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Henry Boot on course for 2011 profits boost

Contractor and developer predicts strong profits despite a 13.7 per cent fall in revenue.

Henry Boot remains on track to outperform market expectations when it posts its 2011 profits in March, it said in a short statement today.

Providing a pre-close trading update, the Sheffield-based firm said revenue is expected to reach £113 million. That would reflect a 13.7 per cent fall on last year, when Henry Boot’s turnover was £131m.

But it said this morning that it expects profit before tax to be “comfortably ahead of consensus market expectations”. Pre-tax profit was £18.9m last year, up from an £11.9m loss in 2009. At the half year in June 2011, the firm reported £9.1m of profits.

The firm - which has construction, development and property and Banner Plant divisions and has been trading for 125 years - sold off land and its Ayr shopping centre for £33.8 million last year.

It said today that its property valuation will be slightly below that of the June 2011 valuation -  reflecting weaker market experience and a review of certain site values.

It added:  “We are beginning to see profitable development opportunities emerging, and over 2012 and 2013 we will begin to invest in more development activity.”

The group said its balance sheet remains robust, with gearing at the year-end at around 2 per cent (2010: 6 per cent). The company also expects to renew its banking facilities for another three years next month.

Its share price climbed 3.7 per cent today to 133.25 pence.

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