I like to carry a small-cap inventory or two, or three, for his or her development potential.

One I’m eager on proper now’s Henry Boot (LSE: BOOT), the UK-based land promotion, property funding, growth, and development firm. It’s at the least price additional consideration due to that cracking identify!

Joking apart, I reckon the agency’s prospects look fascinating, so I wish to dig a bit deeper. For the document, Henry Boot will be discovered within the FTSE Smallcap index, and with the share price close to 230p, the market capitalisation is round £311m.

Optimistic bulletins

The inventory began climbing in April after a decline that began within the late spring of 2022. So I’m hopeful that this character change within the shares is being pushed by one thing substantial within the enterprise.

Certain sufficient, there was some excellent news from the agency in an announcement on 16 April, and it appears to be like prefer it kick-started the brand new uptrend.

The corporate introduced the sale of 494 residential plots in Cambridge to Barratt Developments (now Barratt Redrow). The sale accomplished in July, delivering Henry Boot an inside charge of return of 15% per 12 months. In order that was the conclusion of a good funding for the enterprise.

Chief government Tim Roberts stated on the time the sale demonstrates the “continued demand” the agency has been seeing for its premium websites. It was “particularly encouraging” given the difficult market backdrop and decrease transaction volumes, Roberts stated.

It appears to be like just like the inventory market re-evaluated the prospects for Henry Boot’s enterprise in a constructive method. In order that is likely to be why the share price has been shifting increased.

Roberts reckons the disposal reveals the corporate’s expertise in securing planning permission for advanced websites and “navigating them by means of an more and more onerous planning system“. In order that ability allows the corporate to promote the plots to housebuilders.

The instance is a good perception into how the enterprise makes its dwelling. However it’s been adopted by a number of constructive bulletins since, and an upbeat interim outcomes report delivered on 17 September.

An encouraging outlook assertion

One danger with the shares arises from Henry Boot’s enterprise being delicate to common financial situations. It’s additionally affected by sentiment surrounding the broader property sector. So it’s a kind of shares that requires cautious consideration and timing by potential shareholders.

Nonetheless, September’s outlook assertion from the corporate is optimistic in tone. A strengthening financial system and the prospect of easing rates of interest will doubtless assist the enterprise. So it might be an excellent time to concentrate on the inventory.

In the meantime, multi-year development within the dividend has been sturdy, and the forward-looking yield for 2025 is about 3.6%.

I feel that’s a horny stage of shareholder revenue. So if I had spare money to speculate proper now, I’d dig in with additional research with a view to contemplating a number of shares for November and past. If the financial system and the housing market continues to enhance, Henry Boot could also be properly positioned.