Henry Boot Posts Robust Interim Growth with Profit Doubling and Dividend Increase

Revenue up 19% and profit before tax more than doubles

Henry Boot’s first half was solid and, importantly, sale-led. Group revenue rose 19% to £126.4m, while profit before tax increased to £7.8m from £3.7m. On an underlying basis, stripping out investment property revaluations, PBT was £6.5m versus £3.6m last year. Earnings per share climbed to 4.8p from 2.8p.

Management says 80% of budgeted 2025 sales are already completed, exchanged or reserved, with the balance under offer or in detailed talks. That, plus a second half weighting similar to last year, underpins confidence in full year delivery in line with market expectations of £30.0m PBT.

Key numbers you should know

Metric	H1 2025	H1 2024 / Dec 2024
Revenue	£126.4m	£106.0m
Profit before tax	£7.8m	£3.7m
Underlying PBT	£6.5m	£3.6m
ROCE (12‑month rolling)	9.1%	4.9%
Interim dividend	3.24p	3.08p
NAV per share (ex DB scheme)	304p	312p (Dec 2024)
NAV per share (IFRS)	307p	317p (Dec 2024)
Net debt	£88.1m	£62.7m (Dec 2024)
Gearing	21.4%	14.7% (Dec 2024)
Total land & property sales	£159.6m (share £99.3m)	£150.8m (share) in H1 24

Dividend lifted 5% to 3.24p – why that matters

The interim dividend rises 5% to 3.24p, payable on 24 October 2025 to holders on 3 October. For me, a dividend increase in this market is a clean vote of confidence. It signals that cash generation from disposals and the visibility on second half transactions are strong enough to support a progressive payout, even with higher investment into land and planning.

Hallam Land is doing the heavy lifting

Land promotion is the star of the show. Hallam Land sold 1,222 plots in H1, up from 843 last year, with another 410 exchanged and 1,959 under offer. Management expects to exceed 3,500 plot sales in 2025. The average gross profit per plot improved to £15,734, delivering an ungeared IRR of 22.5% per annum across disposals.

Crucially, planning momentum accelerated after changes to the National Planning Policy Framework. Applications for 4,844 plots were submitted year to date and planning has been secured on 2,782 plots. Plots with planning totalled 8,837 at 30 June, or 9,972 including post half year consents. The strategic land bank expanded to 107,173 plots.

Why it matters

• Hallam Land’s assets are held at cost, so planning wins build a store of latent value that is only recognised on sale. That helps explain robust margins when transactions close.
• The flip side is execution risk. Detailed consents remain slow due to under resourced local authorities, which can push timings to the right.

HBD development: selective now, optionality for the upturn

HBD posted a smaller operating profit of £0.8m as the committed programme has been kept tight. The focus has been on quality industrial and logistics schemes and recycling capital from the investment portfolio.

• Committed programme GDV £128m, of which 35-40% is pre-sold or pre-let.
• Origin JV with Feldberg Capital is bedding in well. Seeded with c.£100m GDV and set to add a further £56m GDV in H2 2025 via transfers at Walsall, Markham Vale and Preston.
• Golden Valley, Cheltenham secured outline planning for c.1m sq ft of commercial and 576 homes. Phase one (£98m GDV) expected to commit in H1 2026.
• Investment portfolio delivered a 5.7% total property return versus 4.2% for the CBRE UK Monthly Index, with £17.7m of disposals at a 12% premium to book. Portfolio now valued at £96.1m, with 90% at EPC C or better.

My read

This is a classic Henry Boot playbook: keep risk low when occupiers are decision shy, sell investments at a premium, and build a pipeline that can be switched on quickly. The Origin JV is capital efficient and should smooth earnings as units are transferred and pre-let progress continues.

Stonebridge Homes: softer trading now, bigger land bank for later

Henry Boot increased ownership of Stonebridge Homes (SBH) to 62.5% in January and has been integrating the business. Completions were 85 homes, slightly below last year, with a 3% increase in private ASP to £391k. The net private reservation rate slipped to 0.45 per outlet per week, and 2025 completions are now guided to c.240-250 units, reflecting planning delays and a cautious buyer.

Operationally, SBH posted a £2.0m operating loss. Strategically, however, the land position strengthened, with 846 plots secured in the period and a total owned and controlled land bank of 2,487 plots.

Why investors should care

• Short term, SBH drags group margins and increases reliance on H2 completions to hit targets.
• Medium term, a larger, better quality land bank and integration with Hallam Land should improve returns when outlets open and sales normalise.

Construction exit sharpens focus

The construction segment delivered £1.9m of operating profit on £41.0m turnover. Management has agreed to sell Henry Boot Construction to a management buy-out vehicle for £4.0m, with completion around year end. Proceeds come via a vendor loan and potential overage. Strategically this tightens the group around land promotion, development and home building.

Balance sheet, debt and NAV

Net debt rose to £88.1m as the group invested in planning and SBH land. Gearing is 21.4%, above the 10-20% comfort band but well within the 30% board limit and below 25.5% a year ago. Facilities run to 2029 and include accordion capacity. The group generated operating cash outflows of £17.6m due to working capital investment.

NAV per share fell to 307p on an IFRS basis and 304p excluding the pension asset, reflecting dividends, the SBH tranche payment and investment into inventory.

What this means

• Leverage is being used to build future earnings via planning and land. That is fine as long as disposals and H2 completions land on time.
• With assets held at cost, NAV can look conservative until sales crystallise uplift. Continued premiums on investment disposals back that up.

Strategy scorecard: where Henry Boot stands

• Capital employed at £427m versus a >£500m medium term target.
• ROCE at 9.1% on a 12‑month basis, aiming for 10-15% through the cycle.
• Land promotion on track to exceed 3,500 plot sales in FY 2025.
• Development completions expected below the medium term £200m (share) aspiration this year, but near term pipeline is strong.
• Investment portfolio intentionally smaller at £96.1m as capital is recycled into higher return projects.

Outlook and my take

The tone is quietly confident. With 80% of budgeted sales secured and several transactions under offer, Henry Boot expects to meet full year market expectations. The group is doubling down on what it does best: promoting land, building prime industrial and urban schemes, and scaling a premium housebuilder.

Positives I like:

• Hallam Land’s planning wins and margin quality.
• Investment sales at premiums and a market beating total property return.
• Origin JV providing a capital-light route to grow I&L exposure.
• Dividend growth aligned to cash-backed sales progress.

Where I stay cautious:

• SBH’s near term trading and the reliance on H2 for completions.
• Gearing slightly above the preferred range, requiring timely disposals to stay comfortable.
• Ongoing delays in detailed planning consents that can shift outlet openings and cash flow.

Overall, this is a tidy H1 that validates the strategy. If second half sales complete as flagged and SBH opens more outlets into 2026, the group looks set to move ROCE back into the 10-15% target range while maintaining its progressive dividend.