SHEPHERD GROUP, one of Yorkshire’s biggest family-owned businesses, is to sell its Shepherd Homes business to Galliford Try as part of a review of operations.
There has been speculation that York-based Shepherd is also looking to sell its construction division as part of the review in order to focus on its profitable Portakabin business, but the company declined to comment yesterday.
Shepherd Group has a number of non-core businesses that could be sold off in order to focus on Portakabin, which makes prefabricated, portable and temporary buildings for offices, schools and hospitals.
In its latest annual results, Shepherd said earnings at Portakabin leapt by nearly a third and results for Shepherd Engineering Services, Shepherd Homes and Shepherd FM were all “encouraging”.
However, the performance at Shepherd Construction and Shepherd Group Engineering was described as disappointing and the group said “decisive mitigating action” has been taken.
In March, trade magazine Construction Enquirer reported that construction firm Wates was weighing up a takeover of Shepherd Construction, Shepherd Engineering Services and Shepherd FM, saying that preliminary talks had been held.
Following renewed speculation last month Shepherd’s CEO Mark Perkins said: “The executive board is currently reviewing the Shepherd Construction business, along with its support service teams with a view to establishing the right scale and platform for future growth and sustainability. We must ensure that Shepherd Construction operates as efficiently as possible to meet the demands of today’s market and safeguard the long term future of the company and its work- force.
“We will do everything possible to minimise potential redundancies and prioritise the welfare of staff.”
Yesterday Shepherd said it has been reviewing its operations to “ensure each business is in the best possible position to take advantage of future trading opportunities”.
This led to the decision to sell Shepherd Homes, a leading regional house builder, to Galliford Try, which will add Shepherd Homes to its house building business, Linden Homes.
Contracts have been exchanged and the sale of Shepherd Homes, which includes six current sites and five sites in planning, is expected at the end of May.
Shepherd Homes employs 60 people and the firm said they are expected to transfer to Linden Homes once the deal is completed.
Shepherd Group chairman David Williams said: “This was not an easy decision for the group board, particularly given the recent strong performance of Shepherd Homes, but this transaction represents an exciting opportunity for both the business and its employees for the long term.”
He added that growth and continuing success in the homes market demands ongoing, large-scale capital investment.
“It was felt this would be better achieved with a group which has significant scale in the housing sector as well as a desire to grow its presence in the North,” he said.
“The group board considers that this decision will prove beneficial for Shepherd Homes and its employees while enabling the wider Shepherd Group to continue to pursue its strategy of focusing future investment on distinct areas of the group, including the development and further expansion of our successful Portakabin business.”
Addleshaw Goddard advised Shepherd Group.