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Highlights
- BOOT has made an agreement to sell its subsidiary Henry Boot Construction to PWS Construction Limited
- Disposal via MBO valued at GBP 4.0m, funded by vendor loan note.
- Transaction reduces group risk profile and simplifies organizational structure.
Henry Boot PLC (LSE:BOOT) announced that it has entered into an agreement to sell its subsidiary Henry Boot Construction to PWS Construction Limited, a company newly formed by the existing HBC management team. The disposal is structured as a management buyout.
The initial consideration is GBP 4.0m, funded by PWS through a vendor loan note issued by Henry Boot. Additional payments may be made to the group in future, contingent on performance criteria. The vendor loan note carries a five-year term with interest set at 2.1% above the Bank of England base rate.
The group stated that the sale will enable it to focus on its core priority areas of high-quality land, prime property development, and premium homes. HBC was noted to be making only a small contribution to group profits and not being part of the medium-term growth strategy. The disposal will also reduce group headcount by approximately 21%.
In the financial year ending 31 December 2024, HBC reported revenue of GBP 49.7m and an operating loss of GBP 2.7m within the group’s consolidated results. Following restructuring and the appointment of a new management team, it is expected that the business will break even in FY25, with 94% of the year’s order book secured.
Post-sale, the business will trade as HBC Construction Group. Under PWS ownership, HBC management will have increased autonomy to diversify the order book and expand within the construction market.
Henry Boot will continue to provide transitional services for a limited period and retain operational oversight through two board representatives at HBC until the vendor loan note has been repaid. The HBC management team has provided personal guarantees, and restrictions on remuneration are in place, consistent with group policy.
Further consideration could be payable to Henry Boot if PWS sells all or part of HBC within eight years of completion. An additional overage provision entitles the group to a profit share should HBC achieve a net margin above 3.0% over the next five years.
The initial carrying amount of the vendor loan note is expected to be recorded at less than GBP 4.0m, reflecting accounting treatment for uncertainty in future cash flows. The excess over the net assets disposed of will be recognized as profit on disposal. Completion of the transaction is anticipated around year-end 2025.
Henry Boot shares were trading at 0.11% higher today at GBX 220.25 per share at the time of writing on 23 September 2025.
