Henry Boot warns of profit hit as land sales slow
The developer has downgraded its full-year expectations after a sharp slowdown in land transactions during the first half of 2026, although the group says demand for its industrial and logistics developments remains resilient.
In a trading update covering the six months to 30 June, Sheffield-based Henry Boot said macroeconomic uncertainty, domestic political instability, and the ongoing conflict in the Middle East had continued to weigh on confidence across the property and construction sectors, leading to weaker transaction volumes.
The group now expects full-year pre-tax profit to come in significantly below current market expectations of £20.4m.
Land promotion business Hallam Land was hardest hit, selling 556 plots during the first half, less than half the 1,222 plots sold in the same period last year.
Henry Boot said several housebuilders had changed their land acquisition strategies, delaying purchases and increasingly seeking deferred payment terms.
While land sales have slowed, the business said its planning pipeline remains strong. Hallam submitted planning applications covering 2,747 plots during the period and remains on track to submit applications for 10,000 plots this year.
It currently has planning consent for almost 9,000 plots, with more than 21,000 additional plots awaiting determination.
The group’s commercial development arm, HBD, delivered a more positive performance, reporting continued occupier demand for industrial and logistics space. Its Origin joint venture portfolio is now 75% let or under offer, compared with just 9% at the start of the year.
Construction has also begun on the first phase of Golden Valley, a £95m gross development value scheme in Cheltenham. The first building, IDEA, a 160,000 sq ft innovation centre forward funded by Cheltenham Borough Council, is already 68% let or under offer. Completion is expected in early 2028.
Housebuilding business Stonebridge Homes completed 72 homes during the first half, down from 85 a year earlier, although the company expects completions to be weighted towards the second half of the year and to finish slightly ahead of 2025 levels overall.
The business continues to face pressure from delayed planning approvals, higher mortgage rates affecting customer demand and rising build costs.
Henry Boot said higher energy prices had contributed to construction cost inflation of around 5%, while slower sales rates had increased site extension costs. As a result, Stonebridge Homes is now expected to report an operating loss for 2026.
Plant hire subsidiary Banner Plant traded in line with expectations during the period, following completion of its Road Link A69 contract in March.
Net debt increased to £132.9m at the end of June from £108m at the end of 2025, although the company expects borrowings to reduce by year-end as delayed transactions complete.
Henry Boot also confirmed it had agreed amendments to certain banking covenants with its lenders and is in discussions over further changes for the remainder of the year.
Despite the weaker outlook, the company said it remained committed to investing for long-term growth rather than pursuing short-term gains at the expense of future returns.
