Henry Boot sells Dronfield-based construction arm in 'win-win' £4m deal affecting 115 workers
Sheffield land and property developer Henry Boot’s sale of its construction arm for £4m represents a “win-win” deal, the company’s chief executive has told The Yorkshire Post.
Dronfield-based Henry Boost Construction (HBC), a division of the wider group, is being taken over through a management buyout in a deal affecting 115 staff – more than 20 per cent of the workforce of the overall business.
Henry Boot chief executive Tim Roberts said the deal will allow the rest of the group to further its strategic focus on its high quality land, prime property development and premium home operations while HBC can build on its own strengths.
He said: “It is a win-win. It frees us up so that we can concentrate on our three core businesses and it frees up the management of HBC. They’ve got more autonomy to run the business in the direction they see fit.”
Mr Roberts said staff within HBC and the wider company appreciate the reasons for the change.
"The announcement from people outside of HBC was greeted with understanding. At HBC, again there was a lot of understanding as to why HBC was going to go its own way.
"Although there is change and people at times can be unsettled by change, the good thing is the people at HBC believe they’ve got a good business and they are still confident about their future.”
Under the terms of the deal, a £4m loan note has been issued by Henry Boot to new owner PWS Construction Limited, with the money due to be repaid over five years at an interest rate of 2.1 per cent above the Bank of England base rate.
Mr Roberts said the deal is expected to be completed in January. Henry Boot will provide transitional support for around a year and have board representation at HBC until the loan is repaid.
During the year ended December 31 2024, HBC generated £49.7m of revenue with an operating loss of £2.7m in the consolidated financial statements of the group. The business is expected to break even in the current financial year.
Mr Roberts said while group revenue will fall following the deal, he does not anticipate profits being substantially affected.
"This year HBC is expected to break even or make a small profit. In the past it has been profitable and I’m sure it will be profitable in the future.
"But when we look forward, we are not thinking we’ve got a financial hole to plug. We’re thinking we have got a wonderful portfolio of opportunities we can spend capital on and our time fulfilling.”
The sale announcement was made in parallel to the publication of the group’s half year results to June, which saw a 19 per cent increase in revenue to £126.4m and profit before tax hitting £7.8m; more than double the £3.7m recorded at the same point in 2024.
Mr Roberts said he was pleased with the direction of travel as the company looks forward.
"It is operationally a solid first half and solid in this environment is something we should be really, really pleased about.
"We have maintained property sales and we have sold £160m worth of property. It is all high-quality stuff.
"Secondly, the Government has improved planning policy and that does mean at one level it is easier to get planning. Hallam, the land promotion business, has been getting more planning and more plots. That is a great store of worth for Henry Boot in the future and it is good for the country because we need more houses.”