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Henry Boot reduces debt but warns of longer lead times

Henry Boot reduced debt to £26m in the first half of 2018 from £62.2m a year earlier but has warned of longer lead times for construction contracts.

In its half-year results to 30 June 2018, the company reported an increase in the size of contracts it was bidding for, but noted a “continuing trend of longer lead times from initial tender submission through to award and then activity on site”.

Henry Boot posted revenue of £196.2m in the first six months, up marginally from £195.4m in the same period of 2017, while pre-tax profit rose almost 16 per cent to £26.2m.

It increased interim dividends to 3.2p compared with 2.8p the year before, and had gearing of 9 per cent compared with 26 per cent in H1 2017.

The company warned on Brexit uncertainty, saying that, while there was no evidence of investment decisions being deferred, it was seeing “more caution and higher levels of due diligence” before projects progress.

Henry Boot reported a “slight reduction” in housebuilding as it continued to ”sell to build rather than build to sell”.

Property investment and development accounted for £112m of the group’s revenue in H1 and £8.6m of pre-tax profit.

Construction was worth £50m (and £4.1m profit) and land development a further £36m (£15.5m profit).

The construction arm has booked 55 per cent of its anticipated work for 2019, the group said.

Its largest ongoing contract is phase one of the £35m Glass Works Barnsley town centre redevelopment for Barnsley Metropolitan Borough Council (pictured), where it is currently pricing further works.

Chief executive John Sutcliffe said: “We are very pleased to report another impressive performance in the first half of 2018, achieving improved profit, earnings per share, net asset value and dividends, while significantly reducing debt compared with a year ago.”

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