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(Alliance News) - Henry Boot PLC on Tuesday cited a slowing economy and higher interest rates as it forecast that profit in the year ahead will be "significantly" below current market expectations.
Henry Boot shares fell 9.1% to 191.00 pence each on Tuesday morning in London.
The Sheffield, England-based property developer said market expectations for pretax profit in 2024 are GBP37.2 million, according to company-compiled consensus. It pointed to "extended payment profiles" with major housebuilders on strategic land sales, which will keep gearing at the upper end of its optimum range.
Henry Boot estimates pretax profit in 2023 met market expectations, however, citing consensus also at GBP37.2 million. This suggests profit will decline in 2024.
"Henry Boot has performed well against the backdrop of a slowing economy, and higher interest rates, generating robust sales within its property development and strategic land businesses. Despite activity reducing in our three key markets of Industrial & Logistics, Residential and Urban Development, our focus on high quality land and development in prime locations has meant the business has performed resiliently," the company said.
Chief Executive Officer Tim Roberts commented: "With a path to lower inflation and improved interest rates, whilst there will undoubtedly be bumps along the way, the economy and our markets have turned a corner, but we expect our results for 2024 to be impacted by these factors. We continue to firmly believe that Henry Boot remains well placed to achieve its medium term growth and return objectives."
By Tom Budszus, Alliance News slot editor
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