REG - Harworth Group PLC - AGM Trading Update

HarworthAnnouncement

24/05/2022 07:00

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RNS Number : 5145M  Harworth Group PLC  24 May 2022

Harworth Group plc

("Harworth" or "the Company")

AGM Trading Update

Continued operational momentum resulting from strategic delivery and robust
demand

 

Harworth Group plc, a leading regenerator of land and property for sustainable
development and investment, provides the following update on its operational
performance in advance of its Annual General Meeting, which will take place at
2pm today. The Company will announce the results of its AGM following the
conclusion of the meeting.

 

Lynda Shillaw, Chief Executive of Harworth, commented: "We have continued our
strong operational momentum into 2022, delivering our growth strategy against
an ongoing backdrop of robust demand for our serviced residential plots and
industrial & logistics products. We have demonstrated a step change in the
scale of our direct development so far this year and recently launched our
initial single-family Build to Rent portfolio of up to 1,200 homes: together
these will accelerate the delivery of our development sites whilst creating
further sustainable places where people want to live and work.

 

"We have also made great progress in replenishing our strategic land bank,
with land acquisitions completed so far this year adding 3.9m sq. ft of
industrial & logistics space and 793 residential plots to our pipeline.
Although these sites are still largely in the land assembly phase, they
represent significant opportunities that will ensure we maintain our target
12-15 year land supply as we deliver on our strategic plan.

 

"Despite macroeconomic headwinds, the fundamental supply and demand factors
driving growth in the industrial & logistics and residential markets
remain intact. These strong underlying market drivers, combined with our
proven successful track record as a developer of large complex sites, our
robust financial position, and our focus on creating high-quality, sustainable
places, give us confidence in our ability to deliver on our medium-term
ambition for Harworth to reach £1bn of EPRA NDV."

 

Advancing 635,000 sq. ft of direct development and land sales across 32.2m sq.
ft industrial & logistics pipeline

·      332,000 sq. ft of Grade A space at Bardon Hill, Leicestershire,
due to practically complete in August 2022; in           advanced
negotiations with a number of potential occupiers

·      Development of a further 303,000 sq. ft underway or being
prepared at the Advanced Manufacturing Park,           Waverley and
Gateway 36, Barnsley; a combination of build-to-suit and speculative
development

·      Received planning permission to begin site preparation for 1.2m
sq. ft of space at Chatterley Valley, Staffordshire; technical work underway
in advance of starting 1.1m sq. ft of space at Wingates, Bolton

·      36% of budgeted industrial & logistics land sales((1)) for
the year have either completed, exchanged or are in heads of terms, either
in-line with or at a premium to book value

 

Progressing serviced plot sales across 30,557-plot residential pipeline, with
single-family Build to Rent ("BTR") portfolio set to accelerate this further

·      100% of budgeted serviced 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 book value

·      Completed the sale of unserviced land at the Yorkshire Main
colliery site in Doncaster to MJ Gleeson for the         delivery of 333
homes, in-line with book value

·      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 early interest from potential investment partners

 

Acquisitions drive further pipeline growth, with planning decisions expected
for a number of key sites

·      Completed a number of land acquisitions so far this year, adding
793 plots and 3.9m sq. ft to Harworth's total     development pipeline

·      Expecting 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 robust operational metrics, supported by strong
leasing activity

·      As at 30 April 2022, portfolio had an average rent of £6.21 per
sq. ft (31 December 2021: £6.32) and vacancy of     3.9% (31 December
2021: 4.1%)((2))

·      Completed 47,500 sq. ft of leasing deals; new lettings at an
average 19% premium to ERV, and renewals on           average 14% ahead
of previous passing rent

 

Harworth remains well capitalised with strong balance sheet and financial
position

·      As at 30 April 2022, net debt was £71.6m (31 December 2021:
£25.7m), resulting in a pro-forma LTV of 9.1% (31     December 2021:
3.4%), based on 31 December 2021 valuations

·      Available liquidity increased to £132.4m (31 December 2021:
£128.0m), following the signing of a new £200m         revolving credit
facility and planned infrastructure spend to accelerate delivery on our sites

 

Further development and implementation of the Harworth Way, targeting enhanced
measurement and reporting of societal and environmental benefits

·      Peter Henry appointed as Director of Sustainability; with over 10
years' experience at Harworth having formerly     been Regional Director for
Yorkshire & Central, Peter has been integral to forming many of the
Company's key principles for sustainable regeneration and placemaking

·      Bardon Hill development targeting Net Zero Carbon in construction
status, aligned to the UK Green Building         Council framework

·      Underlining Harworth's commitment to sustainability, the Board
has recently undertaken a search for an               additional
Non-Executive Director with expertise in this area. That process is close to
reaching a conclusion, and   we expect to make an announcement on a new
appointment shortly

 

Harworth will be hosting a Capital Markets Day for institutional investors and
analysts on 15 June 2022, with parts of the event webcast live on the Harworth
website. Please contact investors@harworthgroup.com for further information.

 

Notes:

(1) 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 prior to 31 August 2022

(2) Calculated using the European Public Real Estate Association (EPRA) Best
Practices Recommendations Guidelines

 

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

 

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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