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Henry Boot's 2025 profits meet expectations, but 2026 set to fall short as net debt rises and Stonebridge Homes underperforms, despite Hallam Land's record plot sales.
This article covers information on Boot(Henry) PLC.
LON:BOOTHenry Boot has guided that 2025 profit before tax will be broadly in line with market expectations, but flagged a materially weaker 2026. The Board now expects 2026 profit before tax to be significantly below the current market consensus of £33.6 million.
Under the surface, the operational engine that drives long term value – land promotion and planning – had a strong year. Hallam Land delivered record plot sales and ramped up planning submissions. The development arm kept its pipeline moving, and the group simplified through the sale of Henry Boot Construction. However, net debt has risen and Stonebridge Homes under-delivered, while Road Link’s profitable PFI contract ends in March 2026. That cocktail explains the cautious outlook.
Despite subdued transaction volumes and flat house and land prices in 2025, Henry Boot says profit before tax will be broadly in line with market expectations. The result includes initial profit recognition from the disposal of Henry Boot Construction, which will be treated as a discontinued operation.
Industrial property remains the bright spot, with sector rental growth of 4.8% over the year. Across the market, deals took longer to get done, particularly in the run up to November’s Budget. Against that backdrop, “resilient” feels fair.
Hallam Land had a standout year. It sold a record 3,957 residential plots, beating its full year financial target. Planning momentum was strong too: 4,159 plots secured consent and 11,083 plots were submitted for planning, with a similar level of submissions expected over the next 12 months.
This matters because Hallam’s model is to create value through planning – plots are held at cost with no uplift until disposal. The current pace positions the group to hit its medium term target of 3,500 plot sales per year and potentially go beyond that as approvals come through.
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HBD completed schemes with a total gross development value (GDV) of £119 million in 2025 (our share: £33 million), down from our share of £188 million in 2024, reflecting a more cautious stance. About 32% of 2025 completions were pre-let or pre-sold, providing some income visibility. Within the Origin industrial and logistics joint venture with Feldberg Capital, three schemes totalling 449,000 sq ft completed and are attracting occupier interest, with 35,000 sq ft already let. A further three schemes with a combined GDV of £56 million (our share: £14 million) were added to Origin in December.
The strategic pipeline is filling out. Henry Boot secured outline planning for Golden Valley, the £1 billion mixed-use campus in Cheltenham. The first phase – IDEA, the 160,000 sq ft National Cyber Innovation Centre with £98 million GDV – is expected to start in H2 2026, with terms agreed for around half the space. HBD was also appointed development partner for Duxford AvTech (£120 million GDV) and secured planning for 5.5 million sq ft of industrial and logistics at FREEPORT 36, Goole (phase one c.£130 million GDV). The investment portfolio again outperformed the CBRE UK Monthly Index.
Stonebridge Homes completed 185 homes in 2025, well below both 2024’s 270 and management’s expected 240-250. Trading conditions were softer, outlet openings were delayed by planning, and around 30 sales slipped into Q1 2026 due to utility connections and planning condition changes. The net private reservation rate was 0.37 per outlet per week (2024: 0.45), not helped by several sites nearing the end of their sales programmes and lacking a full product mix.
On the positive side, the land bank is being built for future growth. Stonebridge added 1,031 plots in the year, taking owned and controlled plots to 2,572 (31 December 2024: 1,726). As the recent majority owner, Henry Boot is tightening the reins – it has replaced the Managing Director, implemented cost savings, and is integrating Stonebridge into group processes.
Year-end net debt rose to c.£108 million from £62.7 million, driven by accelerated planning activity and Stonebridge’s land bank growth. Gearing has moved marginally above the preferred 10-20% range. The company still points to a strong balance sheet and disciplined investment approach, but investors will want to see gearing trend back inside the range as disposals complete.
Henry Boot completed the sale of Henry Boot Construction, a notable simplification that sharpens the focus on high quality land, prime development and premium homes. HBC performed in line with budget, has 100% of 2026 turnover secured, and is well placed to start repaying the vendor loan. Banner Plant and Road Link traded in line with expectations, though Road Link has now entered the final three months of its PFI contract, which expires in March 2026.
Management remains positive on the fundamentals of its three markets as inflation and interest rates ease. Hallam’s consented land portfolio is growing, HBD’s pipeline is strong but selective, and Stonebridge’s enlarged land bank should support more completions over the medium term.
In the near term, there is a lag. The group starts 2026 with a lower forward sales position, transaction activity remains subdued, and the expiry of Road Link’s contract will hit results. As a result, the Board expects 2026 profit before tax to be significantly below consensus. Expect more colour at full year results on 24 March 2026.
| 2025 profit before tax | Broadly in line with market consensus of £29.7 million |
| 2026 profit before tax | Expected significantly below market consensus of £33.6 million |
| Net debt at 31 Dec 2025 | c.£108 million (31 Dec 2024: £62.7 million) |
| Gearing | Marginally above preferred 10-20% range |
| Hallam Land plots sold (2025) | 3,957 (record) |
| Planning consents secured (2025) | 4,159 plots |
| Plots submitted for planning (2025) | 11,083; similar expected over next 12 months |
| HBD completions (2025) | £119 million GDV (our share: £33 million), 32% pre |
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