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Strategic Report Segmental Review Land Promotion

Hallam Land had a very successful year Haverhill (south east of Cambridge) the in 2018. Our UK housebuilder customers balance will be marketed in 2021/22. As achieved strong house sales during the mentioned last year, we benefit from a year and replenished their land portfolios significant asset at Didcot, comprising in good market areas. Profit before tax for 2,150 plots and a share in a local centre, the year was £28.5m (2017: £23.1m) from to the west of the town. During 2018, selling 3,573 plots across 24 residential we selected preferred housebuilders and and three commercial schemes. Because contract negotiations have commenced of these sales, our consented site portfolio as we work to secure disposal of reduced to 16,489 plots (Dec 2017: these plots. 18,529); however, at the year end we had Another significant project that 11,929 plots which were the subject of progressed very well during 2018 was planning applications (Dec 2017: 7,982), at Eastern Green, Coventry. During the and we entered 2019 with 1,480 plot year planners removed this site from the sales exchanged and awaiting completion green belt and allocated it for a mix of in 2019. residential and commercial development We have been encouraged to see As our strategic land portfolio is held in the Coventry city local plan. At the initial indications from the major as inventory, accounting policy requires turn of the year we submitted a planning UK housebuilders that they have these assets to be held at the lower application for 2,625 plots, 15 hectares traded, thus far, well. of cost or net realisable value. In of commercial development, a primary accordance with this policy no uplift school and other community facilities. Nick Duckworth, in value can be recognised within our Coventry is largely surrounded by green Hallam Land Management Limited accounts relating to any of the 16,489 belt and this is the most significant site plots over which planning permission coming forward for development within has been secured. Any increase in the City boundary. Our aim is to secure value created from securing planning planning consent late in 2019 with permission over these assets will development commencing in 2020/21. therefore only be recognised on disposal. Total revenue At our other long-standing projects, Over a six year period, we have gained Cranbrook, the 3,500-unit new planning permission for 21,591 new community at Exeter, and Kingsdown in £74.8m plots, successfully sold 11,396 plots Bridgwater, steady progress continued and built a land portfolio of plots moving during the year. At Cranbrook we sold 2018 £74.8m into the sale process amounting to 180 plots to a regional housebuilder, 16,489, in addition to the land we are and successfully progressed our 2017 £76.2m now progressing through the planning expansion plans for the new town, while system or waiting to come forward into in Bridgwater, 72 plots were sold to a 2016 £51.2m the process. national housebuilder. Both projects continue to perform well. We secured a total of 1,533 new 2015 £46.7m consented plots during the year (or We commence 2019 in very good shape consents subject to Section 106 with 1,480 plots exchanged for sale 2014 £39.0m agreement) including sites at: Bilston and a further 237 exchanged subject (95 plots), Crowmarsh Gifford (75 plots), to reserved matters planning approval. Profit before tax Evesham (220 plots), Sileby (195 plots), Additionally, our consented portfolio Warwick (90 plots), Wellingborough (600 was bolstered in the first few days of plots) and Wetherby (210 plots). At the 2019 when a long-standing scheme to £28.5m year end the Company held land interests the west of Worcester secured outline in 14,325 acres (2017: 13,273 acres) as 2018 £28.5m consent, subject to signing the Section either freehold or under option/promotion 106 agreement, for 900 plots. agreements, including 2,599 acres with 2017 £23.1m We have been encouraged to see planning consent (2017: 2,884 acres). initial indications from the major UK 2016 £17.7m During the year we made initial disposals housebuilders that they have traded, at Market Harborough (226 plots) and thus far, well through the period of 2015 £19.1m Haverhill (450 plots), leaving 236 plots uncertainty arising from the decision to and 800 plots respectively for future leave the EU with no adverse impact 2014 £13.1m years. At Market Harborough the balance on our contracted transactions and, of the holding is contracted for disposal therefore, we look forward to another between 2019 to 2021, whereas at solid year in 2019.

Henry Boot PLC Annual Report and Financial Statements for the year ended 31 December 2018

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Strategic Report

No. of plots sold Land portfolio (acres) Pictured: Coventry, planning application for 2,625 plots 3,573 14,325 submitted during the year. 2018 3,573 2018 12,763 1,562 14,325

2017 2,169 2017 11,665 1,608 13,273

2016 1,609 2016 10,139 1,749 11,888

2015 1,763 2015 9,257 1,804 11,061 Agency and Optioned 2014 1,107 2014 8,166 1,819 9,985 Purchased

Plots in planning process Plots with planning permission 11,929 16,489

2018 11,929 2018 16,489

2017 7,982 2017 18,529

2016 10,452 2016 16,417

2015 17,768 2015 12,043

2014 10,646 2014 11,547

Henry Boot PLC Annual Report and Financial Statements for the year ended 31 December 2018

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Strategic Report Segmental Review Property Investment and Development

with Stonebridge Homes at our site in and we hope to commence development in late 2019/2020. We also expect to start work on 27 apartments on the upper floors of Equitable House in central following the sale of the ground floor retail units in 2018. At Wyvern Park, Skipton, we obtained planning consent to commence infrastructure work in 2019 which should result in us securing residential and employment land receipts in 2020. Elsewhere, we completed bespoke industrial units, for the 11th consecutive We have seen planning, Stonebridge Homes performed year, totalling 108,000 sq ft at Markham development agreements and well in 2018, achieving 145 sales, Vale and are already contracted to deliver letting successes across several nearly doubling since the a further 110,000 sq ft in 2019. of our strategic employment sites. previous year. Finally, The Event Complex Aberdeen Edward Hutchinson, Darren Stubbs, remains within cost budget and on time Henry Boot Developments Limited Stonebridge Homes Limited to open in summer 2019. The exciting £333m development, in partnership with Aberdeen City Council, will create 48,000 square metres of multi-purpose event space, conference and exhibition halls, a stunning 12,500 seat arena, spacious hospitality boxes, a premium restaurant Henry Boot Developments achieved good Butterfields Business Park in Luton. and 350 hotel beds. progress on a diverse range of projects Following planning permission and in both the pre- and post-construction confirmation of further infrastructure Housebuilding phases during 2018. New development grant funding at Airport Business Park Our jointly owned housebuilder, opportunities were progressed on a in Southend, we expect the first design Stonebridge Homes, performed well in 56-acre employment site at Cloverhill and build unit, of 123,000 sq ft for Ipeco, 2018, achieving 145 sales (2017: 79 in Aberdeen, a 300-unit Private Rented to commence in 2019. We have also sales) and carried over 15 reservations Sector (PRS) scheme at Deansgate completed the acquisition of 18 acres at into 2019. We expect to be selling from Station in Manchester and a prominent Preston and entered into development six to eight sites with planning permission city centre site in Manchester for circa agreements at Wakefield, Taunton to deliver our 2019 targets largely in the 100,000 sq ft of Grade A office space. and Enfield to deliver further industrial/ buoyant market areas north and east of logistics schemes. The strategic . We have also invested further in We have seen planning, development employment sites in Nottingham (car our management teams to support the agreements and letting successes dealership use included) and Walsall anticipated growth in the business. across several of our strategic are also making good progress and employment sites. We obtained detailed Our land portfolio with secured we should be developing units by late planning and exchanged a development permission now stands at 379 units 2020/2021. agreement for the International (2017: 320 units) and longer term Advanced Manufacturing Park (IAMP) Our residential opportunities are secured sites, subject to obtaining in Sunderland, with the first phase of progressing well. “Kampus” in planning permission, equate to 489 infrastructure planned for 2019 and Manchester, a £220m forward funded units (2017: 560 units). We are actively are already in detailed discussions with 533 build-to-rent apartment scheme, looking to grow this opportunity portfolio, several potential occupiers. We have is on track to complete in 2020. We with the longer term aim of building commenced construction of 83,000 submitted a planning application late Stonebridge Homes into a multi-region sq ft of speculative industrial space at in 2018 for a 123-apartment scheme mid-tier housebuilder.

Henry Boot PLC Annual Report and Financial Statements for the year ended 31 December 2018

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Strategic Report

Total revenue Rental income Pictured: Progress shot of TECA, the £333m project for Aberdeen City Council, set to £221.9m £7.0m complete mid 2019.

2018 £221.9m 2018 £7.0m

2017 £250.7m 2017 £8.1m

2016 £176.5m 2016 £6.7m

2015 £50.3m 2015 £7.2m

2014 £26.1m 2014 £6.2m

Profit before tax No. of plots sold (Stonebridge Homes Limited) £15.9m 145

2018 £15.9m 2018 145

2017 £26.2m 2017 79

2016 £11.2m 2016 70

2015 £3.5m 2015 41

2014 £4.6m 2014 32

Henry Boot PLC Annual Report and Financial Statements for the year ended 31 December 2018

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Strategic Report Segmental Review Construction

In recent years we have Depots in the North traded well Despite testing weather exceeded targeted profit levels by and we benefited from strong sale conditions in early 2018, the maintaining a good blend of both values for fully depreciated asset contract completed another private and public-sector clients. disposals. successful year in line with expectations. Simon Carr, Giles Boot, Henry Boot Construction Limited Banner Plant Limited Trevor Walker, Road Link (A69) Limited

Henry Boot Construction delivered £71m The civil engineering sector continues Development Centre for the University of construction activity in 2018 and to provide good opportunities. We of Hull, the Royce Discovery Centre for started 2019 with a very strong order completed the infrastructure and roads the University of Sheffield and Brookfield book. In recent years we have exceeded project at the Advanced Manufacturing Campus for the University of Leicester. targeted profit levels by maintaining a Park for the University of Sheffield We also successfully secured a place on good blend of both private and public- and work for Extra MSA at Skelton the Leeds Local Education Partnership. sector clients across a wide range of Lake in Leeds is also progressing well. Further places have been secured on building and civil engineering sectors. There has been an increase in housing the Pagabo public and private sector This provides a solid base to manage opportunities and we are now part of framework and the Procure North West the risk of any short-term uncertainty a preferred consortium aiming to build framework. Several schemes have associated with the UK’s departure from out a major PRS residential scheme in also been secured through the Ministry the EU. Repeat business continues Sheffield. of Justice refurbishment framework. to underpin our success and is an We completed several projects within Through the YORbuild 2 framework, we indication of our excellent performance the educational sector in 2018; the have completed structural works to six and delivery of value for our clients. Aerothermal Technology Building for tower blocks for Leeds City Council. In the commercial sector, Phase 1 of the Loughborough University, concourse In the healthcare sector, we continue Barnsley town centre redevelopment Public Realm works for the University to be a framework delivery partner for scheme, The Glass Works, is now of Sheffield, the School of Earth and the Sheffield Teaching Hospitals NHS nearing completion and we have Environment expansion at the University Foundation Trust. commenced design and remediation of Leeds and the Spine Public Realm works on the first part of Phase 2, an scheme for Lancaster University. We £88m commercial and retail offering. also continue to deliver the Sports

Henry Boot PLC Annual Report and Financial Statements for the year ended 31 December 2018

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Strategic Report

Total revenue Plant Hire Road Link Banner Plant traded broadly in line Road Link (A69) which runs the A69 with expectations. Depots in the North between Newcastle and Carlisle under £102.9m traded well and we benefited from strong a Design, Build, Finance and Operate sale values for fully depreciated asset (DBFO) agreement, completed another 2018 £102.9m disposals. These benefits were offset by successful year in line with expectations. weaker activity in the Midlands-based Traffic volumes were slightly up on 2017 2017 £81.9m depots and management changes have and, despite some days of heavy snow in been implemented to bring new focus the early part of 2018, the road remained 2016 £79.4m here. We continue to invest in the fleet open throughout the year. The contract with capital investment at 12% of asset has seven years to run and remains on 2015 £79.5m cost, while cash inflows, helped by course to operate to plan until the hand- the strong sales values, were ahead of back to Highways England is effected at 2014 £82.4m expectations. that time. Profit before tax £9.2m

2018 £9.2m

2017 £10.0m

2016 £11.0m

2015 £9.9m Pictured: University of Hull, the project consists of a 12-court sports hall built 2014 £10.1m on campus and refurbishment of the existing Grade II listed sports centre.

Henry Boot PLC Annual Report and Financial Statements for the year ended 31 December 2018

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