Henry Boot has agreed to sell its construction arm in a £4m management buyout.

Henry Boot Construction (HBC) is being sold to PWS Construction Limited (PWS), a company newly formed by the HBC management team.

This deal allows the Henry Boot to focus on its “strategic priority areas” of high quality land, prime property development and premium homes.

Today it said HBC is “not part of the group’s medium term growth strategy” and has made only a small contribution to group profits.

During the year ended 31 December 2024, HBC generated £49.7m of revenue with an operating loss of £2.7m. 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, giving management greater freedom to  diversify and expand the order book as well as enhance the business' position in the construction market.

HBC is being sold to PWS for an initial consideration of £4m, which is being funded by PWS via a vendor loan note issued by Henry Boot. The transaction also provides for additional payments to the group in the future based on certain performance criteria.

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, added: “'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 transaction is expected to complete around YE 2025.

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.

Today’s announcement come as Henry Boot Plc announced its unaudited interim results for the six months to 30 June 2025.

The company said it had seen a “solid first half” which it added was “no mean feat in uncertain markets”.

It reported a 19% increase in revenue to £126.4m driven by land and property disposals and profit before tax of £7.8m.

Click here to read the full results.