Sheffield-based Henry Boot said it agreed to sell its Henry Boot Construction (HBC) business to PWS Construction Limited, a company newly formed by the HBC management team, for an initial consideration of £4 million, which is being funded by PWS via a vendor loan note issued by Henry Boot.
The Sheffield group also published results for the six months ended June 30, 2025, showing a 19% increase in revenue to £126.4 million driven by land and property disposals, and profit before tax of £7.8m, up from £3.7 million.
The firm declared a 5% increase in interim dividend to 3.24p “consistent with our progressive dividend policy and our confidence in achieving full year performance in line with market expectations and in the group’s future prospects.”
Henry Boot said the disposal of HBC will reduce the risk profile of the group and reduce group headcount by around 21%.
During the year ended December 31, 2024, Henry Boot Construction generated £49.7 million of revenue with an operating loss of £2.7 million.
“The transaction also provides for additional payments to the group in the future based on certain performance criteria,” said Henry Boot.
“This transaction allows the group to focus on its strategic priority areas of high quality land, prime property development and premium homes.
“HBC is not part of the group’s medium term growth strategy and has made only a small contribution to group profits.
“Therefore, the group 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 transaction will also simplify the group’s structure and investment case.
“Having considered a variety of options for HBC, including both alternative exit routes and retaining the division within the group, the board has concluded that the interests of shareholders will be best served by disposing of HBC to PWS at a price in excess of its net assets.
“The disposal will reduce the risk profile of the group and reduce group headcount by around 21%.
“During the year ended 31 December 2024, HBC generated £49.7m of revenue with an operating loss of £2.7m in the consolidated financial statements of the group.
“Following the significant restructuring undertaken, including the appointment of the new management team, and with 94% of this year’s order book secured, it is expected the business should break even for FY 25.
“Under PWS ownership, the business will be known as HBC Construction Group. The Transaction will offer HBC management greater autonomy to diversify and expand the order book as well as enhance HBC’s position in the construction market, than would be possible if the business remained within the group.
“The term of the vendor loan note from Henry Boot to PWS is five years and will carry interest at 2.1% over the Bank of England base rate.
“The group will continue to provide support to HBC in the short term under a transitional services agreement, with operational oversight from two Henry Boot representatives on the HBC board until the point when the vendor loan note has been repaid.
“Personal guarantees have been given by the HBC management team, with appropriate restrictions on remuneration in line with group policy.
“Additional consideration is potentially payable to the group in the event that PWS sells all or a material part of HBC within eight years of completion. There is also an overage provision providing a profit share to the group should HBC achieve a net margin in excess of 3.0% over the next five years.
“The initial carrying amount of the vendor loan note is anticipated to be less than £4.0m, in line with our accounting policies regarding the uncertainty of future cash flows.
“The excess of the vendor loan note carrying value above the net assets being disposed of will be reflected as a profit on disposal. The transaction is expected to complete around YE 25.”
Henry Boot CEO Tim Roberts 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.“
On the half-year results, Roberts said: “Operationally, we have had a solid first half, which is no mean feat in uncertain markets, but we are also making strong progress strategically.
“In particular, early investment into the resources at Hallam Land, anticipating positive changes to the NPPF, are already bearing fruit in the form of a good first half, both in terms of sales and planning consents.
“Equally, although trading is more subdued, in HBD and Stonebridge Homes, we have grasped the opportunity to build up a store of near-term opportunity, respectively, in the development pipeline and home building landbank.
“The announced sale of HBC also tightens our focus on our chosen areas of land promotion, development and home building.
With 80% of budgeted sales achieved, we have confidence of meeting full-year expectations, and we also have conviction that there are clear opportunities within our high quality portfolio to hit our medium term growth and return targets.”