UK's Henry Boot warns on profit again as Iran war, domestic nerves hit sales
Henry Boot Issues Second Profit Warning Amid Economic and Political Uncertainty
July 22 (Reuters) - Property and construction company Henry Boot issued its second annual profit warning this year on Wednesday, blaming political uncertainty in Britain and the conflict in the Middle East for lower sales of plots.
Key Financial Details
Here are some more details:
Profit Expectations and Market Impact
• The company said its annual pre-tax profit would be significantly below market expectations of £20.4 million ($27.3 million).
Macroeconomic and Geopolitical Factors
• "Macroeconomic uncertainty remains elevated, with domestic political uncertainty and the conflict in the Middle East continuing to weigh on consumer and business confidence," the company said in a trading update.
Impact of Iran War on Construction Costs
• Rising energy prices from the Iran war have driven up construction costs, further pressuring homebuilders grappling with a slowdown in buying amid rising mortgage rates and macroeconomic uncertainty.
Industry Response and Company Outlook
Homebuilders' Strategic Adjustments
• Homebuilders like Barratt Redrow, Taylor Wimpey, and Berkeley have curbed their land buying targets to reflect soft demand and rising cost pressures.
• Henry Boot said some housebuilders had slowed land purchases and increasingly sought deferred payment terms, resulting in transaction delays.
Performance Expectations for the Year
• It said first-half performance would be below the prior-year period, but improve in the second half due to higher expected home completions and delayed land sales completing later in the year.
Additional Information
Currency Exchange Rate
($1 = 0.7476 pounds)
Reporting Credits
(Reporting by Neeshita Beura and Simone Lobo in Bengaluru; Editing by Subhranshu Sahu and Rashmi Aich)
