Henry Boot (LSE:BOOT) told investors that profit before tax for the year to 31 December is now expected to come in significantly below current market expectations (which had been pitched at around £20.4m).
The land promotion, property investment and homebuilding group, updating on trading between 1 January and 30 June, blamed elevated macroeconomic uncertainty, including domestic political instability and the Middle East conflict, for weaker transaction volumes across its markets.
Hallam Land sold 556 plots in the first half, down from 1,222 a year earlier, with homebuilders slowing land acquisition and increasing use of deferred payment terms.
Henry Boot said it now expects 2026 plot sales to be materially below last year's 3,957, though planning progress remains on track, with 2,747 plots submitted in the period toward a 10,000-plot annual target.
Its Stonebridge Homes business completed 72 homes, down from 85, and is expected to post an operating loss for the year after build cost inflation of around 5% and a lower sales rate of 0.38, hit by higher mortgage rates.
The industrial and logistics arm fared better, with Origin joint-venture schemes now 75% let or under offer, up from 9% at the start of the year, while work began on the £95m Golden Valley scheme in July.
Net debt rose to £132.9m at 30 June from £108m at the end of December, though the group still expects a reduction by year-end as delayed transactions complete. Henry Boot has amended interest cover covenants with its lending group for June and September and is in active discussions on full-year terms.
The group will report interim results for the six months ended 30 June on 22 September.
News Intelligence what this means for the company
Henry Boot has slashed profit guidance significantly below consensus expectations of £20.4m, citing macroeconomic headwinds and sector weakness. Hallam Land plot sales collapsed 55% year-on-year to 556 in H1, homebuilders are deferring land purchases, Stonebridge Homes is heading for an operating loss due to 5% build cost inflation and higher mortgage rates, and net debt has surged to £132.9m from £108m in six months. The company has already amended covenant terms with lenders and is renegotiating full-year terms, signalling material financial stress.
The profit warning and covenant amendments materially weaken the investment case. Henry Boot faces a demand shock (plot sales down 55%) colliding with cost inflation (5% build cost rises) while leverage has risen sharply; the group's ability to reduce net debt by year-end—on which it is relying—may now rely on delayed transactions completing in a weakening market.
Insights assembled by AI. Editor-reviewed and grounded in tickstock’s coverage and proprietary knowledge graph.
Content is for informational purposes only, not financial advice.
