- Yorkshire firm flags weak sales of land for development in second warning of 2026
- Analysts’ consensus had already expected a sharp drop in earnings
- Shares drop to levels last seen in early 2013, just before the launch of Help to Buy
- Shares may draw some support from lowly valuation relative to net asset value
“Andy Burnham is under no illusions about the economic challenges that face his fledgling administration, but the second profit warning from this Yorkshire-based property and land developer and housebuilder Henry Boot serves to stress the importance of the new prime minister’s growth and levelling-up agendas,” says AJ Bell investment director Russ Mould.
“A weak housing market means housebuilders are cutting their purchases of land and Henry Boot, like MJ Gleeson back in June, is now warning of the knock-on effect upon its business, with the result that the Sheffield firm’s shares now stand at their lowest level since January 2013.
Source: LSEG Refinitiv data
“Amid tighter regulation, cladding compensation payments, input cost inflation, higher interest and mortgage rates, increased government taxes on property transactions and soggy consumer confidence housebuilders are retrenching. Management teams are preparing for lean times, with the go-go years of Help to Buy and stamp duty holidays now a fading memory. Big builders such as Barratt Redrow, Berkeley, and Taylor Wimpey have all flagged a focus on cash and cutbacks in land purchases as a result.
“This has already hit MJ Gleeson, which issued a trading alert in June. The company cited a delay in one major land sale, and two small ones with the result that its land promotion arm fell into loss in the 12 months to June 2026 and profits across the whole company dropped sharply compared to the prior 12 months.
“Henry Boot has now tripped up, thanks to the same issue.
“Its Hallam Land operation sold just 556 plots of land in the first six months of 2026, compared to 1,222 in the same period last year. Boot now sees total land sales this year coming in well below the 3,957 recorded in 2025.
Source: Company accounts
“Its other operations – urban property redevelopment, warehousing and logistics and a small housebuilding operation – are trading in line with management expectations. However, the shortfall in land transactions means that overall group earnings are now seen falling well short of the analysts’ consensus forecast for pre-tax profit in 2026 of £20 million.
Source: Company accounts, Marketscreener, consensus analysts' forecasts for 2026E (*before Wednesday’s profit warning).
“Boot generated pre-tax income of £26 million in 2025, but profits actually peaked in 2017 at £55 million, during the heady days of Help to Buy. Intriguingly, Boot’s shares have dropped back to the levels seen just before the launch of that programme by then Chancellor of the Exchequer George Osborne in April 2013.
“Boot’s chief executive, Edward Hutchinson, only took the reins from Tim Roberts last week, so his in-tray has already started to bulge.
“One bit of good news for the new boss is that net debt is low at £133 million, compared to the last stated equity figure of £420 million, while patient shareholders will note how the current stock market capitalisation of £210 million means the stock trades on just 0.5 times net asset, or book, value per share.
“In this respect, a lot of bad news is already priced in and investors may now be looking to see what the Burnham administration decides to do in its efforts to drive the housing market and economic activity in the North of England and across the country.”
