Tuesday, January 8, 2019

News: Harworth hit targets again

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Harworth Group, the Rotherham-based regeneration plc, has delivered another strong operational performance.

One of South Yorkshire's largest publicly listed companies was created through the complex restructure of what was UK Coal. A specialist in brownfield regeneration, Harworth, which is based close to its own Waverley development, is one of the largest property and regeneration companies working in the North of England and the Midlands.

The focus has been on "beds and sheds" sectors and Harworth owns and manages a £400m+ portfolio of around 21,000 acres of land on around 135 sites.

The listed firm has provided a trading update for the financial year ended December 31 2018, a period in which it joined the premium segment of the London Stock Exchange.

The update showed that due to strong operational performance in the second half of the year across all of its business segments, Harworth bosses where anticipating that its financial performance for the year will be ahead of its expectations.

Harworth's main metric is EPRA net asset value (EPRA NAV) which provides a fair value of all of its assets and liabilities.

Harworth continues to meet its target to grow EPRA NNNAV by at least 10% per annum. EPRA NNNAV per share is expected to be up 12% for 2018. It was up 12.5% for 2017.

The business model is based on reinvesting capital in acquisitions having created capital growth through planning approvals, remediation and development, and generating income through asset management and land sales.

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Value gains came from Harworth's continued success in securing residential and commercial planning consents, with planning secured for 761 residential plots and around 77,000 sq ft of commercial space on six sites. Record land sales were also recorded, including sales to national and regional housebuilders during the fourth quarter for a total in excess of £20m and multimillion pound deals for development land for commercial uses.

On completed developments, the update highlighted the new headline rents on key sites including Waverley in Rotherham (pictured) where British Steel, Bodycote and Spendor Audio have taken space.

Owen Michaelson, chief executive officer at Harworth Group, said: "The momentum generated from the Group's strong first half results continued into the second half, meaning that we anticipate full year results to exceed our expectations. Sales of consented land at our key development sites have been realised at prices above book value whilst good progress on planning, and future sales and lettings has driven the indicated growth in the valuation of our portfolio. The realisation of new headline rents at Waverley and Logistics North has been particularly pleasing, with £7.75psf for manufacturing space at the latter, reflecting the underlying strength of the regional markets in which we operate.

"This year's strong performance also demonstrates the ability of our management team to generate the majority of our value gains from acquisitions through to active asset management, taking full advantage of particular opportunities as they arise. We remain confident in the long-term fundamentals of the residential and commercial markets in our focus regions in the North of England and the Midlands, notwithstanding any short-term political or economic uncertainty resulting from Brexit negotiations. This gives us the assurance we need to continue to invest selectively in new sites to deliver future shareholder value."

Harworth Group website

Images: Harworth Group

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