Positive Start to 2016

Hallam Land had a very strong start to the year, successfully completing six residential land sales before the EU referendum vote and exchanging on a further three sites which will complete in the second half of the year, including a six acre parcel of employment land in the Midlands. These sales were the key driver behind the Henry Boot Group’s strong financial performance in the half year under review.

At 30 June 2016 Hallam held interests in 11,416 acres (December 2015: 11,061 acres), 1,740 acres owned, 2,606 acres under option and 7,070 under planning promotion agreements.

It was pleasing to see 4,175 residential plots secure planning consent/minded to grant planning consent, during the period. At 30 June 2016, we have 15,183 consented residential plots available for sale (December 2015: 12,043 plots) across 47 sites, with a further 9,500 plots, the subject of planning applications in progress, across 18 sites.

The EU referendum vote on 23 June 2016 saw the UK house builders review land acquisition activity pending clarity on the housing market demand. Some two months on we have seen some land buying confidence return, with appetite for smaller scheme sizes with longer payment deferrals but at broadly maintained pricing levels. We expect these market conditions to continue until the implications of the referendum vote, with regard to the UK housing market, become clearer.

The first half of the year was not only pleasing from a profit perspective; cash to be collected in the second half will provide the resources to make additional land purchases over coming months, especially if the economy softens, further replenishing our freehold stock as well as acquiring additional option and promotion agreements. With the majority of the sales for 2016 now contracted, we are looking ahead to completions in 2017 where we already have two sites at an advanced stage and are, post the referendum, in contract negotiations on a further six.

Good Progress in 2015

2015 started with a period of pre-election uncertainty but, once concluded, our house builder customers once again made land purchases. As the year progressed, we found house builders becoming more selective as they replenished their land banks towards the required level. However, high quality consented sites in good locations continue to be highly sought after and to command good price levels.
During the year we sold sites at Cranbrook (Exeter), Nuneaton, Chellaston (Derby), Haddington, Biddenham (Bedford), Frome, Repton, Pontefract and Edinburgh. In total, our interests in 1,763 plots were sold, a 59% increase on 2014’s 1,107 plots.

The new Government confirmed its commitment to housebuilding, most notably by enforcing National Planning Policy Framework guidance on a five year land supply. We won a number of appeals during the year, including one at Warton, Fylde, where we secured permission for 360 dwellings in advance of an emerging Neighbourhood Plan. During the course of the year we achieved planning consent (or consent subject to a Section106 legal agreement) on our sites in Aldingbourne, Aslockton, Chesterfield, Coxhoe, Haddington, Langho, Launceston, Lutterworth, Market Harborough, Marston Moretaine, Prestonpans, Woodville, Selby and Handcross. At the end of 2015 we had increased our total land interests to over 11,000 acres, 1,982 acres of which has planning consent for over 12,000 plots, and 1,160 acres is allocated in a plan for residential development.

We see the current balanced marketplace continuing through 2016. We will continue to invest in our land portfolio, having careful regard to ensuring our investments are focussed where house builders wish to build, whilst carefully managing our overall investment in the sector. Selectively, the business will seek to secure agreements which benefit our commercial development activity companies, in particular, Stonebridge Projects and Henry Boot Developments.

Cranbrook, the new 3,500 unit community at Exeter; Kingsdown, our urban extension at Bridgwater, and New Lubbesthorpe, a 4,500 unit urban extension west of Leicester, all had a very good year. Cranbrook saw residential occupancies exceed 1,150 (in the two and a half years since residential sales commenced), the opening of a railway station (on the London Waterloo line) and both a secondary school and a second primary school were completed and opened. Development at Kingsdown, Bridgwater, continued with further residential sales anticipated in 2016. Henry Boot Developments are also close to securing a commercial development on the main A38 road frontage. New Lubbesthorpe, a scheme of 4,500 dwellings (where we have an interest in 1,593) commenced development and our investment in this major urban extension will create returns over the longer term.

We successfully sold part of our long-term investment at Biddenham, Bedford, during the year and we forecast further parts will also be sold in 2016 and 2017.

Significant new investments were made during the year at Grazeley, south of the M4 at Reading, and Coventry. Other key strategic sites within our portfolio progressed well during the year; Market Harborough (450 plots) secured a minded to grant planning consent; the first phase of Kettering East (438 plots) was conditionally exchanged to a national house builder; and Phase 2 of Marston Moretaine (365 plots) was granted planning consent in December 2015, the first phase having been sold successfully in 2013 to Bovis Homes, and we expect to market part of this scheme in 2016.

Outlook for 2016 and beyond.

2016 has started well with two site sales already concluded and a number of others progressing well for completion later in the year; 180 plots were sold in Alton, Hampshire, and seven acres of employment land were unconditionally exchanged in Lutterworth.

We expect the house builders to remain selective when purchasing land in 2016 but we have a strong land portfolio with a supportive planning regime, a substantial number of sites available to the market and, at this stage, we anticipate that 2016 will be yet another year of good progress.

SALE CONCLUDED AT BIDDENHAM, BEDFORDSHIRE

Hallam and its joint-venture partner The Harpur Trust have completed a multimillion-pound land sale to Bovis Homes and Linden Homes.

The sale of the site in Biddenham in Bedfordshire represents the culmination of 17 years of work by Hallam which started with the acquisition of a small part of the site in 1997.

Hallam continued to acquire additional parts of the site, obtained a detailed planning permission and been in constant liaison with Bedford Borough Council in respect of key infrastructure works.

The disposal of the site to Bovis and Linden will result in the eventual construction of more than 700 new homes, a school, playing fields and country park. The deal will also see the long-awaited completion of the Bedford Western Bypass.

Nick Duckworth, Director of Hallam, said: “On behalf of Hallam Land Management and the Harpur Trust I am delighted that we have been able successfully to conclude this transaction after a significant amount of work over almost 20 years. We look forward to seeing Bovis Homes and Linden successfully develop the site and to working with them in future.”

NORTH WEST NEW APPOINTMENT

Welcome to Alex Whitehouse who joins us as a Graduate Planner based in our Manchester North West office, and will be working with Katie Dean, Regional Manager.

Having completed an undergraduate degree in Town and Country Planning at Sheffield Hallam University, Alex undertook a Masters in Civic Design at the University of Liverpool, and joined Hallam in January 2015. He has experience in both public and private sector planning environments, and also spent time as a researcher looking at the role green infrastructure plays in promoting development.

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2013 HALLAM REVIEW

Hallam had another very active year in 2013. Whereas 2012 was very productive in terms of obtaining planning permissions but quiet in terms of sales trading, 2013 has seen an upturn in the number of site disposals and continued further success securing planning consents. The strategic land market has shown a steady improvement throughout the year and those areas of the country where land sales proved difficult in the recession have reduced in number and in size. As a consequence, we achieved a higher number of land disposals this year. Prices have moved up steadily across the board, although deals still remain very difficult to complete as a result of the complexity of due diligence undertaken.

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ALL CHANGE IN SCOTLAND

Gary Smith was appointed as a Director of Hallam Land Management Limited with effect from 1st January 2014.

Gary joined the company in 1998 having previously worked for Compaq Computer Manufacturers. Gary started with Hallam as a Temporary Assistant Land Buyer and has had a number of roles within the company, he was previously promoted to Regional Manager in January 2012. Gary has enjoyed much success over the last 15 years in obtaining land sites and securing planning permissions in the central belt of Scotland. He enjoyed time away from the company in 2004 spending 18 months in Australia.

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NORTH WEST NEW APPOINTMENT

Welcome to Victoria Payne who joins us as the new Assistant Planner for the North West. Victoria will be based at the Regional Office in Manchester City Centre and will be working with Katie Dean, Area Manager.

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NORTH EAST NEW APPOINTMENT

Hallam Land Management is pleased to welcome Rebecca Wasse who joins us as the new Regional Manager for the North East region.

Rebecca will be based at the new North East Regional Office in Leeds City Centre and will be working with Anthony Greaves, Area Manager.  Rebecca will concentrate upon enhancing our presence in the region with the objective of identifying and sourcing new residential development and wind farm opportunities to add to our existing portfolio.

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HALLAM PROGRESS UPDATE

Hallam have had a productive year to date in terms of land disposals, helped by the significant number of planning permissions obtained in 2012 at Burdiehouse, Banbury, Evesham, Long Buckby, Mansfield and Nuneaton. Currently we have agreed terms to sell a further seven sites during the latter part of this year and the first months of 2014.

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HALLAM ANNUAL REVIEW

Hallam have had another successful year, despite a quiet year selling land with consent. Site disposals with planning permission were restricted to small sites at Mansfield, Desford and Bishopbriggs. The work we have undertaken to build value into our land holdings has not been reflected in the 2012 pure financial results. During the year, we worked on an unprecedented number of sites within the planning process and were particularly successful in securing planning permissions or minded to grant planning permissions on a large number of sites and further increased our site acreage.

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