Cohesive Consistent Confident

Henry Boot PLC
Annual Report and Financial Statements for the year ended 31 December 2015
www.henryboot.co.uk
Stock Code: BHY
22. Government grants
Government grants have been received in relation to the infrastructure of one of the Company’s land developments and three of the
Group’s property developments.
Grant income received relating to revenue grants are included within deferred income and released to the Statement of
Comprehensive Income on a systematic basis to match the costs it is intended to compensate. There are no unfulfilled conditions
or contingencies attached to the grants that have been recognised.
Amounts credited to the Statement of Comprehensive Income during the year were £ 917,000 (2014: £nil).
Grant income relating to capital grants is included within deferred income until the completion conditions are met; at this point the
grant is transferred to offset the cost of the asset.
23. Capital risk management
The Company’s objectives when managing capital are:
• to safeguard the Group’s ability to continue as a going concern and have the resources to provide returns for shareholders and
benefits for other stakeholders; and
• to maximise returns to shareholders by allocating capital across our businesses based on the level of expected return
and risk.
The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it
in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust
the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new
shares or sell assets to reduce debt.
The Group monitors capital on the basis of net debt to equity. Net debt is total debt less cash and cash equivalents and at
31 December 2015 this was £38.9m (2014: £36.4m). Equity comprises all components of equity and at 31 December 2015 this
was £221.5m (2014: £200.5m).
During 2015 the Group’s strategy, which was unchanged from previous years, was to maintain the debt to equity ratio below 50%.
This level was chosen to ensure that we can access debt relatively easily and inexpensively if required.
In February 2015, the Group concluded negotiations with its three banking partners to put in place a £60m facility to replace the
£50m facility we had in place at 31 December 2014. The renewed facilities commenced on 17 February 2015, with a renewal date
of 17 February 2018 and an option to extend the facility by one year, each year, for the next two years occurring on the anniversary
of the facility. On 17 February 2016 we exercised our option to extend the facilities by one year to 17 February 2019. The renewed
facilities, on improved terms, maintain covenants on the same basis as the previous facilities.
The Group’s secured bank facilities are subject to covenants over loan to market value of investment properties, interest cover,
gearings and minimum consolidated tangible assets value.
The Group has other bank debt on which there are also covenant requirements. The Group operated comfortably within all of its
requirements throughout the year.
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