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MIDAS SHARE TIPS UPDATE: Property firm Henry Boot finds its feet and gets polished new shine
The Henry Boot annual meeting is a traditional affair. Shareholders are invited to the Hilton hotel in Sheffield and, after official business is finished, there is a generous, three-course lunch. Covid-19 put the brakes on this gathering for a couple of seasons, but the custom was proudly resurrected this year, when investors enjoyed prawn cocktail, roast beef and treacle pudding, the same fare that has been served at Boot meetings for decades.
Henry Boot is a rarity on the stock market these days. More than 45 per cent of the shares are owned by the original Boot family and the property and development company used to be run by Boot family members too. Today the board is Bootless but the family remains committed to the business and this gives Henry Boot a particular culture.
Headquartered in Sheffield, the company is known as a responsible business that treats employees well and makes decisions geared towards long-term success. That ethos delivers rewards and the company’s total shareholder returns – including share price growth and dividends – have been better than the rest of the stock market over the past three, five, ten and even 20 years.
City slicker: Headquartered in Sheffield, the company is known as a responsible business
Chief executive Tim Roberts is determined to keep it that way. Boot operates two main divisions. Hallam Land Management acquires greenfield land, takes it through the complexities of planning and sells it to housebuilders.
HBD turns brownfield sites into places where people can work or live. Much of the business centres on industrial parks but there is residential development too, including the conversion of the former Terry’s chocolate factory in York into a blend of flats, open space and a retirement home.
Trading is strong across the group. The land business aims to sell 3,500 plots a year and has already sold more than 3,470 with orders going out to 2023. HBD sites are in demand with around 75 per cent of the annual target either pre-let or pre-sold.
And a smaller, third division, Stonebridge Homes, has already secured more than 90 per cent of its 200-home target for 2022.
Brokers expect a 33 per cent uplift in Boot revenues to £309million this year, with profits up 34 per cent to £47million and an increase in the dividend from 6.1p to 6.7p.
Reassuringly for investors, further growth is pencilled in for next year and the year after.
Midas verdict: Midas recommended Henry Boot in 2011 when the shares were £1.21. By 2016, they had risen to £2.03 and they are now £2.88. Investors who kept the faith have been well rewarded and should hold on to their stock. This is a business which thinks about the long term but delivers in the short term too. A winning combination.
Traded on: Main market Ticker: BOOT Contact: henryboot.co.uk or 0114 255 5444