LONDON (Alliance News) - Property investment and construction company Henry Boot PLC Friday reported an increase in profit in the first half, reflecting a strong performance across the business.
The company, which constructs homes and retail buildings across the UK, posted pretax profit of GBP13.4 million for the six months-ended June 30, up from GBP7.4 million a year earlier, following a revaluation surplus of GBP1.8 million, compared with a GBP512,000 deficit a year earlier.
Revenue was lower at GBP65.8 million, down from GBP81.8 million a year earlier, as a GBP15 million one-off gain from the sale of land at the company's Chocolate Factory site in York in the prior year was not repeated.
However, operating profits were up 79% at GBP14.0 million from GBP7.8 million a year earlier, as a result of several land sales and combined development property sale profits and valuation gains of GBP2.1 million, compared with a combined deficit of GBP300,000 a year earlier.
Demand for investment properties outside London began to increase during late 2013 and into 2014 and, with supply still relatively constrained, this has fed through to valuation increases in many investment property sectors. Henry Boot said this trend is now beginning to be reflected in its regionally located property, with modest valuation increases at the half year. This positive trend is also expected to improve the forecast development returns for a number of projects currently in construction, the company said.
Henry Boot said occupancy levels within its investment properties have continued to improve over the last quarter and reflect a general improvement in occupier demand across many sectors.
The company said property highlights include being appointed as preferred development partner by Aberdeen City Council to develop a new exhibition and conference centre and adjoining business park. Henry Boot will then redevelop the existing conference centre site following relocation to the newly built facility.
Henry Boot said its construction arm has also made gains, winning a number of orders to achieve its budged revenue for the year. As a result, the company is now starting to build an encouraging order book for 2015.
Highlights for the division include a contract at Sheffield Hallam University and the refurbishment and fit-out of the Joseph Banks laboratory for the University of Lincoln.
In addition, the company said its land development arm also continues to make progress. Overall at the period-end Henry Boot held interests in 9,512 acres, compared with 9,723 acres at the end of December 2013, with 1,788 acres owned, 2,951 acres under option and 4,773 acres under planning promotion agreement.
Looking ahead, the company said based on a "prudent" assessment, it expects trading profits including revaluation gains to exceed internal initial expectations for the year.
On the back of its performance the company increases its interim dividend 7.7% to 2.10 pence from 1.95 pence.