Henry Boot ups dividend as developer optimistic about UK property market

Developer Henry Boot has increased its dividend for the year as the firm remains hopeful about green shoots in the UK’s property market. 

This morning, the group proposed a final dividend of 4.40p, an increase of 10.0 per cent  bringing the total dividend for the year to 7.33p. 

The announcement came in conjunction with its full year results. 

Revenue at Henry Boot increased by 5.3 per cent to £359.4m which it said was driven by property development and housing completions. 

However, profit before tax came in at £37.7m which was £8m lower than the year before, with the group blaming “stubbornly” high inflation and “rising interest rates” for the fall.

Tim Roberts, chief executive officer, Henry Boot said: “We are not immune from the challenges that the UK economy presents to the near-term trading environment and as previously reported, we expect a lag in performance in the year ahead.”

“However, the outlook for both inflation and interest rates is improving and it’s beginning to feel as though the UK economy has turned a corner, with recent reductions in mortgage rates also pointing towards a hopefully brighter future.”

He added: “With this in mind, and given the group’s continued strong financial position, we remain confident in achieving our medium term growth and return targets, as reflected in the 10 per cent dividend increase we have announced today.” 

It follows a torrid time for UK property developers who were bruised by high inflation and buyers struggling with mortgage affordability. 

However, inflation falling to its lowest level in two and a half years and hopes the central bank will cut interest rates at some point during the year should further improve sentiment in the market. 

Andy Murphy, director of financials and industrials at Edison group said its profit dip “is hardly surprising” after last year’s rate rises.

“The sector, though, is beginning to show the green shoots of recovery as the rates environment stabilises. House prices are now nearing their 2022 level, and mortgage rates are soon expected to dip below four per cent.

“All of this will be a spur to purchases – and to construction.”