Boot(h) Share Price (BHY)

I bought BHY as part of a construction portfolio in my ISA. The others have done very well (BWY and PSN) but BHY has just shot up after being fairly flat. I am planning to hold, but a little curious as to why it lagged others in the sector, then suddenly caught up. Any suggestions?

Can anyone tell me when the x dividend date is? Thanks in advance.

True, adding speculative value to Henry Boot's share price requires some revival in the UK's housing market. In the absence of that, the share price is underpinned by net asset value of 130p per share (see table), yet that book value is based solely on the cost of Boot's would-be housing land. When land becomes consented it becomes more valuable and Boot is currently turning the stuff into plots with planning permission at the rate of about 2,000 plots a year. In other words, it is building a pipeline for plenty of future profitable revenues....as always dyor and good luck

Other opportunities include work for the prison service, the courts and national forensic services. And, with the government announcing a resumption of private-finance initiative schemes Boot hopes to win new work. It already has a 61 per cent stake in a contract to maintain the A69 between Newcastle and Carlisle, and work is starting to flow from its inclusion as a supply chain partner on a 25-year scheme to maintain roads around Sheffield. Henry Boot also runs a plant hire business, Banner Plant. Predictably, a slow down in construction work has dented demand for hire equipment but, after a slow start to the year, there are some early signs of demand picking up, although management is keeping a tight hold on costs until real signs of recovery show through. Finances are in decent shape, too. Last year's cash pile was turned by the half-year into a net debt of £22m, but this resulted from extra purchases of land.

Another attractions of Henry Boot is its diverse revenue stream. On the property development side, the group has a 200-acre business park it is developing with Derbyshire County Council; of this, 100,000 sq ft has been pre-let. Elsewhere, contracts have been exchanged for Tesco to develop a 31,000 sq ft store in Doncaster. Other projects include a joint venture with Calderdale & Huddersfield NHS Foundation to convert a 56,000 sq ft listed mill. This has been pre-let to the trust on a 25-year term. And, at the half-year, investment properties were valued at £145m (6 per cent up on the year). Construction is a sector that makes investors wary, but Henry Boot's construction division has been operating above expectations – the division remains on target to secure 60 per cent of its targeted revenue for 2013 by the end of 2012. And this is despite adopting a cautious approach to taking on new work, preferring to maintain profit margins at the expense of volume. Recurring revenue has played a part in maintaining income, with several long-term framework agreements already in place to provide social housing, notably in S****horpe, Manchester and Doncaster.

So, Hallam has been busy buying land. By the middle of November its land bank had grown to 9,069 acres. No value has been put on this, but a few months earlier Boot’s landbank was 8,761 acres and in the books at £68.1m. And within the current land bank over 20 per cent has planning consent. Hallam now looks well-placed to turn these assets into cash at a considerable premium to their book value. True, land sales have been pretty subdued this year, but management has built a significant pipeline of sites with planning consent that are about to be marketed. Furthermore, some of these are already subject to agreed terms, which means that Hallam has some buyers already lined up. And while the housing market is pretty depressed, any improvement would help to boost demand for consented land significantly.