TIDMHWG
RNS Number : 3781A
Harworth Group PLC
21 January 2020
21 January 2020: 7am
LEI 213800R8JSSGK2KPFG21
Harworth Group plc
Year-end Trading Update
LEADING REGENERATION COMPANY CONTINUES TO DELIVER GOOD
OPERATIONAL PERFORMANCE
Harworth Group plc ("Harworth" or "the Group"), a leading
regenerator of land and property for development and investment,
today provides a trading update for the financial year ended 31
December 2019.
The Group has delivered a solid operational performance in the
second half of the year despite the planning headwinds reported as
part of its 2019 interim results. This, coupled with the indicative
outcome of the independent annual valuation of the property
portfolio, means that the Group anticipates that its financial
performance for the year ended 31 December 2019 (including its
principal measure of Group EPRA NNNAV) will be in line with
expectations and its stated aim of delivering long-term
market-leading returns for its shareholders.
Harworth continues to transform its portfolio of land and
property through active management across its four main business
areas, realising strong financial returns as well as creating new
places where people want to live and work.
Highlights for the period from 1 October to 31 December 2019
include:
GROWING AND REFINING OUR LAND AND PROPERTY PORTFOLIO
-- Completed land purchases totalling over 33 acres adjacent to
two of Harworth's major developments for a combined consideration
of GBP6.25 million;
-- Purchased two income-producing industrial units at Brighouse
and Sherburn-in-Elmet for a combined
consideration of GBP12.8 million, reflecting a blended net initial yield of 8.08%;
-- Entered into five Planning Promotion Agreements across all
three core regions as part of assuring the Group's long- term land
pipeline; and
-- Sold 194.86 acres of non-core land as part of reducing our
agricultural landholding and our planned exit from the North
East
PREPARING LAND TO CREATE NEW COMMUNITIES AS MASTER DEVELOPER
-- Submitted planning applications for over 1.3m sq. ft of
commercial space and 1,300 residential plots, including on the
former Ironbridge Power Station in Shropshire. As at 31 December
2019, a total of over 4.1m sq. ft of employment space and over
3,000 residential plots were in the planning system awaiting
determination;
-- Completed initial site works and enabling contracts at
Coalville in Leicestershire and Moss Nook in St Helens to unlock
the delivery of nearly 3,000 consented residential plots; and
-- Successfully demolished Ironbridge Power Station's four
former cooling towers in December as part of ongoing site
preparation
DELIVERING SERVICED PLOTS FOR NEW HOMES AND COMMERCIAL
SPACES
-- 25.7 acres of serviced residential land sold for a combined
288 plots at Thoresby Vale, Nottinghamshire (Harron Homes) and
Riverdale Park, Doncaster (Taylor Wimpey) for a total consideration
of GBP14.06 million, above 2018 book value;
-- 43 acres of serviced commercial land sold at its joint
venture Gateway 45 Leeds site to PLP for the development of up to
855,000 sq ft of industrial and distribution space; and
-- Completed the freehold land sale of its Solar Portfolio -
seven former Colliery sites in Yorkshire, Nottinghamshire and
Derbyshire totalling 251 acres with no further development
potential - to Lightsource BP for GBP5.0 million, at a price above
2018 book value and representing a net initial yield of 4.61%
ACTIVELY MANAGING THE GROUP'S INCOME PORTFOLIO WITH NEW LETTINGS
AND PROVIDING QUALITY ACCOMMODATION FOR BUSINESSES
-- Increased annualised income by over GBP1.0 million from new
Business Space purchases at Sherburn-in-Elmet and Brighouse, where
an agreement for lease was signed on the vacant building within
three months of purchase;
-- Agreed a 20-year pre-let with the UK Atomic Energy Authority
for a 25,000 sq. ft bespoke fusion technology research facility at
the Advanced Manufacturing Park ("AMP") in Rotherham, with rent
commencing on practical completion in September 2020 in line with
existing headline rents at AMP; and
-- Completed a new 10-year letting of the 25,497 sq. ft Unit
F2/D at Multiply Logistics North, a Joint Venture with Lancashire
Pension Fund, with a further 10-year letting of the 20,434 sq. ft
Unit F2/F agreed after
period end. Both agreements were in line with existing headline rents at the development
The Group's land and property portfolio, balance sheet and cash
flow remain strong, ensuring that it is well positioned for
long-term value creation.
Owen Michaelson, Chief Executive Officer, commented:
"We anticipate full year results to be in line with
expectations, reflecting good progress being made across all
business sectors.
"Our results reflect that the majority of our value gains are
realised through the active asset management of our underlying land
and property portfolio, including strong residential and commercial
land sales and continued efforts to improve the depth and breadth
of our income portfolio. Our regional markets in the North of
England and Midlands remain solid and should benefit further from
emerging government policy.
"Looking forward, the planning headwinds that we reported at the
half year still remain in place and we continue to manage this risk
accordingly on a site-by-site basis. In addition, the returns from
large-scale sites such as ours are not linear. Whilst we therefore
continue to target long-term market-leading returns, our current
trading plans indicate a profile for our historic site portfolio
that anticipates delivering lower returns in the near term whilst
our new sites work through the development cycle.
"We will continue to deploy our capital wisely through our
regional operating model on appropriate new land and property
opportunities in order to drive returns whilst supporting the
ongoing regeneration of our regions through the delivery of new
homes and jobs."
Harworth will announce its preliminary full year results for the
financial year ended 31 December 2019 on 17 March 2020.
-ENDS-
Enquiries:
Harworth Group plc FTI Consulting
Owen Michaelson, Chief Executive Dido Laurimore
Officer
Kitty Patmore, Chief Financial Richard Gotla
Officer
Iain Thomson, Head of Communications Eve Kirmatzis
& IR
Tel: +44 (0)114 349 3131 Tel: +44 (0)20 3727 1000
investors@harworthgroup.com Harworth@fticonsulting.com
ABOUT HARWORTH GROUP PLC
Listed on the premium segment of the main market, Harworth Group
plc (LSE: HWG) is a leading regenerator of land and property for
development and investment which owns, develops and manages a
portfolio of approximately 20,500 acres of land on around 120 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
developments and employment areas (harworthgroup.com).
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END
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