Shares in land and property developer Henry Boot (BOOT) fell 10% after the firm warned on FY26 earnings. Due to a combination of factors, the group now sees this year’s earnings ‘significantly below current market expectations’.
| Share price: 197p (-10%) | PE: 9.9x |
| Market cap: £268m | Yield: 3.6% |
Boot said despite continued political and economic uncertainty it expected FY25 profit to be in line with estimates. Strong demand for prime residential sites saw land sales hit a record, but that was the extent of the good news.
Transaction volumes subdued
Transaction volumes across the firm’s markets were ‘subdued’, with deals taking longer to complete. The situation was exacerbated in H2 by uncertainty ahead of the November Budget.
The value of the firm’s share in completed development schemes fell to £33 million from £188 million in 2024. Meanwhile, Stonebridge Homes completed just 185 units against a target of 240-250 and 270 units the previous year.
This was partly due to weaker demand and partly due to a slower pace of outlet openings after planning delays. The firm had targeted 12 outlets but only operated from an average of nine during the year.
For 2026, developments will be in line with last year, but forward sales are lower across the group. Add to that the expiry of the profitable Road Link contract this March and profits will be ‘significantly’ below forecasts.
Just three weeks ago, Boot was trumpeting the fact land sales last year hit a record. Today, all that optimism seems to have vanished into thin air.
Hallam Land still has a high-quality portfolio, but it can’t control the level of demand. The development business has a strong pipeline, but management are being ‘selective’ in which projects they progress.
That leaves Stonebridge, which serves the premium home market, the area most susceptible to swings in consumer sentiment. We’ve no doubt the group is well set for the medium term, but today’s ‘reset’ of expectations is pretty brutal.
Read the press release here: https://www.henryboot.co.uk/investors/
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