Why Shares In Henry Boot plc Soared Today

Although we don’t believe in timing the market or panicking over every stock fluctuation, understanding how a business is performing, competing and changing is vital to sensible investment.

The share price of Henry Boot (LSE: BHY) — the property, land development and construction company — lifted over 10% earlier today, following release of its half-year results for 2014. 

Revenue was lower than in H1 2013, down 20% to £65,8m, due primarily to the £15m one-off sale of land at Chocolate Factory site in York in the prior period.

henrybootBut the company reported that operating profit up 79%, at £14m — attributed to several land sales and combined development property sale profits and valuation gains — and pre-tax profit increased by 81%, to £13.4m. 

The company’s net asset value per share remains much the same as in the prior period, at 149p (it was 148p at the end of December 2013).

Earnings per share more than doubled, rising 106% to 7.4p, and the board is recommending increasing the interim dividend by 7.7%, to 2.1p per share, payable on 24 October this year. 

Looking ahead, the company says it has a number of strategic land sites and development schemes progressing to completion over the next 24 months, and that its portfolio of work-in-progress is larger than at any time in the last five years.

Commenting on the results, the Chairman, John Brown, said:

“I am pleased to report another strong set of results for Henry Boot for the half year ended 30 June 2014.

“Commercial development activity is now at its highest level since 2007 with new, pre-let developments achieving hurdle rates of return, expected to commence in the second half of the year.

“We currently anticipate trading profits including revaluation gains to exceed the Board’s initial expectations for the year.” 

At 205p, Henry Boot’s share price is up 10.6% on this time last year, compared with a FTSE All-Share Index that’s gained 5.4%. And over the past five years, Henry Boot has left the All-Share trailing, rising by 164% to the index’s 45%.

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Jon Wallis has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.