Henry Boot Plc Business Information, Profile, and History

Company Perspectives:

Henry Boot is committed to the continuous review and improvement of i ts group operations and its client focus strategy. Within this cultur e are included the principal areas of quality assurance, safety, envi ronmental responsibility, information technology and human resource d evelopment.

History of Henry Boot Plc

Henry Boot plc is one of the United Kingdom's oldest and most well-kn own construction firms--in part because of the company participation in building the famed Pinewood Film Studios in Buckinghamshire. Once one of England's top homebuilders, Boot has refocused itself for the new century along two primary lines of operation: property developmen t and land management, the group's largest division, through subsidia ries Henry Boot Developments and Hallam Land Management; and commerci al and industrial construction, through Henry Boot Construction UK. T he company sold off its homebuilding division and other noncore opera tions in a major restructuring completed in 2004. Boot's property dev elopment business operates on a national scope, with regional offices in Sheffield, Manchester, London, Bristol, and Glasgow. Boot's const ruction wing focuses on England's northern regions, and targets contr acts including prisons, schools, hospitals, and road-building. This l atter activity includes the group's participation in the Road Link (A 69) Holdings consortium. The company also operates a plant hire subsi diary, Banner Plant Ltd. The founding Boot family remains active in t he company, with E.J. Boot serving as group managing director into th e mid-2000s. The company is listed on the London Stock Exchange. In 2 004, 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, starte d out in business with a simple pushcart. The building market, especi ally 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 hou sing from the fast-growing army of workers, as well as the rising mid dle 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 ope rations. 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 mo rtgages. The availability of mortgages placed home construction withi n 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 b y 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 c arts into the 20th century. By the outbreak of World War I, the compa ny had begun the shift to motorized transport, and already counted si x 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 f or 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 an d winning a large number of construction contracts for the military. Examples of the group's projects during the war included a seaplane b ase in Calshot, an airport in Manston, the American Army Rest Camp an d Hospital in Southampton, and the Chepstow military Hospital. The co mpany distinguished itself by its ability to complete its projects qu ickly, and within the space of a single year built more than 1,000 bu ildings 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 jo inery, plumbing, and painting services. The company also entered the manufacture and distribution of building materials for the general co nstruction market. This activity enabled the company to reduce its ow n cost of materials, while ensuring their supply for the group's ongo ing 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 constr uction industry.

The interwar period saw Boot emerge as a top British and European con struction company. The company's first move into the international ma rket came soon after the war, when the French government turned to En gland 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 Europea n scale. The company went public in 1920 and began competing for cont racts across Europe. Boot participated in an impressive number of lar ge-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 Athe ns, Greece. The latter office oversaw a massive £10 million pro ject (at the time, one of the largest in Europe) involved in moderniz ing Athens' infrastructure, as well as installing drainage and irriga tion systems in a massive land reclamation project for agricultural u se. Launched in 1927, the project, which was temporarily suspended af ter the German occupation of Greece during World War II, was complete d only in 1952.

Boot also enjoyed other triumphs in the prewar period. In 1936, the c ompany became one of the driving forces behind the construction of Pi newood Studios--based on a design developed by Charles Boot himself-- in an effort to challenge the growing dominance of the Hollywood prod uction 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 unpre cedented boom period. By the outbreak of World War II, the company ha d 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 dur ing the war years was its participation in the construction of the ha rbors used for the launch of the D-Day invasion in 1944. Following th e war, the company became a major partner for the United Kingdom's st eel and coal industries, and also developed a specialty in railroad e ngineering and construction. The company continued as manufacturer, e stablishing a dedicated joinery operation, while its homebuilding ope rations continued to flourish. Joining the company, and later becomin g 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 at tention toward its international growth. For this, the company depart ed from its European base to begin competing for projects elsewhere i n the world. The company launched operations in Hong Kong in 1976, wh ere the group became responsible for the construction of the city's M ass Transit Railway System, as well as for building the Kowloon-Canto n railroad extension. Elsewhere in the Asian region, the company took on a £120 million railway project in Singapore, and also exten ded its operations to Malaysia. Through the end of the 1970s and into the 1980s, Boot added projects in Saudi Arabia and Jordan, as well a s in Nigeria.

Refocused for the New Century

The economic slowdown of the 1970s, and the United Kingdom's lapse in to an extended recession, caught up to Boot in the early 1980s. With its domestic market shrinking, the company suffered a number of setba cks internationally as well. The company's profit began to decline, a nd Boot was frustrated in efforts to boost its foreign operations to compensate. As a result, the company was forced to restructure its op erations 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 engineeri ng operation as well.

Continued difficulties in the late 1980s and early 1990s encouraged B oot to streamline its operations still further. In particular, the co mpany abandoned its international operations to return its focus whol ly on the domestic British market. The newest restructuring effort en abled the company to restore its profit growth through most of the 19 90s. Yet the primary motor for the company's growth during this perio d and into the beginning of the 2000s was its young property developm ent business.

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

The new market situation forced Boot to review its operations once ag ain, and in 2002 the company launched its latest round of restructuri ng. As part of that process, the company decided to sell off the high er-risk, but higher-margin divisions of its construction operations, in a management buyout completed that year. In 2003, Boot's restructu ring 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. A lthough the company maintained a construction division, these operati ons had been greatly reduced, and focused on the lower-risk commercia l and industrial markets. Instead, Boot's center of gravity had shift ed firmly to its property development and land management arm, which had played a minor role in the group's operations just a decade earli er. Although the company's sales had shrunk back, from more than &pou nd;110 million in 2003 to slightly more than £84 million in 200 4, the group's profits rebounded strongly, representing some 19 perce nt 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 3 50,000-square-foot Ayr Central complex in Ayr. That structure, expect ed to be opened in March 2006, was already leased at more than 70 per cent by mid-2005. After nearly 120 years in operation, Henry Boot rem ained a prominent name in the United Kingdom's building market.

Principal Subsidiaries: Banner Plant Ltd.; Hallam Land Managem ent Ltd.; Henry Boot Construction (UK) Ltd.; Henry Boot Developments Ltd.

Principal Competitors: Taysec Construction Ltd.; AMEC plc; Bar ratt Developments plc; Persimmon plc.

Chronology

• Key Dates:
• 1886: Henry Boot starts his own building business with a singl e 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 operati on.
• 1936: Charles Boot, son of Henry Boot, designs Pinewood Studio s, built by the company.
• 1950s:Railroad engineering operations, which become a company special ty, 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 operation s.
• 1990s:The company begins property development and land management ope rations.
• 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 Willi am Bowden.
• 2005: Profits grow as the restructuring is completed.