Harworth starts 2018 with a bang after robust 2017

By Paul Norman - Tuesday, March 06, 2018 9:00

Harworth Group, the listed brownfield land and property developer in the Midlands and North of England, reported a further year of double digit EPRA NNNAV growth, up 12.5% (2016: 12.5%), with 80% of value gains generated through active management, in its full years for the period ended 31 December 2017.

Earnings per share were up 15.4% to 15.8p (2016: 13.7p) while the dividend per share increased by 10% to 0.828p.

It flagged a number of operational highlights including:

• Planning secured for the delivery of 825 residential plots and over 3m sq ft of commercial, bringing the consented portfolio to 10,448 residential plots and 12.13m sq ft of commercial

• 622 residential plots sold (2016: 619 residential plots), across six parcels achieving profit on sale of £3.8m; in addition, over 850,000 sq. ft of commercial land sold across five parcels for £22.7m, delivering a profit on sale of £4.3m

• March 2017 £27.1m equity proceeds fully invested through the acquisition of five sites, providing over 410 acres of development opportunities

• Over 360,000 sq ft of long-term lettings completed on five new commercial buildings

It also said that 2018, while outside the results period, marked its strongest start to a year with over 50% of expected full year 2018 sales agreed above book value.

Harworth’s Chief Executive, Owen Michaelson, said: “These are another strong set of results where we have again delivered double digit EPRA NNNAV growth, reflecting our continued ability to maximise the value of our portfolio whilst simultaneously growing our strategic landbank and income base through acquisitions and new lettings.

“Our focus, on the “beds and sheds” sectors in the North of England and the Midlands, is firmly underpinned by strong economic and consumer trends in the regions, and reinforced by supportive Government policy. This favourable backdrop coupled with active management has been reflected in 2017’s planning successes and the sales and lettings achieved at our major developments such as Waverley and Logistics North.

“Whilst our existing sites continue to perform well and have plenty of future potential, we are also pleased with the progress of the five new acquisitions to our strategic landbank, which were acquired with the cash proceeds from new equity raised last March. These acquisitions delivered significant revaluation gains in 2017 and provide a substantial pipeline for us to deliver further value gains through our market-leading planning and development expertise.

“2018 has started strongly, with over 50% of expected full year sales already agreed since the year-end and the completion of three new lettings generating additional recurring income, further demonstrating the success of our proven and robust strategy. This performance, together with the supportive market fundamentals in the areas in which we operate, means we look to the future with confidence.”

Michaelson said: "The strong start to this year gives us extra comfort and stability as we are a second half weighted business. The asset management driven gains are really thanks to clear milestone events occuring such as planning persmissions.

"Importantly now, three years in from starting to refill the hoppers, 25% of the portfolio is not legacy sites from UK Coal and the new sites purcahsed have outperformed the portfolio."

Michaelson said commercial demand was "steady".


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