Henry Boot has sold its construction arm following a management buyout deal worth £4m.
The Sheffield developer and regeneration specialist announced to shareholders that it has offloaded Henry Boot Construction (HBC) to PWS Construction Limited, a newly-formed company comprising the management team of the construction division. The deal has been made possible by a vendor loan note issued by Henry Boot in a transaction which also provides for additional payments to the group in the future, based on certain performance criteria.
Henry Boot said the deal allows the group to “focus on its strategic priority areas of high quality land, prime property development and premium homes”. It said HBC is not part of the group’s medium term growth strategy and has made only a small contribution to group profits. It believes that its prospects for long term growth “will be enhanced by a portfolio of activities concentrated on high quality projects with greater synergies”.
The company said the disposal will reduce the risk profile of the group and reduce group headcount by around 21%. During 2024 HBC generated £49.7m of revenue with an operating loss of £2.7m in the consolidated financial statements of the group.
Following significant restructuring, including the appointment of the new management team, it is expected the business should break even for the financial year 2025. Under PWS ownership, the business will be known as HBC Construction Group.
Tim Roberts, CEO at Henry Boot, said: “The sale of HBC which we are announcing today allows Henry Boot to further its strategic focus on high quality land, prime property development and premium homes. It also enhances prospects for long term growth with a more focussed portfolio of activities with greater synergies. While HBC’s contribution to the group is relatively small, it is a well established business with a strong track record of delivery and an excellent management team and we wish them well for the future.”
Lee Powell, managing director at HBC Construction Group said: ‘’Today’s transaction represents a hugely exciting opportunity for everyone at HBC as well as for our valued clients and stakeholders. After an extremely long association with Henry Boot, we at PWS have a clear plan for growth as an independent business while ensuring we maintain our focus on excellent customer service and delivery. We would like to thank Tim and the entire team at Henry Boot for their support in facilitating this transaction.”
The deal came as Henry Boot published its half-year report, in which it saw a 19% increase in revenue to £126.4m, driven by land and property disposals. Meanwhile, pre-tax profit more than doubled from £3.7m to £7.8m.
