HISTORIC York firm Shepherd Group is at the centre of construction industry rumours hinting at the possible sell-off of part of the business.

Trade press has been reporting that the family-run group, which employs 3,200 staff across its three divisions, is in talks with Surrey-based Wates to sell a large section of its construction business.

While Portakabin, Shepherd Homes and Shepherd Group Engineering - made up of Portasilo and Portastor - are not believed to be affected, the firm's other businesses Shepherd Construction, Shepherd Engineering Services and Shepherd FM, which all fall within the Shepherd Group Built Environment division, are reported to be involved in the talks.

Yesterday a spokesperson for Shepherd Group, which is headquartered in Huntington, told The Press "we don't comment on speculation or rumours", while Wates issued a statement claiming: "We don’t comment on speculation. As you would expect, we talk to people in the industry about different things all the time."

Officials from union Unite, which represents workers with the Shepherd Group, said it was unaware of any takeover talks, and was yet to hear from workers on site regarding the rumours.

The reports follow news earlier this year of up to 80 redundancies at Portasilo and Portastor as part of a cost cutting drive to address "very difficult trading challenges".

Yesterday Unite regional officer Steve Clark said: "Since January we have been working with Shepherd and have managed to negate nearly all the redundancies.

"Some left through voluntary redundancy, while for others we managed to find alternative work elsewhere in the Shepherd business including Portakabin."

Mr Clark said following negotiations the restructure of the businesses resulted in five compulsory redundancies.

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

The group hailed its Portakabin division as its “primary source of quality earnings”, describing results for Shepherd Engineering Services, Shepherd Homes and Shepherd FM as encouraging, while expressing disappointment by the performance of Shepherd Construction and Shepherd Group Engineering.