BOOT (HENRY) PLC — Interim / Quarterly Report 2014

Jun 30, 2014

CREATING VALUE THROUGH... PLANNING, CONSTRUCTING & DEVELOPING

www.henryboot.co.uk Stock code: BHY

CONTENTS

IFC

HALF-YEARLY REVIEW

01 Key financial highlights

02 Chairman's statement 08 A diverse portfolio

CONDENSED FINANCIAL STATEMENTS

10 Consolidated statement of comprehensive income (unaudited)

• 11 Consolidated statement of financial position (unaudited)
• 12 Consolidated statement of changes in equity (unaudited)
• 13 Consolidated statement of cash flows (unaudited)
• 14 Notes to the condensed financial statements
• 22 Responsibility statements of the directors

CORPORATE INFORMATION

• 23 Company information
• 23 Financial calendar
• 23 Advisers
• 24 Group contact information

welcome to our Half-yearly report

Henry Boot PLC, established over 125 years ago, is one of the UK's leading and long-standing property investment and development, land development and construction companies.

Our key objective is to maximise long-term shareholder value through the development of and investment in high quality property assets, the promotion of new land development opportunities, construction and plant hire activities.

Group Operations

Hallam Land Management Limited

planning CONSTRUCTING

Henry Boot Construction Limited Banner Plant Limited Road Link (A69) Limited Read more about our

Construction on page 06

developing

Henry Boot Developments Limited Stonebridge Projects Limited

Read more about our Property Investment & Development on page 05

Front Cover: Top (left to right) Dunbar, East Lothian Markham Vale, Derbyshire

Bottom (left to right) Cranbrook, Exeter, Devon Bifrangi UK Ltd, Lincoln Deansgate, Manchester

KEY financial highlights

Highlights

Visit us online

For more information on Henry Boot PLC please visit our website at www.henryboot.co.uk

Operational Highlights

• • Each of our business segments has traded well in the period.
• • The portfolio of "work in progress" is larger now than at any time in the last five years.
• • A total of 9,512 acres in the strategic land portfolio with planning permission for 10,800 units.
• • Property development activity at the construction stage is at its highest point since 2007.
• • Building encouraging 2015 construction order book.
• • The combination of increased commercial development, over 10,800 permissioned housing units available for future sale and solid returns from the construction segment should strongly support growing shareholder returns into 2015 and beyond.

HALF-YEARLY REVIEW

Chairman's statement

John Brown Chairman

Profit before tax of £13.4million an increase of 81%

over 2013

The Board has approved a

2.10p per share

interim dividend, an 8% increase on 2013

Read our financial statements in detail on page 10

View more content online at: www.henryboot.co.uk

Once again, I am very pleased to report a strong set of results for Henry Boot PLC. Each of our business segments has traded very well in the period as the general economic recovery takes stronger hold and confidence returns to our markets.

Results

Once again, I am very pleased to report a strong set of results for Henry Boot PLC. Each of our business segments has traded well in the period as the general economic recovery takes stronger hold and confidence returns to our markets.

In the period, we fully recovered the profitability timing difference arising from two transactions which were initially anticipated for 2014, but which actually completed very late in 2013. Furthermore, we have a number of both strategic land sites and development schemes progressing to completion over the next 24 months. This portfolio of "work in progress" is larger than at any time in the last five years and is the result of the acquisition of opportunities throughout the bottom of the property cycle. Now that the market is recovering more strongly, this portfolio is expected to offer solid returns. The progress achieved by each trading segment is covered in more detail below.

Trading Review

During the period under review, revenue was lower at £65.8m (2013: £81.8m) as the £15.0m one-off sale of land at the Chocolate Factory site in York in the prior period was not repeated. However, operating profits were 79% higher at £14.0m (2013: £7.8m) as a result of several land sales and combined development property sale

profits and valuation gains of £2.1m, compared to a combined deficit of £0.3m in 2013.

Administration and pension costs of £9.1m were slightly higher (2013: £8.7m) as we increased staff recruitment and saw the impact of salary increases. Net finance costs were slightly higher at £0.6m (2013: £0.4m) as we carried a slightly higher average debt level through the period.

Profit before tax was 81% higher at £13.4m (2013: £7.4m). Taxation at £2.6m (effective rate 19.3%) compared to £1.8m (effective rate 24.6%) in 2013. Therefore, retained profits were £10.8m (2013: £5.6m) and resulted in a 106% increase in basic earnings per share to 7.4p (2013: 3.6p).

Statement of Financial Position

Non-current assets were very similar to the 2013 year end position at £175.6m (31 December 2013: £176.0m). A reduction in long-term receivables was offset by increased expenditure on investment property developments and plant hire assets. Within current assets, higher inventories at £99.2m (31 December 2013: £91.0m) are largely due to further investment in our strategic land portfolio and initial expenditure on planning fees for our development site in York. We completed the sale of our B&Q investment property in

Rotherham which explains the reduction in the value of assets held for sale. The remaining value of assets held for sale at £2.7m relates to two smaller properties, the sales of which are expected to complete in the second half of the year. The reduction in cash and cash equivalents of £10.7m largely explains the reduction in current borrowings from £46.5m to £31.8m as short-term 2013 year end debt was repaid during the period from cash received in December 2013.

Net debt at 30 June 2014 was £33.1m (31 December 2013: £36.1m). Of this debt, £4.8m (31 December 2013: £3.0m) relates to infrastructure loans for our Hallam Land sites at Exeter and Bridgwater. The remaining balance relates to our £50m facilities, which are due for renewal in May 2015, where we continue to trade well within the applicable covenants. Our intention is to renew these facilities in early 2015 prior to the renewal date noted above.

The defined benefit pension scheme liabilities under IAS 19 (revised) increased to £22.7m (31 December 2013: £20.1m) reflecting a 0.2% reduction in the liabilities discount rate offset by slightly better than anticipated investment performance.

Overall, net assets increased slightly in the period and stood at £196.1m (31 December

HALF-YEARLY REVIEW

2013: £193.5m) as retained earnings were offset by the increased pension deficit and dividends paid in the period. NAV per share was 149p (31 December 2013: 148p).

Cash Flows

Operating cash inflows before movements in working capital were £10.6m (2013: £7.1m) and after a net investment in working capital of £5.9m (largely strategic land), cash inflows from operations were £4.7m (2013: outflows £7.7m). Interest payable of £0.6m and tax paid of £2.3m reduced the net cash inflow from operating activities to £1.8m (2013: outflow £9.0m). Net cash inflows from investing activities of £6.6m were largely derived from the B&Q investment property sale, offset by further, ongoing development expenditure on investment properties.

Dividend payments totalling £5.0m (2013: £4.9m) were made in the period and as well as net equity share cash outflows of £0.4m (2013: nil) in connection with employee share scheme transactions. Overall, these flows resulted in a net cash inflow of £3.0m between 31 December 2013 and 30 June 2014.

Dividend

The Board has approved a 7.7% increased interim dividend of 2.10p per share (2013: 1.95p per share) which will be paid on 24 October 2014, to shareholders on the register at the close of business on 26 September 2014.

PERFORMANCE REVIEW Land Development

Hallam Land has maintained the strong progress it made last year. We have continued the success in obtaining planning permissions which started with the introduction of the National Planning Policy Framework and the presumption in favour of development where there is an absence of a five year supply of available land for residential development. This new regime has enabled Hallam Land to consistently win consents and achieve a growing supply of sites with permission. The number of permissions achieved in the first half of the year (circa 500 acres) has brought our total of consented sites (or sites with a "minded to grant" consent) to over 40.

The legal formalities relating to title and seeking to improve the consents which have been obtained mean that not all of these sites are necessarily immediately available for sale. Nevertheless, the increased volume of sites helped us conclude disposals and by this half year, we had completed sales on six sites and exchanged contracts on one other.

In addition, we are currently negotiating the sales of six other sites, some of which should exchange or complete before the year end. We are also continuing our rate of success in achieving new permissions which will translate into disposals in future years. Furthermore, we continue to sign up new sites

East Leake, Nottinghamshire

A planning promotion agreement for 30 acres of land with planning permission for 170 units. A disposal was completed in March 2014.

Find out more about Hallam Land on pages 03 and 04

View more content online at: www.hallamland.co.uk

Chairman's statement continued

Strategic land portfolio

9,512 acres with planning permission

for over 10,800 units

An inventory value of £92.1million for strategic land assets and are looking to increase the size of our portfolio. At 30 June 2014, we held interests in 9,512 acres (31 December 2013: 9,723 acres) with 1,788 acres owned (31 December 2013: 1,791 acres), 2,951 acres under option (31 December 2013: 3,184 acres) and 4,773 acres under Planning Promotion Agreement (31 December 2013: 4,748 acres). The inventory value of these assets is £92.1m (31 December 2013: £83.9m) as we continue to invest heavily in the planning process and new sites.

As we have commented previously, the Government's "Help to Buy" scheme together with other financial initiatives has undoubtedly assisted housing sales which, in turn, has helped the market for land sales. There has been much commentary about the possibility of a house price bubble, particularly in London and the south east around London. Outside this area, any fear of a bubble

has evaporated as house builders have acquired larger land banks and found it difficult to quickly increase the production of new homes. As a consequence, we find the wider UK land market less buoyant than it was at the beginning of the year with fewer bidders, who are bidding less aggressively than previously. This is not having any great impact on our business at the present time, given the high quality greenfield sites we are marketing, but it is something we continually monitor.

As we move through the second half, we remain in a strong position to capitalise on this generally buoyant market helped by the significant number of consented sites we hold, some of which will be sold in tranches over a number of years.

Whilst these larger sites can provide profits over an extended period of time, they are often difficult to commence because of the very high, upfront infrastructure costs. Government grants, in the form of Pinch Point funding, Local Investment Fund and Regional Infrastructure Fund monies, are very welcome but the Government needs to be careful that the conditions which attach to these funds do not make them prohibitive to take up. It is, therefore, vital that, alongside major strategic sites, we also have a number of smaller sites with consent which are easier to open up to development and, therefore, to dispose of.

The UK house building industry appears to be entering a phase of steady sales growth coupled with modest price inflation. Whilst London and its immediate surrounding areas are likely to show more dynamic characteristics, the rest of the country is exhibiting more sedate growth. This stable environment for the house building industry is no bad

thing and we are confident that we can operate successfully in it.

Property Investment and Development

Demand for investment properties outside London began to increase during late 2013 and into 2014 and, with supply still relatively constrained, this has fed through to valuation increases in many investment property sectors. This trend is now beginning to be reflected in our regionally located property, with modest valuation increases at the half year. This positive trend is also expected to improve the forecast development returns for a number of projects currently in the course of construction. Furthermore, we took advantage of this improvement in demand to sell our 50,000 sq ft B&Q retail warehouse investment in Rotherham, which was developed five years ago.

Occupancy levels within our investment properties have continued to improve over the last quarter and reflect a general improvement in occupier demand across many sectors. However, we are aware of a small number of lease events which will temporarily increase void space by the year end, before the majority of this space is let to new tenants in 2015. These events have already been factored into investment property valuations. Our mixed-use office and restaurant development on Deansgate, Manchester, is now fully let with contracts for the last unit now exchanged.

Property development activity at the construction stage is at its highest point since 2007 with work already under way, or just about to commence, on seven projects. We have a number of further projects expected to commence before the end of the year. These include initiatives to enhance existing investment property values which include the development of a 69,000 sq ft warehouse extension in conjunction with a re-gear of the existing lease to create a new 20 year lease to Recticel Ltd in Stoke-on-Trent. We expect this work to be completed in September 2014. We are also more than half way through the part redevelopment, part refurbishment, of the existing shopping centre investment in Beeston, Nottingham, which will also be completed by the end of the year, where the bulk of the space is already pre-let to retail and leisure operators.

The second phase of the conversion of the listed, former wire mill in Huddersfield to create 50,000 sq ft of clinical and office space, in partnership with Calderdale & Huddersfield NHS Foundation Trust, will be completed at the end of this year. In Thorne, Doncaster, where we have a development arrangement with The Royal Bank of Scotland, we completed a plot sale to Tesco PLC for a 35,000 sq ft foodstore and construction of the site infrastructure is now well under way with contracts for further plot sales expected to be exchanged shortly.

At Markham Vale, our 200 acre business park venture with Derbyshire County Council, two factory developments totalling 50,000 sq ft are due for

completion imminently and the construction of two industrial units, totalling 150,000 sq ft, which are both the subject of agreed pre-let terms, is expected to commence by the end of the year. We have also expanded the food and retail facilities serving the business park with a petrol station and drive-thru coffee shop developed for Euro Garages. Finally, we have agreed a detailed planning permission for a Marston's pub/ restaurant with the site sale and building work expected to commence shortly.

Building contracts have now been let for two budget hotels, one in Richmond upon Thames, pre-let to Travelodge, and the other in Malvern, pre-let to Premier Inn. Both developments are expected to be completed in the middle of 2015. On Westlakes Science Park in Cumbria, we recently acquired a development site and simultaneously exchanged an unconditional pre-let agreement with WS Atkins PLC to take a 22,000 sq ft office development. Work is now on site and we expect to complete the development in mid 2015. In Skipton, however, where we own 56 acres of allocated employment land, our mixeduse planning application including a foodstore, already contracted to J Sainsbury plc, was refused at planning committee and we are now reviewing the development options.

We were very pleased to be appointed as preferred development partner by Aberdeen City Council to develop a new exhibition and conference centre and adjoining business park,

Conversion to clinical and office space

50,000 sq ft for Calderdale &

Huddersfield NHS Trust

Warehouse extension of

69,000 sq ft

for existing client in Stoke-on-Trent

Completion of plot sale for a

35,000 sq ft foodstore to Tesco PLC

Chairman's statement continued

and then to redevelop the existing conference centre site following relocation to the newly built facility. Extensive pre-planning consultation is now well under way though the initial phase of this very large project will take some time to resolve. Also in Scotland, on our six acre development site in Livingston town centre, we hope to secure detailed planning permission for a pre-let 43,000 sq ft retail warehouse scheme. Subject to securing consent, this development should commence on site and conclude in 2015.

In York we are making good progress with the redevelopment of the former Terry's Chocolate Factory following our purchase and onward sale of the part of the site with residential consent to David Wilson Homes in 2013. Firstly, terms are now agreed with a specialist residential developer to jointly convert the multistorey factory building into more than 150 apartments. Secondly, sale terms have recently been finalised with a care home operator to convert the former headquarters building into an assisted living operation. These developments, and the interest we have from hotel operators for the balance of the site, are all conditional upon securing detailed planning permission but we hope to make substantial progress with this by the year end with a view to commencing activity on site in 2015.

Looking ahead, we have secured a number of new development opportunities throughout the country which we are now progressing through legal due diligence or the planning process. We anticipate that many of these will be committed, profitable development schemes in 2015 and beyond.

Construction

After carrying a healthy order book into 2014, the division has now won orders to achieve its budgeted turnover and is confident that it will achieve targeted profit levels for the year. We are, therefore, now starting to build an encouraging order book for 2015.

Our presence in the social housing sector remains strong with long-term frameworks in Doncaster for St Leger Homes, Scunthorpe for North Lincolnshire Homes, Manchester for Eastlands Homes, ASRA Housing Group, and with projects being delivered under the EN Procure and YORbuild frameworks.

We are now into the third year of our six year framework with the Ministry of Justice Strategic Alliance Agreement for new-build and refurbishment schemes for HM Prison Service, HM Court and Tribunals Service, National Probation Service and Forensic Science Service in the north of England. We are pleased to report that we have secured a further four new projects to add to the four schemes currently being delivered.

The education sector continues to provide good opportunities with the awards of the MERI Building Phases 2 & 3 for Sheffield Hallam University and the refurbishment and fit-out of

the Joseph Banks laboratory for the University of Lincoln. We are also undertaking works at Ampleforth College and have recently secured a refurbishment of Blue Coat School in Oldham.

In the health sector, opportunities continue under a framework agreement with the Sheffield Teaching Hospitals where we have delivered schemes at both the Northern General and Royal Hallamshire Hospitals. A five storey mill building refurbishment to provide clinical and office space in Huddersfield for the Pennine Property Partnership LLP was completed earlier in the year.

An increase in activity in the commercial, industrial and leisure sectors has seen the successful completion of the Moorfoot office refurbishment for Sheffield City Council and the multi RIBA award winning managed workspace project in Sheffield. The £8.0m state-of-the-art Screw Press House for Bifrangi UK Ltd in Lincoln was also successfully handed over in June as was the food warehouse for Holdsworth Foods at Markham Vale. Work is progressing on the construction of a food production facility for Ready Egg at Markham Vale and the laboratory refurbishment scheme for Smithers Viscient in Harrogate. We have also recently commenced a new Visitor Centre for Games Workshop in Nottingham.

Work commenced at the end of February 2014 for Stocksbridge Regeneration Company Limited on the £30.0m construction phase of the Fox Valley retail development in

Stocksbridge. This major project comprises retail, commercial and associated civil engineering works for completion early in 2016.

We have seen an increase in civil engineering opportunities through a supply-chain partnership on the 25 year Amey PFI Sheffield Highways scheme, where we continue to deliver a significant number of civil engineering projects largely on the road system throughout Sheffield. We also recently completed a water treatment facility for Byzak and have commenced infrastructure works at Thorne Park for Henry Boot Developments. In addition, we are seeing good opportunities through the YORCivils framework.

The Group continues to retain a 61% stake in Road Link (A69), the PFI project to maintain the A69 trunk road between Newcastle and Carlisle. Road Link (A69), which has now completed 18 years of the 30 year contract with the Highways Agency, continues to trade in line with the Board's expectations.

Banner Plant has seen a further improvement in activity in the first half compared with the comparative period in 2013. Utilisation and, more recently, rates have improved slightly which, if maintained through to the year end, should result in the delivery of a better result than 2013.

Outlook

Trading in the first half of 2014 has been strong and we have a considerable number of strategic land sites for sale. The completion timing of these sales is always very difficult to predict with certainty. However, based on a prudent assessment, we currently anticipate trading profits including revaluation gains to exceed the Board's initial expectations for the year. We will, of course, keep the market advised of progress during the rest of the year via the Interim Management Statement in November and pre-close Trading Statement in January 2015.

Taking each business segment in turn:

Land Development

The initiatives to help support, largely, first time buyers and the general recovery in consumer confidence have had a positive effect on demand for new housing. Major UK house builders who have reported in the last two months have seen significant increases in sales rates. Most also reported that their supply of new build plots was also increasing. Therefore, the land market remains in equilibrium with good levels of land supply and demand. As explained above, we continue to replenish our strategic land site acreage and continue to see good opportunities being brought to market. The stock of housing units with permission achieved at 10,845 units bodes well for sales in 2015 and beyond.

Property Investment and Development

Development activity is now beginning to grow and, as highlighted in the Performance Review, we are developing out seven sites with several others following

closely behind. This activity level far exceeds anything we have done since 2007 and as we complete these schemes in a generally recovering marketplace, we should achieve acceptable development values.

Construction

Workloads are good and we are currently building the 2015 order book. Contract pricing remains competitive and there are some raw material pricing pressures. However, the opportunities to tender are also very good and we are very comfortable with the current marketplace. Banner Plant continues to trade at high levels of utilisation and is also seeing some hire rate improvement, especially for newer, more efficient, lower emission plant. Road Link (A69) continues to perform in line with management expectations.

Group Risks and Uncertainties

The Directors set out in the 2013 Annual Report and Financial Statements (and reproduced in note 12) the key risks that could have a material effect on our results. The Board does not consider that these risks, which were identified at the time, have changed materially since then. Economic recovery is gaining momentum and trading conditions across all businesses in the Group are good. We have a strong portfolio of both strategic land and commercial development opportunities which we hope to capitalise on as this recovery continues. More specifically, commercial development activity is now at its highest level since

2007 with new, pre-let developments achieving hurdle rates of return expected to commence in the second half of the year. The combination of this increased level of commercial development, our strategic land sites with well over 10,800 permissioned housing units available for future sale and the solid returns from the construction segment should strongly support growing shareholder returns into 2015 and beyond.

John Brown

Chairman 21 August 2014

A diverse portfolio

It is its diversity, flexibility and strength of performance that have kept Henry Boot at the forefront of its markets over many years. This is a selection of schemes being undertaken representing the three distinct core business segments of land development, property investment and development, and construction.

Malvern

Henry Boot Developments Limited

Location

Townsend Way, Worcestershire Type

Town centre leisure Size 66 bed hotel

Malvern is located in Worcestershire approximately 4 miles from Junction 7 of the M5 Motorway via the A449 or Junction 8 via the A4104.

The 1.1 acre site is to the north east of the town on the Enigma Business Park and fronts the busy arterial route of Townsend Way. Planning Permission was granted in July 2014 for a 66 bed hotel and car parking, with Whitbread PLC taking a 25 year lease for a Premier Inn hotel. Construction is due to commence in the summer of 2014.

View more content online at: www.henrybootdevelopments.co.uk

Plant Hire

Banner Plant Limited

Location

Chesterfield, Dronfield, Derby, Leeds, Rotherham and Wakefield

Type

Plant, temporary accommodation, power tools, powered access, big air compressors and serviced toilets

Size

Over 2,800 products

The range of products has constantly evolved to meet customer needs and to fulfil the requirements of modern health and safety legislation. The primary supply area stretches from Yorkshire in the north to the East Midlands and Birmingham in the south whilst more specialist divisions have national coverage.

Find out more about Banner Plant on page 07

View more content online at: www.bannerplant.co.uk

Stocksbridge Henry Boot Construction Limited

Location Fox Valley, South Yorkshire Type Mixed-use development Size £30.0 million

This scheme is the redevelopment of the former Outokumpu site in

Road Maintenance Road Link (A69) Limited

Location Cumbria and Northumberland Type Road operation and maintenance Size 52 miles of trunk road from Carlisle to Newcastle

A 30 year contract with the Highways Agency to operate and maintain the A69, which is the major east–west allweather route in the north of England. Works include road surfacing, bridge repairs, winter preparation and routine maintenance.

Stocksbridge near Sheffield. The mixed-use scheme will offer retail, office and leisure facilities as well as a new 600 space car park and 63,000 sq ft Tesco store. Completion of the project is planned for

early 2016.

Haddington

Hallam Land Management Limited

Location
Dovecot, East Lothian
Type
Land promotion
Size
Planning for 113 new homes

A planning in principle application was approved on appeal on this optioned site. The approved scheme is for 113 units and will include an affordable housing element of 25%. Hallam Land is close to exchanging contracts with a national house builder and hopes to complete this transaction in 2014.

Carlton

Stonebridge Projects Limited

Location Wakefield, West Yorkshire Type Residential development Size 14 new homes

Shayfield Lane, Carlton, is a small development of 14 quality homes built on the edge of open countryside. The development consists of four & five bedroom detached houses built on an area of land totalling 1.7 acres. All properties are now sold.

Consolidated statement of comprehensive income (unaudited)

for the half year ended 30 June 2014

	Half year	Half year	Year
	ended	ended	ended
	30 June	30 June	31 December
	2014	2013	2013
	Unaudited £'000	Unaudited £'000	Audited £'000
Revenue	65,795	81,830	153,794
Cost of sales	(44,843)	(64,962)	(115,971)
Gross profit	20,952	16,868	37,823
Other income	16	15	30
Administrative expenses	(7,478)	(6,935)	(13,936)
Pension expenses	(1,600)	(1,811)	(3,632)
	11,890	8,137	20,285
Increase/(decrease) in fair value of investment properties	1,839	(512)	(1,563)
Profit on sale of investment properties	11	179	304
Profit on sale of assets held for sale	270	—	—
Operating profit	14,010	7,804	19,026
Finance income	208	320	694
Finance costs	(790)	(736)	(1,526)
Share of (loss)/profit of joint ventures	(21)	7	183
Profit before tax	13,407	7,395	18,377
Tax	(2,582)	(1,817)	(5,143)
Profit for the period from continuing operations	10,825	5,578	13,234
Other comprehensive income/(expense) not being reclassified to
profit or loss in subsequent periods:
Deferred tax on property revaluations	—	—	84
Actuarial (loss)/gain on defined benefit pension scheme	(3,837)	7,323	8,537
Deferred tax on actuarial loss/(gain)	768	(1,684)	(2,447)
Movement in fair value of cash flow hedge	54	82	151
Deferred tax on cash flow hedge	(12)	(19)	(38)
Total other comprehensive (expense)/income not being reclassified to
profit or loss in subsequent periods	(3,027)	5,702	6,287
Total comprehensive income for the period	7,798	11,280	19,521
Profit for the period attributable to:
Owners of the Parent Company	9,657	4,723	11,315
Non-controlling interests	1,168	855	1,919
	10,825	5,578	13,234
Total comprehensive income attributable to:
Owners of the Parent Company	6,614	10,400	17,558
Non-controlling interests	1,184	880	1,963
Basic earnings per ordinary share for the profit attributable to	7,798	11,280	19,521
owners of the Parent Company during the period	7.4p	3.6p	8.6p
Diluted earnings per ordinary share for the profit attributable to
owners of the Parent Company during the period	7.3p	3.6p	8.5p

Consolidated statement of financial position (unaudited)

at 30 June 2014

	30 June	30 June	31 December
	2014	2013	2013
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
ASSETS
Non-current assets
Intangible assets	7,386	8,538	7,994
Property, plant and equipment	18,929	17,897	17,354
Investment properties	136,160	142,549	132,394
Investment in joint ventures	159	3	180
Trade and other receivables	6,980	15,364	12,686
Deferred tax assets	5,989	6,942	5,411
	175,603	191,293	176,019
Current assets
Inventories	99,236	84,292	91,013
Trade and other receivables	43,464	49,653	43,103
Cash and cash equivalents	4,848	3,267	15,587
Assets classified as held for sale	2,730	—	10,511
	150,278	137,212	160,214
LIABILITIES
Current liabilities
Trade and other payables	53,486	55,655	50,171
Current tax liabilities	2,652	1,236	2,505
Borrowings	31,834	36,748	46,492
Provisions	4,790	6,243	7,147
	92,762	99,882	106,315
NET CURRENT ASSETS	57,516	37,330	53,899
Non-current liabilities
Trade and other payables	2,537	2,297	4,840
Borrowings	6,143	5,346	5,207
Retirement benefit obligations	22,683	22,277	20,075
Provisions	5,694	10,148	6,312
	37,057	40,068	36,434
NET ASSETS	196,062	188,555	193,484
EQUITY
Share capital	13,522	13,510	13,510
Property revaluation reserve	3,355	3,271	3,355
Retained earnings	173,999	167,260	171,938
Other reserves	3,727	3,535	3,566
Cost of shares held by ESOP trust	(130)	(211)	(188)
Equity attributable to owners of the Parent Company	194,473	187,365	192,181
Non-controlling interests	1,589	1,190	1,303
TOT AL EQUITY	196,062	188,555	193,484

Consolidated statement of changes in equity (unaudited)

at 30 June 2014

12

			Attributable to owners of the Parent Company
	Share	Property revaluation	Retained	Other	Cost of shares held by ESOP		Non controlling	Total
	capital £'000	reserve £'000	earnings £'000	reserves £'000	trust £'000	Total £'000	interests £'000	equity £'000
At 1 January 2013	13,510	3,271	160,692	3,497	(444)	180,526	1,377	181,903
Profit for the period	—	—	4,723	—	—	4,723	855	5,578
Other comprehensive income	—	—	5,639	38	—	5,677	25	5,702
Total comprehensive income	—	—	10,362	38	—	10,400	880	11,280
Equity dividends	—	—	(3,797)	—	—	(3,797)	(1,067)	(4,864)
Proceeds on disposal of treasury shares	—	—	—	—	4	4	—	4
Share-based payments	—	—	3	—	229	232	—	232
	—	—	(3,794)	—	233	(3,561)	(1,067)	(4,628)
At 30 June 2013 (unaudited)	13,510	3,271	167,260	3,535	(211)	187,365	1,190	188,555
At 1 January 2013	13,510	3,271	160,692	3,497	(444)	180,526	1,377	181,903
Profit for the year	—	—	11,315	—	—	11,315	1,919	13,234
Other comprehensive income	—	84	6,090	69	—	6,243	44	6,287
Total comprehensive income	—	84	17,405	69	—	17,558	1,963	19,521
Equity dividends	—	—	(6,358)	—	—	(6,358)	(2,037)	(8,395)
Proceeds on disposal of treasury shares	—	—	—	—	26	26	—	26
Share-based payments	— —	— —	199 (6,159)	— —	230 256	429 (5,903)	— (2,037)	429 (7,940)
At 31 December 2013 (audited)	13,510	3,355	171,938	3,566	(188)	192,181	1,303	193,484
Profit for the period	—	—	9,657	—	—	9,657	1,168	10,825
Other comprehensive income	—	—	(3,069)	26	—	(3,043)	16	(3,027)
Total comprehensive income	—	—	6,588	26	—	6,614	1,184	7,798
Equity dividends	—	—	(4,125)	—	—	(4,125)	(898)	(5,023)
Proceeds from shares issued	12	—	—	135	—	147	—	147
Proceeds on disposal of treasury shares	—	—	—	—	25	25	—	25
Purchase of treasury shares	—	—	—	—	(581)	(581)	—	(581)
Share-based payments	—	—	(402)	—	614	212	—	212
	12	—	(4,527)	135	58	(4,322)	(898)	(5,220)
At 30 June 2014 (unaudited)	13,522	3,355	173,999	3,727	(130)	194,473	1,589	196,062

Consolidated statement of cash flows (unaudited)

for the half year ended 30 June 2014

	Half year	Half year	Year
	ended	ended	ended
	30 June	30 June	31 December
	2014	2013	2013
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
		(restated*)
Cash flows from operating activities
Operating profit	14,010	7,804	19,026
Adjustments for non-cash items:
Amortisation of PFI asset	577	567	1,140
Goodwill impairment	102	102	204
Depreciation of property, plant and equipment	1,630	1,522	3,086
Revaluation (increase)/decrease in investment properties	(1,839)	512	1,563
Amortisation of capitalised letting fees	15	35	88
Share-based payment expense	212	232	429
Pension scheme credit	(1,229)	(933)	(1,921)
Gain on disposal of assets held for sale	(270)	—	—
Gain on disposal of property, plant and equipment	(97)	(185)	(406)
Gain on disposal of investment properties	(11)	(179)	(304)
Operating cash flows before movements in equipment held for hire	13,100	9,477	22,905
Purchase of equipment held for hire	(2,696)	(2,614)	(3,303)
Proceeds on disposal of equipment held for hire	211	223	471
Operating cash flows before movements in working capital	10,615	7,086	20,073
Increase in inventories	(7,919)	(2,671)	(9,106)
Decrease/(increase) in receivables	4,048	(13,816)	(5,129)
(Decrease)/increase in payables	(2,068)	1,742	(4,294)
Cash generated from/(used by) operations	4,676	(7,659)	1,544
Interest paid	(633)	(567)	(1,152)
Tax paid	(2,255)	(760)	(1,984)
Net cash flows from operating activities	1,788	(8,986)	(1,592)
Cash flows from investing activities
Purchase of intangible assets	(71)	(55)	(186)
Purchase of property, plant and equipment	(656)	(231)	(793)
Purchase of investment property	(3,389)	(3,939)	(6,417)
Proceeds on disposal of property, plant and equipment	33	76	153
Proceeds on disposal of investment properties	128	588	2,219
Proceeds on disposal of assets held for sale	10,478	450	450
Dividends received from joint ventures	—	25	25
Interest received	104	29	290
Net cash flows from investing activities	6,627	(3,057)	(4,259)
Cash flows from financing activities
Proceeds from issuance of ordinary shares	147	—	—
Purchase of treasury shares	(581)	—	—
Proceeds on disposal of treasury shares	25	4	26
Decrease in borrowings	(27,932)	(761)	(12,937)
Increase in borrowings	14,160	12,259	39,326
Dividends paid – ordinary shares	(4,115)	(3,787)	(6,337)
– non-controlling interests	(898)	(1,067)	(2,037)
– preference shares	(10)	(10)	(21)
Net cash flows from financing activities	(19,204)	6,638	18,020
Net (decrease)/increase in cash and cash equivalents	(10,789)	(5,405)	12,169
Net cash and cash equivalents at beginning of period	15,587	3,418	3,418
Net cash and cash equivalents at end of period	4,798	(1,987)	15,587
Analysis of net debt:
Cash and cash equivalents	4,848	3,267	15,587
Bank overdrafts	(50)	(5,254)	—
Net cash and cash equivalents	4,798	(1,987)	15,587
Bank loans	(33,114)	(33,720)	(48,746)
Related party loans	—	(200)	—
Government loans	(4,813)	(2,920)	(2,953)
Net debt	(33,129)	(38,827)	(36,112)

CONDENSED FINANCIAL STATEMENTS

* The half year ended 30 June 2013 has been restated to reclassify movements relating to equipment held for hire from investing activities to operating activities in accordance with IAS 7.

Notes to the condensed financial statements

for the half year ended 30 June 2014

1. General information

14

The Company is a public limited company, listed on the London Stock Exchange and incorporated and domiciled in the United Kingdom. The address of its registered office is Banner Cross Hall, Ecclesall Road South, Sheffield, United Kingdom, S11 9PD.

The financial information set out on pages 10 to 13 does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006 and is neither audited nor reviewed. The Financial Statements for the year ended 31 December 2013, which were prepared under IFRS as adopted by the European Union, have been reported on by the Group's auditors and delivered to the Registrar of Companies. The Independent Auditors' Report was unqualified and did not contain any statement under Section 498 of the Companies Act 2006.

2. Basis of preparation and accounting policies

The half-yearly financial information has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34 'Interim Financial Reporting' as adopted by the European Union.

The Company meets its day-to-day working capital requirements through a secured loan facility, which includes an overdraft facility, and was renewed on 7 May 2012 for a period of three years. Renewal negotiations have commenced and we anticipate that renewed facilities will be in place by early 2015. Economic conditions are on an improving trend; however, there are still risks facing the business. As part of their regular going concern review the Directors specifically address all the risk areas that they consider material to the assessment of going concern. The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and thus they continue to adopt the going concern basis of accounting in preparing the half-yearly financial information.

The preparation of half-yearly financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates.

In preparing these half-yearly financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated Financial Statements for the year ended 31 December 2013.

The half-yearly financial information has been prepared using the same accounting policies and methods of computation as compared with the annual Financial Statements for the year ended 31 December 2013, except for as described below:

The following standards and interpretations are mandatory for the first time for the financial year ending 31 December 2014:

		Effective from
IAS 27 (issued 2011)	'Separate Financial Statements'	1 January 2013*
IAS 28 (issued 2011)	'Investments in Associates and Joint Ventures'	1 January 2013*
IFRS 10 (issued 2011)	'Consolidated Financial Statements'	1 January 2013*
IFRS 10 (issued 2012)	'Transition Guidance'	1 January 2013*
IFRS 11 (issued 2011)	'Joint Arrangements'	1 January 2013*
IFRS 11 (issued 2012)	'Transition Guidance'	1 January 2013*
IFRS 12 (issued 2011)	'Disclosures of Interests in Other Entities'	1 January 2013*
IFRS 12 (issued 2012)	'Transition Guidance'	1 January 2013*
IFRIC 21 (issued 2013)	'Levies'	1 January 2014
IAS 27 (issued 2012)	'Investment Entities'	1 January 2014
IAS 32 (amended 2011)	'Offsetting Financial Assets and Financial Liabilities'	1 January 2014
IAS 36 (amended 2013)	'Recoverable Amount Disclosures for Non-Financial Assets'	1 January 2014
IAS 39 (amended 2013)	'Novation of Derivatives and Continuation of Hedge Accounting'	1 January 2014
IFRS 10 (issued 2012)	'Investment Entities'	1 January 2014
IFRS 12 (issued 2012)	'Investment Entities'	1 January 2014

* Mandatory from 1 January 2014.

The adoption of these standards and interpretations has not had a significant impact on the Group.

The Group did not early adopt any new or amended standards and does not plan to early adopt any of the standards issued but not yet effective or mandatory.

3. Segment information

For the purpose of the Board making strategic decisions, the Group is currently organised into three operating segments: Property investment and development; Land development; and Construction. Group overheads are not a reportable segment; however, information about them is considered by the Board in conjunction with the reportable segments.

Operations are carried out entirely within the United Kingdom.

Inter-segment sales are charged at prevailing market prices.

The accounting policies of the reportable segments are the same as the Group's accounting policies as detailed on page 14.

Segment profit represents the profit earned by each segment before tax and is consistent with the measure reported to the Group's Board for the purpose of resource allocation and assessment of segment performance.

			Half year ended 30 June 2014 Unaudited
	Property investment
	and	Land		Group
	development	development	Construction	overheads	Eliminations	Total
Revenue	£'000	£'000	£'000	£'000	£'000	£'000
External sales	15,336	9,649	40,810	—	—	65,795
Inter-segment sales	151	—	4,265	333	(4,749)	—
Total revenue	15,487	9,649	45,075	333	(4,749)	65,795
Operating profit/(loss)	6,422	5,611	3,973	(1,996)	—	14,010
Finance income	559	284	672	4,051	(5,358)	208
Finance costs	(3,410)	(792)	(270)	(1,676)	5,358	(790)
Share of losses of joint ventures	(21)	—	—	—	—	(21)
Profit before tax	3,550	5,103	4,375	379	—	13,407
Tax	(296)	(1,097)	(1,125)	(64)	—	(2,582)
Profit for the period	3,254	4,006	3,250	315	—	10,825

				Half year ended 30 June 2013 Unaudited
	Property
	investment
	and	Land		Group
	development	development	Construction	overheads	Eliminations	Total
Revenue	£'000	£'000	£'000	£'000	£'000	£'000
External sales	20,825	19,355	41,650	—	—	81,830
Inter-segment sales	151	—	1,714	319	(2,184)	—
Total revenue	20,976	19,355	43,364	319	(2,184)	81,830
Operating profit/(loss)	1,261	5,645	3,059	(2,167)	6	7,804
Finance income	709	440	683	4,075	(5,587)	320
Finance costs	(3,484)	(741)	(294)	(1,804)	5,587	(736)
Share of profits of joint ventures	7	—	—	—	—	7
Profit/(loss) before tax	(1,507)	5,344	3,448	104	6	7,395
Tax	303	(1,242)	(853)	(24)	(1)	(1,817)
Profit/(loss) for the period	(1,204)	4,102	2,595	80	5	5,578

Notes to the condensed financial statements continued

for the half year ended 30 June 2014

3. Segment information continued

	Year ended 31 December 2013 Audited
Revenue	Property investment and development £'000	Land development £'000	Construction £'000	Group overheads £'000	Eliminations £'000	Total £'000
External sales	37,623	37,655	78,516	—	—	153,794
Inter-segment sales	296	8	3,726	656	(4,686)	—
Total revenue	37,919	37,663	82,242	656	(4,686)	153,794
Operating profit/(loss)	3,056	11,896	8,180	(4,112)	6	19,026
Finance income	1,629	750	1,398	25,245	(28,328)	694
Finance costs	(7,202)	(1,506)	(580)	(3,726)	11,488	(1,526)
Share of profit of joint ventures	183	—	—	—	—	183
Profit/(loss) before tax	(2,334)	11,140	8,998	17,407	(16,834)	18,377
Tax	(173)	(2,587)	(2,228)	(150)	(5)	(5,143)
Profit/(loss) for the year	(2,507)	8,553	6,770	17,257	(16,839)	13,234

	30 June	30 June	31 December
	2014	2013	2013
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
Segment assets
Property investment and development	168,162	173,819	172,749
Land development	113,751	110,035	113,251
Construction	31,156	32,142	27,117
Group overheads and other	1,975	2,300	2,118
	315,044	318,296	315,235
Unallocated assets
Deferred tax assets	5,989	6,942	5,411
Cash and cash equivalents	4,848	3,267	15,587
Total assets	325,881	328,505	336,233
Segment liabilities
Property investment and development	3,944	4,903	4,280
Land development	18,551	21,289	22,976
Construction	42,222	46,062	39,248
Group overheads and other	1,790	2,089	1,966
	66,507	74,343	68,470
Unallocated liabilities
Current tax liabilities	2,652	1,236	2,505
Current borrowings	31,834	36,748	46,492
Non-current borrowings	6,143	5,346	5,207
Retirement benefit obligations	22,683	22,277	20,075
Total liabilities	129,819	139,950	142,749
Total net assets	196,062	188,555	193,484

1. Earnings per ordinary share Earnings per ordinary share is calculated on the weighted average number of shares in issue. Diluted earnings per ordinary share is calculated on the weighted average number of shares in issue adjusted for the effects of any dilutive potential ordinary shares.

5. Dividends

	Half year ended 30 June 2014 Unaudited £'000	Half year ended 30 June 2013 Unaudited £'000	Year ended 31 December 2013 Audited £'000
Amounts recognised as distributions to equity holders in year:
Preference dividend on cumulative preference shares	10	10	21
Interim dividend for the year ended 31 December 2013 of 1.95p per share (2012: 1.80p)	—	—	2,551
Final dividend for the year ended 31 December 2013 of 3.15p per share (2012: 2.90p)	4,115	3,787	3,786
	4,125	3,797	6,358

An interim dividend amounting to £2,756,000 (2013: £2,551,000) will be paid on 24 October 2014 to shareholders whose names are on the register at the close of business on 26 September 2014. The proposed interim dividend has not been approved at the date of the Consolidated Statement of Financial Position and so has not been included as a liability in these Financial Statements.

6. Tax

	Half year	Half year	Year
	ended	ended	ended
	30 June	30 June	31 December
	2014	2013	2013
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
Current tax:
UK corporation tax on profits for the year	2,201	1,534	4,064
Adjustment in respect of earlier years	201	24	(13)
Total current tax	2,402	1,558	4,051
Deferred tax:
Origination and reversal of temporary differences	180	259	1,092
Total deferred tax	180	259	1,092
Total tax	2,582	1,817	5,143

Corporation tax is calculated at 21.5% (2013: 23.25%) of the estimated assessable profit for the period being management's estimate of the weighted average corporation tax rate for the period.

Deferred tax balances at the period end have been measured at 21% and 20% (June 2013: 23%), being the rates expected to be applicable at the date the actual tax will arise.

Notes to the condensed financial statements continued

for the half year ended 30 June 2014

7. Investment properties

18

	Completed investment	Investment property under
	property	construction	Total
	£'000	£'000	£'000
Fair value
At 1 January 2013	96,149	44,226	140,375
Subsequent expenditure on investment property	626	3,212	3,838
Capitalised letting fees	68	33	101
Amortisation of capitalised letting fees	(30)	(5)	(35)
Disposals	(202)	(175)	(377)
Transfer to inventories	(193)	(648)	(841)
(Decrease)/increase in fair value in year	(711)	199	(512)
At 30 June 2013 (unaudited)	95,707	46,842	142,549
Adjustment in respect of tenant incentives	4,543	—	4,543
Adjustment in respect of tax benefits	(671)	—	(671)
Market value at 30 June 2013	99,579	46,842	146,421
Fair value
At 1 January 2013	96,149	44,226	140,375
Subsequent expenditure on investment property	1,297	4,903	6,200
Capitalised letting fees	169	48	217
Amortisation of capitalised letting fees	(87)	(1)	(88)
Disposals	(361)	(1,528)	(1,889)
Transfers to assets held for sale	(10,511)	—	(10,511)
Transfer to inventories	(68)	(279)	(347)
Transfers within investment property	5,040	(5,040)	—
Decrease in fair value in year	(1,101)	(462)	(1,563)
At 31 December 2013 (audited)	90,527	41,867	132,394
Subsequent expenditure on investment property	2,027	1,303	3,330
Capitalised letting fees	35	24	59
Amortisation of capitalised letting fees	(14)	(1)	(15)
Disposals	(17)	(100)	(117)
Transfers to assets held for sale	(1,100)	—	(1,100)
Transfer to inventories	(80)	(150)	(230)
Transfers within investment property	1,405	(1,405)	—
Increase/(decrease) in fair value in year	2,477	(638)	1,839
At 30 June 2014 (unaudited)	95,260	40,900	136,160
Adjustment in respect of tenant incentives	2,610	—	2,610
Adjustment in respect of tax benefits	(474)	—	(474)
Market value at 30 June 2014	97,396	40,900	138,296

At 30 June 2014, the Group had entered into contractual commitments for the acquisition and repair of investment property amounting to £4,539,000 (31 December 2013: £321,000).

8. Borrowings

	Half year	Half year	Year
	ended	ended	ended
	30 June	30 June	31 December
	2014	2013	2013
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
Bank overdrafts	50	5,254	—
Bank loans	33,114	33,720	48,746
Government loans	4,813	2,920	2,953
Loans from related parties	—	200	—
	37,977	42,094	51,699
Movements in borrowings are analysed as follows:
			£'000

At 1 January 2014	51,699
Secured bank loans	12,000
Repayment of secured bank loans	(27,632)
Government loans	2,160
Repayment of Government loans	(300)
Movement in bank overdrafts	50
At 30 June 2014	37,977

9. Provisions for liabilities and charges

Since 31 December 2013 the following movements on provisions for liabilities and charges have occurred:

• • the road maintenance provision represents management's best estimate of the Group's liability under a five-year rolling programme for the maintenance of the Group's PFI asset. During the period £693,000 has been utilised and additional provisions of £215,000 have been made, all of which were due to normal operating procedures; and
• • the Land development provision represents management's best estimate of the Group's liability to provide infrastructure and service obligations, which remain with the Group following the disposal of land. During the period £2,811,000 has been utilised and additional provisions of £314,000 have been made.

10. Defined benefit pension scheme

The assumptions that have been used in the calculations of the defined benefit pension scheme by its actuary were as follows:

	30 June	30 June	31 December
	2014 %	2013 %	2013 %
Retail Prices Index (RPI)	3.00	2.75	3.00
Retail Prices Index 'Jevons' (RPIJ)	2.40	—	2.40
Consumer Prices Index (CPI)	2.00	2.00	2.00
Pensionable salary increases	1.00	1.00	1.00
Rate in increase to pensions in payment liable for Limited Price Indexation (LPI)	2.40	2.75	2.40
Revaluation of deferred pensions	2.00	2.00	2.00
Liabilities discount rate	4.30	4.80	4.50

Notes to the condensed financial statements continued

for the half year ended 30 June 2014

10. Defined benefit pension scheme continued

Amounts recognised in the Consolidated Statement of Comprehensive Income in respect of the scheme are as follows:

	Half year ended	Half year	Year
		ended	ended
	30 June	30 June	31 December
	2014 Unaudited £'000	2013	2013
		Unaudited	Audited
		£'000	£'000
Current service cost	(591)	(596)	(1,200)
Ongoing scheme expenses	(165)	(199)	(340)
Net interest expense	(428)	(654)	(1,288)
Pension Protection Fund	(106)	(103)	(206)
Pension expenses	(1,290)	(1,552)	(3,034)

The amount included in the Statement of Financial Position arising from the Group's obligations in respect of the scheme is as follows:

	Half year	Half year	Year
	ended	ended	ended
	30 June	30 June	31 December
	2014	2013	2013
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
Present value of scheme obligations	162,112	153,628	156,254
Fair value of scheme assets	(139,429)	(131,351)	(136,179)
	22,683	22,277	20,075

11. Related party transactions

There have been no material transactions with related parties during the period.

There have been no material changes to the related party arrangements as reported in note 29 of the Annual Report and Financial Statements for the year ended 31 December 2013.

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

12. Key risks

In common with all organisations, the Group faces risks which may affect its performance. These are general in nature and include: obtaining business on competitive terms, retaining key personnel, successful integration of new business streams and market competition.

The Group operates a system of internal control and risk management in order to provide assurance that we are managing risk whilst achieving our business objectives. No system can fully eliminate risk and therefore the understanding of operational risk is central to the management process within Henry Boot. The long-term success of the Group depends on the continual review, assessment and control of the key business risks it faces.

The Directors do not consider that the principal risks and uncertainties have changed since the publication of the Annual Report for the year ended 31 December 2013. To enable shareholders to appreciate what the business considers are the main operational risks, they are briefly outlined below:

Development

• • Not developing marketable assets for both tenants and the investment market on time and cost-effectively.
• • Rising market yields on completion making development uneconomic.
• • Construction and tenant risk which is not matched by commensurate returns on development projects.

12. Key risks continued

Land

• • The inability to source, acquire and promote land would have a detrimental effect on the Group's strategic land bank and income stream.
• • Prices may be affected by changes in Government policy, legislation, planning environment and taxation.
• • A dramatic change in house builder funding sentiment and demand for housing can have a marked change on the demand and pricing profile for land.

Investments

• Identifying and retaining assets which have the best opportunity for long-term rental and capital growth, or conversely selling those assets where capital values have been maximised.

Interest rates

• Significant upward changes in interest rates affect interest costs, yields and asset prices and reduce demand for commercial and residential property.

Treasury

• The lack of readily available funding to either the Group or third parties to undertake property transactions can have a significant impact on the marketplace in which the Group operates.

Planning

• • Increased complexity, cost and delay in the planning process may slow down the project pipeline.
• • Significant changes in demand for housing and the attendant decline in land prices may have a detrimental effect on the supply of land being brought to market by landowners.
• • Changes in Government or Government policy, as happened in 2010, towards planning policies could impact on the speed of the planning consent process or the value of sites.

Personnel

• Attraction and retention of the highest calibre people with the appropriate experience is crucial to our long-term growth in the highly competitive labour markets in which the Group works.

Pension

• The Group operates a defined benefit pension scheme which has been closed to new members for some time. Whilst the trustees have a prudent approach to the mix of both return seeking and fixed interest assets, times of economic instability can have an impact on those asset values with the result that the reported pension deficit increases. Furthermore, the relationship between implied inflation and long-term gilt yields has a major impact on the pension deficit and the business has little control over those variables.

Environmental

• • The Group is inextricably linked to the property sector and environmental considerations are paramount to our success.
• • Stricter environmental legislation will increase development and house building costs and therefore could impact on profitability if capital and land values do not increase to reflect this more efficient energy performance.

Economic

• • The Group operates solely in the UK and is closely allied to the real estate, house building and construction sectors. A strong economy with strong tenant demand is vital to create long-term growth in rental and asset values, whilst at the same time creating a healthy market for the construction and plant hire divisions. The much published reductions in public spending, the more difficult planning regime and comparatively low levels of property lending could have an impact on the Group's business.
• • The referendum on Scottish independence gives rise to uncertainty over the economic, taxation and legislative impact of a vote for independence. We have £16m of assets in Scotland which could be affected by this change.

Counterparty

• Depends on the stability of customers, suppliers, funders and development partners to achieve success.

13. Approval

At the Board meeting on 21 August 2014 the Directors formally approved the issue of these statements.

Responsibility statements of the directors

We confirm that to the best of our knowledge:

• a) the unaudited Condensed Consolidated Financial Statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union;
• b) the Half-yearly Report includes a fair review of the information required by Section DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
• c) the Half-yearly Report includes a fair review of the information required by Section DTR 4.2.8R (disclosure of related parties transactions and changes therein).

The Directors of Henry Boot PLC are listed in the Henry Boot PLC Annual Report for the year ended 31 December 2013. A list of current Directors is maintained on the Henry Boot PLC Group website: www.henryboot.co.uk.

On behalf of the Board

E J Boot Director 21 August 2014 J T Sutcliffe Director 21 August 2014

Company information

Henry Boot PLC

Registered office:

Banner Cross Hall Ecclesall Road South Sheffield S11 9PD United Kingdom

Registered in England and Wales No. 160996

t: 0114 255 5444 f: 0114 258 5548 e: plc@henryboot.co.uk w: www.henryboot.co.uk

Non-Executive Chairman John Brown

Executive Directors Jamie Boot John Sutcliffe

Non-Executive Directors Michael Gunston James Sykes

Company Secretary Russell Deards

Financial calendar

London Stock Exchange announcements

Half-yearly Results 2014: 22 August 2014

Second 2014 Interim Management Statement: mid November 2014

Financial year end: 31 December 2014

Trading Update 2014: end January 2015

Preliminary statement of results 2014: 26 March 2015

First 2015 Interim Management Statement: mid May 2015

Half-yearly Report and Annual Report and Financial Statements 2014

Half-yearly Report 2014: 5 September 2014

Annual Report and Financial Statements 2014: 17 April 2015

Dividend paid on ordinary shares

2014 interim: 24 October 2014

Annual General Meeting 21 May 2015

Advisers

Chartered Accountants and Statutory Auditors

PricewaterhouseCoopers LLP 1 East Parade Sheffield S1 2ET

Corporate Finance

KPMG Corporate Finance 1 The Embankment Neville Street Leeds LS1 4DW

Financial PR

Tooleystreet Communications Limited Regency Court 68 Caroline Street Birmingham B3 1UG

Bankers Barclays Bank PLC 1 St Paul's Place

121 Norfolk Street Sheffield S1 2JW

Lloyds Bank plc 14 Church Street Sheffield S1 1HP

The Royal Bank of Scotland plc 2 Whitehall Quay Leeds LS1 4HR

Registrars

Capita Asset Services The Registry 34 Beckenham Road Beckenham Kent BR3 4TU

Solicitors

DLA Piper UK LLP 1 St Paul's Place Sheffield S1 2JX

Stockbrokers

Investec Bank plc 2 Gresham Street London EC2V 7QP

group contact information

Property Investment and Development

Henry Boot Developments Limited Head office Banner Cross Hall, Ecclesall Road South, Sheffield, S11 9PD t: 0114 255 5444 e: hbdl@henryboot.co.uk w: www.henrybootdevelopments.co.uk

Regional offices: Bristol, Glasgow, London and Manchester

Stonebridge Projects Limited

Head office Park House, Park Square West, Leeds, LS1 2PW t: 0113 357 1100

• e: sales@stonebridgehomes.co.uk or info@stonebridgeoffices.co.uk
• w: www.stonebridgehomes.co.uk or www.stonebridgeoffices.co.uk

Land Development

Hallam Land Management Limited Head office

Banner Cross Hall, Ecclesall Road South, Sheffield, S11 9PD t: 0114 255 5444 e: hallamland@henryboot.co.uk w: www.hallamland.co.uk

Regional offices: Bristol, Glasgow, Leeds, London, Manchester and Northampton

Construction

Henry Boot Construction Limited Head office

Callywhite Lane, Dronfield, Derbyshire, S18 2XN t: 01246 410111 e: hbc@henryboot.co.uk w: henrybootconstruction.co.uk

Regional office: Manchester

Banner Plant Limited

Head office Callywhite Lane, Dronfield, Derbyshire, S18 2XS t: 01246 299400 e: dronfield@bannerplant.co.uk w: www.bannerplant.co.uk

Hire centres: Chesterfield, Derby, Dronfield, Leeds, Rotherham and Wakefield

Road Link (A69) Limited

Stocksfield Hall, Stocksfield, Northumberland, NE43 7TN t: 01661 842842 e: enquiries@roadlinka69.co.uk

Visit us online For more information on Henry Boot PLC please visit our website at www.henryboot.co.uk

Printed on Cocoon Silk 100. A recycled paper containing 100% recycled waste and manufactured at a mill certified with ISO 14001 environmental management standard. Fully recyclable and biodegradable. The pulp used in this product is bleached using an Elemental Chlorine Free process. (ECF)

Further copies of the 2014 Half-yearly Report may be obtained from the Company Secretary.

Henry Boot PLC

Registered office: Banner Cross Hall Ecclesall Road South Sheffield S11 9PD United Kingdom

Registered in England and Wales No. 160996

t: 0114 255 5444 f: 0114 258 5548 e: cosec@henryboot.co.uk www.henryboot.co.uk