REG - Harworth Group PLC - Trading Update H1-2025

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RNS Number : 9296T  Harworth Group PLC  05 August 2025

HARWORTH GROUP PLC

('Harworth' or the 'Group' or the 'Company')

 

Trading Update H1-2025(1)

Positive operational momentum despite softer residential markets

 

Harworth Group plc, a leading land and property regenerator of sustainable
developments, is publishing an operational update for H1 2025, ahead of the
Half Year results scheduled for Tuesday 16 September 2025. See page 2* for
abbreviations.

 

Lynda Shillaw, Chief Executive of Harworth, commented: "I am very pleased
with the sustained operational momentum of the last six months and especially
the consistency of delivery against milestones, including accretive
acquisitions and strong a pipeline of Residential plot sales. With our
extensive experience and specialist skills, our teams remain focused on the
delivery of value-creating management actions to achieve our strategic targets
of £1bn EPRA NDV by the end of 2027 and a £0.9bn I&L Investment
Portfolio by the end of 2029.

"The quality of our land bank remains excellent, and we have
an encouraging pipeline of potential deals, demonstrated by a strong level
of interest across c. 1.2m sq ft of our I&L land and property portfolio.
Notwithstanding, the length of time to conclude transactions remains
elongated, pushing out the timing of value gains. These deals are more likely
to materialise from 2026 onwards, in line with the timing of our strategic
growth plan being back-end weighted from 2026 and 2027.

"Our focus sectors remain in structural undersupply, are aligned to Government
policy, and are key to stimulating and supporting UK economic growth. The
scale and importance of our key sites to regional pipelines and our
through-the-cycle business model means that we continue to invest in
infrastructure and the creation of serviced plots, having already enabled 2.4m
sq ft with a further 1.1m sq ft of enabling works and 4.1m sq ft of
infrastructure works underway across 2025.

"The macroeconomic challenges and volatility that I have highlighted
previously have not abated, which when combined with domestic fiscal and
policy agendas, contribute to weak UK economic growth. The current challenges
across residential markets have also been well reported. Accounting for the
positive operational momentum against the current market backdrop, we
anticipate that gains across our I&L portfolio during the first half will
be dampened by valuation headwinds and cost increases across some of our
residential sites, resulting in H1-2025 EPRA NDV growth being flat to
marginally up."

 

Highlights for the first half 2025:

 ·     Significant planning applications submitted: 4.9m sq ft I&L
 space (total 8.1m sq ft), and c. 1,200 Residential plots. In July,
 applications for a further 1.5m sq ft of I&L space and c. 2,800
 Residential plots (total 4,900) were submitted.
 ·     Tactical acquisitions underpinning future growth: completed
 acquisitions of 0.4m sq ft and 2,000 plots, included taking 100% control via
 the buyout of our joint-venture partner at Gateway 45 (Leeds) | YAC | I&L
 | MD, bringing an additional c. 0.4 sq ft of consented I&L space
 (ownership now up to 0.8 sq ft).
 ·     Release of HS2 safeguarding lands adds to near-term momentum: With
 Gateway 45 being the biggest beneficiary of land released from HS2
 safeguarding, this provides momentum to move our near-term plans forward,
 being adjacent to our Skelton Grange (Leeds) site, where we are undertaking
 remediation and enabling works on behalf of Microsoft for its proposed
 hyperscale data centre.
 ·   New strategic partnership with Church Commissioners for England:
 conditionally exchanged on a new joint venture to deliver a significant
 mixed-use development in West Yorkshire, with a total site capacity at c. 1.2m
 sq ft of employment space and c. 1,500 Residential plots.
 ·    Strong volume of residential plot
 sales: completed 649 Residential plots, including a notable level of
 Planning Promotion Agreements (PPAs). A further 1,593 Residential plots sales
 conditionally exchanged or are in legals demonstrating that the residential
 market continues to progress, despite headwinds.
 ·     Further growth in Grade A quality of core I&L Investment
 Portfolio: the sale of a secondary I&L asset alongside practical
 completion and letting of one of units at the AMP (South Yorkshire) | YAC |
 I&L | IP further raised the quality of the portfolio to 48% Grade A by
 area and 65% by value (Dec 2024: 45% by area, 63% by value).
 ·     Balance sheet strength deployed underpinned by flexible funding:
 we took advantage of particularly dry weather in H1 to tactically advance site
 delivery, enabling works and development, which are fundamental to deliver on
 our ambitious I&L development targets, partially drawing down of our
 revolving credit facility (RCF) to do so. This resulted in available liquidity
 of £59.8m and pro forma LTV of 20.9%, within our self-imposed target of up to
 25% during the year.
 ·     Delivering sustainable, innovative and scalable biodiversity net
 gain solutions: addressing developers' challenge to meet Biodiversity Net Gain
 (BNG) legislation, we have taken a sector leadership position, launching and
 managing our first registered Biodiversity Gain Site, issuing biodiversity
 units to meet our BNG obligations and allocate any surplus units to our other
 projects or sell to other developers.

 

*We aim to create long-term, through-the-cycle value by focusing on:

 Two structurally undersupplied sectors:     Two core products:

 1. Industrial & Logistics ('I&L')           1. Serviced remediated land for sale

2. Residential ('R')
2. Development to hold and for sale
 Three portfolios:                           Three regions:
 1. I&L Investment Portfolio ('IP'),         1. Yorkshire & Central ('YAC'),

2. Strategic Land ('SL')
2. Midlands ('MID')

3. Major Developments ('MD')
3. North West ('NOW')

 

Our land bank stands at 33.8m s ft of I&L of which 71% is derisked(2) (Dec
2024: 33.6m sq ft; 63% derisked) and 31,636 Residential plots of which 46% is
derisked (Dec 2024: 31,264; 46% derisked).

 

Since 2021, we have received planning on 9.1m sq ft of I&L space with an
estimated GDV of £1.3bn, we have concluded on cumulative sales of c. £590m,
including. 7,200 Residential plots and we have bought or optioned I&L land
totalling 14.3m sq ft, with an estimated Gross Development Value (GDV) of
£2.1bn.

 

Notes:

1. All values are Harworth's share, unless noted otherwise

2. Pipeline with a consent or in the planning system

 

For further information

 

 Harworth Group plc
 Lynda Shillaw (Chief Executive)                     T: +44 (0)114 349 3131

 Kitty Patmore (Chief Financial Officer)             E: investors@harworthgroup.com (mailto:investors@harworthgroup.com)

Dougie Maudsley (Interim Chief Financial Officer)

 FTI Consulting
 Dido Laurimore                                      T: +44 (0)20 3727 1000

 Richard Gotla                                       E: Harworth@fticonsulting.com (mailto:Harworth@fticonsulting.com)

 Eve Kirmatzis

 

About Harworth

 

Harworth Group plc (LSE: HWG), is a leading land and property regenerator of
sustainable developments. We own, develop, and manage a portfolio of over
15,000 acres of Strategic Land over 100 sites located throughout the North of
England and Midlands. We specialise in delivering long-term value for all
stakeholders by regenerating large, complex sites, particularly former
industrial sites, into new Industrial & Logistics developments and
serviced Residential land to create sustainable places, support new homes,
jobs and communities where people want to live and work. Visit
www.harworthgroup.com for further information. LEI: 213800R8JSSGK2KPFG21

 

 

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