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House builder liquidates ailing social housing arm amid COVID-19 impact
House builder and construction contractor Henry Boot has placed its social housing arm into liquidation as the firm struggles to recover financially from the COVID-19 pandemic.
Henry Boot said that Starfish Commercial, which it acquired in December 2019, was not performing “in line with expectations with COVID-19 materially impacting its operations”.
Starfish works alongside housing associations and local authorities to deliver affordable and social housing units and was a joint venture partner with Magenta Living.
In a stock market note, Henry Boot said its construction division has seen recent increases in activity, with that side of the business now operating at 90% of pre-pandemic levels, but that Starfish has not seen the same bounce-back and it is unclear when recovery might reach a “sustainable level”.
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“These factors have led us to make the difficult decision of placing Starfish into creditors’ voluntary liquidation,” the firm said.
Henry Boot said the move has a “minimal impact” on its financial position and management’s expectations for its year-end results.
“Affordable housing is still a market of interest and we will continue to pursue our interest in this sector, but this will now be part of the overall services offered by our construction business,” the company said.
The organisation added that it was encouraged by growing momentum within its operations and it will continue to focus on investing in three long-term markets: residential, industrial and logistics, and urban development.
Results for Henry Boot published last month showed that revenue had plummeted to £108.7m in the first six months of 2020, down from £189m in the same period last year, while profits slumped from £24.1m to £7.2m.
