Henry Boot Lowers Profit Forecast on Weak Land and Property Markets

Henry Boot PLC warned on Wednesday that its pretax profit for fiscal 2026 will fall significantly short of market expectations, citing persistent weakness in land transactions and a subdued UK property market. The company stated that profits would be materially below the consensus forecast of £20.4 million.

Challenging Conditions Across Segments

The company's trading update highlighted difficulties across its key divisions. The most significant impact came from its land promotion business, Hallam Land, which sold only 556 plots in the first half of the year, a steep decline from the 1,222 plots sold in the same period last year.

Henry Boot attributed the slowdown to housebuilders delaying land purchases and increasingly opting for deferred payment structures. The company now expects total plot sales for the full fiscal year to be materially below 2025 levels. Its homebuilding unit, Stonebridge Homes, is also facing headwinds from slower sales rates, planning delays, higher mortgage rates, and build cost inflation of approximately 5%, leading management to anticipate an operating loss for the division in fiscal 2026.

In contrast, the company's industrial and logistics development business, HBD, continues to perform well operationally, supported by robust demand. However, the company noted a modest decline in its overall investment portfolio value due to some outward yield movement.

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Financial Position and Outlook

Reflecting the difficult trading environment, Henry Boot's net debt increased to £133 million from £108 million at the end of the previous year. Management expects debt levels to decrease as transactions that have been delayed are completed.

While the company anticipates an improved performance in the second half of the year—driven by delayed land sales, higher housing completions, and new logistics lettings—it cautioned that overall transaction volumes are likely to remain subdued. In response, the group said it is focused on cash generation and cost control, prioritizing long-term value creation over short-term earnings.