More than two years after joining Henry Boot as chief executive, Tim Roberts is still managing to find some firsts – until today, pandemic restrictions meant he had never had the opportunity to present the group’s financial results to investors and analysts in person. “I think people enjoyed coming,” he says with a laugh. “Not because of what [finance director Darren Littlewood] and I have got to say – it’s just that people need to get out more.”
That is not to say the results didn’t add to the atmosphere. Henry Boot’s annual profit for 2021 doubled year-on-year to £35.1m, with revenue up by almost 4% at £230.6m. For Roberts, the performance signals a clear recovery in its markets of land promotion, construction and development.
Supply to sites
Now, the company is adapting to market challenges as it eyes further growth. Roberts singled out several headwinds faced by the company and wider industry: “stubbornly high” build cost inflation, supply restrictions and a “competitive” employment market.
What levers can a business of Henry Boot’s structure pull in response? “You’ve got to be on it,” Roberts tells EG. “The development business and the construction business and the housebuilding business, they’re having meetings every single week, and all those meetings are about is making sure that we get enough supply to the sites.”
Macroeconomic concerns are mounting. “Last year, on the housing side, we were seeing average price increases of cost at 6%, and this year it will be higher than that,” Roberts says. “We’re also seeing supply restrictions – brick, steel, concrete, timber can be hard to get. The one thing Henry Boot can do, because we can’t control any of those markets, is be really thoughtful about who we get supplies from, how far in advance we order them, and how we manage that process.”
The entities within the group help here, the chief executive adds. “We have an advantage over some because we are not just a developer, we’re also a contractor, so the development business will talk with the contracting business, and the contracting business is very close to some of these suppliers. If we do see that markets are getting more restricted, we are doing our best to order early.”
Fiscal framework
Where the company can, it is passing on – or at least sharing – the risk. “Of the £277m of development that we are doing, on 89% of that we have already placed fixed-price contracts with a contractor outside of Henry Boot,” Roberts says. “And on the contracting side, you are beginning to see inflation clauses in contracts where the client shares some of the risk, or takes the risk on costs that you can’t fix.”
Speaking with EG in the hours before chancellor Rishi Sunak delivers his Spring Statement, Roberts says companies like his need “a sensible, growing economy in a good fiscal framework so that we can get on with our day-to-day business”.
“I do hope the government sticks with the levelling up agenda, because I think that’s important for the country. And if they carry out some of their initiatives that they’re suggesting, that would be good for development outside of London. Henry Boot is a national business, but still a lot of our work is in the Midlands and the North.”
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