TIDMHWG
RNS Number : 0449T
Harworth Group PLC
20 July 2022
20 July 2022
Harworth Group plc
("Harworth" or "the Company")
Half Year Trading Update
Strategic delivery and robust demand drive significant valuation
growth
Harworth Group plc, a leading regenerator of land and property
for sustainable development and investment, is today providing a
trading update in respect of the six months ended 30 June 2022,
ahead of the announcement of its Half Year Results on 13 September
2022.
Due to Harworth's strong operational progress in the first half,
and the resilience of its markets in the year to date, the Company
now anticipates that EPRA NDV(1) as at 30 June 2022 will be ahead
of current analyst consensus(2) for 31 December 2022.
Lynda Shillaw, Chief Executive of Harworth, commented: "We made
significant operational and financial progress in the first half:
our Grade A logistics direct development at Bardon Hill is letting
well and close to practical completion, and we continue to
accelerate our residential sales including the largest ever sale to
date at Waverley. This has driven our EPRA NDV and means we are
continuing to deliver successfully against our growth strategy
supported by a robust market for our residential and industrial
& logistics products.
"Harworth is particularly well-positioned within our markets: we
sell serviced and therefore de-risked residential land to
housebuilders, we develop industrial & logistics sites in
underserved regional markets, and the scale of our portfolio and
range of our products, including our newly launched single-family
Build to Rent portfolio, provide significant diversification.
"We are alive to the complex geopolitical and macro-economic
environment impacting economies across the world, and we remain
closely attuned to their potential impact on our markets. We are
cautious that the anticipated uncertainty in near-term market
conditions in the UK, combined with the strong performance in the
first 6 months of the year, mean that our 2022 results will likely
be first half weighted.
"Despite this, the supply and demand factors supporting our
markets have been resilient to date, our pipeline remains robust
and our through the cycle investment and management actions
continue to drive value across our portfolio. Our proven successful
track record as a developer of large complex sites to create
high-quality sustainable places, combined with our strong financial
position, provide a stable platform for growth as we continue to
deliver on our strategic plan to reach GBP1bn of EPRA NDV over the
medium term."
Increased direct development unlocking value from 32.2m sq. ft
industrial & logistics pipeline
-- 84% of budgeted industrial & logistics land sales for the
year(3) have either completed, exchanged or are subject to heads of
terms, either in-line with or at a premium to 31 December 2021 book
value
-- Significant progress towards ambition of 800,000 sq. ft of
direct development per annum including:
o 332,000 sq. ft of Grade A space at Bardon Hill,
Leicestershire, and targeting Net Zero Carbon in construction
status, on track to practically complete in August; exchanged or
under offer on 92% of total space
o 100,000 sq. ft unit completed at the Advanced Manufacturing
Park ("AMP"), Rotherham in June, occupied by SBD Apparel, and
development underway or being prepared for a further 203,000 sq. ft
at the AMP and Gateway 36, Barnsley
Progressing 28,990 plot residential pipeline through sale of
serviced plots and new Build to Rent ("BTR") product
-- Over 100% of budgeted residential plot sales for the year
have either completed, exchanged or are in heads of terms, either
in-line with or at a premium to 31 December 2021 book value
-- Completed the Group's largest serviced residential land sale
to date: a GBP29m sale at Waverley to Barratt and David Wilson
Homes, capable of delivering approximately 450 homes
-- Diversification of residential product with the launch of a
portfolio of up to 1,200 single-family BTR homes across 10 sites,
to be delivered through a forward funding agreement: significant
interest received and preferred partner selected with exchange
targeted later in 2022
Targeting a 12-15 year land supply through acquisitions and
progressing sites through planning
-- Completed several land acquisitions so far this year,
primarily supporting land assembly and adding 1,143 plots and 3.9m
sq. ft to Harworth's total development pipeline
-- Targeting planning determinations later this year for 3.0m
sq. ft of industrial & logistics space across: Gascoigne Wood,
North Yorkshire; Skelton Grange, Leeds; and Houghton Main,
Barnsley
Investment Portfolio showing strong operational metrics:
-- As at 30 June 2022, the portfolio had a vacancy(4) rate of
3.8% (31 December: 4.1%) with 96.1% of rent collected to date for
the June quarter
-- Completed 47,936 sq. ft of leasing deals in the first half;
new lettings at an average 17% premium to ERV, and renewals on
average 15% ahead of previous passing rent
Maintaining a strong balance sheet and financial position, with
significant available liquidity
-- As at 30 June 2022, net debt was GBP67.8m (31 December 2021:
GBP25.7m) resulting in a net loan to portfolio value based on
December 2021 valuations of 8.7% (31 December 2021: 3.4%)
-- Available liquidity of GBP144.4m (31 December 2021:
GBP128.0m), following the signing of a new GBP200m revolving credit
facility
Notes:
(1) European Public Real Estate Association (EPRA) Net Disposal
Value: an adjusted net asset value metric that is one of Harworth's
Key Performance Indicators
(2) Current analyst consensus for EPRA NDV per share as at 31
December 2022 is 211p, comprising four forecasts ranging from 209p
to 213p
(3) Excludes the sale of the Kellingley development site, for
which Harworth exchanged contracts in 2021. The transaction will
only complete if all sale conditions are satisfied in September
2022
(4) Calculated using the EPRA Best Practices Recommendations Guidelines and December 2021 ERV
For further information
Harworth Group plc
Lynda Shillaw (Chief Executive) T: +44 (0114) 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
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as amended by The
Market Abuse (Amendment) (EU Exit) Regulations 2019. 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 approximately 14,000 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
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