Harworth reports solid net development value growth

The London-listed firm said EPRA NDV increased 3.5% to £687m, up from £662.9m at the end of 2023, keeping it on track to achieve its £1bn target by 2027.

It also reported a total return of 4% - a marked improvement from the 0.1% recorded in the first half of 2023.

Operating profit surged 164% to £21.1m, compared to £8m in the same period last year, reflecting strong financial performance.

Harworth said its net loan-to-value (LTV) ratio stood at 9.8%, while available liquidity was £154.2m, and net debt reached £80.5m due to higher mid-year drawdowns.

The company highlighted its extensive land pipeline, which it said had the potential to deliver 38.8 million square feet of industrial and logistics space, as well as 26,639 residential plots.

During the period, it secured planning permission for 1.8 million square feet of industrial space and 500 housing plots, with an additional 1.5 million square feet and 500 plots approved after the reporting period.

Additionally, it said new allocations in local plans could add another 5.7 million square feet of industrial space and 2,875 housing plots.

Harworth said it exceeded expectations in land sales, having completed, exchanged, or reached heads of terms on 145% of its budgeted sales for the year, positioning the group well for increased development and investment activity in the industrial and logistics sectors.

“Harworth continues to consistently deliver strong progress against its strategic objectives and we remain on track to reach £1bn EPRA NDV by the end of 2027,” said chief executive officer Lynda Shillaw.

“In June, we announced that the group would increase its focus on industrial and logistics direct development, with an intention to grow the investment portfolio, through direct development and selective acquisitions, to £0.9bn by the end of 2029.

“This reflects the opportunity we see to deliver into a sector which is key to economic growth and where there is critical undersupply of high-quality space, in order to grow recurring income and underpin sustainable shareholder returns.”

Shillaw said the company was “cautiously optimistic” that a combination of improving economic stability and supportive government policy would be beneficial for both the real estate sector and for Harworth.

“In the near term we recognise market confidence could potentially be tempered by the extent of the steps taken by the government to address the public funding deficit, but as a long-term investor Harworth is well versed in delivering performance through different policy environments.”

At 1054 BST, shares in Harworth Group were up 2.1% at 170.5p.

Reporting by Josh White for Sharecast.com.