors (10,098) 930 (8,462)
Increase (decrease) in creditors
and provisions 15,610 (1,982) 7,938
-------- -------- --------
Net cash inflow (outflow) from
operating activities 3,523 (6,840) 12,347
-------- -------- --------
Analysis of net debt
At Cash At
31.12.02 Flows 30.06.03
#'000 #'000 #'000
Cash at bank 14,030 (4,377) 9,653
Creditors (bank overdraft) - (41) (41)
Bank loans (10,000) - (10,000)
Finance leases (2,495) 595 (1,900)
-------- -------- --------
1,535 (3,823) (2,288)
-------- -------- --------
NOTES
1. The 2002 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. The unaudited results of the group
for the half year ended 30th June 2002 and year ended 31st December 2002 have
been restated to reflect the results of activities discontinued during 2002 and
in the half year 2003.
2. Earnings per ordinary share are calculated on the weighted average number
of shares in issue.
3. The interim dividend amounting to #1,024,000 (2002 #915,240) will be paid
on 30th October 2003 to shareholders whose names are on the register at the
close of business on 3rd October 2003.
4. At the Board meeting on 23rd September 2003 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 2002.
6. Property valuations have been brought forward without amendment from the
previous annual accounts.
EDITOR'S NOTES
Henry Boot is currently involved in a number of major property development
schemes throughout the country, including:
#30 MILLION NOVA SCOTIA RETAIL PARK, BLACKBURN
Henry Boot Developments will shortly be starting demolition work in preparing
the site of the new 12 acre Nova Scotia Retail Park on the edge of Blackburn
town centre. 150,000 sq.ft of space has already been pre-let for a B&Q
Warehouse and garden centre in the first phase of development, the construction
of which is due to commence in October.
#80 MILLION STEVENAGE TOWN CENTRE REGENERATION SCHEME
Henry Boot Developments has been included by Stevenage Borough Council in a
shortlist of four to compete for the regeneration of the Hertfordshire town.
The scheme will include more than 200,000 sq.ft of additional retail space,
leisure, restaurants, affordable homes, improved public space, enhanced
community facilities and a new public transport interchange.
#18 MILLION REDEVELOPMENT OF THE MALL, BROMLEY
Work on the redevelopment of The Mall in Bromley, which was acquired by Henry
Boot Developments last year, is to start in the autumn and will transform the
outdated precinct into a bright, contemporary high street shopping mall.
The scheme will provide 100,000 sq.ft of retail and health & fitness
accommodation, and include Argos remaining as a key anchor tenant. An existing
255 space car park is also to be refurbished. Phase one of the redevelopment is
due to open in summer 2004 and phase two by the end of 2004/early 2005.
UNIQUE #50 MILLION 'SHOPPING STREET' DEVELOPMENT IN AYR TOWN CENTRE
Planning consent has been granted for a 200,000 sq.ft retail development in Kyle
Street in the centre of Ayr. It has been designed on a 500 ft. long
pedestrianised 'shopping street' concept, the first of its kind in the UK, with
495 basement car spaces. Debenhams have taken the 80,000 sq.ft anchor tenancy
and other national retailers are currently vying for lead positions within the
scheme. The first units are expected to be ready for occupation in spring 2006.
NEW 200 ACRE MARKHAM VALE BUSINESS PARK, M1, DERBYSHIRE
Henry Boot Developments has been chosen by Derbyshire County Council as
preferred bidder for the development of a business park on the 200-acre
employment growth zone of the former Markham Colliery, which will involve the
introduction of a new junction 29a on the M1. The scheme will offer a range of
plots from 1/2 to 50 acres in size, and be able to accommodate units of over
1,000,000 sq.ft. Although the land will be available immediately, the new
junction will not be ready until autumn, 2005.
#30 MILLION CITY CENTRE REGENERATION, PLYMOUTH
Plymouth City Council has selected Henry Boot Developments as its preferred
partner for the regeneration of the two acre Bretonside Bus Station site.
Proposals will see the site transformed into a mixed use scheme including a
large number of residential units, office accommodation, and retail and leisure
space. The scheme will also provide a new piazza and feature a footbridge
linking the city centre to the historic Barbican harbourside.
It is expected that the development will be completed in 2006 and negotiations
are already taking place with a number of important potential occupiers.
#20 MILLION HIGH STREET REDEVELOPMENT IN WALTHAMSTOW
Property in Walthamstow High Street is to be redeveloped to provide 160,000 sq.
ft of accommodation, including 90,000 sq.ft for retail and leisure purposes.
Also within the scheme is 20,000 sq.ft of residential accommodation and a new
50,000 sq.ft library. Work is to start on site by the end of the year with the
retail first phase available in 12 months.
#25 MILLION RETAIL & LEISURE SCHEME, WORKSOP, NOTTS
Detailed planning applications have been submitted for a major 120,000 sq.ft
retail and leisure development close to Worksop town centre as part of a joint
venture between Henry Boot Developments and Bassetlaw District Council.
Contracts have already been exchanged with Tesco to relocate its existing
supermarket in the town to new 70,000 sq.ft premises on the site.
#18 MILLION TOWN CENTRE REDEVELOPMENT, SOUTH SHIELDS
Work on a 40,000 sq.ft retail redevelopment scheme in Waterloo Square, South
Shields, is due to start on site within the next two months. The scheme has
been designed to provide flexible and efficient high street accommodation
ranging from 2,500 sq.ft to 10,000 sq.ft. Retailer interest is strong, and
negotiations are already at the legal stage with one party for a 10,000 sq.ft
unit. The construction of a 60,000 sq.ft supermarket is expected to start in
the new year.
The development is part of a wider development partnership between Henry Boot
Developments and South Tyneside MBC.
CREATION OF 18 ACRE MEIR PARK, STOKE-ON-TRENT
Following the development of a 130,000 sq.ft B&Q Warehouse on the site of the
former Staffordshire Tableware factory at Meir, Henry Boot Developments has
completed the demolition of remaining buildings to provide an excellent 18-acre
development site. Its ideal position on the A50 link road between the M6 and
the M1 makes it suitable for retail, leisure, industrial, office and other uses,
subject to planning.
FURTHER #2.5 MILLION EXPANSION AT PRIORY PARK, HULL
Having purchased the remaining 40 acres of the highly successful Priory Park
site from former joint venture partner Rail Property, planning has been
submitted for a further #2.5m phase of infrastructure works. Also at present,
two 10,000 sq.ft business units are being constructed and will be available
either leasehold or freehold in spring 2004. Planning permission is also being
sought for 17,000 sq.ft of speculative office units as part of a joint venture
with Allenby Commercial Limited.
Contracts have been exchanged with De Vere Hotels for the sale of 4.3 acres of
land for a 130 bed hotel with leisure facilities and conference rooms. On-site
works are expected to start in January 2004, subject to planning consent.
Additional land has been sold to VW Layerthorpe for the construction of a 13,000
sq.ft bodyshop repair facility.
PRE-LET TO HOMEBASE INCLUDED ON MAJOR #5 MILLION MIXED USE DEVELOPMENT, RIPON
Henry Boot Developments is currently progressing the development of 11 acres of
mixed use development land adjacent to Ripon bypass. A planning application for
37,500 sq. ft of retail and seven acres of B1, B2 and B8 uses has been
submitted, and consent is expected in autumn 2003. 22,000 sq.ft of retail
accommodation has already been pre-let to Homebase, and keen interest is being
shown in the remaining space by other well known companies.
#10 MILLION REDEVELOPMENT OF THE SQUARE SHOPPING CENTRE, BEESTON, NOTTS
Following its recent acquisition of The Square Shopping Centre in Beeston, Henry
Boot Developments has entered into negotiations with Broxtowe Borough Council to
redevelop surrounding land to form a new retail centre of some 50,000 sq. ft.
The existing 80,000 sq. ft centre will be extensively refurbished to complement
the new development.
NEW HARTLEPOOL MARINA RETAIL SCHEME
Henry Boot Developments is promoting a prime four-acre retail development in the
bustling Hartlepool Marina area which already hosts such major retail names as
Asda, Currys, JJB Sports, Matalan and Staples. A detailed planning application
for 50,000 sq.ft of retail accommodation has been submitted, and discussions are
taking place with operators.
FURTHER EXPANSION AT WENTWORTH PARK, M1 JUNCTION 36, SOUTH YORKSHIRE
The 200 acre Wentworth Park continues to be one of the leading business parks in
South Yorkshire. Further construction work is due to commence in the coming
months on a new 110,000 sq.ft cold storage warehouse, offices and retail unit
for a substantial local company. There are now only 3.5 acres of land available
for development.
This information is provided by RNS
The company news service from the London Stock Exchange
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