When I originally approached Henry Boot, the Sheffield based construction and property company, requesting a visit by a party from the North East Region I little expected the company to be the subject of an Investors Chronicle feature a few months later. The subsequent visit arranged through the kind auspices of Jamie Boot, the Chief Executive, took place on the 11th October at their impressive Banner Cross Hall offices.
Henry Boot has been in existence for over 125 years, and the present Chief Executive, Jamie Boot, is the 4th generation of the family to be involved in it's management. The company is divided into four separate businesses; Hallam Land Management, Construction, Plant Hire and Property Development. Each business operates as a distinct entity, led by a Managing Director each of whom have been at Henry Boot for twenty years or more. This theme of continuity is one that runs through the company.
The presentation by Jamie Boot and the Finance Director, John Sutcliffe, stressed the solidity of the company, with an NAV that has doubled since 2002, a debt free balance sheet and a market value of £154m. The company turned in profits of £18.9m in 2010, with the construction business producing £9.9m on £84.5m turnover. Similarly, property development turned in profits of £4.3m in 2010. Both these sections of the company have healthy order books in 2011 in a range of areas such as hotel, leisure, school extensions, retail and even six prison upgrades and security improvements. Although Hallam Land only turned in £0.6m profits in 2010, this part of Henry Boot holds extensive land holdings of £55m mainly located in the prosperous south and west of England. The Investor Chronicle article of the 23rd June quoted a report by Arbuthnot Securities that estimated that Hallam Land could add 40p to Henry Boot's reported NAV of 145p. Plant Hire showed a small profit in 2010, but cash generation reduced the operation's borrowings to their lowest level for over ten years.
Henry Boot has a lot going for it in these uncertain times concentrating, as it does, on long term objectives preferring steady organic growth rather than enhancement by acquisition.
We were most grateful to Jamie Boot for accepting our request for the visit, and to him and John Sutcliffe for the presentation and their response to our questions.
John Hillman
