TIDMHWG
RNS Number : 0816M
Harworth Group PLC
12 September 2023
Harworth Group plc
Half Year Results for the six months ended 30 June 2023
Management actions underpin uptick in valuations and resilient
EPRA NDV performance
Strong balance sheet with significant available liquidity
Harworth Group plc ("Harworth" or the "Group"), a leading
regenerator of land and property for sustainable development and
investment, today announces its results for the six months ended 30
June 2023.
Key non-statutory H1 H1 FY Key statutory H1 H1 FY
measures(1) 2023 measures
2022 2022 2023 2022 2022
Operating profit
Total Return (%) 0.1 14.1 0.1 (GBPm) 8.0 99.9 44.5
------ ------ ------ ------------------ ------- ------ ------
EPRA NDV per share Net asset value
(p)(2) 195.7 224.7 196.5 (GBPm) 603.1 655.1 602.7
------ ------ ------ ------------------ ------- ------ ------
Total dividend
Value gains (GBPm) 7.5 110.3 (2.0) per share (p)(3) 0.444 0.404 1.3
------ ------ ------ ------------------ ------- ------ ------
Net loan to portfolio
value (%) 8.6 7.6 6.6 Net debt (GBPm) 63.7 67.8 48.4
------ ------ ------ ------------------ ------- ------ ------
Lynda Shillaw, Chief Executive of Harworth, commented:
"Harworth's first half performance reflected good progress against
strategic objectives, coupled with a strong operational delivery,
which highlights the resilience of our through-the-cycle model, and
sustained demand for our serviced residential land and industrial
& logistics assets. In particular, the combination of sales of
more mature industrial & logistics sites and our development of
new high-specification space has accelerated the transition of our
Investment Portfolio towards our goal of 100% Grade A. In
residential, we continue to transact with a range of housebuilders,
both national and regional, alongside progressing our alternative
product offerings, including Build-to-Rent and Affordable
Housing.
"Our management actions and sustained demand for our products
have resulted in an uptick in valuations and EPRA NDV remaining
broadly stable over the first six months of the year. The
industrial & logistics market has stabilised over the period,
albeit transactions are taking longer to complete, and the
residential Build-to-Rent market is experiencing sustained demand.
However, interest rate rises, cost inflation and planning delays
are all impacting the housebuilders. House prices have remained
reasonably resilient supported by reduced volumes of new build.
While land buying is subdued and selective, we are seeing a good
level of demand for our de-risked consented serviced land
product.
"Harworth is a long-term through-the-cycle business, and we
remain confident that our strategy to become a GBP1bn business by
2027 will deliver long-term value. Our significant landbank,
specialist skillset and strong balance sheet position us well to
maximise the significant value embedded in our sites."
Good occupier interest as direct development of industrial &
logistics stock continues across 37.3m sq. ft pipeline:
-- Completed 110,000 sq. ft of Grade A space at Gateway 36 in
Barnsley: 35% let, with good interest for remaining units
-- On-site with 166,000 sq. ft at the Advanced Manufacturing
Park ('AMP') in Rotherham, which is 44% pre-let
Progressing sales and broadening the range of residential
products across 28,359-plot pipeline:
-- After period-end, completed the sale of serviced land at
Thoresby Vale, Nottinghamshire to Barratt and David Wilson Homes
for GBP9.9m, in line with 31 December 2022 valuations
-- Working towards exchange of contracts with selected
investment and construction partners for development of a
single-family Build-to-Rent ('BTR') portfolio; good progress
securing planning approvals
-- Strong levels of interest received for Affordable Housing portfolio, launched in April 2023
Scaling up through land acquisitions and land promotion
activities:
-- Acquisitions added 1.1m sq. ft of industrial & logistics
space and 700 residential plots to the pipeline
-- Secured planning for 397 residential units and 0.3m sq. ft of industrial & logistics space
-- Applications for 7.4m sq. ft of industrial & logistics
space and 1,641 residential plots progressing through the planning
system
Investment Portfolio now 29% Grade A (31 December 2022: 18%)
-- Significant progress in transitioning portfolio by largely
retaining directly developed assets and disposing of those where
value has been maximised through asset management initiatives
-- Investment Portfolio sales completed in H1 totalled GBP52.1m,
with a further GBP17.9m of disposals completed after period end,
all at prices in line with December 2022 valuations before selling
costs
-- Vacancy rate(4) of 11.6% at 30 June 2023 (31 December 2022:
8.3%); reduced to 1.1% by excluding vacant space completed in the
preceding 12 months (31 December 2022: 2.7%)
-- Leasing activity added GBP0.9m (6%) to annualised rent; new
lettings, renewals and reviews at an average 4% premium to
estimated rental values ('ERV'), with renewals and reviews 27%
ahead of previous passing rent
Continued focus on making a lasting positive impact on the
planet and communities
-- Publication of Net Zero Carbon ('NZC') Pathway in April 2023,
outlining the steps that the Group is taking to achieve its
ambition of being operationally NZC by 2030 and NZC for all
emissions by 2040
-- Opening of new 50-acre country park at Cadley Park in
Derbyshire, providing new recreational space and wildlife habitats
at the 600-home development
Management actions drive broadly stable EPRA NDV
-- EPRA NDV(1)(2) per share decreased by 0.4% to 195.7p (31
December 2022: 196.5p), as first half valuation gains of GBP7.5m
were offset by net operating costs, interest expenses and tax
-- Statutory net assets increased by 0.1% to GBP603.1m (31 December 2022: GBP602.7m)
-- Underlying increase of 10% in the interim dividend to 0.444p
per share, in line with Group's dividend policy
-- At reporting date, 98% of budgeted sales of the year either
completed, exchanged or in heads of terms
Strong balance sheet and financial position, with low gearing
and significant available liquidity
-- As at 30 June 2023 net debt was GBP63.7m (31 December 2022:
GBP48.4m), representing an LTV of 8.6% (31 December 2022: 6.6%)
-- Available liquidity of GBP163.5m at 30 June 2023 (31 December
2022: GBP175.6m); no major refinancing requirements until 2027
Notes:
(1) Harworth discloses both statutory and alternative
performance measures ('APMs'). A full description of, and
reconciliation to, the APMs is set out in Note 2 to the financial
statements
(2) European Public Real Estate Association ('EPRA') Net Disposal Value ('NDV')
(3) The Ex-dividend date, Record date and Payment date for the
2023 interim dividend can be found in the Shareholder Information
section of this announcement
(4) Calculated using the EPRA Best Practices Recommendations
Guidelines. Occupier Ilke Homes, which represents 7% of headline
rent roll, entered administration during the period, but has
remained in occupation to date. The related space is therefore
classified as occupied for the purposes of this calculation.
For further information
Harworth Group plc
Lynda Shillaw (Chief Executive) T: +44 (0)114 349 3131
Kitty Patmore (Chief Financial Officer) E: investors@harworthgroup.com
Tom Loughran (Head of Investor & Stakeholder
Relations)
FTI Consulting
Dido Laurimore T: +44 (0)20 3727 1000
Richard Gotla E: Harworth@fticonsulting.com
Eve Kirmatzis
Results presentation
Harworth will host a presentation for analysts and investors at
10.00am today. A live webcast and playback of this presentation can
be accessed at the following link:
https://brrmedia.news/HWG_HY23
About Harworth
Listed on the Premium Segment of the Main Market, Harworth Group
plc (LSE: HWG) is a leading sustainable regenerator of land and
property for development and investment which owns, develops and
manages a portfolio of over 13,000 acres of land on around 100
sites located throughout the North of England and Midlands. The
Group specialises in the regeneration of large, complex sites, in
particular former industrial sites, into new residential and
industrial & logistics developments. Visit
www.harworthgroup.com for further information. LEI:
213800R8JSSGK2KPFG21
Chief Executive's review
Harworth's first half performance reflected good progress
against strategic objectives, coupled with a strong operational
delivery, which highlights the resilience of our through-the-cycle
model, and sustained demand for our serviced residential land and
industrial & logistics assets. This sustained demand for our
products, and our management actions, have resulted in our
valuations increasing and EPRA NDV remaining broadly stable over
the first six months of the year.
Our markets
Harworth's focus markets of residential and industrial &
logistics both continue to be characterised by favourable supply
and demand dynamics, and are fundamental to delivering growth in
the UK economy.
For the industrial & logistics sector, the structural
drivers of demand seen in recent years remain intact, with the
growth of e-commerce, on-shoring and near-shoring and an increasing
focus amongst occupiers on securing modern and sustainable spaces.
Data from Savills shows that, although take-up of industrial space
in the first half was lower than the record-breaking levels seen in
the previous three years, it was broadly in line with levels seen
before the pandemic. There also continues to be a diverse range of
sectors driving demand, with manufacturing accounting for a record
proportion of take-up in the first half.
The decline in demand during the first half saw a corresponding
rise in supply, with Savills estimating a market-wide vacancy rate
of 6.3% as at 30 June 2023, increased from 3.0% a year ago, but
broadly in line with the long-term pre-pandemic average, and
expected to gradually fall as speculative development in the market
is curtailed. Across Harworth's focus regions of Yorkshire &
Central, the North West and the Midlands, vacancy remains below the
national average with less than one year's supply based on current
take-up, underpinning the particularly favourable supply and demand
dynamics of our regional markets. What is more, we continue to see
rental growth from our letting activity and rent reviews.
Following a rapid valuation correction in the industrial &
logistics market in the second half of 2022, asset prices have
stabilised, and there are signs that liquidity is returning. We can
evidence sustained demand for high-quality, well-located assets
through our sale of GBP70.0m of Investment Portfolio assets so far
this year, at prices that are in line with, or ahead of, December
2022 book values. Figures from MSCI show that capital values for UK
industrial assets remained broadly stable over the six months to 30
June 2023, which reflects our own valuation performance.
In residential markets, consumer demand remains subdued, as a
result of higher mortgage rates, challenging affordability and
lower consumer confidence, albeit interest rates appear to be
nearing their peak. Reporting from housebuilders suggests reduced
construction volumes over the coming year and a more selective
approach to land acquisitions. Despite this, we have seen good
levels of demand from a wide range of housebuilders, both national
and regional, many of whom we have long-term relationships with,
underscoring the differentiated nature of our serviced and,
therefore, de-risked land product. It also reflects the reality
that, due to a defective planning system and lower levels of
applications for major schemes, the supply of consented land across
the market is becoming increasingly constrained.
The institutional BTR market has continued to grow despite the
wider market uncertainty, demonstrating the defensive nature of the
product and the acute shortage of rental homes in the UK. Savills
reports that investment volumes in the sector had a record-breaking
second quarter in 2023, bringing the total investment in the first
half to GBP2.1bn. The UK's BTR stock now stands at 88,100 homes,
representing growth of 12% in the last 12 months, with regional
markets growing faster than London. Despite this, only 11% of the
built stock is single-family and transactions remain focused on
multifamily, which have accounted for around 60% of investment over
the last 12 months. Rents in the sector continue to grow, but
challenges facing consumers highlight the importance of providing
affordable products. Our single-family BTR and Affordable Housing
portfolios of sites are particularly well-positioned to address the
acute supply imbalance.
Operational performance
Our strategy sets out a clear road map for our ambition to grow
EPRA NDV* to GBP1bn by 2027. It aims to accelerate the delivery of
our sites and achieve our NZC ambitions, drawing on our highly
specialist expertise and extensive land bank. The table below shows
our progress to date against the four key growth drivers of this
strategy.
Ambition
Growth driver 2021 2022 Progress in H1 2023 by 2027
Increasing 51,000 sq. 432,000 sq. 110,000 sq. ft developed 800,000 sq.
direct development ft developed ft developed ft completed
of industrial On-site with 166,000 on average
& logistics sq. ft, of which 44% per annum
stock is pre-let
-------------- -------------- --------------------------- -----------------
Accelerating 1,411 plots 2,236 plots 92% of budgeted plot 2,000 plots
sales and broadening sold sold sales for the year sold on average
the range of completed, exchanged per annum
our residential or in heads of terms
products
-------------- -------------- --------------------------- -----------------
Scaling up Land supply of 12-15 Maintained 12-15 year Maintain
land acquisitions years land supply through a land supply
and promotion acquisitions representing of 12-15
activities 1.1m sq. ft and 700 years
plots
------------------------------ --------------------------- -----------------
Repositioning 11% of the 18% of the 29% of the Investment 100% of the
our Investment Investment Investment Portfolio was Grade Investment
Portfolio to Portfolio Portfolio A at period end Portfolio
modern Grade was Grade was Grade to be Grade
A A A A
-------------- -------------- --------------------------- -----------------
In January, we completed the development of 110,000 sq. ft as
part of the next phase of Gateway 36, with one unit already let and
another in heads of terms. As we have previously indicated, our
focus for 2023 will be on built-to-suit and pre-let direct
development opportunities, as well as land sales to potential
occupiers. In line with this strategy, we have pre-let a 73,000 sq.
ft unit at the AMP to a technology occupier and are in advanced
discussions on build-to-suit opportunities with other potential
occupiers at the site.
Our residential land sales are typically heavily weighted
towards the second half of the year. Therefore, our focus in the
first half has been on progressing transactions and carrying out
land preparation and infrastructure works across our development
sites. Underscoring the level of demand, we have on average
received seven housebuilder bids for each residential land parcel
marketed so far this year (2022: seven bids), with average headline
bids ahead of book values. Shortly after period end, we completed a
sale to Barratt and David Wilson Homes of a land parcel at Thoresby
Vale, for the construction of 174 homes.
Some of our budgeted residential sales for the year relate to
our BTR portfolio, for which we are making good progress towards
exchanging contracts with our preferred investment and construction
partners. While timelines have become protracted in places owing
mainly to a challenging planning environment, we have been
successful in achieving planning approvals across several of our
portfolio sites. For Harworth, this is not about delivering any
transaction, but doing the right transaction and ensuring that we
manage the risks as the market has shifted around us. It has also
been critical throughout for us to identify partners with whom we
can develop a long-term relationship based on shared values and
ambitions.
We also launched an Affordable Housing portfolio during the
year, which comprises approximately 400 homes that meet the
National Planning Policy Framework criteria for affordable housing
(which entails social rents, affordable rents, and a range of
intermediate rent and for-sale products such as the shared
ownership scheme). We have had good levels of interest in the
portfolio, which will allow us to further accelerate the delivery
and enhance the vibrancy of our residential sites.
Turning to acquisitions, we added 1.1m sq. ft of industrial
& logistics space and 700 residential plots to our pipeline
during the period. These were achieved through a combination of
freehold acquisitions and Planning Promotion Agreements ('PPAs').
The size of our landbank remains a key differentiator for us,
providing flexibility and the potential to smooth our returns
profile at a portfolio level, as well as unlocking exciting new
opportunities for the business.
During the period, we accelerated our plans to reposition the
Investment Portfolio, with the proportion of Grade A space within
it rising from 18% at the beginning of the period to 29%. This was
driven by a significant sales programme of assets where we had
maximised value through asset management or development
initiatives. These sales totalled GBP52.1m in the first half, with
a further GBP17.9m of disposals completed after period end, all at
prices that were in line with December 2022 valuations before
selling costs. Letting activity remains strong, with completed
deals adding GBP0.9m of annualised rent during the period (H1 2022:
GBP0.1m) representing significant uplifts to previous passing rents
and a modest premium to 31 December 2022 ERVs.
Our sustainability programme, The Harworth Way, is our framework
for integrating sustainability and social value into both our
business and the developments we create. Perhaps the most tangible
output of this is the placemaking that we create across our
development sites, and I was delighted that we have been able to
progress several initiatives in this space so far this year. In
April we opened a new 50-acre country park at our Cadley Park
development in Derbyshire, which benefits from new purpose-built
footpaths and cycleways, a picnic area and community orchard, as
well as new habitats to protect and promote local wildlife,
alongside a memorial pit wheel, commemorating the site's rich
mining history. We are continuing work on further country parks at
our Thoresby Vale and Pheasant Hill Park sites, both of which are
expected to be open next year.
Financial performance
Despite the challenging macroeconomic environment, management
actions offset adverse valuation movements on our major development
sites and drove value across our Investment Portfolio and strategic
land sites, resulting in EPRA NDV per share* remaining broadly flat
at 195.7p (31 December 2022: 196.5p), which translated into a Total
Return of 0.1% for the first half of 2023 (H1 2022: 14.1%).
Statutory net asset value was GBP603.1m (31 December 2022:
GBP602.7m).
Sales of serviced land and property, in addition to income from
rent, royalties and fees, resulted in Group revenue of GBP18.2m (H1
2022: GBP62.6m). Revenue was broadly in line with H1 2020 and H1
2021, t he reduction from H1 2022 primarily reflecting lower
residential development property sales, which were brought forward
into 2022 to capitalise on the strength of the residential market
at the time.
The Board is proposing an interim dividend of 0.444p per share,
representing 10% underlying growth from 2022, in line with our
dividend policy.
We maintain a strong balance sheet and financial position, with
significant available liquidity of GBP163.5m as at 30 June 2023 (31
December 2022: GBP175.6m) and no major refinancing events until
2027. Our LTV at period-end was 8.6% (31 December 2022: 6.6%),
affording us a high degree of flexibility and resilience as we
pursue our strategy.
Outlook
The economic outlook for the UK is likely to remain challenging
in the near term, although there are encouraging signs that
inflationary pressures are easing and interest rates are
approaching their peak. For the industrial & logistics market,
the structural drivers of demand remain largely intact, while
supply remains constrained, particularly for Grade A energy
efficient buildings and across our regions where supply represents
less than a year of demand. For residential, while affordability
challenges are weighing on house buyer demand, our sites are
located in the more affordable regions and housebuilders remain
attracted to our serviced residential land product, which is ready
to build on from day one. At the same time, our increasingly
diversified residential products range will provide exposure to
significant growth markets.
Harworth is a long-term through-the-cycle business. Most of our
sites will be in development, planning or land assembly through the
next few years and into the next decade. Our landbank is
significant, with the ability to deliver 37.3m sq. ft of industrial
and logistics space and 28,359 homes, and our nearer term sites
(those classified as Major Developments) have a combined gross
development value of around GBP2.4bn. Crucially, we have the team
with the specialist skillset to look through near-term market
conditions and deliver these schemes and, where we need to, invest
to create the future value and returns that we can unlock from our
sites.
Finally, I would like to thank my colleagues across the
business, who have embraced the ambition of our strategy and have
worked extremely hard to deliver another six months of strong
progress. Our robust financial performance and operational progress
against a challenging market backdrop is a testament to their
dedication, determination, skills, and teamwork.
Lynda Shillaw
Chief Executive
12 September 2023
*Harworth discloses both statutory and alternative performance
measures ('APMs'). A full description of, and reconciliation to,
the APMs is set out in Note 2 to the financial statements
Operational review
Industrial & logistics land portfolio
At 30 June 2023, the industrial & logistics pipeline
totalled 37.3m sq. ft (31 December 2022: 35.0m sq. ft), of which
5.6m sq. ft was consented (31 December 2022: 5.4m sq. ft), and 7.4m
sq. ft was in the planning system awaiting determination (31
December 2022: 5.6m sq. ft). The pipeline was 57% owned freehold,
with the remaining 43% controlled via options or PPAs.
Acquisitions and land assembly
During the period, freehold acquisitions added 1.1m sq. ft to
the pipeline. These comprised:
-- Parkside East, St Helens, Merseyside: a 50-acre site with
direct access to Junction 22 of the M6, close to the M62
interchange. The site was allocated in the recently adopted local
plan and forms part of a wider regeneration area, supported by the
council. Harworth is developing a masterplan for up to 0.8m sq. ft
of employment space, which will be submitted for planning
approval.
-- A land parcel at Skelton Grange, Leeds: a parcel of land
adjacent to the Group's existing Skelton Grange site, which has the
potential to deliver an additional 0.3m sq. ft of industrial &
logistics space.
Planning
During the period, planning approval was secured for 0.3m sq. ft
of industrial & logistics space across two sites: 0.2m sq. ft
on the site of the former Houghton Main Colliery in South
Yorkshire, and 0.1m sq. ft at Bardon West, adjacent to the Group's
existing Bardon Hill site in Leicestershire.
Three significant planning applications currently remain in the
system awaiting determination:
-- Cinderhill, Derbyshire: Proposals for a mixed-use development
comprising 1.8m sq. ft of high specification employment space
alongside 300 houses and a new junction on the A38 trunk road.
-- Gascoigne Wood, North Yorkshire: this 185-acre former
colliery site benefits from an existing rail connection and close
proximity to the A1(M) and M62. Revised plans have been submitted
for 1.5m sq. ft of rail-linked industrial & logistics space at
the site.
-- Skelton Grange, Leeds: formerly the location of Skelton
Grange Power Station, this 50-acre site was acquired by Harworth in
2014 and is adjacent to Junction 45 of the M1, to the south-east of
Leeds city centre. Plans have been submitted for 800,000 sq. ft of
space across five units, in addition to infrastructure upgrades,
new cycle ways and footpaths, and ecological enhancements.
Direct development and placemaking
During the period, 110,000 sq. ft of industrial & logistics
space was completed at Gateway 36 in Barnsley, representing the
start of the development's second phase. The units were delivered
to Harworth's sustainable commercial building specification,
targeting EPC A and BREEAM Excellent, with whole life carbon
assessments and renewable energy provision incorporated into the
design.
Direct development works currently underway total 166,000 sq.
ft, all at the AMP. The works comprise 93,000 sq. ft of speculative
construction as part of the next phase of the development, which
has received significant occupier interest, and a 73,000 sq. ft
built-to-suit development which has been pre-let to a technology
occupier.
Residential land portfolio
As at 30 June 2023, the residential pipeline had the potential
to deliver 28,359 housing plots (31 December 2022: 29,311), of
which 6,508 were consented (31 December 2022: 6,111), and 1,641
were in the planning system awaiting determination (31 December
2022: 1,890). The pipeline was 51% owned freehold, with the
remaining 49% subject to PPAs, options or overages.
Acquisitions and land assembly
During the period, a PPA was signed on a parcel of land at
Aughton, Rotherham, capable of delivering up to 700 homes. Harworth
will work with local stakeholders to bring forward a masterplan in
advance of submitting a planning application.
Planning
During the period, planning consent was secured for 397 homes at
a site in Killamarsh, Derbyshire. The site is now being marketed
for sale, and bids have been received from a range of
housebuilders.
Plot sales
As at reporting date, 92% of the Group's budgeted residential
land sales for the year had been completed, exchanged or were
subject to heads of terms.
Residential products
One of the Group's key strategic objectives is broadening the
range of its residential products, and to date it has launched two
portfolios of sites to deliver on this:
-- Single-family BTR portfolio: approximately 1,000
single-family homes across nine sites, to be delivered through a
forward-funding agreement. The Group has secured planning consents
across several sites in the first half and is now progressing
towards exchange with its preferred investment and delivery
partners.
-- Affordable Housing portfolio: approximately 400 homes across
four sites, that meet the National Planning Policy Framework
criteria for affordable housing (social rents, affordable rents, as
well as a range of intermediate rent and for-sale products, such as
the shared ownership scheme), to be delivered by a forward-funding
agreement. The portfolio has received good levels of interest.
Placemaking
As a master developer, Harworth prides itself on investing in
its residential sites to provide enhanced infrastructure, amenities
and green spaces. This investment creates a sense of community that
improves the wellbeing of residents and enhances the attractiveness
of these developments to housebuilders and a wide range of
partners. During the period, several placemaking initiatives were
undertaken across the portfolio:
-- Cadley Park, Derbyshire: In April 2023, a new 50-acre country
park was opened, having been developed by Harworth working in close
partnership with South Derbyshire District Council as well as the
National Forest, RSPB, Derbyshire Wildlife Trust and the local
community. The park benefits from new purpose-built footpaths and
cycleways, a picnic area and community orchard, as well as new
habitats to protect and promote local wildlife. The site also
features a memorial pit wheel, commemorating the site's rich mining
history.
-- South East Coalville, Leicestershire: a land sale to Aldi was
completed, for the construction of a new supermarket that will form
a key part of the site's proposed local centre.
-- Waverley, South Yorkshire: construction is underway of a new
150-bedroom hotel, including a restaurant and gym facilities, which
will also be available to residents on site. Planning permission
has also been granted for a new primary health centre, and a
planning application has been submitted for a revised design for
Olive Lane, a new centre of the community with cafes, restaurants
and shops. These amenities are expected to be delivered by late
2024.
-- Moss Nook, Merseyside: In March 2023, a planning application
was submitted for new sports facilities at the site, which will be
the home of a local junior football team and help to unlock the
next phase of residential development.
Investment Portfolio
This portfolio comprises both industrial & logistics assets
that have been acquired by Harworth and, increasingly, those that
have been directly developed and retained. It provides recurring
rental income in addition to asset management opportunities and the
potential for capital value growth.
As at 30 June 2023, the Investment Portfolio comprised 14 sites
covering 2.9m sq. ft (31 December 2022: 19 sites covering 4.0m sq.
ft). It generated GBP15.8m of annualised rent (31 December 2022:
GBP19.7m), equating to a gross yield of 6.6% (31 December 2022:
7.0%) and a net initial yield of 5.9% (31 December 2022: 6.2%).
Annualised rent for the portfolio decreased during the period, as a
result of a highly successful sales programme of more mature
assets, which was partially offset by the creation of new Grade A
space at Gateway 36 and a 3.0% like-for-like increase in rents .
Grade A space represented 29% of the portfolio (31 December 2022:
18%).
During the period, 277,000 sq. ft of leasing deals were
completed (H1 2022: 48,000 sq. ft), adding GBP0.9m of annualised
rent (H1 2022: GBP0.1m). New lettings, renewals and reviews at an
average 4% premium to estimated rental values ('ERV'), with
renewals and reviews 27% ahead of previous passing rent.
The portfolio had an average rent per tenant of GBP6.55 per sq.
ft at 30 June 2023 (31 December 2022: GBP6.43) and, weighted by
area, an average rent of GBP5.32 per sq. ft (31 December 2022:
GBP4.69).
Across the Investment Portfolio, operational metrics remain
robust. Vacancy was 11.6% at 30 June 2023 (31 December 2022: 8.3%),
which reduces to 1.1% when space completed in the preceding 12
months is excluded (31 December 2022: 2.7%); while the weighted
average unexpired lease term ("WAULT") was 12.5 years (31 December
2022: 11.3 years).
Occupier Ilke Homes, which represents 7% of headline rent roll,
entered administration during the period, but has remained in
occupation to date. The related space is therefore classified as
occupied for the purposes of the vacancy calculation. The Group is
currently exploring options for the site, including reletting,
refurbishment or redevelopment of the unit.
Disposals
A key element of Harworth's growth strategy is to transition its
Investment Portfolio to modern Grade A, by retaining more direct
development but also by disposing of assets where value has already
been maximised through asset management and development
initiatives.
The sales of five Investment Portfolio sites were completed in
the first half for total consideration of GBP52.1m, with a further
GBP17.9m of disposals completed after period end. These sales were
all at prices in line with December 2022 valuations before selling
costs.
Natural Resources portfolio
Harworth's Natural Resources portfolio comprises sites used by
occupiers for a wide range of energy production and extraction
purposes, including wind and solar energy schemes, battery storage
and methane capture. As part of the Group's Energy & Natural
Capital strategy, the aim is to grow this portfolio, alongside
strategic partners where appropriate, through developing renewable
energy generation solutions and other sustainability initiatives
such as battery storage, solar, EV charging, multi-fuel hubs and
reforestation/rewilding. The strategy has a wider focus on
embedding these energy concepts and future-proofing principles
across all of Harworth's sites to maximise energy availability and
resilience, create economic value and help fulfil the Group's NZC
ambitions.
As at 30 June 2023, the Natural Resources portfolio generated
GBP2.4m of annualised gross rent (31 December 2022: GBP2.1m).
Net Zero Carbon pathway
In 2022, the Group committed to becoming NZC for Scope 1, Scope
2 and Scope 3 business travel emissions by 2030 and to being NZC
for all emissions by 2040. To meet these objectives, the Group has
developed a NZC pathway and embedded NZC commitments into a range
of workstreams and targets to guide the Group's growth strategy in
the development of industrial & logistics and residential
sites.
Further information on The Harworth Way and the Group's NZC
pathway can be found within the 2022 Annual Report and standalone
NZC Pathway Report, which were both published in April 2023.
Financial review
Overview
Our first half financial performance was resilient, delivering a
Total Return (the movement in EPRA NDV * plus dividends per share
paid in the period expressed as a percentage of opening EPRA NDV
per share) of 0.1% (H1 2022: 14.1%). Positive revaluation gains
achieved across the portfolio were offset by net operating costs,
interest costs, tax and dividends, enabling EPRA NDV to remain
broadly flat at 195.7p per share (31 December 2022: 196.5p). Our
performance reflected good progress against strategic objectives,
coupled with a strong operational delivery, and provides a good
foundation for the Group's future growth.
Sales of serviced land and property, in addition to income from
rent, royalties and fees, resulted in Group revenue of GBP18.2m
during the period (H1 2022: GBP62.6m). Revenue was broadly in line
with H1 2020 and H1 2021, the reduction from H1 2022 primarily
reflecting lower residential development property sales, which were
brought forward into 2022 to capitalise on the strength of the
residential market at the time. The prior year period also included
revenue from a built-to-suit project and fees from a PPA. Rental
income collection has been consistently strong, with like-for-like
income increases of 3.0% across the portfolio. Management actions
included the completion of direct development at Gateway 36 in
Barnsley, lettings and rent reviews, which offset the reductions
resulting from the sale of investment property during the period as
we continued to transition the Investment Portfolio towards Grade
A. Looking forward, the sales profile is robust, with 98% of 2023
budgeted sales by value already completed, exchanged or in heads of
terms at the time of reporting (at the time of reporting H1 2022:
98%).
The fair value of investment properties increased by GBP15.0m
(FY 2022: GBP19.7m decrease, H1 2022: GBP85.3m increase), which
contributed to an underlying operating profit of GBP8.0m (FY 2022:
GBP44.5m, H1 2022: GBP99.9m) and profit after tax of GBP2.8m (FY
2022: GBP27.8m, H1 2022: GBP79.1m).
The Group has declared an interim dividend of 0.444p (H1 2022:
0.404p) per share , representing a 10% growth from 2022, in line
with our dividend policy.
BNP Paribas and Savills, our independent valuers, completed a
desktop valuation of our portfolio as at 30 June 2023, resulting in
first half valuation gains* of GBP11.1m (FY 2022: GBP15.0m losses,
H1 2022: GBP105.5m gains), including the movement in the market
value of development properties. These gains were the result of
management actions including progress on development sites,
obtaining planning permissions, completing direct development
schemes and asset management initiatives, against the backdrop of
an industrial & logistics market which had stabilised over the
period. However, the revaluation gains were held back by the wider
economic environment and offset by further outward movement in
investment yields in some instances alongside higher construction
costs. Beyond valuation movements, losses on sales were GBP3.5m (H1
2022: profit of GBP4.9m). Although sales prices were in line with
book values overall, the loss was driven by the impact of selling
costs and higher levels of estimated future site-wide
infrastructure costs allocated to prior period sales, in particular
at our Waverley site where increased costs were driven by a change
in the site masterplan. This gave us total value gains of GBP7.5m
(H1 2022: GBP110.3m).
Over the period, net asset value grew to GBP603.1m (31 December
2022: GBP602.7m). With EPRA adjustments for development property
valuations included, EPRA NDV at 30 June 2023 reduced very slightly
to GBP631.2m (31 December 2022: GBP633.8m) representing a per share
decrease of 0.4% to 195.7p (31 December 2022: 196.5p).
The Group remains well capitalised and as at 30 June 2023 had
available liquidity of GBP163.5m (31 December 2022: GBP175.6m). Net
debt was GBP63.7m (31 December 2022: GBP48.4m) resulting in a net
loan to portfolio value at 30 June 2023 of 8.6% (31 December 2022:
6.6%). At the same date, 30% of the Group's drawn debt was subject
to fixed rates (31 December 2022: 34%) . We currently do not have
interest rate hedging in place against drawings under our Revolving
Credit Facility (RCF), although this will remain under review.
Presentation of financial information
As our property portfolio includes development properties and
joint venture arrangements, Alternative Performance Measures
('APMs') can provide valuable insight into our business alongside
statutory measures. In particular, revaluation gains on development
properties are not recognised in the Consolidated Income Statement
and the Balance Sheet. The APMs outlined below measure movements in
development property revaluations, overages and joint ventures. We
believe that these APMs assist in providing stakeholders with
additional useful disclosure on the underlying trends, performance
and position of the Group.
Our key APMs* are:
-- Total Return: the movement in EPRA NDV plus dividends per
share paid in the period expressed as a percentage of opening EPRA
NDV per share.
-- EPRA NDV per share: EPRA NDV aims to represent shareholder
value under an orderly sale of the business, where deferred tax,
financial instruments and certain other adjustments are calculated
to the full extent of their liability net of any resulting tax.
EPRA NDV per share is EPRA NDV divided by the number of shares in
issue at the end of the period (less shares held by the Employee
Benefit Trust or Equiniti Share Plan Trustees Limited to satisfy
Restricted Share Plan and Share Incentive Plan awards.)
-- Value gains: the realised profits from the sales of
properties and unrealised profits from property valuation movements
including joint ventures, and the mark-to-market movement on
development properties and overages .
-- Net loan to portfolio value: Group debt net of cash held
expressed as a percentage of portfolio value.
A full description of all non-statutory measures and
reconciliations between all statutory and non-statutory measures
are provided in Note 2 to the condensed consolidated interim
financial statements.
Our financial reporting is aligned to our business units of
Capital Growth and Income Generation, with items which are not
directly allocated to specific business activities held centrally
and presented separately.
Income Statement
H1 2023 H1 2022
---------------------------------------- ----------------------------------------
Capital Income Central Capital Income Central
Growth Generation Overheads Total Growth Generation Overheads Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------ ------- ----------- ---------- ------- ----------- ---------- ------
Revenue 4.3 13.9 - 18.2 47.0 15.6 - 62.6
Cost of sales (6.1) (3.5) - (9.6) (32.9) (4.2) - (37.1)
------------------------------ ------- ----------- ---------- ------ ------- ----------- ---------- ------
Gross profit (1.8) 10.4 - 8.6 14.1 11.4 - 25.5
------------------------------ ------- ----------- ---------- ------ ------- ----------- ---------- ------
Administrative
expenses (2.2) (2.3) (9.8) (14.3) (2.1) (1.3) (7.5) (10.9)
Other gains 12.5 1.3 - 13.8 72.6 12.8 - 85.4
------- ----------- ---------- ------ ------- ----------- ---------- ------
Operating profit/(loss) 8.5 9.4 (9.8) 8.0 84.5 22.9 (7.5) 99.9
------------------------------ ------- ----------- ---------- ------ ------- ----------- ---------- ------
Share of (loss)/profit
of JVs (0.9) 0.1 - (0.8) 1.0 1.2 - 2.2
Net interest credit/(expense) 0.3 - (3.1) (2.8) - - (3.4) (3.4)
------------------------------ ------- ----------- ---------- ------ ------- ----------- ---------- ------
Profit/(loss)
before tax 7.9 9.5 (12.9) 4.5 85.6 24.1 (10.9) 98.8
------------------------------ ------- ----------- ---------- ------ ------- ----------- ---------- ------
Tax charge - - (1.6) (1.6) - - (19.7) (19.7)
------------------------------ ------- ----------- ---------- ------ ------- ----------- ---------- ------
Profit/(loss)
after tax 7.9 9.5 (14.5) 2.8 85.6 24.1 (30.6) 79.1
------------------------------ ------- ----------- ---------- ------ ------- ----------- ---------- ------
Note: There are minor differences on some totals due to
roundings.
Capital Growth revenue, which primarily relates to the sale of
development properties, decreased during the period due to
accelerated residential land sales undertaken in H1 2022 to
capitalise on the market conditions at the time. H1 2022 also saw
fees generated from PPAs and build-to-suit development, which
together totalled GBP 7.9m.
Revenue from Income Generation (the Investment Portfolio,
Natural Resources and Agricultural Land) mainly comprises property
rental and royalty income. Revenue of GBP13.9m (H1 2022: GBP15.6m)
was lower due to the final sales of coal fines inventory occurring
during H1 2022. Revenue for the first half also included the impact
of new lettings related to direct development and asset management
initiatives, as well as increased royalties from energy assets.
Rental income from the Investment Portfolio decreased on an
annualised basis from GBP19.7m at 31 December 2022 to GBP15.8m,
reflecting the successful sale of assets totalling GBP52.1m where
we had maximised value through asset management initiatives.
Excluding the impact of these sales and the practical completion of
our Gateway 36 Barnsley development, rent grew by 3.0%.
Cost of sales comprises the inventory cost of development
property sales and both the direct and recoverable service charge
costs of the Income Generation business. Cost of sales decreased to
GBP9.6m (H1 2022: GBP37.1m), of which GBP5.3m related to the
inventory cost of development property sales (H1 2022: GBP26.8m).
H1 2022 also included additional costs related to build-to-suit
development. In the year, we saw a small increase in the net
realisable value provision on development properties of GBP0.3m (H1
2022: GBP2.4m reduction) following the valuation process as at 30
June 2023.
Administrative expenses increased in the period by GBP3.4m (H1
2022: GBP2.2m increase). This included the impact of increased
employee numbers, primarily driven by recruitment in 2022 to right
size the resources of the Group to deliver our strategy, as well as
the impact of inflationary cost increases. Growth in employee
numbers has slowed during 2023. Administrative expenses also
included an increase in provisions for bad and doubtful debts as
well as an impairment of lease incentives, together totalling
GBP1.5m (H1 2022: GBP0.3m), which included the GBP1.2m impact of
one of our occupiers, Ilke Homes, entering administration in June
2023. Costs were also incurred in relation to strategic workstreams
such as the development of our mixed tenure products and ESG
initiatives. Administrative expenses expressed as a percentage of
revenue over the 12 months to 30 June 2023 was 21%, increasing from
14% for the 12 months to 30 June 2022, reflecting the increases in
costs as well as the timing of revenue generating activity, in
particular the acceleration in activity relating to sales of
development property to capitalise on the positive market
conditions during H1 2022.
Other gains comprised a GBP14.8m combined net increase (H1 2022:
GBP85.3m) in the fair value of investment properties and assets
held for sale ('AHFS') less the loss on sale of investment
properties and AHFS of GBP1.1m including transaction fees (H1 2022:
GBP0.1m profit).
Joint venture losses of GBP0.8m (H1 2022: GBP2.2m profit) were
largely the result of a small decrease in the property valuation at
Aire Valley Land. Value gains/(losses) on a non-statutory basis are
outlined below.
Non-statutory value gains/(losses)(*)
Value gains/(losses) are made up of profit/(loss) on sale,
revaluation gains/(losses) on investment properties (including
joint ventures), and revaluation gains/(losses) on development
properties, AHFS and overages. A reconciliation between statutory
and non-statutory value gains can be found in Note 2 to the
condensed consolidated interim financial statements.
GBPm Category H1 2023 H1 2022 30 31 Dec
Jun 22
23
------------------ ------------- -------------------------- ----------------------------- ----------- -----------
Loss Reval. Total Profit Reval. Total Total Total
on gains/ on sale gains/ valuation valuation
sale (losses) (losses)
------------------ ------------- ------ ---------- ------ --------- ---------- ------ ----------- -----------
Capital
Growth
------------------ ------------- ------ ---------- ------ --------- ---------- ------ ----------- -----------
Residential
Major
Developments Development (2.3) (2.2) (4.5) 5.2 5.8 11.0 234.4 228.1
------------------ ------------- ------ ---------- ------ --------- ---------- ------ ----------- -----------
Industrial
& logistics
Major
Developments Mixed (0.2) (2.3) (2.5) (0.5) 43.4 42.9 75.8 68.2
------------------ ------------- ------ ---------- ------ --------- ---------- ------ ----------- -----------
Residential
Strategic
Land Investment (0.1) 3.3 3.2 0.2 34.1 34.3 55.6 51.4
------------------ ------------- ------ ---------- ------ --------- ---------- ------ ----------- -----------
Industrial
& logistics
Strategic
Land Investment - 9.9 9.9 - 8.0 8.0 105.2 82.2
------------------ ------------- ------ ---------- ------ --------- ---------- ------ ----------- -----------
Income Generation
------------------ ------------- ------ ---------- ------ --------- ---------- ------ ----------- -----------
Investment
Portfolio Investment (0.9) 2.5 1.6 - 14.7 14.7 240.2 280.9
------------------ ------------- ------ ---------- ------ --------- ---------- ------ ----------- -----------
Natural
Resources Investment - (0.2) (0.2) - (0.7) (0.7) 20.1 20.3
------------------ ------------- ------ ---------- ------ --------- ---------- ------ ----------- -----------
Agricultural
Land Investment - 0.1 0.1 - 0.1 0.1 6.5 5.7
------------------ ------------- ------ ---------- ------ --------- ---------- ------ ----------- -----------
Total (3.5) 11.1 7.5 4.9 105.5 110.3 737.8 736.8
--------------------------------- ------ ---------- ------ --------- ---------- ------ ----------- -----------
Notes: A full description and reconciliation of the APMs in the
above table is included in Note 2 to the condensed consolidated
interim financial statements . There are some minor differences on
some totals due to roundings. Profit/(loss) on sale includes the
impact of transaction fees incurred.
Loss on sale of GBP3.5m (H1 2022: GBP4.9m profit) reflected the
completion of sales broadly in line with book value, offset by
selling costs, and included an increase in the estimate of shared
infrastructure costs attributable to prior period sales, in
particular at our Waverley site where increased costs were driven
by a change in the site masterplan. Revaluation gains were GBP11.1m
(H1 2022: GBP105.5m) and are outlined in the table below.
H1 2023 H1 2022
GBPm GBPm
---------------------------------------------------- ------- -------
Increase in fair value of investment properties 15.0 85.3
Decrease in value of assets held for sale (0.2) -
Movement in net realisable value provision
on development properties (0.3) 2.4
----------------------------------------------------- ------- -------
Contribution to statutory operating profit 14.6 87.7
----------------------------------------------------- ------- -------
Share of (loss)/profit of joint ventures (0.8) 2.2
Unrealised (losses)/gains on development properties
and overages (*) (2.7) 15.6
Total non-statutory revaluation gains 11.1 105.5
----------------------------------------------------- ------- -------
Note: There are minor differences on some totals due to
roundings
The principal revaluation gains and losses across the divisions
reflected the following:
Industrial & logistics
Following significant investment yield increases in the second
half of 2022, the industrial & logistics market remained
relatively stable over the first half of 2023 with small increases
in yields of 25bps. Occupier demand remained resilient during the
period and market rents across the sector increased. For
development sites, costs of construction increased over the period
but at a lower rate compared to 2022 . Combined, this resulted in
revaluation losses of GBP2.3m on Major Developments. Strategic Land
valuations increased due to the progression of site strategies on
individual sites.
Investment Portfolio property yields moved in line with the
market and our management actions securing sales, new leases,
renewals and rent reviews resulted in the net initial yield moving
30bps to 5.9% from 6.2% as at 31 December 2022. The equivalent
yield moved from 7.8% to 7.4%.
Residential
The residential land market was stable during the first half.
Supply of serviced land remained constrained and house prices were
maintained in our regions with demand remaining from a range of
housebuilders for serviced land. Progress toward residential land
sales on our Major Development sites continued to demonstrate
demand for our serviced land product and underpin valuations. As we
saw with industrial & logistics development sites, costs of
construction increased over the period, which resulted in
revaluation losses of GBP2.2m on Major Developments.
Sites progressing through the planning process supported
Strategic Land valuations, with planning secured for 397
residential units at a development site in South Yorkshire leading
to a valuation gain.
Natural Resources
Valuations remained broadly consistent during the period, with a
minor valuation decline due to the discontinuation of coal mine
methane extraction.
Agricultural Land
We experienced a small valuation increase as a result of
improving agricultural land prices.
Net realisable value provision
The net realisable value provision on development properties as
at 30 June 2023 was GBP10.1m (31 December 2022: GBP9.8m). This
provision is held to reduce the value of six development properties
from their deemed cost (the fair value at which they were
transferred from an investment to a development categorisation) to
their net realisable value at 30 June 2023. The transfer from
investment to development property takes place once planning is
secured and development with a view to sale has commenced.
Cash and sales
The Group made property sales * in the period of GBP56.2m (H1
2022: GBP39.0m), realising a total loss on sale of GBP3.5m (H1
2022: profit of GBP4.9m). Sales comprised residential development
sales of GBP4.0m (H1 2022: GBP38.8m), industrial & logistics
land sales of GBPnil (H1 2022: GBP0.2m) and disposals of
income-generating sites where value has been maximised through
asset management initiatives of GBP52.2m (H1 2 022: GBPnil),
accelerating progress towards a 100% Grade A Investment
Portfolio.
Cash proceeds from sales in the period were GBP58.2m (H1 2022:
GBP33.7m) as shown in the table below:
H1 2023 H1 2022
GBPm GBPm
-------------------------------------- ------- -------
Total property sales (1) 56.2 39.0
Less deferred consideration on
sales in the period (1.0) (5.3)
Add receipt of deferred consideration
from sales in prior years 3.0 -
--------------------------------------- ------- -------
Total cash proceeds 58.2 33.7
--------------------------------------- ------- -------
1. A full description and reconciliation of APMs is included in
Note 2 to the condensed consolidated interim financial
statements.
Tax
The income statement charge for taxation for the period was
GBP1.6m (H1 2022: GBP19.7m), which comprised a current year tax
charge of GBP0.3m (H1 2022: GBP3.9m) and a deferred tax charge of
GBP1.3m (H1 2022: GBP15.8m).
The current tax charge was low in the first half, primarily as a
result of tax on investment property sales having been crystalised
upon their transfer to AHFS in the prior year, coupled with
administrative costs and interest offsetting trading profits during
the period. The increase in deferred tax largely relates to
unrealised gains on investment properties. The deferred tax balance
has been calculated based on the rate expected to apply on the date
the liability is reversed.
At 30 June 2023, the Group had deferred tax liabilities of
GBP29.6m (31 December 2022: GBP25.9m) and deferred tax assets of
GBP4.1m (31 December 2022: GBP1.8m). The net deferred tax liability
was GBP25.5m (31 December 2022: GBP24.1m).
Basic earnings per share and dividends
Basic earnings per share for the period decreased to 0.9p (H1
2022: 24.5p) reflecting the lower valuation gains on the land and
property portfolio in H1 2023, compared to a significant valuation
gain in H1 2022, as well as accelerated sales activity during H1
2022 to capitalise on the market conditions at the time.
The Board has determined to pay an interim dividend of 0.444p
(H1 2022: 0.404p) per share, an increase of 10% in line with the
Group's policy.
Property categorisation
Until sites receive planning permission and their future use has
been determined, our view is that the land is held for a currently
undetermined future use and should, therefore, be held as
investment property. We categorise properties and land that have
received planning permission, and where development with a view to
sale has commenced, as development properties.
As at 30 June 2023, the balance sheet value of all our
development properties was GBP219.2m (31 December 2022: GBP205.0m)
and their independent valuation by BNP Paribas was GBP249.7m,
reflecting a GBP30.5m cumulative uplift in value since they were
classified as development properties. In order to highlight the
market value of development properties, and overages, and to be
consistent with how we state our investment properties, we use EPRA
NDV*, which includes the market value of development properties and
overages less notional deferred tax, as our primary net assets
metric.
Net asset value
30 Jun 2023 30 Jun 2022 31 Dec
GBPm GBPm 2022
GBPm
---------------------------------------- ------------ ----------- -----------
Properties(1) 700.3 800.0 695.4
Cash 8.5 38.4 11.6
Trade and other receivables 57.3 71.6 60.7
Other assets 14.2 5.7 11.8
----------------------------------------- ------------ ----------- -----------
Total assets 780.3 915.7 779.5
Gross borrowings (72.1) (106.2) (60.0)
Deferred tax liability (25.5) (58.6) (24.1)
Other liabilities (79.6) (95.8) (92.7)
----------------------------------------- ------------ ----------- -----------
Statutory net assets 603.1 655.1 602.7
----------------------------------------- ------------ ----------- -----------
Mark to market value adjustment
on development properties and overages
less notional deferred tax (2) 28.1 69.7 31.2
========================================= ============ =========== ===========
EPRA NDV(2) 631.2 724.8 633.8
----------------------------------------- ------------ ----------- -----------
Number of shares in issue less
Employee Benefit Trust & Equiniti
Share Plan Trustees Limited-held
shares 322,612,685 322,586,735 322,612,685
----------------------------------------- ------------ ----------- -----------
EPRA NDV per share(2) 195.7p 224.7p 196.5p
----------------------------------------- ------------ ----------- -----------
1. Properties include investment properties, development
properties, AHFS, occupied properties and investment in joint
ventures.
2. A full description and reconciliation of the APMs in the
above table is included in Note 2 to the consolidated financial
statements.
EPRA NDV* at 30 June 2023 was GBP631.2m (31 December 2022:
GBP633.8m), which includes the mark-to-market adjustment on the
value of the development properties and overages. The total
portfolio value as at 30 June 2023 was GBP737.8m, an increase of
GBP1.0m from 31 December 2022. The Group's share of losses from
joint ventures of GBP0.8m (H1 2022: GBP2.2m profit) resulted in
investments in joint ventures decreasing to GBP29.1m (31 December
2022: GBP29.8m). Trade and other receivables include deferred
consideration on sales as set out previously. At 30 June 2023,
deferred consideration of GBP32.5m was outstanding (31 December
2022: GBP34.6m), of which 94% is due within one year.
The table below sets out our top ten sites by value, which
represent 48% of our total portfolio, split according to their
categorisation:
Site Site type Categorisation Region Progress to date
in Balance
Sheet
------------------- -------------------- -------------- ---------- -----------------------------
Benthall Major Development Investment Midlands 1,000 residential units
Grange, Ironbridge consented, land sold
for 110 units
------------------- -------------------- -------------- ---------- -----------------------------
South East Major Development Development Midlands 2,016 residential units
Coalville consented, land sold
for 771 units
------------------- -------------------- -------------- ---------- -----------------------------
Bardon Investment Portfolio Investment Midlands Units completed, with
57% of site by area
let
------------------- -------------------- -------------- ---------- -----------------------------
Nufarm Investment Portfolio Investment Yorkshire n/a
& Central
------------------- -------------------- -------------- ---------- -----------------------------
Ansty(1) Strategic Land Investment Midlands Proposed industrial
& logistics site, planning
not yet submitted
------------------- -------------------- -------------- ---------- -----------------------------
Waverley Investment Portfolio Investment Yorkshire 2.1m sq. ft of industrial
AMP & Central & logistics space consented,
1.6m sq. ft built or
sold
------------------- -------------------- -------------- ---------- -----------------------------
Thoresby Major Development Development Yorkshire 800 residential units
& Central consented, land sold
for 362 units
------------------- -------------------- -------------- ---------- -----------------------------
Waverley Major Development Development Yorkshire 3,038 residential units
& Central consented, land sold
for 2,442 units
------------------- -------------------- -------------- ---------- -----------------------------
Knowsley Investment Portfolio Investment North West n/a
------------------- -------------------- -------------- ---------- -----------------------------
Wingates Major Development Development North West Up to 1.1m sq. ft of
industrial & logistics
space consented
------------------- -------------------- -------------- ---------- -----------------------------
1. Contracts have been conditionally exchanged for the sale of
the site
Financing strategy
Harworth's financing strategy remains to be prudently geared.
The Income Generation portfolio provides a recurring income source
to service debt facilities and this is supplemented by proceeds
from sales. The Group has an established sales track record that
has been built up since re-listing in 2015.
To deliver its strategic plan, the Group has adopted a target
net loan to portfolio value* at year-end of below 20%, with a
maximum of 25% in-year. As a principle, the Group will seek to
maintain its cash flows in balance by funding the majority of
infrastructure expenditure through disposal proceeds, while
allowing for growth in the portfolio.
The Group intends to continue to enter into development and
infrastructure loans alongside its RCF to support its growth
strategy.
Debt facilities
The Group has a GBP200m RCF, together with a GBP40m uncommitted
accordion option, which was entered into in 2022. The RCF is
provided by NatWest, Santander and HSBC and is aligned to the
Group's strategy, providing significant liquidity and flexibility
to enable us to pursue our strategic objectives. The interest rate
on the RCF is based on a loan-to-value ratchet mechanism with a
margin payable above SONIA in the range of 2.25% to 2.50%. The
Group has no major refinancing requirements until 2027.
As part of its funding structure, the Group also uses
infrastructure financing provided by public bodies and
site-specific direct development loans to promote the development
of major sites and bring forward the development of industrial
& logistics units .
The Group had borrowings and loans of GBP72.1m at 30 June 2023
(31 December 2022: GBP60.0m; 30 June 2022: GBP106.2m), being the
RCF drawn balance (net of capitalised loan fees) of GBP43.7m (31
December 2022: GBP34.6m; 30 June 2022: GBP92.4m) and infrastructure
or direct development loans (net of capitalised loan fees) of
GBP28.4m (31 December 2022: GBP25.4m; 30 June 2022: GBP13.9m). The
Group's cash balances at 30 June were GBP8.5m (31 December 2022:
GBP11.6m; 30 June 2022: GBP38.4m). The resulting net debt was
GBP63.7m (31 December 2022: GBP48.4m; 30 June 2022: GBP67.8m).
Net debt* increased with property expenditure and acquisitions
offset by the completion of serviced land and property sales. The
movements in net debt over the period are shown below:
H1 2023 H1 2022
GBPm GBPm
-------------------------------------- ------- -------
Opening net debt as at 1
January (48.4) (25.7)
====================================== ======= =======
Cash (outflow)/inflow from
operations (22.4) 3.2
Property expenditure and acquisitions (28.8) (31.2)
Disposal of investment property,
AHFS and overages 50.5 0.1
Investments in joint ventures - (1.1)
Interest and loan arrangement
fees (2.1) (4.0)
Dividends paid (3.0) (2.7)
Tax paid (8.5) (6.9)
Other cash and non-cash movements (1.0) 0.5
====================================== ======= =======
Closing net debt as at 30
June (63.7) (67.8)
====================================== ======= =======
The weighted average cost of the Group's debt, using an end of
month average 2023 balance and 30 June 2023 rates was 6.19% with a
0.9% non-utilisation fee on undrawn RCF amounts (31 December 2022:
5.52% with a 0.9% non-utilisation fee; 30 June 2022: 2.89% with a
0.9% non-utilisation fee). The weighted average term of drawn debt
is now 2.9 years (31 December 2022: 3.2 years; 30 June 2022: 5
years).
The Group's hedging strategy to manage its exposure to interest
rate risk is to hedge the lower of around half its average debt
during the year or its net debt* balance at year-end. At 30 June
2023 30% (31 December 2022: 34%) of the Group's drawn debt,
reflecting 35% of net debt (31 December 2022: 44%), was subject to
fixed rate interest rates with no hedging instruments in place on
the remaining floating rate debt. Projected drawn debt and hedging
requirements remain under active review with any new hedging to be
aligned to future net debt requirements.
As at 30 June 2023, the Group's gross loan to portfolio value*
was 9.8% (31 December 2022: 8.1%; 30 June 2022: 12.0%) and its net
loan to portfolio value was 8.6% (31 December 2022: 6.6%; 30 June
2022: 7.6%). If gearing is assessed against the value of the core
income portfolio (the Investment Portfolio and Natural Resources
portfolio) only, this equates to a gross loan to core income
generation portfolio value of 31.7% (31 December 2022: 26.1%; 30
June 2022: 35.9%) and a net loan to core income portfolio value of
28.0% (31 December 2022: 21.0%; 30 June 2022 22.9%). Under the RCF,
the Group could withstand a material fall in portfolio value,
property sales or rental income before reaching covenant
levels.
At 30 June 2023, undrawn capacity under the RCF was GBP155.0m
(31 December 2022: GBP164.0m; 30 June 2022: GBP106.0m). Going
forwards, the RCF, alongside selected use of infrastructure loans
where appropriate, will continue to provide the Group with
sufficient liquidity to execute our growth strategy.
Kitty Patmore
Chief Financial Officer
12 September 2023
* Harworth discloses both statutory and alternative performance
measures ('APMs'). A full description and reconciliation to the
APMs is set out in Note 2 to the financial statements
Appendix 1: Supplementary operational information
1.1 Main industrial & logistics sites (as at 30 June
2023)
Name Location Sold Consented Estimated GDV Completion
or developed or planned remaining to date
(m sq. (m sq. ft) develop (GBPm)
ft)
------------------------ -------------------- -------------- -------------- ---------------- -----------
Advanced Manufacturing Rotherham,
Park South Yorkshire 1.6 2.1 consented 45 - 55 2027
------------------------ -------------------- -------------- -------------- ---------------- -----------
Barnsley,
Gateway 36 South Yorkshire 0.6 1.3 consented 70 - 80 2026
------------------------ -------------------- -------------- -------------- ---------------- -----------
Chatterley Stoke-on-Trent, - 1.2 consented 135 - 145 2027
Valley Staffordshire
------------------------ -------------------- -------------- -------------- ---------------- -----------
Wingates Bolton, Greater - 1.0 consented 130 - 140 2028
Manchester
------------------------ -------------------- -------------- -------------- ---------------- -----------
North Yorkshire North Yorkshire n/a 3.0 planned 300 - 350 2040
site
------------------------ -------------------- -------------- -------------- ---------------- -----------
Junction 15, Northampton, n/a 1.6 planned 200 - 220 2030
M1 Northamptonshire
------------------------ -------------------- -------------- -------------- ---------------- -----------
Rothwell Rothwell, - 1.5 planned 190 - 210 2028
Northamptonshire
------------------------ -------------------- -------------- -------------- ---------------- -----------
Gascoigne Sherburn-in-Elmet, - 1.5 planned 180 - 190 2028
Wood North Yorkshire
------------------------ -------------------- -------------- -------------- ---------------- -----------
Skelton Grange Leeds, West - 1.1 planned 150 - 160 2027
Yorkshire
------------------------ -------------------- -------------- -------------- ---------------- -----------
1.2 Main residential sites (as at 30 June 2023)
Name Location Sold Consented or Completion
(plots) planned date
(plots)
------------------ ----------------------------- --------- ---------------- -----------
Rotherham,
Waverley South Yorkshire 2,442 3,038 consented to 2025
------------------ ----------------------------- --------- ---------------- -----------
South East Coalville,
Coalville Leicestershire 793 2,016 consented to 2031
------------------ ----------------------------- --------- ---------------- -----------
Simpson Park Harworth, Nottinghamshire 628 1,615 consented to 2027
------------------ ----------------------------- --------- ---------------- -----------
Pheasant Hill Doncaster,
Park South Yorkshire 645 1,200 consented to 2028
------------------ ----------------------------- --------- ---------------- -----------
Benthall Grange, Ironbridge,
Ironbridge Shropshire 110 1,000 consented to 2030
------------------ ----------------------------- --------- ---------------- -----------
St Helens,
Moss Nook Merseyside 256 900 consented to 2026
------------------ ----------------------------- --------- ---------------- -----------
Thoresby Vale Edwinstowe, Nottinghamshire 536 800 consented to 2027
------------------ ----------------------------- --------- ---------------- -----------
Knowsley,
Huyton Merseyside n/a 1,500 planned to 2033
------------------ ----------------------------- --------- ---------------- -----------
Staveley,
Staveley Derbyshire n/a 590 planned to 2028
------------------ ----------------------------- --------- ---------------- -----------
Principal risks and uncertainties
A detailed explanation of the Group's risk management framework,
the principal risks and uncertainties affecting the Group and the
steps it takes to mitigate these risks, can be found on pages 43 to
53 of the Annual Report and Financial Statements for the year ended
31 December 2022 (the "2022 Annual Report"), available at
harworthgroup.com/investors .
The Board has assessed the principal and emerging risks facing
the Group and considers that, save as outlined below, there have
been no material changes to the risks set out in the 2022 Annual
Report.
Availability of and competition for strategic sites
The Board has determined the status of this risk to have reduced
to "medium" as uncertain market conditions have constrained the
appetite of capital for long-term strategic sites moderating the
level of competition for land. At the same time, our strong balance
sheet enables us to continue to grow our strategic land portfolio,
and during the first half of the year acquisitions added 1.1m sq.
ft of industrial & logistics space and 700 housing plots to the
pipeline.
Power infrastructure capacity
The Board identified a new principal risk reflecting the
challenges in securing adequate power capacity for development
sites creating uncertainty in the cost and programme for
development. This new risk has a "medium" residual risk status,
which is expected to reduce in the medium term should the
connections application process change (currently under
consultation by the National Grid). In the meantime, Harworth is
focused on early engagement with Distribution Network Operators and
National Grid, and entry into reservation commitments where
necessary.
Development supply chain
The previous "Supply chain cost inflation and constraints" risk
has been expanded to incorporate all risks associated with
management of the development supply chain. The Board recognised
that cost inflation in the supply chain had been identified as a
distinct principal risk to reflect a persistently high inflationary
environment following the Covid pandemic, but with starts on site
reducing through 2023 and supply chains beginning to normalise,
this risk is starting to subside. At the same time the impact of
rising interest rates on the cost of borrowing and a stalling
economy are beginning to put pressure on the development supply
chain. This new risk therefore combines supply chain counterparty
risk, including the risk of insolvencies, as well as inflation risk
and has a "medium" residual risk status. However, post the end of
the half-year there have been insolvencies both in our supply chain
and those of our end users, and we are aware of an increased
prevalence of financial distress across the construction sector
more generally. As such, this risk is trending higher and continues
to be the subject of intensive scrutiny and management during the
second half of the year.
Counterparties: service providers
The previous "Supply chain and delivery partner management
(counter-party risk)" has been revised to reflect the heightened
risk of insolvencies amongst the Company's critical service
providers beyond those in our development supply chain. This
reframed risk has a "medium" residual risk status.
In addition to the changes outlined above, the Board is closely
monitoring the "Planning", "Residential and Commercial markets" and
"Availability of appropriate capital" principal risks, all of which
may trend higher during the second half of the year. Planning
remains challenging reflecting both policy and local authority
resourcing headwinds, however Harworth continues to make progress
through management actions and secured planning for 397 residential
units and 0.3m sq. ft of industrial & logistics space during
H1. Whilst economic headwinds continue and the cost of capital is
increasing (though inflation appears to be slowly easing),
Harworth's core markets of industrial & logistics and
residential remain key drivers of economic growth, and the Group
remains well capitalised with low balance sheet gearing. This
strong financial position, coupled with the scale and mix of
Harworth's portfolio, positions the Group well to mitigate and
adapt to changes in the external environment. Given these factors,
the Board is confident in the resilience of Harworth's business
model and believes that existing mitigating actions remain
appropriate as management focuses on what can be controlled within
the business.
Directors' Responsibilities Statement
For the six months ended 30 June 2023
The Directors who held office at the date of approval of these
Financial Statements confirm that to the best of their
knowledge:
1. the Condensed Consolidated Interim Financial Statements have
been prepared in accordance with the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority and in
accordance with IAS 34 'Interim Financial Reporting' as contained
in UK-adopted international accounting standards; and
2. the Interim Management Report includes a fair review of the information required by:
a. Rule 4.2.7R of the Disclosure and Transparency Rules, being
an indication of important events that have occurred during the six
months ended 30 June 2023 and their impact on the Condensed
Consolidated Interim Financial Statements, and a description of the
principal risks and uncertainties for the remaining six months of
the financial year; and
b. Rule 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the six months
ended 30 June 2023 and that have materially affected the financial
position or performance of the Group during that period, and any
changes in the related party transactions described in the last
Annual Report and Financial Statements that could do so.
The Directors who served during the six months ended 30 June
2023 were as follows:
Alastair Lyons Chair
Lynda Shillaw Chief Executive
Katerina Patmore Chief Financial Officer
Angela Bromfield Senior Independent Director
Ruth Cooke Independent Non-Executive Director
Lisa Scenna Independent Non-Executive Director
Patrick O'Donnell Bourke Independent Non-Executive Director
Marzia Zafar Independent Non-Executive Director
Steven Underwood Non-Executive Director
Martyn Bowes Non-Executive Director
By order of the Board
Chris Birch
General Counsel and Company Secretary
12 September 2023
Cautionary statement
This report for the six months ended 30 June 2023 contains
certain forward-looking statements with respect to the Company's
financial condition, results, operations and business. These
statements and forecasts involve risk and uncertainty because they
relate to events and depend upon circumstances that will occur in
the future. There are factors that could cause actual results or
developments to differ materially from those expressed or implied
by these forward-looking statements and forecasts. Nothing in this
report should be construed as a profit forecast.
Directors' liability
Neither the Company nor the Directors accept any liability to
any person in relation to this report for the six months ended 30
June 2023 except to the extent that such liability could arise
under English law. Accordingly, any liability to a person who has
demonstrated reliance on any untrue or misleading statement or
omission shall be determined in accordance with section 90A of the
Financial Services and Markets Act 2000.
Shareholder Information
Financial Calendar
Interim results for the six months Announced 12 September 2023
ended 30 June 2023
Interim dividend for the year ending Ex-dividend date 21 September 2023
31 December 2023 Record date 22 September 2023
Payable 20 October 2023
---------------- ------------------
Results for the year ending 31 December Announced March 2024
2023
---------------- ------------------
Annual report and financial statements Published April 2024
for the year ending 31 December 2023
---------------- ------------------
2024 Annual General Meeting Scheduled May 2024
---------------- ------------------
Final dividend for the year ending Payable June 2024
31 December 2023
---------------- ------------------
Registrars
All administrative enquiries relating to shareholdings should,
in the first instance, be directed to Equiniti, Aspect House,
Spencer Road, Lancing, West Sussex, BN99 6DA (telephone: 0371 384
2301) and should state clearly the registered shareholder's name
and address.
Dividend Mandate
Any shareholder wishing dividends to be paid directly into a
bank or building society should contact the Registrars for a
dividend mandate form. Dividends paid in this way will be paid
through the Bankers' Automated Clearing System ("BACS").
Shareview service
The Shareview service from Equiniti allows shareholders to
manage their shareholding online. It gives shareholders direct
access to their data held on the share register, including recent
share movements and dividend details and the ability to change
their address or dividend payment instructions online.
To visit the Shareview website, go to www.shareview.co.uk. There
is no charge to register but the 'shareholder reference' printed on
proxy forms or dividend stationery will be required.
Website
The Group's website ( harworthgroup.com ) gives further
information on the Group. Detailed information for shareholders can
be found at harworthgroup.com/investors.
Consolidated income statement
Unaudited Unaudited
6 months 6 months Audited
ended ended Year ended
30 June 30 June 31 December
2023 2022 2022
Note GBP'000 GBP'000 GBP'000
----------------------------------------- ------ --------- --------- ------------
Revenue 3 18,237 62,560 166,685
Cost of sales 3 (9,609) (37,090) (83,292)
----------------------------------------- ------ --------- --------- ------------
Gross profit 3 8,628 25,470 83,393
Administrative expenses 3 (14,349) (10,940) (22,090)
Other gains/(losses) 3 13,774 85,402 (16,761)
Other operating expenses 3 (45) (27) (56)
Operating profit 3 8,008 99,905 44,486
Finance costs 4 (3,105) (3,428) (6,367)
Finance income 4 335 72 227
Share of (loss)/profit of joint ventures
(including impairment) 9 (773) 2,236 (7,487)
----------------------------------------- ------ --------- --------- ------------
Profit before tax 4,465 98,785 30,859
Tax charge 5 (1,618) (19,681) (3,021)
----------------------------------------- ------ --------- --------- ------------
Profit for the period/year 2,847 79,104 27,838
----------------------------------------- ------ --------- --------- ------------
Earnings per share from operations pence pence pence
----------------------------------------- ------ --------- --------- ------------
Basic 7 0.9 24.5 8.6
----------------------------------------- ------ --------- --------- ------------
Diluted 7 0.9 24.2 8.5
----------------------------------------- ------ --------- --------- ------------
The Notes 1 to 15 are an integral part of these condensed
consolidated interim financial statements.
All activities are derived from continuing operations.
Consolidated statement of comprehensive income
Unaudited
Unaudited 6 months Audited
6 months ended ended Year ended
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
------------------------------------------- --------------- --------- ------------
Profit for the period/year 2,847 79,104 27,838
Other comprehensive income/(expense)
- items that will not be reclassified
to profit or loss:
Net actuarial gain in Blenkinsopp
Pension scheme 86 388 295
Revaluation of Group occupied property (67) (34) (133)
Deferred tax on other comprehensive
expense items (22) (127) (101)
Other comprehensive income - items
that may be reclassified subsequently
to profit or loss:
Fair value of financial instruments - 156 156
Total other comprehensive (expense)/income (3) 383 217
------------------------------------------- --------------- --------- ------------
Total comprehensive income for the
period/year 2,844 79,487 28,055
------------------------------------------- --------------- --------- ------------
Consolidated balance sheet
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2023 2022 2022
Note GBP'000 GBP'000 GBP'000
------------------------------- ------ --------- --------- ------------
ASSETS
Non-current assets
Property, plant and equipment 1,236 712 600
Right of use assets 557 327 254
Trade and other receivables 2,735 7,508 4,013
Investment properties 8 430,366 588,278 400,363
Investments in joint ventures 9 29,055 39,475 29,828
Retirement benefit asset 31 - -
------------------------------- ------ --------- --------- ------------
463,980 636,300 435,058
------------------------------- ------ --------- --------- ------------
Current assets
Inventories 10 231,304 165,651 216,393
Trade and other receivables 54,538 64,081 56,658
Assets held for sale 11 20,811 11,165 59,790
Cash 12 8,493 38,424 11,583
Current tax asset 1,142 111 -
------------------------------- ------ --------- --------- ------------
316,288 279,432 344,424
------------------------------- ------ --------- --------- ------------
Total assets 780,268 915,732 779,482
------------------------------- ------ --------- --------- ------------
LIABILITIES
Current liabilities
Borrowings 13 - - (3,067)
Trade and other payables (76,315) (90,887) (82,499)
Lease liabilities (152) (103) (82)
Current tax liabilities - - (7,013)
(76,467) (90,990) (92,661)
------------------------------- ------ --------- --------- ------------
Net current assets 239,821 188,442 251,763
------------------------------- ------ --------- --------- ------------
Non-current liabilities
Borrowings 13 (72,145) (106,236) (56,911)
Trade and other payables (2,733) (4,509) (2,819)
Lease liabilities (410) (235) (172)
Net deferred tax liabilities (25,460) (58,612) (24,141)
Retirement benefit obligations - (93) (114)
------------------------------- ------ --------- --------- ------------
(100,748) (169,685) (84,157)
------------------------------- ------ --------- --------- ------------
Total liabilities (177,215) (260,675) (176,818)
------------------------------- ------ --------- --------- ------------
Net assets 603,053 655,057 602,664
------------------------------- ------ --------- --------- ------------
SHAREHOLDERS' EQUITY
Called up share capital 14 32,345 32,298 32,305
Share premium account 24,688 24,672 24,688
Fair value reserve 179,339 278,928 174,520
Capital redemption reserve 257 257 257
Merger reserve 45,667 45,667 45,667
Investment in own shares (90) (45) (50)
Retained earnings 318,000 194,176 297,439
Current year profit 2,847 79,104 27,838
------------------------------- ------ --------- --------- ------------
Total shareholders' equity 603,053 655,057 602,664
------------------------------- ------ --------- --------- ------------
Condensed consolidated statement of changes in shareholders'
equity
Called Share Fair Capital Investment
up share premium Merger value redemption in own Retained Total
capital account reserve reserve reserve shares earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- --------- -------- --------- --------- ----------- ---------- ---------- ---------
Balance at 1 January
2022 (audited) 32,272 24,627 45,667 199,629 257 (24) 275,556 577,984
Profit for the six months
to 30 June 2022 - - - - - - 79,104 79,104
Fair value gains - - - 86,224 - - (86,224) -
Transfer of unrealised
gains on disposal of
investment
property - - - (6,891) - - 6,891 -
Other comprehensive
(expense)/income:
Actuarial gain in
Blenkinsopp
pension scheme - - - - - - 388 388
Revaluation of Group
occupied
property - - - (34) - - - (34)
Fair value of financial
instruments - - - - - - 156 156
Deferred tax on other
comprehensive expense
items - - - - - - (127) (127)
--------------------------- --------- -------- --------- --------- ----------- ---------- ---------- ---------
- - - 79,299 - - 188 79,487
Transactions with owners:
Share-based payments - - - - - - 263 263
Dividends paid - - - - - - (2,727) (2,727)
Share issue 26 45 - - - (21) - 50
Balance at 30 June 2022
(unaudited) 32,298 24,672 45,667 278,928 257 (45) 273,280 655,057
--------------------------- --------- -------- --------- --------- ----------- ---------- ---------- ---------
Loss for the six months
to 31 December 2022 - - - - - - (51,266) (51,266)
Fair value losses - - - (96,243) - - 96,243 -
Transfer of unrealised
gains on disposal of
investment
property - - - (8,066) - - 8,066 -
Other comprehensive
(expense)/income:
Actuarial loss in
Blenkinsopp
pension scheme - - - - - - (93) (93)
Revaluation of Group
occupied
property - - - (99) - - - (99)
Deferred tax on other
comprehensive income items - - - - - - 26 26
--------------------------- --------- -------- --------- --------- ----------- ---------- ---------- ---------
- - - (104,408) - - 52,976 (51,432)
Transactions with owners:
Purchase of own shares - - - - - (26) - (26)
Share-based payments - - - - - - 326 326
Dividends paid - - - - - - (1,305) (1,305)
Share issue 7 16 - - - 21 - 44
--------------------------- --------- -------- --------- --------- ----------- ---------- ---------- ---------
Balance at 31 December
2022 (audited) 32,305 24,688 45,667 174,520 257 (50) 325,277 602,664
--------------------------- --------- -------- --------- --------- ----------- ---------- ---------- ---------
Profit for the six months
to 30 June 2023 - - - - - - 2,847 2,847
Fair value gains - - - 17,888 - - (17,888) -
Transfer of unrealised
gains on disposal of
investment
property - - - (13,002) - - 13,002 -
Other comprehensive
(expense)/income:
Actuarial gain in
Blenkinsopp
pension scheme - - - - - - 86 86
Revaluation of group
occupied
property - - - (67) - - - (67)
Deferred tax on other
comprehensive expense
items - - - - - - (22) (22)
--------------------------- --------- -------- --------- --------- ----------- ---------- ---------- ---------
- - - 4,819 - - (1,975) 2,844
Transactions with owners:
Purchase of own shares - - - - - (40) - (40)
Share-based payments - - - - - - 546 546
Dividends paid - - - - - - (3,001) (3,001)
Share issue 40 - - - - - - 40
--------------------------- --------- -------- --------- --------- ----------- ---------- ---------- ---------
Balance at 30 June 2023
(unaudited) 32,345 24,688 45,667 179,339 257 (90) 320,847 603,053
--------------------------- --------- -------- --------- --------- ----------- ---------- ---------- ---------
Consolidated statement of cash flows
Unaudited Unaudited Audited
6 months 6 months year ended
ended ended 31 December
30 June 30 June 2022
2023 2022 GBP'000
GBP'000 GBP'000
---------------------------------------------- --------- ------------- ----------------
Cash flows from operating activities
Profit before tax for the period/year 4,465 98,785 30,859
Net finance costs 2,770 3,356 6,140
Other (gains)/losses (13,774) (85,402) 16,761
Share of loss/(profit) of joint ventures
(including impairment) 773 (2,236) 7,487
Share-based transactions(1) 533 281 728
Depreciation of property, plant and equipment
and right of use assets 112 71 152
Pension contributions in excess of charge (59) (77) (149)
---------------------------------------------- --------- ------------- ----------------
Operating cash (outflows)/inflows before
movements in working capital (5,180) 14,778 61,978
(Increase)/decrease in inventories (15,311) 6,731 16,502
Decrease/(increase) in receivables 3,397 (16,465) (6,482)
(Decrease)/increase in payables (5,325) (1,845) (13,137)
---------------------------------------------- --------- ------------- ----------------
Cash (used in)/generated from operations (22,419) 3,199 58,861
Interest paid (2,065) (2,023) (3,998)
Corporation tax paid (8,462) (6,920) (17,702)
Cash (used in)/generated from operating
activities (32,946) (5,744) 37,161
---------------------------------------------- --------- ------------- ----------------
Cash flows from investing activities
Interest received 335 72 227
Investment in joint ventures - (1,108) (1,849)
Distribution from joint ventures - - 665
Net proceeds from disposal of investment
properties, AHFS and overages 50,506 127 14,232
Property acquisitions (12,019) (4,509) (13,445)
Expenditure on investment properties and
AHFS (16,801) (26,699) (53,107)
Expenditure on property, plant and equipment (238) (91) (110)
---------------------------------------------- --------- ------------- ----------------
Cash generated from/(used in) investing
activities 21,783 (32,208) (53,387)
---------------------------------------------- --------- ------------- ----------------
Cash flows from financing activities
Net proceeds from issue of ordinary shares - 49 67
Proceeds from other loans 5,309 9,050 19,850
Repayment of other loans (3,116) - -
Proceeds from bank loans 20,000 139,000 154,000
Repayment of bank loans (11,000) (79,000) (152,000)
Loan arrangement fees (66) (2,001) (2,022)
Payment in respect of leases (53) (32) (91)
Dividends paid (3,001) (2,727) (4,032)
Cash generated from financing activities 8,073 64,339 15,772
---------------------------------------------- --------- ------------- ----------------
(Decrease)/increase in cash (3,090) 26,387 (454)
---------------------------------------------- --------- ------------- ----------------
Cash as at beginning of period/year 11,583 12,037 12,037
---------------------------------------------- --------- ------------- ----------------
(Decrease)/increase in cash (3,090) 26,387 (454)
---------------------------------------------- --------- ------------- ----------------
Cash as at end of period/year 8,493 38,424 11,583
---------------------------------------------- --------- ------------- ----------------
(1) Share-based transactions reflect the non-cash expenses
relating to share-based payments included within the income
statement
Notes to the condensed consolidated interim financial
statements
for the six months ended 30 June 2023
1. Accounting policies
The principal accounting policies adopted in the preparation of
this condensed consolidated interim financial information are set
out below. These policies have been consistently applied to all of
the periods presented, unless otherwise stated.
General information
Harworth Group plc (the "Company") is a company limited by
shares, incorporated and domiciled in the UK (England). The address
of its registered office is Advantage House, Poplar Way, Catcliffe,
Rotherham, South Yorkshire, S60 5TR.
The Company is a public company listed on the London Stock
Exchange.
The condensed consolidated interim financial statements for the
six months ended 30 June 2023 comprise the accounts of the Company
and its subsidiaries (together referred to as the "Group").
These condensed consolidated interim financial statements do not
comprise statutory accounts within the meaning of section 434 of
the Companies Act 2006. The financial information presented for the
year ended 31 December 2022 is derived from the statutory accounts
for that year. Statutory accounts for the year ended 31 December
2022 were approved by the Board of Directors on 13 March 2023 and
delivered to the Registrar of Companies. The report of the auditor
on those accounts was unqualified, did not contain an emphasis of
matter paragraph and did not contain any statement under section
498 of the Companies Act 2006.
The condensed consolidated interim financial statements for the
six months ended 30 June 2023, which have not been audited, were
approved by the Board on 08 September 2023.
Basis of preparation
These condensed consolidated interim financial statements for
the six months ended 30 June 2023 have been prepared in accordance
with the Disclosure Guidance and Transparency Rules of the
Financial Conduct Authority and in accordance with IAS 34 'Interim
Financial Reporting' as contained in UK-adopted international
accounting standards.
These condensed consolidated interim financial statements should
be read in conjunction with the Group's annual financial statements
for the year ended 31 December 2022, which were prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and in accordance
with UK adopted International Financial Reporting Standards
("IFRS").
Going-concern basis
These condensed consolidated interim financial statements are
prepared on the basis that the Group is a going concern. In forming
its opinion as to going concern, the Company prepares cash flow and
banking covenant forecasts based upon assumptions, with particular
consideration to the key risks and uncertainties and the
macro-economic environment as well as taking into account available
borrowing facilities. The going concern period assessed is until
December 2024 which has been selected as it can be projected with a
reasonable degree of accuracy and covers a complete period of
reporting under the Group's RCF.
A key focus of the assessment of going concern is the management
of liquidity and compliance with borrowing facilities for the
period to December 2024. In 2022, a new five year GBP200m RCF was
agreed with HSBC joining as a new lender in addition to existing
lenders NatWest and Santander. The new RCF is aligned to the
Group's strategy and provides significant additional liquidity and
flexibility to enable it to pursue its strategic objectives. The
new facility is subject to financial covenants, including minimum
interest cover, maximum infrastructure debt as a percentage of
property value and gearing, all of which have been tested through
the going concern assessment undertaken. Available liquidity,
including cash and cash equivalents and bank facility headroom was
GBP163.5m as at 30 June 2023.
The Group benefits from diversification across its Capital
Growth and Income Generation businesses including its industrial
and renewable energy property portfolio. Taking into account the
independent desktop valuation carried out by BNP Paribas and
Savills as at 30 June 2023, the Group net loan-to-portfolio value
remains low at 8.6%, within the Board's target range and with
headroom to allow for falls in property values. Rent collection
remained strong, with 98% collected to date for H1 2023.
In addition to the Company's base cashflow forecast, a
sensitised forecast was produced that reflected a number of severe
but plausible downsides. This downside included: 1) a severe
reduction in sales to the housebuilding sector as well as lower
investment property sales; 2) notwithstanding strong rent
collection to date in line with previous quarters, a prudent
material increase in bad debts across the portfolio over the
majority of the going concern assessment period; 3) a material
decline in the value of land and investment property values as a
result of macro-economic conditions; and 4) a significant increase
in interest rates, impacting the cost of the Group's RCF.
A scenario has also been run which demonstrates that very severe
loss of revenue, valuation reductions and interest cost increases
would be required to breach banking covenants. A scenario with
consideration of potential climate change and related transition
impacts was also examined as part of the Group's focus on
climate-related risks and opportunities.
Even in the downside scenarios, for the going concern period to
December 2024, the Group expects to continue to have sufficient
cash reserves to continue to operate with headroom on lending
facilities and associated covenants and has additional mitigation
measures within management's control, for example reducing
development and acquisition expenditure and reducing operating
costs, that could be deployed to create further cash and covenant
headroom if required.
Based on these considerations, together with available market
information and the Directors' knowledge and experience of the
Group's property portfolio and markets, the Directors considered it
appropriate to adopt the going concern basis of accounting in the
preparation of the Group's condensed consolidated interim financial
statements.
Accounting policies
Changes in accounting policy and disclosures
(a) New standards, amendments and interpretations
A number of new standards and amendments to standards and
interpretations are effective for annual periods beginning on or
after 1 January 2023. None of these have a significant effect on
the financial statements of the Group.
(b) New standards, amendments and interpretations not yet
adopted
A number of new standards and amendments to standards and
interpretations are effective for annual periods beginning on or
after 1 January 2024 and have not been applied in preparing these
financial statements. None of these are expected to have a
significant effect on the financial statements of the Group.
Estimates and judgements
The preparation of the condensed consolidated interim financial
statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial
statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied in the
consolidated financial statements for the year ended 31 December
2022.
2. Alternative Performance Measures ("APMs")
Introduction
The Group has applied the December 2019 European Securities and
Markets Authority ("ESMA") guidance on APMs and the November 2017
Financial Reporting Council ("FRC") corporate thematic review of
APMs in these results. An APM is a financial measure of historical
or future financial performance, position or cash flows of the
Group which is not a measure defined or specified under IFRS.
Overview of use of APMs
The Directors believe that APMs assist in providing additional
useful information on the underlying trends, performance and
position of the Group. APMs assist stakeholder users of the
accounts, particularly equity and debt investors, through the
comparability of information. APMs are used by the Directors and
management, both internally and externally, for performance
analysis, strategic planning, reporting and incentive-setting
purposes.
APMs are not defined by IFRS and therefore may not be directly
comparable with other companies' APMs, including peers in the real
estate industry. APMs should be considered in addition to, and are
not intended to be a substitute for, or superior to, IFRS
measurements.
The derivations of our APMs and their purpose
The primary differences between IFRS statutory amounts and the
APMs that we use are as follows:
1. Capturing all sources of value creation - Under IFRS, the
revaluation movement in development properties which are held in
inventory is not included in the balance sheet. Also, overages are
not recognised in the balance sheet until they are highly probable.
These movements, which are verified by our independent valuers BNP
Paribas and Savills, are included within our APMs;
2. Re-categorising income statement amounts - Under IFRS, the
grouping of amounts, particularly within gross profit and other
gains, does not clearly allow Harworth to demonstrate the value
creation through its business model. In particular, the statutory
grouping does not distinguish value gains (being realised profits
from the sales of properties and unrealised profits from property
value movements) from the ongoing profitability of the business
which is less susceptible to movements in the property cycle.
Finally, the Group includes profits from joint ventures within its
APMs as its joint ventures conduct similar operations to Harworth,
albeit in different ownership structures ; and
3. Comparability with industry peers - Harworth discloses some
APMs which are EPRA measures as these are a set of standard
disclosures for the property industry and thus aid comparability
for our stakeholder users.
Our key APMs
The key APMs that the Group focuses on are as follows:
-- Total Return - The movement in EPRA NDV plus dividends per
share paid in the year expressed as a percentage of opening EPRA
NDV per share
-- EPRA NDV per share - EPRA NDV aims to represent shareholder
value under an orderly sale of the business, where deferred tax,
financial instruments and certain other adjustments are calculated
to the full extent of their liability net of any resulting tax.
EPRA NDV per share is EPRA NDV divided by the number of shares in
issue at the end of the period, less shares held by the Employee
Benefit Trust or Equiniti Share Plan Trustees Limited to satisfy
Long Term Incentive Plan and Share Incentive Plan awards
-- Value gains - These are the realised profits from the sales
of properties and unrealised profits from property value movements
including joint ventures and the mark to market movement on
development properties and overages
-- Net loan to portfolio value - Group debt net of cash held
expressed as a percentage of portfolio value
EPRA Net Asset Measures
EPRA introduced a new set of Net Asset Value metrics in 2020:
EPRA Net Reinstatement Value ("NRV"), EPRA Net Tangible Assets
("NTA") and EPRA NDV. While the Group uses only EPRA NDV as a key
APM, the EPRA Best Practices Recommendations guidelines require
companies to report all three EPRA NAV metrics and reconcile them
to IFRS. These disclosures are provided below.
30 June 2023
-------------------------------------------------- ------------ --------------------------
EPRA NDV EPRA NTA EPRA NRV
GBP'000 GBP'000 GBP'000
-------------------------------------------------- ------------ ------------ ------------
Net assets 603,053 603,053 603,053
Cumulative unrealised gains on development
properties 30,500 30,500 30,500
Cumulative unrealised gains on overages 7,000 7,000 7,000
Deferred tax liabilities (IFRS) - 25,460 25,460
Notional deferred tax on unrealised gains (9,321) - -
Deferred tax liabilities @ 50% - (17,391) -
Purchaser costs - - 51,142
-------------------------------------------------- ------------ ------------ ------------
631,232 648,622 717,155
-------------------------------------------------- ------------ ------------ ------------
Number of shares used for per share calculations 322,612,685 322,612,685 322,612,685
-------------------------------------------------- ------------ ------------ ------------
Per share 195.7 201.1 222.3
-------------------------------------------------- ------------ ------------ ------------
30 June 2022
-------------------------------------------------- ------------ --------------------------
EPRA NDV EPRA NTA EPRA NRV
GBP'000 GBP'000 GBP'000
-------------------------------------------------- ------------ ------------ ------------
Net assets 655,057 655,057 655,057
Cumulative unrealised gains on development
properties 84,271 84,271 84,271
Cumulative unrealised gains on overages 4,500 4,500 4,500
Deferred tax liabilities (IFRS) - 58,612 58,612
Notional deferred tax on unrealised gains (19,070) - -
Deferred tax liabilities @ 50% - (38,841) -
Purchaser costs - - 66,590
-------------------------------------------------- ------------ ------------ ------------
724,758 763,599 869,030
-------------------------------------------------- ------------ ------------ ------------
Number of shares used for per share calculations 322,586,735 322,586,735 322,586,735
-------------------------------------------------- ------------ ------------ ------------
Per share 224.7 236.7 269.4
-------------------------------------------------- ------------ ------------ ------------
31 December 2022
-------------------------------------------------- ------------ --------------------------
EPRA NDV EPRA NTA EPRA NRV
GBP'000 GBP'000 GBP'000
-------------------------------------------------- ------------ ------------ ------------
Net assets 602,664 602,664 602,664
Cumulative unrealised gains on development
properties 33,852 33,852 33,852
Cumulative unrealised gains on overages 7,500 7,500 7,500
Deferred tax liabilities (IFRS) - 24,141 24,141
Notional deferred tax on unrealised gains (10,171) - -
Deferred tax liabilities @ 50% - (17,156) -
Purchaser costs - - 46,307
-------------------------------------------------- ------------ ------------ ------------
633,845 651,001 714,464
-------------------------------------------------- ------------ ------------ ------------
Number of shares used for per share calculations 322,612,685 322,612,685 322,612,685
-------------------------------------------------- ------------ ------------ ------------
Per share 196.5 201.8 221.5
-------------------------------------------------- ------------ ------------ ------------
1) Reconciliation to statutory measures
a. Revaluation gains/(losses) Unaudited Unaudited Audited
6 months 6 months year ended
ended ended 31 December
30 June 30 June 2022
2023 2022 GBP'000
GBP'000 GBP'000
----------------------------------------------- ----------- ---------- -------------
Increase/(decrease) in fair value of
investment properties 15,005 85,274 (19,725)
(Decrease)/increase in fair value of
AHFS (172) 2 (199)
Share of (loss)/profit of joint ventures (773) 2,236 (7,487)
Net realisable value provision on development
properties (1,019) (1,880) (7,074)
Reversal of previous net realisable
value provision on development properties 744 4,260 5,030
----------------------------------------------- ----------- ---------- -------------
Amounts derived from statutory reporting 13,785 89,892 (29,455)
Unrealised (losses)/gains on development
properties (2,210) 14,574 10,493
Unrealised (losses)/gains on overages (500) 1,000 4,003
----------------------------------------------- ----------- ---------- -------------
Revaluation gains 11,075 105,466 (14,959)
----------------------------------------------- ----------- ---------- -------------
b. (Loss)/profit on sale Unaudited Unaudited Audited
6 months 6 months year ended
ended ended 31 December
30 June 30 June 2022
2023 2022 GBP'000
GBP'000 GBP'000
----------------------------------------------- ----------- ---------- -------------
(Loss)/profit on sale of investment
properties (427) 157 923
(Loss)/profit on sale of AHFS (632) (31) 2,071
(Loss)/profit on sale of development
properties (1,344) 6,787 57,252
Release of net realisable value provision
on disposal of development properties - 713 1,649
Profit on sale of overages - - 169
----------------------------------------------- ----------- ---------- -------------
Amounts derived from statutory reporting (2,403) 7,626 62,064
Less previously unrealised gains on
development properties released on
sale (1,142) (2,755) (49,093)
(Loss)/profit on sale (3,545) 4,871 12,971
----------------------------------------------- ----------- ---------- -------------
c. Value gains/(losses) Unaudited Unaudited Audited
6 months 6 months year ended
ended ended 31 December
30 June 30 June 2022
2023 2022 GBP'000
GBP'000 GBP'000
----------------------------------------------- ----------- ---------- -------------
Revaluation gains/(losses) 11,075 105,466 (14,959)
(Loss)/profit on sale (3,545) 4,871 12,971
----------------------------------------------- ----------- ---------- -------------
Value gains/(losses) 7,530 110,337 (1,988)
----------------------------------------------- ----------- ---------- -------------
d. Total property sales Unaudited Unaudited Audited
6 months 6 months year ended
ended ended 31 December
30 June 30 June 2022
2023 2022 GBP'000
GBP'000 GBP'000
----------------------------------------------- ----------- ---------- -------------
Revenue 18,237 62,560 166,685
Less revenue from other property activities (283) (8,196) (10,478)
Less revenue from income generation
activities (13,929) (15,587) (31,251)
Add proceeds from sales of investment
properties, AHFS and overages 52,125 250 13,550
----------------------------------------------- ----------- ---------- -------------
Total property sales 56,150 39,027 138,506
----------------------------------------------- ----------- ---------- -------------
e. Operating profit contributing to Unaudited Unaudited Audited
growth in EPRA NDV 6 months 6 months year ended
ended ended 31 December
30 June 30 June 2022
2023 2022 GBP'000
GBP'000 GBP'000
----------------------------------------------- ----------- ---------- -------------
Operating profit 8,008 99,905 44,486
Share of (loss)/profit on joint ventures (773) 2,236 (7,487)
Unrealised (losses)/gains on development
properties (2,210) 14,574 10,493
Unrealised (losses)/gains on overages (500) 1,000 4,003
Less previously unrealised gains on
development properties released on
sale (1,142) (2,755) (49,093)
Operating profit contributing to growth
in EPRA NDV 3,383 114,960 2,402
----------------------------------------------- ----------- ---------- -------------
f. Portfolio value Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
----------------------------------------------- ----------- ---------- -------------
Land and buildings (included within
Property, plant and equipment) 933 600 500
Investment properties 430,366 588,278 400,363
Investments in joint ventures 29,055 39,475 29,828
AHFS 20,811 11,165 59,790
Development properties (included within
inventories) 219,153 160,444 204,952
----------------------------------------------- ----------- ---------- -------------
Amounts derived from statutory reporting 700,318 799,962 695,433
Cumulative unrealised gains on development
properties as at period/year end 30,500 84,271 33,852
Cumulative unrealised gains on overages
as at period/year end 7,000 4,500 7,500
----------------------------------------------- ----------- ---------- -------------
Portfolio value 737,818 888,733 736,785
----------------------------------------------- ----------- ---------- -------------
g. Net debt Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
----------------------------------------------- ----------- ---------- -------------
Gross borrowings (72,145) (106,236) (59,978)
Cash and cash equivalents 8,493 38,424 11,583
----------------------------------------------- ----------- ---------- -------------
Net debt (63,652) (67,812) (48,395)
----------------------------------------------- ----------- ---------- -------------
h. Net loan to portfolio value (%) Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
----------------------------------------------- ----------- ---------- -------------
Net debt (63,652) (67,812) (48,395)
Portfolio value 737,818 888,733 736,785
----------------------------------------------- ----------- ---------- -------------
Net loan to portfolio value (%) 8.6% 7.6% 6.6%
----------------------------------------------- ----------- ---------- -------------
i. Net loan to core income generation Unaudited Unaudited Audited
portfolio value (%) As at As at As at
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
----------------------------------------------- ------------ ------------ -------------
Net debt (63,652) (67,812) (48,395)
Core income generation portfolio value
(investment portfolio and natural resources) 227,567 295,986 230,133
----------------------------------------------- ------------ ------------ -------------
Net loan to core income generation
portfolio value (%) 28.0% 22.9% 21.0%
----------------------------------------------- ------------ ------------ -------------
j. Gross loan to portfolio value (%) Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
----------------------------------------------- ------------ ------------ -------------
Gross borrowings (72,145) (106,236) (59,978)
Portfolio value 737,818 888,733 736,785
----------------------------------------------- ------------ ------------ -------------
Gross loan to portfolio value (%) 9.8% 12.0% 8.1%
----------------------------------------------- ------------ ------------ -------------
k. Gross loan to core income generation Unaudited Unaudited Audited
portfolio value (%) As at As at As at
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
----------------------------------------------- ------------ ------------ -------------
Gross borrowings (72,145) (106,236) (59,978)
Core income generation portfolio value
(investment portfolio and natural resources) 227,567 295,986 230,133
----------------------------------------------- ------------ ------------ -------------
Gross loan to core income generation
portfolio value (%) 31.7% 35.9% 26.1%
----------------------------------------------- ------------ ------------ -------------
l. Number of shares used for per share Unaudited Unaudited Audited
calculations (number) As at As at As at
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000
----------------------------------------------- ------------ ------------ -------------
Number of shares in issue at end of
period/year 323,449,828 322,982,941 323,051,124
Less Employee Benefit Trust and Equiniti
Share Plan Trustees Limited held shares
(own shares) at end of period/year (837,143) (396,206) (438,439)
----------------------------------------------- ------------ ------------ -------------
Number of shares used for per share
calculations 322,612,685 322,586,735 322,612,685
----------------------------------------------- ------------ ------------ -------------
m. Net Asset Value (NAV) per share Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
----------------------------------------------- ------------ ------------ -------------
NAV (GBP'000) 603,053 655,057 602,664
Number of shares used for per share
calculations 322,612,685 322,586,735 322,612,685
----------------------------------------------- ------------ ------------ -------------
NAV per share (p) 186.9 203.1 186.8
----------------------------------------------- ------------ ------------ -------------
2) Reconciliation to EPRA measures
a) EPRA NDV Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
-------------------------------------------- ------------ ------------ -------------
Net assets 603,053 655,057 602,664
Cumulative unrealised gains on development
properties 30,500 84,272 33,852
Cumulative unrealised gains on overages 7,000 4,500 7,500
Notional deferred tax on unrealised
gains (9,321) (19,070) (10,171)
-------------------------------------------- ------------ ------------ -------------
EPRA NDV 631,232 724,759 633,845
-------------------------------------------- ------------ ------------ -------------
b) EPRA NDV per share (p) Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
-------------------------------------------- ------------ ------------ -------------
EPRA NDV GBP'000 631,232 724,759 633,845
Number of shares used for per share
calculations 322,612,685 322,586,735 322,612,685
-------------------------------------------- ------------ ------------ -------------
EPRA NDV per share (p) 195.7 224.7 196.5
-------------------------------------------- ------------ ------------ -------------
c) EPRA NDV growth and total return Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2023 2022 2022
GBP'000
-------------------------------------------- ------------ ------------ -------------
Opening EPRA NDV/share (p) 196.5 197.6 197.6
Closing EPRA NDV/share (p) 195.7 224.7 196.5
Movement in the period/year (p) (0.8) 27.1 (1.1)
-------------------------------------------- ------------ ------------ -------------
EPRA NDV growth (0.4%) 13.7% (0.6%)
-------------------------------------------- ------------ ------------ -------------
Dividends paid per share (p) 0.9 0.8 1.2
Total return per share (p) 0.1 27.9 0.1
-------------------------------------------- ------------ ------------ -------------
Total return as a percentage of opening
EPRA NDV 0.1% 14.1% 0.1%
-------------------------------------------- ------------ ------------ -------------
d) Net loan to EPRA NDV Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
-------------------------------------------- ------------ ------------ -------------
Net debt (63,652) (67,812) (48,395)
EPRA NDV 631,232 724,759 633,845
-------------------------------------------- ------------ ------------ -------------
Net loan to EPRA NDV 10.1% 9.4% 7.6%
-------------------------------------------- ------------ ------------ -------------
3. Segment information
Segmental Income Statement Unaudited 6 months ended 30 June
2023
Capital Growth
Sale of development Income
properties Other property activities Generation Central Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- ---------------------------- ------------------------- ----------- -------- --------
Revenue (1) 4,025 283 13,929 - 18,237
Cost of sales (5,644) (479) (3,486) - (9,609)
---------------------------- ---------------------------- ------------------------- ----------- -------- --------
Gross profit (2) (1,619) (196) 10,443 - 8,628
Administrative expenses - (2,231) (2,332) (9,786) (14,349)
Other gains (3) - 12,502 1,272 - 13,774
Other operating expense - - - (45) (45)
---------------------------- ---------------------------- ------------------------- ----------- -------- --------
Operating profit/(loss) (1,619) 10,075 9,383 (9,831) 8,008
Finance costs - 33 - (3,138) (3,105)
Finance income - 333 2 - 335
Share of loss of joint
ventures - (896) 123 - (773)
---------------------------- ---------------------------- ------------------------- ----------- -------- --------
Profit/(loss) before tax (1,619) 9,545 9,508 (12,969) 4,465
---------------------------- ---------------------------- ------------------------- ----------- -------- --------
(1) Revenue
Revenue is analysed as follows:
Sale of development properties 4,025 - - - 4,025
Revenue from PPAs - 36 - - 36
Rent, service charge and royalties revenue - 235 13,444 -13,679
Other revenue - 12 485 - 497
-------------------------------------------- ----- --- ------ ------
4,025 283 13,929 -18,237
-------------------------------------------- ----- --- ------ ------
(2) Gross profit
Gross profit is analysed as follows:
Gross profit excluding sales of development properties - (196) 10,443 - 10,247
Gross profit on sale of development properties (1,344) - - -(1,344)
Net realisable value provision on development properties (1,019) - - -(1,019)
Reversal of previous net realisable value provision on development properties 744 - - - 744
(1,619) (196) 10,443 - 8,628
------- ----- ------
(3) Other gains
Other gains are analysed as follows:
Increase in fair value of investment
properties -12,726 2,279 -15,005
Decrease in the fair value of AHFS - (114) (58) - (172)
Loss on sale of investment properties - (110) (317) - (427)
Loss on sale of AHFS - - (632) - (632)
-12,502 1,272 -13,774
------ -----
Segmental Balance Sheet
As at 30 June 2023
Capital Income
Growth Generation Central Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- ----------- -------- --------
Non-current assets
Property, plant and equipment - - 1,236 1,236
Right of use assets - - 557 557
Trade and other receivables 2,735 - - 2,735
Investment properties 196,328 234,038 - 430,366
Investments in joint ventures 15,566 13,489 - 29,055
Retirement benefit asset - - 31 31
214,629 247,527 1,824 463,980
-------- ----------- -------- --------
Current assets
Inventories 231,304 - - 231,304
Trade and other receivables 35,485 12,782 6,271 54,538
AHFS 2,514 18,297 - 20,811
Cash and cash equivalents - - 8,493 8,493
Current tax asset - - 1,142 1,142
269,303 31,079 15,906 316,288
------------------------------- -------- ----------- -------- --------
Total assets 483,932 278,606 17,730 780,268
-------------------------------- -------- ----------- -------- --------
Financial liabilities are not allocated to the reporting
segments as they are managed and measured at a Group level.
Segmental Income Statement Unaudited 6 months ended 30 June
2023
Capital Growth
Sale of development Income
properties Other property activities Generation Central Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- ---------------------------- ------------------------- ----------- -------- --------
Revenue (1) 38,777 8,196 15,587 - 62,560
Cost of sales (28,897) (3,969) (4,224) - (37,090)
---------------------------- ---------------------------- ------------------------- ----------- -------- --------
Gross profit (2) 9,880 4,227 11,363 - 25,470
Administrative expenses - (2,117) (1,328) (7,495) (10,940)
Other gains (3) - 72,553 12,849 - 85,402
Other operating expense - - - (27) (27)
---------------------------- ---------------------------- ------------------------- ----------- -------- --------
Operating profit/(loss) 9,880 74,663 22,884 (7,522) 99,905
Finance costs - - - (3,428) (3,428)
Finance income 60 12 - - 72
Share of loss of joint
ventures - 991 1,245 - 2,236
---------------------------- ---------------------------- ------------------------- ----------- -------- --------
Profit/(loss) before tax 9,940 75,666 24,129 (10,950) 98,785
---------------------------- ---------------------------- ------------------------- ----------- -------- --------
(1) Revenue
Revenue is analysed as follows:
Sale of development properties 38,777 - - -38,777
Revenue from PPAs - - 3,675 - - 3,675
Build-to-suit development revenue - - 4,215 - - - 4,215
Rent, service charge and royalties revenue - - 301 13,971 -14,272
Revenue from coal fines - - - 1,018 1,018
Other revenue - - 5 598 - 603
-------------------------------------------- ------ ----- ------ ------
38,777 8,196 15,587 -62,560
-------------------------------------------- ------ ----- ------ ------
(2) Gross profit
Gross profit is analysed as follows:
Gross profit excluding sales of development properties - 4,227 11,363 - 15,590
Gross profit on sale of development properties 6,787 - - - 6,787
Net realisable value provision on development properties (1,880) - - -(1,880)
Reversal of previous net realisable value provision on development properties 4,260 - - - 4,260
Release of net realisable value provision on disposal of development properties 713 - - - 713
--------------------------------------------------------------------------------- ------- ------ ------ -------
9,880 4,227 11,363 - 25,470
--------------------------------------------------------------------------------- ------- ------ ------ -------
(3) Other gains
Other gains are analysed as follows:
Increase in fair value of investment properties - 72,399 12,875 - 85,274
Decrease in the fair value of AHFS - 2 - - 2
Profit/(loss) on sale of investment properties - 170 (13) - 157
Loss on sale of AHFS - (18) (13) - (31)
- 72,553 12,849 - 85,402
------- ------ ------
Segmental Balance Sheet As at 30 June 2022
Capital Income
Growth Generation Central Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- ----------- -------- --------
Non-current assets
Property, plant and equipment - - 712 712
Right of use assets - 8 319 327
Trade and other receivables 7,508 - - 7,508
Investment properties 286,790 301,488 - 588,278
Investments in joint ventures 21,028 18,447 - 39,475
-------------------------------- -------- ----------- -------- --------
315,326 319,943 1,031 636,300
-------- ----------- -------- --------
Current assets
Inventories 165,651 - - 165,651
Trade and other receivables 47,250 16,174 657 64,081
AHFS 1,925 9,240 - 11,165
Cash and cash equivalents - - 38,424 38,424
Current tax asset - - 111 111
214,826 25,414 39,192 279,432
------------------------------- -------- ----------- -------- --------
Total assets 530,152 345,357 40,223 915,732
-------------------------------- -------- ----------- -------- --------
Financial liabilities are not allocated to the reporting
segments as they are managed and measured at a Group level.
Segmental Income Statement Audited year ended 31 December
2022
Capital Growth
Sale of development Income
properties Other property activities Generation Central Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- ---------------------------- ------------------------- ----------- -------- --------
Revenue (1) 124,956 10,478 31,251 - 166,685
Cost of sales (68,099) (6,305) (8,888) - (83,292)
---------------------------- ---------------------------- ------------------------- ----------- -------- --------
Gross profit (2) 56,857 4,173 22,363 - 83,393
Administrative expenses - (4,123) (1,877) (16,090) (22,090)
Other gains/(losses) (3) - 17,788 (34,549) - (16,761)
Other operating expense - - - (56) (56)
---------------------------- ---------------------------- ------------------------- ----------- -------- --------
Operating profit/(loss) 56,857 17,838 (14,063) (16,146) 44,486
Finance costs - (168) - (6,199) (6,367)
Finance income - 227 - - 227
Share of loss of joint
ventures - (4,317) (3,170) - (7,487)
---------------------------- ---------------------------- ------------------------- ----------- -------- --------
Profit/(loss) before tax 56,857 13,580 (17,233) (22,345) 30,859
---------------------------- ---------------------------- ------------------------- ----------- -------- --------
(1) Revenue
Revenue is analysed as follows:
Sale of development properties 124,956 - - - -124,956
Revenue from PPAs - - 5,810 - - 5,810
Build-to-suit development revenue - 4,215 - - 4,215
Rent, service charge and royalties revenue - 426 28,151 - 28,577
Revenue from coal fines - - 2,113 - 2,113
Other revenue - - 27 987 - 1,014
-------------------------------------------- ------- ------ ------ -------
124,956 10,478 31,251 -166,685
-------------------------------------------- ------- ------ ------ -------
(2) Gross profit
Gross profit is analysed as follows:
Gross profit excluding sales of development properties - 4,173 22,363 - 26,536
Gross profit on sale of development properties 57,252 - - - 57,252
Net realisable value provision on development properties (7,074) - - - (7,074)
Reversal of previous net realisable value provision on development
properties 5,030 - - - 5,030
Release of net realisable value provision on disposal of development
properties 1,649 - - - 1,649
------------------------------------------------------------------------------ ------- ------ -------- --------
56,857 4,173 22,363 - 83,393
------------------------------------------------------------------------------ ------- ------ -------- --------
(3) Other gains/(losses)
Other gains/(losses) are analysed as follows:
Increase/(decrease) in fair value of investment
properties - 17,958 (37,683) -(19,725)
Decrease in the fair value of AHFS - (199) - - (199)
Profit on sale of investment properties - 76 847 - 923
(Loss)/profit on sale of AHFS - (216) 2,287 - 2,071
Profit on sale of overages - 169 - - 169
------------------------------------------------------------------------------ ------- ------ -------- --------
- 17,788 (34,549) -(16,761)
------------------------------------------------------------------------------ ------- ------ -------- --------
Segmental Balance Sheet
As at 31 December 2022
Capital Income
Growth Generation Central Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- ----------- -------- --------
Non-current assets
Property, plant and equipment - - 600 600
Right of use assets - - 254 254
Trade and other receivables 4,013 - - 4,013
Investment properties 164,533 235,830 - 400,363
Investments in joint ventures 16,462 13,366 - 29,828
185,008 249,196 854 435,058
-------- ----------- -------- --------
Current assets
Inventories 216,393 - - 216,393
Trade and other receivables 41,287 14,913 458 56,658
AHFS 2,627 57,163 - 59,790
Cash and cash equivalents - - 11,583 11,583
260,307 72,076 12,041 344,424
------------------------------- -------- ----------- -------- --------
Total assets 445,315 321,272 12,895 779,482
-------------------------------- -------- ----------- -------- --------
Financial liabilities are not allocated to the reporting
segments as they are managed and measured at a Group level.
4. Finance costs and finance income
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
----------------------------------------------------- --------- ------------- ----------------
Finance costs
- Bank interest (1,294) (1,594) (2,206)
- Facility fees (771) (428) (1,791)
- Amortisation of up-front fees (331) (345) (685)
* Acceleration of amortisation of up-front fees
following extinguishment of Facility - (599) (599)
- Other interest (709) (462) (1,086)
----------------------------------------------------- --------- ------------- ----------------
(3,105) (3,428) (6,367)
----------------------------------------------------- --------- ------------- ----------------
Finance income 335 72 227
----------------------------------------------------- --------- ------------- ----------------
Net finance costs (2,770) (3,356) (6,140)
----------------------------------------------------- --------- ------------- ----------------
5. Tax
The Group calculates the period tax expense using the tax rate
that would be applicable to the expected total annual earnings. The
major components of tax expense in the interim condensed
consolidated statement of profit or loss are:
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
--------------------------------------------------- --------- ------------- ----------------
Tax charges/(credits)
Current tax charge 307 3,862 21,768
Deferred tax charge/(credit) relating to
origination and reversal of temporary differences 1,311 15,819 (18,747)
--------------------------------------------------- --------- ------------- ----------------
Tax charge recognised in income statement 1,618 19,681 3,021
--------------------------------------------------- --------- ------------- ----------------
The deferred tax charge largely relates to unrealised gains on
investment properties.
6. Dividends
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
----------------------------------------- --------- ------------- ----------------
Full year dividend of 0.929p per share
for the year ended 31 December 2022 3,001 - -
Interim dividend of 0.404p per share for
the six months ended 30 June 2022 - - 1,305
Full year dividend of 0.845p per share
for the year ended 31 December 2021 - 2,727 2,727
----------------------------------------- --------- ------------- ----------------
3,001 2,727 4,032
----------------------------------------- --------- ------------- ----------------
The Board has determined that it is appropriate for an interim
dividend for the year ending 31 December 2023 to be paid of 0.444p
(H1 2022: 0.404p) per share, an increase of 10% in line with the
Group's policy.
There is no change to the current dividend policy to continue to
grow the dividends by 10% each year.
7. Earnings per share
Earnings per share has been calculated by dividing the profit
attributable to ordinary shareholders by the weighted average
number of shares in issue and ranking for dividend during the
period/year.
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
30 June 30 June 31 December
2023 2022 2022
----------------------------------------------- ----------- ----------- ----------------
Profit from continuing operations attributable
to owners of parent (GBP'000) 2,847 79,104 27,838
Weighted average number of shares used
for basic earnings per share calculation 322,603,991 322,544,685 322,571,783
----------------------------------------------- ----------- ----------- ----------------
Basic earnings per share (pence) 0.9 24.5 8.6
----------------------------------------------- ----------- ----------- ----------------
Weighted average number of shares used
for diluted earnings per share calculation 328,033,119 326,444,715 326,317,353
----------------------------------------------- ----------- ----------- ----------------
Diluted earnings per share (pence) 0.9 24.2 8.5
----------------------------------------------- ----------- ----------- ----------------
The difference between the weighted average number of shares
used for the basic and diluted earnings per share calculation is
due to the effect of share options that are dilutive.
8. Investment properties
The Group holds five categories of investment property being
Agricultural Land, Natural Resources, the Investment Portfolio,
Major Developments and Strategic Land in the UK, which sit within
the operating segments of Income Generation and Capital Growth.
Income Generation Capital Growth
------------------------------------- ------------------------
Agricultural Natural Investment Major Strategic
Land Resources Portfolio Developments Land Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- ------------ ----------- ---------- ------------- --------- -----------
At 1 January 2022
(audited) 5,412 30,551 259,726 45,483 137,183 478,355
---------------------------- ------------ ----------- ---------- ------------- --------- -----------
Direct acquisitions - - - - 1,748 1,748
Subsequent expenditure - 3 2,159 21,043 3,494 26,699
Increase/(decrease)
in fair value 90 (743) 13,528 31,304 41,095 85,274
Transfers from development
properties - - - 5,440 - 5,440
Net transfer to AHFS - (9,238) - - - (9,238)
At 30 June 2022 (unaudited) 5,502 20,573 275,413 103,270 183,520 588,278
---------------------------- ------------ ----------- ---------- ------------- --------- -----------
Direct acquisitions - - - - - 10,115 10,115
Subsequent expenditure - 9 663 19,885 5,850 26,407
Disposals - (860) - - - (860)
Increase/(decrease)
in fair value 192 580 (51,330) (36,661) (17,780) (104,999)
Transfers to development
properties - - - - (60,513) (60,513)
Net transfer to AHFS - (576) (56,589) - (900) (58,065)
At 31 December 2022
(audited) 5,694 19,726 210,407 44,244 120,292 400,363
---------------------------- ------------ ----------- ---------- ------------- --------- -----------
Direct acquisitions 655 - - - 10,401 11,056
Subsequent expenditure - 29 293 12,759 3,647 16,728
Disposals - - (11,136) - - (11,136)
Increase/(decrease)
in fair value 122 (242) 2,400 (1,050) 13,775 15,005
Transfers between divisions - - 8,140 (8,140) - -
Transfers from development
properties - - - 400 - 400
Transfers to property,
plant and equipment - - (500) - - (500)
Net transfer to AHFS - - (1,550) - - (1,550)
At 30 June 2023 (unaudited) 6,471 19,513 208,054 48,213 148,115 430,366
Valuation process
The Directors' valuation as at 30 June 2023 was based on a
desktop valuation completed by BNP Paribas and Savills on the
portfolio of properties. BNP Paribas and Savills are independent
firms acting in the capacity of external valuers with relevant
experience of valuations of this nature.
9. Investment in joint ventures
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
At 1 January 29,828 36,131 36,131
Investments in joint ventures - 1,108 1,849
Distributions from joint ventures - - (665)
Share of (losses)/profits of joint ventures (773) 2,236 (7,487)
At end of period/year 29,055 39,475 29,828
10. Inventories
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
-------------
Development properties 219,153 160,444 204,952
Planning promotion agreements 3,581 2,931 2,994
Option agreements 8,570 2,276 8,447
--------- ----------------
Total inventories 231,304 165,651 216,393
--------- ----------------
The movement in development properties is as follows:
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
-------------
At start of period 204,952 172,701 172,701
Subsequent expenditure 17,436 16,855 35,430
Disposals (2,560) (26,765) (57,857)
Net realisable value (provision)/release (275) 3,093 (395)
Net transfer (to)/from investment properties (400) (5,440) 55,073
--------- ----------------
At end of period 219,153 160,444 204,952
--------- ----------------
The movement in net realisable value provision was as
follows:
Unaudited Unaudited Unaudited
As at As at As at
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
At start of period 9,776 12,154 12,154
Charge for the period 1,019 1,880 7,074
Reversal of previous net realisable value provision (744) (4,260) (5,030)
Released on disposals - (713) (1,649)
Released on transfer to investment property - (2,773) (2,773)
At end of period 10,051 6,288 9,776
11. Assets held for sale
AHFS relate to investment properties identified as being for
sale within 12 months, where a sale is considered highly probable
and the property is immediately available for sale.
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
At start of period 59,790 1,925 1,925
Net transfer from investment properties 1,550 9,238 67,303
Subsequent expenditure 73 - 1
(Decrease)/increase in fair value (172) 2 (199)
Disposals (40,430) - (9,240)
At end of period 20,811 11,165 59,790
12. Cash
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
Cash 8,493 38,424 11,583
13. Borrowings
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
Current:
Secured - infrastructure and direct
development loans - - (3,067)
- - (3,067)
Non-current:
Secured - bank loan (43,731) (92,386) (34,558)
Secured - infrastructure and direct
development loans (28,414) (13,850) (22,353)
Total non-current borrowings (72,145) (106,236) (56,911)
Total borrowings (72,145) (106,236) (59,978)
Loans are stated after deduction of unamortised fees of GBP1.7m
(30 June 2022: GBP2.3m, 31 December 2022: GBP2.0m).
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
Infrastructure and direct
development loans
Gateway
Scrudf Limited Partnership 36 (6,726) - (1,413)
Merseyside Pension Fund Bardon Hill (21,688) (10,884) (20,940)
North West Evergreen Limited Logistics
Partnership North - (2,966) (3,067)
Total infrastructure and
direct development loans (28,414) (13,850) (25,420)
Bank loan (43,731) (92,386) (34,558)
Total borrowings (72,145) (106,236) (59,978)
The bank borrowings are part of a GBP200m Revolving Credit
Facility ("RCF"), with a GBP40m uncommitted accordion option,
provided by NatWest, Santander and HSBC. The term of the facility
is five years and it is repayable in March 2027.
The RCF is subject to financial and other covenants. The bank
borrowings are secured by way of a floating debenture over assets
not otherwise used as security under specific infrastructure loans.
Proceeds from and repayments of bank loans are reflected gross in
the Consolidated Statement of Cash Flows and reflect timing of
utilisation of the RCF.
The infrastructure loans are provided by public bodies in order
to promote the development of major sites. The loans are drawn as
work on the respective sites is progressed and they are repaid on
agreed dates or when disposals are made from the sites.
14. Share capital
Issued, authorised and fully paid Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
At start of period/year 32,305 32,272 32,272
Shares issued 40 26 33
---------
At end of period/year 32,345 32,298 32,305
---------
Issued, authorised and fully paid - number of shares Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December 2022
2023 2022
At start of period/year 323,051,124 322,724,566 322,724,566
Shares issued 398,704 258,375 326,558
At end of period/year 323,449,828 322,982,941 323,051,124
Own shares held (837,143) (396,206) (438,439)
At end of period/year 322,612,685 322,586,735 322,612,685
There is only one class of share in issue: ordinary shares of 10
pence each. All shares carry equal rights to dividends, voting and
return of capital on a winding up of the Company, as set out in the
Company's Articles of Association.
15. Related party transactions
The Group carried out the following transactions with related
parties. The following entities are related parties as a
consequence of shareholdings, joint venture arrangements and
partners of such and/or common Directorships. All related party
transactions are clearly justified and beneficial to the Group, are
undertaken on an arm's-length basis on fully commercial terms and
in the normal course of business.
Unaudited Unaudited Audited
6 months ended/as at 6 months ended/as at year ended/
30 June 30 June as at
2023 2022 31 December
GBP'000 GBP'000 2022
GBP'000
MULTIPLY LOGISTICS NORTH HOLDINGS LIMITED &
MULTIPLY LOGISTICS NORTH LP
Sales
Recharges of costs 4 - -
Asset management fee 25 58 145
Water charges 84 60 113
Purchases
Recharge of costs 1 - -
Receivables
Other receivables 4 - -
GENUIT GROUP (FORMERLY POLYPIPE)
Sales
Rent 16 10 20
Receivables
Trade receivables 6 6 6
THE AIRE VALLEY LAND LLP
Receivable 26 26 26
CRIMEA LAND MANSFIELD LLP
Receivable 9 1 9
NORTHERN GATEWAY DEVELOPMENT VEHICLE LLP
Partner loan made during the year - 1,108 1,849
INVESTMENT PROPERTY FORUM
Purchases - - 1
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IR GZGMLGMFGFZZ
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