The firm has secured 95% of its budgetted volume for 2012, so the outcome looks robust. What they have not yet managed to do is convince the market that margins have been improved to justify the rating which the shares have, and provide a better return on capital than could be obtained from the bank.
HB does not have much land in the hotter market areas that is ready for building - it is presently offering sites to builders in Mansfield, Bridgwater, Bolsover, Kilmarnock, Edinburgh, Evesham, Desford,Tillicoultry, Rotherham, Sutton in Ashfield, Handcross, East Leake, Leeds, Melksham and Leicester.
There is stronger demand in some of the areas where it has undetermined planning applications, such as Market Harborough (500 plots), Chatteris (1,000 plots), Bedford (495 plots), but less so in Blaby (1,593 plots), Irthlingborough (700 plots), Monmouth (145 plots), Rugby (183 plots), Torrance (9 plots), Grimsargh (200 plots) and Marston Moretaine (125 plots).
The social housing sector continues to provide a steady flow of work for the construction division under long-term frameworks in Scunthorpe, Manchester, Leicester and Doncaster. In addition, HB are also undertaking major schemes for Eastlands Homes and Southway Housing and have been appointed to the EN Procure, Fusion 21 and Yorkshire Housing frameworks. The margin on this work is quite poor, however.
HB shares closed on Friday at 145p which values the firm at £190 million