Boot (henry) Share Discussion Threads

[888icb] 25/3/2024 11:46

“Financial Highlights

· 5.3% increase in revenue to £359.4m (2022: £341.4m) driven by land disposals, property development and housing completions

· Profit before tax of £37.3m (2022: £45.6m) and underlying profit¹ of £36.7m (2022: £56.1m), in line with market expectations and supported by our focus on high quality land and development in prime locations

· Capital employed has increased by 4.5% to £417m (2022: £399m) continuing our stated growth strategy and progressing, towards our medium target of £500m

· ROCE² of 9.9% (2022: 12.0%), rounded, at the lower end of our medium-term target of 10-15%

· NAV³ per share is up by 3.7% to 306p (2022: 295p), due to resilient operational performance. Excluding the defined benefit pension scheme surplus, NAV per share showed an underlying increase of 3.4% to 300p (December 2022: 290p)

· Strong balance sheet, with net debt⁴ of £77.8m (2022: £48.6m) reflecting continued investment in committed developments and selective acquisitions. Gearing at 19.0% (2022: 12.3%) within the optimum stated range of 10-20%

· Proposed final dividend of 4.40p (2022: 4.00p), an increase of 10.0%, in line with our progressive dividend policy, bringing the total dividend for the year to 7.33p (2022: 6.66p)

· We remain confident in achieving our medium term growth and return targets“
The NAV per share is 306p against today’s share price of 182p. That is a massive discount to NAV and the results are very positive. This is a very undervalued share it would appear.

[spectoacc] 25/3/2024 11:36

Be lying if I said I'd read it all, but what I did read seems very reasonable.


"So, all in all we are pleased with the way the business has performed, during what for our key markets has been a difficult year. We are now firmly focused on 2024 and our medium term growth targets - which remain very achievable. Whilst there is a path to lower inflation and reduced interest rates the expected recovery is very likely to be weighted towards the second half of the year."


"Not surprisingly, we do not have clear visibility on how all of this will unfold and, with key transactions to execute and complete this year in both land promotion and development, we expect 2024 results will be heavily second half weighted."


I'm not sure I've ever seen a co describe their balance sheet as "..Rock solid.."!

"Our balance sheet remains rock solid...".


So for me - BOOT are very well placed for when the market turns, but neither they nor us know when that is. Also, does that make them good value at £2.50, £2, £1.50, £1? I've no idea. I've a suspicion they're a little high atm, due to expectation of a recovery that isn't baked-in yet.

That may just be wishful thinking, wanting to get back in lower.

[essentialinvestor] 25/3/2024 10:46

Any thoughts foljs on the outlook?.

[essentialinvestor] 26/2/2024 18:24

* board of directors.

[rmillaree] 26/2/2024 18:21

when you say BOD do you mean them board ?

i would presume the board here have not really been big share buyers over the years anyway ? so i would not expect them to change things now by buying in bulk. so i dont really look at lack of buying as being meaningful either way.

Ok there was some buying during covid - but what else is a board member gonna spend their wages on if they cant leave the house?

[essentialinvestor] 26/2/2024 15:15

Still no BOD buying, unless some developments behind the scenes which are preventing this?..not the most optimistic of signs.

[hpcg] 17/2/2024 15:57

This might be a viable swing to trade though.

[spectoacc] 01/2/2024 19:42

Fair point, suspect with their long experience of the cycle, they know things will get worse before they get better.

[essentialinvestor] 01/2/2024 19:12

No BOD buying post update.

[essentialinvestor] 24/1/2024 12:42

John Gladman, who holds about 9% of the business, does not appear to have sdded since June '23.

[essentialinvestor] 23/1/2024 11:17

hp, planning reform not necessarily a definite downside for BOOT.

BOOT currently own, or have options over 100,000 plots, of which they have planning permission on only 8,000.

You could make a case reform will increase availability of land, however it 'should' also reduce cost and complexity in a (current) lengthy planning process. We need to see exactly what is proposed by the next Labour government and how this will work in practice.

It is however worth highlighting as a longer term development to mindful of.


The recent sale to Vistry took 20 years from an initial option to purchase, with Boot still retaining some of those plots.

[hpcg] 23/1/2024 09:43

I'm not sure how anyone could think this was a good trading update. That is aside from the existential threat that planning reform has to the strongest part of the business. Aside from that, this is dead money for the next 12 months when there is a world of opportunities out there in companies that are either going great guns now or will recover first.

[daneswooddynamo] 23/1/2024 09:41

Business wise it’s obviously going to be a tough year but if the market is right on inflation/interest rates these shares will be usefully higher in 12 months time imo

[riverman77] 23/1/2024 09:25

One of the many irrationalities of the stock market - share price falls in advance because everyone expects a profit warning, and then falls again when the the warning is confirmed. Of course, this all provides a good opportunity for patient investors with a long time horizon, but I agree that BOOT will probably remain weak for the next year or so.

[spectoacc] 23/1/2024 09:21

Read beyond the 18th paragraph, it's a stonking p/w.

[my retirement fund] 23/1/2024 09:20

Was the market expecting them to be reporting ahead of expectations or something? Seems a little irrational to me.

[spectoacc] 23/1/2024 08:44

Wouldn't rule out a t/o (albeit difficult with family holding, ie depends what they want) but agree with @EI that £1.70 looks the price. I don't intend buying above that, after reading today's RNS.

Housing market is going to get worse, not better, near term.

[shaker45] 23/1/2024 08:41

They really need inflation and interest rates to start falling, before they can unlock the great value in their land bank. Maybe better buying opportunities along the way.

[spectoacc] 23/1/2024 08:35

Problem is that:

"...Gearing at year end was towards the top end of the optimum stated range."

That's before the "significantly below" trading to come in 2024.

Agree BOOT aren't going bust anytime, but you'd rather they went into a very uncertain year with gearing not already being at the top of their target range.

Wondering if the time to buy BOOT is on any fundraise. I'd back them to raise money and increase their land holdings, when prices are weak.

The disappointment of today's news is just how much hardball the housebuilders are playing, particularly with payment terms.

[essentialinvestor] 23/1/2024 08:33

Yup, I've made a similar point previously, their longer term record of growing NAV is excellent.

They've also been around for an age, I shredded invoices (previously issued) to Henry Boot as a teenager while working for Higgs and Hill in New Malden - I was given all the glamorous jobs ;

[riverman77] 23/1/2024 08:29

BOOT is more of an asset play (trading well below book value) and earnings are always going to be lumpy. The value lies in its land bank and housing plots - whether this value is realised this year or in future years not such a big issue for me so would use any weakness to top up. Cashflow will be weak this year but fortunately they have very modest debt so shouldn't be a problem if this ticks up a bit in the short term.

[essentialinvestor] 23/1/2024 08:21

I still think in the £1.70's is a decent longer term price...no guarantees as always. That may not be available (again)
unless they warn, again!.

[spectoacc] 23/1/2024 08:17

Thought I'd buy the warning, but haven't done yet - cashflow and debt look an issue to work through in 2024, more serious than just a year of lower profits.

[essentialinvestor] 23/1/2024 07:51

Forgive the indulgence of reposting the above, but that did look the case, now confirmed.