Henry Boot’s construction arm saw turnover and profit fall last year as its biggest projects were delayed by materials shortages.
Unaudited results for the year to 31 December 2023 show that the listed developer and contractor’s construction arm saw revenue decrease by more than a quarter to £99.5m from £128.6m.
In the same period, construction operating profit nearly halved to £6.5m from £12.1m.
The company blamed the “challenging year” on unspecified materials shortages at its two biggest projects – the £40m Kangaroo Works build-to-rent project and £42m Heart of the City mixed-use scheme, both in Sheffield.
Construction materials shortages eased throughout 2023, with the Construction Leadership Council’s Material Supply Chain Group recently saying there are now “good levels of product availability across the board”.
Henry Boot Construction’s order book was below target at the start of 2024, the results state, with only 49 per cent of it secured, compared with a target of 65 per cent.
“We remain determined not to take on work where either the terms or pricing are commercially unattractive,” the firm said.
Overall revenue grew to £359.4m from £341.4m in 2022, driven by land disposals, property development and housing completions.
Its overall margin slipped as pre-tax profit was down to £37.3m, from £45.6m the year before.
Henry Boot chief executive Tim Roberts said the company’s focus on land, commercial property development and housebuilding in prime locations meant it had performed “relatively well” given the wider economic picture.
“While constraining our ability to bring forward developments in one respect, the government’s consistent failure to make much-needed reforms to an increasingly dysfunctional planning system does play to the strengths of our land promotion business while helping underpin demand from national housebuilders, who are still actively acquiring prime strategic sites to shore up their future pipelines,” he said.
Roberts added that the company overall expected a “lag in performance” in the year ahead.
“However, the outlook for both inflation and interest rates is improving and it’s beginning to feel as though the UK economy has turned a corner, with recent reductions in mortgage rates also pointing towards a hopefully brighter future,” he said.
