Harworth Group plc
("Harworth" or "the Company")
Year-end Trading Update
Management actions drive robust
performance in 2023 and strong momentum into 2024
Harworth Group plc, a leading
regenerator of land and property for sustainable development and
investment, is today providing a trading update in respect of its
financial year ended 31 December 2023, ahead of the announcement of
its Full Year Results on 19 March 2024.
The Group anticipates that EPRA
NDV(1) as at 31 December 2023 will be slightly ahead of
current market consensus(2). This is the result of
management actions undertaken on development sites to unlock high
value uses, and positive progress with planning applications, which
have underpinned valuation gains.
Lynda Shillaw, Chief Executive of Harworth,
commented: "Harworth had a strong
2023 and delivered another robust performance. The unique
combination of our extensive landbank and applying our specialist
skillset to identify and realise the highest value from each of our
sites saw us complete serviced land and property sales at prices in
line with, or ahead of, book values, achieve lettings ahead of
estimated rental values, and progress sites through the planning
system, all against an uncertain market backdrop.
"Since re-listing in 2015, Harworth
has doubled its EPRA NDV. The progress made across our portfolio in
2023 has meant that our year-end valuation is slightly ahead of
expectations, moving us closer to our strategic ambition of
becoming a £1bn business by 2027.
"As we enter 2024, there are some
signs of optimism in the macro environment whilst our key markets
remain characterised by structural undersupply. We are encouraged
that we are seeing continued good demand into the new year for our
serviced residential land as well as occupier interest in our
employment sites. This, combined with our long-term
through-the-cycle approach, our low loan-to-value and significant
financial liquidity means that as well as securing and progressing
opportunities to deliver long-term value to investors, we are well
positioned to take the management actions that will generate
further value gains from our portfolio in the year
ahead."
193,000 sq. ft of industrial & logistics space developed
during the year, with a remaining pipeline of 37.7m sq.
ft
· Completed development of 110,000 sq. ft of Grade A space at
Gateway 36 in Barnsley and 83,000 sq. ft at the Advanced
Manufacturing Park ("AMP") in Rotherham, which is 39% is let,
exchanged or in heads of terms
· Work
underway on a further 187,000 sq. ft of space at the AMP,
comprising two pre-let units and one build-to-suit unit that will
be owned by its occupier, underscoring the location's popularity
and Harworth's flexible approach to development
· Infrastructure works continuing at Chatterley Valley in
Staffordshire, and to commence shortly at Wingates in Bolton, with
combined planning permissions to develop 2.2m sq. ft
1,170 residential plots sold during the period, with an
extensive remaining pipeline of 27,190 plots
· Nine
transactions completed with six different housebuilders, comprising
national and regional operators, demonstrating sustained demand for
the Group's de-risked residential serviced land
· Headline sales proceeds of £52.1m, with all transactions at
prices in line with, or ahead of, book values
· After
year-end, completed a further plot sale, at book value, to
Sky-House to construct 50 new homes at Waverley in Rotherham, with
a robust pipeline for further residential plot sales in the months
ahead
Progress in securing planning approvals and forward-funding
agreements for mixed tenure products
· First
forward-funding agreement signed as part of our portfolio of sites
for affordable housing, with Great Places, for the development of
50 affordable homes
· Planning approvals now received for 31% of our portfolio of
sites for build-to-rent properties; progressing towards exchange of
contracts with selected partners
· Planning approval received for the first pilot site for net
zero carbon homes product, at the Prince of Wales development in
Pontefract
Further strengthening our pipeline through acquisitions and
planning progress to unlock high value uses
· Acquisitions added 1.8m sq. ft of industrial & logistics
space and 809 residential plots to the pipeline
· Secured planning for 397 residential units, with a further 500
units approved post year-end, and 1.1m sq. ft of industrial &
logistics space, including a 0.8m sq. ft approval at Skelton
Grange, Leeds
· Applications for 10.1m sq. ft of industrial & logistics
space and 1,774 residential plots progressing through the planning
system at the year-end
Investment Portfolio now 37%(3) Grade A (31
December 2022: 18%)
· £70.0m
of Investment Portfolio sales completed during the year in line
with book values, all of which are assets where value had been
maximised prior to sale through asset management
initiatives
· After
year-end, completed the sale of a site in
Flaxby, North Yorkshire, previously occupied by Ilke Homes, for a
headline sales price of £13.3m, ahead of book value
· Leasing activity added £1.9m (16%) to annualised rent; new
lettings achieved an average 7% premium to ERVs, and renewals and
rent reviews achieved on average a 27% uplift to previous passing
rent
· Vacancy rate of 11.2%(3) (31 December 2022: 8.3%);
reduced to 1.2% by excluding space completed in the preceding 12
months (31 December 2022: 2.7%); 97% of rent due in 2023
collected
Providing sustainable new community infrastructure across the
regions
· Opened
71 acres of green space across Cadley Park, Derbyshire and South
East Coalville, Leicestershire, alongside a new learn-to-ride cycle
track at Waverley
· Began
construction of a new forest school at South East Coalville and a
new mixed-use centre at the heart of the community at Waverley,
Olive Lane, providing retail and leisure space
Strong balance sheet and financial position, with low gearing
and significant available liquidity
· Year-end net debt of £36.4m (31 December 2022: £48.4m),
representing a pro-forma LTV based on 30 June 2023 valuations of
5.3% (30 June 2023: 8.6%)
· Available liquidity of £192.2m at year-end (31 December 2022:
£175.6m): no major refinancing requirement until 2027
Notes:
(1) European Real Estate Association
('EPRA') Net Disposal Value ('NDV'), an adjusted Net Asset Value
metric which is one of Harworth's key Alternative Performance
Measures
(2) Current consensus for 31 December 2023
EPRA NDV per share is 194.0p, comprising four analyst forecasts
ranging from 189.5p to 195.6p
(3) Excludes a site in Flaxby, North
Yorkshire, which was previously occupied by Ilke Homes, as this was
sold shortly after year-end
For further information
Harworth Group plc
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Lynda Shillaw (Chief
Executive)
Kitty Patmore (Chief Financial
Officer)
Tom Loughran (Head of Investor &
Stakeholder Relations)
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T: +44 (0114) 349 3131
E:
investors@harworthgroup.com
|
|
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FTI
Consulting
|
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Dido Laurimore
Richard Gotla
Eve Kirmatzis
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T: +44 (0)20 3727 1000
E:
Harworth@fticonsulting.com
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The information contained within
this announcement is deemed by the Company to contain inside
information as stipulated under the Market Abuse Regulation (EU)
No. 596/2014 as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018 ("MAR"). The person
responsible for making this announcement on behalf of Harworth is
Chris Birch, Company Secretary.
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