Henry Boot sells construction unit to focus on land and property

Investing.com -- Henry Boot has agreed to sell Henry Boot Construction (HBC) to PWS Construction Limited for an initial consideration of £4.0 million, allowing the company to focus on its strategic priorities.

The sale to PWS, a company newly formed by the HBC management team, will be funded through a vendor loan note issued by Henry Boot. The deal includes provisions for additional payments based on future performance criteria.

This transaction enables Henry Boot to concentrate on high-quality land, prime property development, and premium homes, which form the core of its medium-term growth strategy. HBC has made only a small contribution to group profits.

During the year ended December 31, 2024, HBC generated £49.7 million in revenue but recorded an operating loss of £2.7 million in the group’s consolidated financial statements.

Following significant restructuring and with 94% of this year’s order book secured, the business is expected to break even for fiscal year 2025.

Under the new ownership, the business will operate as HBC Construction Group. The five-year vendor loan note will carry interest at 2.1% above the Bank of England base rate.

Henry Boot will provide short-term support under a transitional services agreement and maintain operational oversight through two representatives on the HBC board until the loan is repaid.

The transaction includes an additional consideration provision if PWS sells all or a significant part of HBC within eight years of completion. There is also an overage clause providing Henry Boot with a profit share if HBC achieves a net margin exceeding 3.0% over the next five years.

The sale will reduce Henry Boot’s risk profile and decrease group headcount by approximately 21%. The transaction is expected to complete around year-end 2025.

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."

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