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researches are Henry Boot Plc and Persimmon Plc. Both the companies
Henry Boot Plc was established by local farmers’ son Henry Boot in
1886 to carry out modest jobbing work in Sheffield and surrounding area.
The company expanded its horizons rapidly and successfully moved into
large scale public works and housing projects. The company was
incorporated 1919 when Charles Boot took over the business after the
death of his father Henry Boot. Charles Boot headed the efforts of
roads were constructed within one year during Great War. During the
years 1919 – 1939 inter-war period, Henry Boot built over 80,000 houses
which were more than any other contractor in United Kingdom. Henry
Boot Plc under the leadership of Charles Boot developed Pinewood Studios
on the layout and practice of USA film studio. The company acquired
small, both for the public and private sector. Company’s turnover
included long term contract for the National Coal Board and British Steel
Corporation, railway engineering contracting, joinery manufacture and
houses for sale. Henry Boot Plc formed subsidiary in the name of Banner
residential properties. The expansion of Henry Boot Plc continued with the
1976 the company saw an increase in overseas work initially with the
tracks for Mass Transit Railway System followed by £13 million railway
construction and plant hire. Presently Henry Boot Plc is a fully listed
reliability. (www.henryboot.co.uk)
building quality homes with best design, construction and service and in
the process building around 10,000 beautifully designed new homes per
year in more than 400 locations all over United Kingdom. The company
constructs home to suite all the lifestyles keeping in mind the needs of
homes in various locations all over the country. The company was first
listed in London Stock Exchange in 1985 and has acquired some major
2001, and Westbury Plc in 2006. The company’s business operates under
c.£1.76 billion. The Persimmon Homes is the core operation, while Charles
two and three bedroom terraced and semi detached house. The group
(http://production.investis.com)
Both the companies, Henry Boot Plc and Persimmon Plc are touted
acquisitions of major groups and both of them are listed in London Stock
Exchange which makes them the eligible rivals in their own respective
study their financial performance, their overall performance for the past
both the companies. The report would be prepared using annual reports
The annual reports of Henry Boot Plc for the year 2008 mention that
trading profits increased by 53% to £44 million from £28.8 million in 2007.
million. Whereas the annual reports of Persimmon reveal that the credit
turmoil had drastic impact on the performance of the company. The credit
to the end of the year at c.35% The following table shows face to face
The above table reveals that both the companies are drastically
10 to 15% growth in pre-tax profits. The above table shows that Henry
Boot Plc reported an increase of 14% in pre-tax profits during the year
2007 at £46.5 million from £40.8 million for the year 2006. Subsequently
from £582.1 million in 2006 to £585.1 million in the year 2007. Later in
the year 2008, both the companies showed negative results with a huge
decline of -59% (Henry Boot Plc) and -79% (Persimmon) proving that
credit crisis has a definite and strong impact on both the companies. The
basic earnings per share also decreased from 24.5p in 2007 to 10.8p in
the year 2008 for Henry Boot and 138.3p in 2007 to 35.3p in 2008 for
Persimmon.
The overall turnover of Persimmon for the year 2006 to 2008 has
been decreasing effectively due to recent credit crisis. The turnover has
been consistently over the past few years from £3141.9 million in 2006 to
to Persimmon, it has
setback as a result of
year 2007 was £124.8 million decreased from £142.3 million because
higher construction revenues were offset by lower land sales as fewer
increase in revenue in the coming year 2008 at £193.7 million which was
within the years 2006 – 2009. The gross profit has decreased to £265.3
immediate signs of
2008 at £58.6 million due to strong land trading activities. Both Henry
Boot Plc and Persimmon Plc are experiencing drastic fall in their sales.
However Henry Boot saw an exception in the year 2008 wherein the
companies which can be seen in the figure. The companies which are
United Kingdom are facing downfall in specific areas like property and
land sale, houses and constructions. (Henry Boot Plc, Annual Report,
Persimmon Plc,
III. Company
Analysis –
Henry Boot
The Henry Boot Plc and Persimmon Plc, both, operate in the UK
and investment in high quality property assets and the promotion of new
British private residence construction company and has been in the same
Report- 2008)A careful and deliberate perusal of the annual reports and
financial statements for both the companies reveal various facts about the
construction, PFI and plant hire activities. There are small number of
warehouse scheme in Port Talbot completed during early 2009. And work
123,000 sq.ft production unit for Recital (UK) Limited was completed and
ft retail warehouse unit for B&Q. ((Henry Boot, Annual Report) In regard to
sites are selected carefully and all sites are reviewed for replanning
shows that work under progress for the last five years has varying
inventory value of these land assets was valued at £53.9m on 130 sites
which are mostly Greenfield and for residential development. With respect
to Persimmon, the land held by the company as per the financial records
£2346.1m (2007) and £1779.5m (2008) with 101% turnover for the year
2008. The annual report reveals that net revenue for the year 2008
statements show that there has been considerable increase from the year
2004 to 2006 after which there was decrease in the turnover from 2007
Health and safety is at the top of the agenda in all the activities of
management through the group are based upon the identification on the
objectives, Henry Boot Plc and its subsidiary are required to implement
organization, control; assess and manage the risks to the health and
responsibilities and identify training needs and provide health and safety
training to industry and nationally recognized standards. (Henry Boot,
Annual Report)
company recruited 124 people in the year 2008 with turnover equated to
reduction in employees since the start of 2008. The reports reveal that
Annual Report)
Shareholder Interests
respective companies.
5
FMR Corp/FIL Limited 14.9 AXA SA: 5.46
4
Hermes Specialist UK Focus Fund 7.16 Prudential plc 5.14
J P Morgan Asset Management (UK) 5.39 D H Davidson and 4.86
Limited family:
The Fulmer Charitable Trust 4.41 Fidelity Investment 4.18
Services
Source : Henry Boot, Annual Report and Yahoo Finance, UK, Persimmon
Profile.
Financial Statement
According to the financial report, Henry Boot Plc cost of sales was
amounted to £193.6 million from £124.7 million in the year 2007 and
£142.2 in the year 2006. Whereas the Persimmon Plc reported year end
decrease of 18%. The cash flow statements show that profit from
operations for the Persimmon decreased from 671.3 million to 195 million
Persimmon as compared
Report)
million due to sale of Milton Keynes. The trading profit came down
drastically to £3.7 million from £30.2 million in 2008. The interest in land
of 150 units, outline applications at Monmouth for 245 units, Bolsover for
250 units, and site for 100 units sold at Chudleigh, Devon, land sales of 15
acres in 2009 as compared to 265 acres during the same period last year.
Henry Boot Developments capital values down by 50% from peak and
Annual Report)
the year 2008 has increased to £193.7 million from £124.7 million, there
2007, construction to £9.3 million in 2008 from £8.4 million in 2007 which
drastic decrease from £50.3 million in the year 2007. The overall profit for
the year was £15.6 million in 2008 as compared to £32.8 million in the
year 2007 and £26.7 million in the year 2006. (Henry Boot, Annual
Report)
Persimmon Plc
which remained elevated through to the end of the year at c.35% and
volumes ended the year at 36% down on 2007 which was 41% down in
the second half. The company had completed 10,202 units in the year
and land bank reduced to 69,279 plots, sales 36% lower at c.850 units
and outlets reduced to c.420 sites and debt reduced to c. £600 million.
The financial statements of Persimmon Plc reveal that the group has
increasing phase except the period during crisis, 2007 – 2008, when the
completion projects decreased. The basic EPS also decreased from ever
(2007) to 35.3p in the year 2008, the credit of which goes to the recent
credit crisis. Moreover dividend per share also decreased from 27.50p
(2004), 31.00p (2005), 46.50p (2006), 51.20p (2007) to mere 5.00p in the
year 2008 which is a matter of concern for a group which has a long
history and considers itself as the number one in the housing industry.
Persimmon, reveal that even during the financial crisis, Henry Boot
2010. (uk.finance.yahoo.com)
one in the housing sector has been going through bad phase because of
credit crisis. Yet, Henry Boot reported an increase in total profit for the
year 2008 but the developments were low or nil as compared to the
previous year. John White, Group Chairman, Persimmon Plc, states that
many house builders made some mistakes by believing the volume story
and setting overhead, expanding land bank without considering the effect
Recommendations
for the past three years reveals that company’s performance was better
before the credit crisis. It is further revealed that though Henry Boot Plc
has reported an increase in total profit for the year 2008, there was
Whereas Persimmon Plc reported a decrease in annual total profit for the
year 2008 which was supported by the decreasing unit constructions and
reported by Permission Plc that in its trading update for the year ended 31
December 2009, that 2010 forward sales is 40% ahead of the year 2009
at about GBP 640 million. The group stated that it has completed 8976
group stated that it had increased its trading profit by 53% due to land
over large sites, constructing more houses and lesser apartments while
flows and trading profits are the key to future increases in dividend. With
the emerging trend of zero carbon homes, it has become necessary for
the construction companies to built homes that comply with the standards
of Category A of the Green Guide. However Henry Boot has already in the
remain one amongst the leaders. The above suggestions might improve
http://www.henryboot.co.uk/pdf/HenryBoot%20History.pdf
http://www.persimmonhomes.com/about-persimmon-homes.aspx
http://workinproperty.blogspot.com/2009/03/henry-boot-plc-reports-
good-results.html
www.hernybook.co.uk
www.hernybook.co.uk
www.hernybook.co.uk
s=PSN.L
http://wrightreports.ecnext.com/coms2/reportdesc_COMPANY_C8261
9030
s=PSN.L
Sustainability,
http://production.investis.com/psn/csr/stakeholder/2008/csr2008/csr
2008.pdf
11. Persimmon says 2010 forward sales 40% ahead Y-o-Y Update,
http://www.rttnews.com/ArticleView.aspx?Id=1173121
http://production.investis.com
http://production.investis.com
http://production.investis.com
15. Resi 09, Re-building the market, Presentation by John White, Group
content/uploads/2009/09/John-White-Persimmon-plc.pdf