Henry Boot plc

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Henry Boot plc

Banner Cross Hall
Sheffield
United Kingdom
Telephone: +44 0114 255 5444
Fax: +44 0114 258 5548
Web site: http://www.henryboot.co.uk

Public Company
Incorporated: 1886
Employees: 462
Sales: £84.2 million ($156.30 million) (2004)
Stock Exchanges: London
Ticker Symbol: BHY
NAIC: 236220 Commercial and Institutional Building Construction; 236115 New Single-Family Housing Construction (Except Operative Builders); 236116 New Multi-Family Housing Construction (Except Operative Builders); 236117 New Housing Operative Builders; 236210 Industrial Building Construction; 237110 Water and Sewer Line and Related Structures Construction; 237210 Land Subdivision; 237310 Highway, Street, and Bridge Construction; 237990 Other Heavy and Civil Engineering Construction; 532120 Truck, Utility Trailer and RV (Recreational Vehicle) Rental and Leasing; 532412 Construction, Mining and Forestry Machinery and Equipment Rental and Leasing; 611513 Apprenticeship Training

Henry Boot plc is one of the United Kingdom's oldest and most well-known construction firms—in part because of the company participation in building the famed Pinewood Film Studios in Buckinghamshire. Once one of England's top home-builders, Boot has refocused itself for the new century along two primary lines of operation: property development and land management, the group's largest division, through subsidiaries Henry Boot Developments and Hallam Land Management; and commercial and industrial construction, through Henry Boot Construction UK. The company sold off its homebuilding division and other noncore operations in a major restructuring completed in 2004. Boot's property development business operates on a national scope, with regional offices in Sheffield, Manchester, London, Bristol, and Glasgow. Boot's construction wing focuses on England's northern regions, and targets contracts including prisons, schools, hospitals, and road-building. This latter activity includes the group's participation in the Road Link (A69) Holdings consortium. The company also operates a plant hire subsidiary, Banner Plant Ltd. The founding Boot family remains active in the company, with E.J. Boot serving as group managing director into the mid-2000s. The company is listed on the London Stock Exchange. In 2004, turnover topped £84 million ($156 million).

Pushcart Beginnings in the 1880s

Henry Boot founded his own building business in 1886 in Sheffield, in the north of England. Boot, who was 35 years old at the time, started out in business with a simple pushcart. The building market, especially the homebuilding market, had been expanding rapidly in the late 19th century. The rapid industrialization of the company, especially in major northern cities such as Sheffield, stimulated demand for housing from the fast-growing army of workers, as well as the rising middle class. At the same time, the building society movement had become a national phenomenon. Formed expressly to assist society members in building their own homes, building societies benefited from a series of legislation, providing a more stable financial base for their operations. In the late 19th century, the majority of building societies were of the "permanent" type, and rather than contributing directly to members' homebuilding projects, the societies had begun issuing mortgages. The availability of mortgages placed home construction within the reach of a far larger population than ever before.

Boot profited from the buoyant market, expanding his business from a one-man affair to become a major local building group. Later joined by son Charles Boot—leading to the adoption of Henry Boot & Sons as the company's name—Boot built up a stable of some 20 horses and carts into the 20th century. By the outbreak of World War I, the company had begun the shift to motorized transport, and already counted six trucks in 1914. By the end of the war, the company had more or less retired its horse-drawn fleet.

Charles Boot took over the direction of the company in the early part of the century and led it on an even greater expansion. (Henry Boot died in 1931.) The company had taken an early interest in competing for public housing as well as public works and infrastructure projects, including road-building, bridge-building, and the like. The company also contributed greatly to the British war effort, competing for and winning a large number of construction contracts for the military. Examples of the group's projects during the war included a seaplane base in Calshot, an airport in Manston, the American Army Rest Camp and Hospital in Southampton, and the Chepstow military Hospital. The company distinguished itself by its ability to complete its projects quickly, and within the space of a single year built more than 1,000 buildings for the military, as well as 50 miles of roads and sewers.

International Group in the 1920s

By then, too, Boot had expanded its range of operations to include joinery, plumbing, and painting services. The company also entered the manufacture and distribution of building materials for the general construction market. This activity enabled the company to reduce its own cost of materials, while ensuring their supply for the group's ongoing construction projects, even into the difficult years of the late 1920s and early 1930s. The production and sale of building materials also helped protect the company from cyclical downturns in the construction industry.

The interwar period saw Boot emerge as a top British and European construction company. The company's first move into the international market came soon after the war, when the French government turned to England for assistance in rebuilding its devastated towns and villages. Boot set up its own office in Paris and competed successfully for a large number of contracts. Boot quickly sought expansion on a European scale. The company went public in 1920 and began competing for contracts across Europe. Boot participated in an impressive number of large-scale infrastructure projects, including the building of harbors, subways, and water, sewage, and drainage systems.

The company set up additional offices in Barcelona, Spain and in Athens, Greece. The latter office oversaw a massive £10 million project (at the time, one of the largest in Europe) involved in modernizing Athens' infrastructure, as well as installing drainage and irrigation systems in a massive land reclamation project for agricultural use. Launched in 1927, the project, which was temporarily suspended after the German occupation of Greece during World War II, was completed only in 1952.

Boot also enjoyed other triumphs in the prewar period. In 1936, the company became one of the driving forces behind the construction of Pinewood Studios—based on a design developed by Charles Boot himself—in an effort to challenge the growing dominance of the Hollywood production studios. Built on a 100-acre site in Buckinghamshire, Pinewood Studios provided the base for the British film industry's emergence as one of the world's film centers.

Meanwhile, Boot's domestic homebuilding construction enjoyed an unprecedented boom period. By the outbreak of World War II, the company had completed some 80,000 homes, including more than 50,000 for England's local building authorities.

Boot once again turned its construction and engineering operations to work for the British military effort. Among the group's projects during the war years was its participation in the construction of the harbors used for the launch of the D-Day invasion in 1944. Following the war, the company became a major partner for the United Kingdom's steel and coal industries, and also developed a specialty in railroad engineering and construction. The company continued as manufacturer, establishing a dedicated joinery operation, while its homebuilding operations continued to flourish. Joining the company, and later becoming its head, was Hamer Boot.

The boom years of the British economy during the 1950s and 1960s gave way to a slowdown in the mid-1970s. Boot responded by turning its attention toward its international growth. For this, the company departed from its European base to begin competing for projects elsewhere in the world. The company launched operations in Hong Kong in 1976, where the group became responsible for the construction of the city's Mass Transit Railway System, as well as for building the Kowloon-Canton railroad extension. Elsewhere in the Asian region, the company took on a £120 million railway project in Singapore, and also extended its operations to Malaysia. Through the end of the 1970s and into the 1980s, Boot added projects in Saudi Arabia and Jordan, as well as in Nigeria.

Refocused for the New Century

The economic slowdown of the 1970s, and the United Kingdom's lapse into an extended recession, caught up to Boot in the early 1980s. With its domestic market shrinking, the company suffered a number of setbacks internationally as well. The company's profit began to decline, and Boot was frustrated in efforts to boost its foreign operations to compensate. As a result, the company was forced to restructure its operations for the first time. This process, led by Hamer Boot's son E.J. (Jamie) Boot, led to the company's exit from its joinery business in 1986. Two years later, the company sold off its railroad engineering operation as well.

Company Perspectives:

Henry Boot is committed to the continuous review and improvement of its group operations and its client focus strategy. Within this culture are included the principal areas of quality assurance, safety, environmental responsibility, information technology and human resource development.

Continued difficulties in the late 1980s and early 1990s encouraged Boot to streamline its operations still further. In particular, the company abandoned its international operations to return its focus wholly on the domestic British market. The newest restructuring effort enabled the company to restore its profit growth through most of the 1990s. Yet the primary motor for the company's growth during this period and into the beginning of the 2000s was its young property development business.

Boot continued to win high-profile projects into the late 1990s, such as the construction of a new building for the Birmingham Symphony Orchestra, completed in 1999. The slackening of the British construction market again in the late 1990s, a result in part of the tightening of the government's planning approval process, intensified competition in the market and brought a drop in Boot's own profit growth.

The new market situation forced Boot to review its operations once again, and in 2002 the company launched its latest round of restructuring. As part of that process, the company decided to sell off the higher-risk, but higher-margin divisions of its construction operations, in a management buyout completed that year. In 2003, Boot's restructuring continued with the sale of its homebuilding division to William Bowden for £48 million.

By the end of 2004, Boot's profile had changed rather dramatically. Although the company maintained a construction division, these operations had been greatly reduced, and focused on the lower-risk commercial and industrial markets. Instead, Boot's center of gravity had shifted firmly to its property development and land management arm, which had played a minor role in the group's operations just a decade earlier. Although the company's sales had shrunk back, from more than £110 million in 2003 to slightly more than £84 million in 2004, the group's profits rebounded strongly, representing some 19 percent of revenues.

The "new-look" Henry Boot plc returned to revenue growth by 2005. The company's prospects for the immediate future appeared bright as well, aided by a number of prominent property developments, such as the 350,000-square-foot Ayr Central complex in Ayr. That structure, expected to be opened in March 2006, was already leased at more than 70 percent by mid-2005. After nearly 120 years in operation, Henry Boot remained a prominent name in the United Kingdom's building market.

Principal Subsidiaries

Banner Plant Ltd.; Hallam Land Management Ltd.; Henry Boot Construction (UK) Ltd.; Henry Boot Developments Ltd.

Principal Competitors

Taysec Construction Ltd.; AMEC plc; Barratt Developments plc; Persimmon plc.

Key Dates:

1886:: Henry Boot starts his own building business with a single pushcart in Sheffield.
1920:: Boot goes public and opens an office in Paris, launching construction projects on the European continent.
1926:: Boot establishes a dedicated joinery manufacture operation.
1936:: Charles Boot, son of Henry Boot, designs Pinewood Studios, built by the company.
1950s:: Railroad engineering operations, which become a company specialty, are established.
1975:: Operations are expanded to the Far East, with a contract to build a Mass Transit System for the city of Hong Kong.
1986:: The company restructures its operations, selling off the joinery business.
1988:: The company sells off the railroad engineering operations.
1990s:: The company begins property development and land management operations.
2002:: The company engages in a new restructuring to refocus on property development and land management, and sells off most of the construction division.
2003:: The company sells off the homebuilding division to William Bowden.
2005:: Profits grow as the restructuring is completed.