THE company leading the construction of a North-East train factory is selling a number of its businesses.

Shepherd Group has an agreement with Surrey-based Wates Group to offload Shepherd Engineering Services and Shepherd Facilities Management.

A number of contracts from its construction business will also be transferred to Wates, as will 1,200 jobs.

The move comes after Shepherd, which is behind the building of Hitachi Rail Europe’s plant, in Newton Aycliffe, County Durham, confirmed 55 job cuts across its construction division.

David Williams, chairman of the York-based firm, which has offices in Darlington and Newcastle, said the changes would strengthen the business, giving it more opportunity to focus on its profitable Portakabin division.

He said: “We have a strong history of adapting to market opportunities.

“This deal would support our long-term growth, providing exciting opportunities for the businesses retained in Shepherd Group.

“The board recognises Shepherd Construction needs scale in order to capitalise on its full potential."

Latest accounts showed Shepherd Construction ran up an £8.2m loss last year, as turnover fell by a third to £240m.

Shepherd Engineering Services business performed better, making a £5.3m profit as turnover rose eight per cent to £208m.

The company previously revealed it will sell its homes operation to Galliford Try, with 60 staff transferring to Galliford’s housing business, Linden Homes.