Tim Roberts, Chief Executive Officer commented: “Having seen strong sales across the Group, we have had our best year ever at an underlying profit level. Reflecting a particularly challenging backdrop as the year progressed, during which a noteworthy £30m of accretive sales was achieved in a weak market, the year-end valuation movements in our investment portfolio have had an impact on our 2022 profit before tax. Whilst it’s too early to predict the outturn for 2023 at this stage, the Group expects this year to be more challenging than 2022. We remain convinced, however, that in the medium term our three key markets, and the resilience of our business model, will allow us to continue to meet our strategic growth and return ambitions.”
Trading update for the year ended 31 December 2022
Henry Boot has benefited from strong sales within its property development and strategic land businesses, driving the Group’s best ever financial results on an underlying profit basis, which excludes unrealised valuation movements on investment property. In line with the fall of UK commercial property values, the investment portfolio reduced in value, resulting in the Group expecting profit before tax for the year ended 31 December 2022 to be slightly below market expectations.
Throughout 2022, the Group continued to recycle capital achieving profitable sales whilst continuing to invest in the business’s high quality development programme. Concurrently, the business has remained selective on new projects, with net debt increasing only marginally to c.£49m (2021: £44m), remaining at the lower end of our targeted gearing range of 10-20%. Whilst there is a need to be cautious about the near-term trading environment given macro-economic headwinds, the Group continues to make progress against its strategic objectives and remains confident about achieving its medium-term growth and return targets.
Hallam Land Management (HLM) traded strongly in 2022, exceeding its strategic target of selling 3,500 plots per annum, with sales materially higher than in the prior year primarily due to a major disposal of 2,170 plots to Taylor Wimpey and Persimmon Homes at Didcot. The site’s community benefits include a total of 54 acres of public open space, within which 15 acres of new woodland will be planted.
In 2022, HLM continued to source new opportunities to grow its land bank securing 21 sites which have the potential to deliver c.6,900 plots. The total land portfolio has increased to 95,407 plots (2021: 92,667) of which 9,325 plots have planning. Whilst demand for land from the national housebuilders reduced in H2 22 against the backdrop of a slowing economy, the ongoing challenges of the planning system combined with critical housing shortages will ensure that demand for HLM’s stock of permissioned sites remains robust. This is reflected in the level of forward sales with HLM ending the year with 992 plots (2021: 1,880 plots) unconditionally exchanged for completion in 2023/24.
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