HENRY Boot will put the cash from the sale of its £80 million-turnover house building division into commercial property and plant.
Chief executive Jamie Boot said: 'Land prices have risen significantly over the past few years. We have property and land management divisions and a plant side and there are cash demands on all those businesses.
'We don't want to have to retrench our customer base, so our view was that we would look at offers for the house building business.'
The division has offices in Derby, Birmingham, Doncaster and Bristol and employs more than 100 staff. Henry Boot also builds houses in Scotland out of a Glasgow office but this business has been run down in recent years.
Housing was one of the drivers behind last year's group pre-tax profits of £13.4 million and completions have shot up from 160 in 1991 to 651 in 2000.
The firm sold 62 more houses in the first half of 2002, with 361 sales, but overall completions were static in 2001.
The operating margin has also declined from 17.6 per cent in 1995 to around 10 per cent now - well below the industry average.
The firm began looking for a buyer last year. It is talking to a number of companies but only confirmed the sale in a stock exchange statement last week.
In a surprise move, Henry Boot sold its £40 million-turnover construction management arm last month for £5 million.
Mr Boot added: 'There was a shortage of management construction work and the business was moving down the design and build route. We didn't want to increase our exposure to this sort of work.'
Henry Boot reports its annual results for 2002 on April 14.
steve. menary@construct. emap. com