Property developer Henry Boot PLC (LON:BOOT) posted weaker 2018 profits and said it expects this year to be challenging as the UK real estate sector adjusts to life outside the European Union.
The company said pre-tax profit fell to £48.6mln last year from £55.4mln in 2017 and revenue dropped to £397.1mln from £408.5mln.
A slow year for the property investment and development arm offset increased activity in the construction division, which is working on a £34mln a town centre redevelopment contract for the Barnsley Metropolitan Borough Council.
Pension costs
The group was also hit by increased pension expenses after a High Court ruled that Lloyds Banking Group PLC (LON:LLOY) must amend its pension rules to equalise payments for men and women. The judgement against Lloyds had far-reaching implications across the corporate sector.
Henry Boot said the ruling resulted in increased obligations for defined benefit pension schemes. Its pension expenses increased by £1.6mln from £0.6mln.
The company proposed a final dividend of 5.8p, taking the total for the year to 9.0p, up 13% on the previous year.
Looking ahead, chairman Jamie Boot said: ''We anticipate that 2019 will be a challenging year, as the UK real estate sector adapts to the marketplace following the UK's decision to leave the EU.
“Nevertheless, I remain confident that we will achieve sector-leading results, despite the challenges we face, as we continue to build an extensive pipeline of opportunities in each of our businesses."
Despite Brexit uncertainty, Henry Boot said the new year has “started well” and its expectations for 2019 remain unchanged.