Tim Roberts took the helm at developer and construction company Henry Boot just a little over a year ago – but that time now feels like another world. Nonetheless, Roberts isn’t about to allow the Covid-19 crisis to dampen ambitions. As the chief executive steers the business into the next stage of a post-pandemic market, he and the team have vowed to be “more explicit” than ever about their drive for growth.
This morning’s annual results (23 March) included some tough reading for shareholders. Revenue of £222.4m was down by more than 40% on 2019, with pre-tax profit plunging by two-thirds to £17.1m. But the balance sheet is “resilient”, Roberts tells EG. “A lot of real estate businesses have been writing off big amounts on balance sheets as stranded assets,” he adds. “We have none of those, and we’ve got a strong balance sheet with cash of £38m on it and no gearing. That puts us in a great position.”
A great position for growth across the industrial, residential and urban development spaces, Roberts hopes, as he maps out ambitious medium-term targets for all parts of the company: “We’ve said that we want to grow capital employed by about £150m. We will be just over a £500m business if we do that.”
Great returns
In the land promotion business, Hallam Land Management, that means lifting plots sold per annum to around 3,500 from an average of around 2,500 during the past five years. The division is “a Rolls-Royce business” that has delivered “great returns”, Roberts says. So far in 2021 it has pre-sold some 2,000 plots, roughly the same as it sold in the entirety of last year.
Henry Boot Developments aims to “materially increase the pace” of activity through a mixture of pre-lets, pre-funding deals, joint ventures and speculative builds, Roberts says. “That would mean that we would then be completing around £200m of development per annum – a big developer,” he adds.
The investment portfolio, halved through the disposal of retail assets before Roberts’ arrival, will now be rebuilt from £80m today to around £150m, with a focus on income-producing buildings that also have scope for redevelopment or refurbishment. “That will give us steady, reliable, repeatable income – and all businesses need some of that,” Roberts says.
Housebuilding is expected to pick up, with an aim of taking Stonebridge Homes’ output up to 600 units a year. “If we’re doing that, then we’ll not only be selling houses in Yorkshire. We’ll also be selling them in the North East region and we’ll also be moving into the Midlands,” Roberts says. “We think there’s good demand for that [prime] type of property.”
Truth serum
And then there’s construction, which posted a profit ahead of expectations, including a marked recovery during the second half of the year. “I think if you’d given the truth serum to either me or my finance director, Darren Littlewood, in the spring and asked would we have made money out of construction – the answer would have been ‘no’,” Roberts admits.
Roberts now wants the construction division to play a role in the government’s plans to channel more investment into the UK regions. The company has a track record of working with the public sector, he adds – “they like dealing with us and we like dealing with them” – and there should now be ample opportunity to continue that.
“The government’s ‘build back better’ and levelling-up agenda will be good for the country,” he says. “I was brought up in Yorkshire and then spent 30 years of my life making my living down in London. Going back up to Yorkshire – my family are still there, I’ve bought a home up there – you are aware that there are inequalities of investment.
“The government can do its best, and I know that you can’t fix these things in the short term, but if it’s got a plan for the medium term, that would be good for the country, good for society, and I think it would be good for Henry Boot.”
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