SHEPHERD Group has confirmed a further sell-off of its businesses as it offloads an entire division in a bid to focus investment on its profitable Portakabin operations.

The historic, family-run York firm has today confirmed it is selling one of its three divisions, containing three separate businesses, to Surrey-based Wates Group, with the transfer of 1,200 jobs.

The deal, which follows rumours dating back to March of a sale between the two construction groups, will see Shepherd Construction, Shepherd Engineering Services and Shepherd FM, all part of Shepherd Group's Built Environment division, acquired by Wates.

The announcement comes just a week after Shepherd sold its Fulford-based Shepherd Homes business, also previously part of the Built Environment division, to Galliford Try.

As with the Shepherd Homes sale, the Wates deal will see all Shepherd staff transferred in the deal.

However the sale of Shepherd Construction comes just a day after the Shepherd Group confirmed it has made 55 redundancies in the business as part of an operations review, said to be "entirely separate" from the deal with Wates.

Shepherd bosses say the downsizing of the businesses will enable the group to pursue the board's strategy of focusing future investments on the areas of the group with "significant sustainable development opportunities".

They said the sale would specifically enable Shepherd Group to further develop the UK and European expansion of its successful Portakabin business, which last year was its most successful division with pre tax profits of almost £30 million, up 32 per cent from the previous year.

David Williams, chairman of Shepherd Group said: "As a company with 125 years heritage, Shepherd Group has a strong history of adapting to market opportunities as they evolve.

"This deal would support our long-term growth strategy, providing exciting opportunities for the businesses retained in Shepherd Group as well as those involved in the proposed sale.

"The Shepherd Group Board recognises that Shepherd Construction needs scale in order to capitalise on its full potential and the market opportunities arising out of its acknowledged technical capability.

"Our aim is to ensure the best possible future opportunity for all our businesses – and that includes Shepherd Construction, Shepherd Engineering Services and Shepherd FM.

"This transaction would also enable Shepherd Group to focus future investment on significant sustainable development opportunities such as the continued expansion of our Portakabin business."

While Wates will acquire all of Shepherd Engineering Services and Shepherd FM, the sale of Shepherd Construction on includes the trade, assets and people, with Shepherd Group retaining the name and a number of projects already underway.

Andrew Davies, chief executive of Wates Group, said: "The acquisition of Shepherd Construction’s capability, Shepherd Engineering Services and Shepherd FM would complement and enhance our existing Construction and Property Services businesses, with access to additional areas of expertise in off-site construction, design for manufacture and assembly operations and expansion in new markets into the North of England."

Alongside Shepherd Group Built Environment, and Portakabin, the Shepherd Group encompasses a third division Shepherd Group Engineering, made up of Portasilo and Portastor, with the Huntington headquartered group employing 3,200 staff in total.

In its latest set of financial results the entire Shepherd Group reported flat earnings of £10.1 million off the back of falling revenues, down to £686 million from £748 million in 2013.