TIDMHWG
RNS Number : 5487P
Harworth Group PLC
29 May 2018
LEI 213800R8JSSGK2KPFG21
29 May 2018
Harworth Group plc ("Harworth" or the "Company")
AGM Statement
Good progress continues in 2018
Harworth Group plc ("Harworth" or the "Company"), the leading
regenerator of land and property for development and investment,
will hold its Annual General Meeting at 2pm today, when it will
provide shareholders with an update on its operational performance.
Owen Michaelson, Chief Executive, will make the following
statement:
"Harworth has continued to make good progress in the first five
months of the year in delivering on its strategic priorities.
Anticipated full year results continue to be in line with the
Board's expectations.
"Strong advances have been made in replenishing the strategic
land bank with the purchase of four new sites for GBP45 million, a
significant move that supports our stated commitment of broadening
our presence in our core regions.
"Our focus remains on expanding and maximising the value of our
strategic land bank to deliver further long-term value to
shareholders, whilst growing and improving income through a
combination of new lettings and the selective recycling of the
portfolio. This is alongside maintaining low gearing and financial
headroom to support the continued growth of the business.
"Underpinning our strategy is the continued undersupply of new
homes and high-quality commercial space in our regions where demand
remains strong. This provides a range of value-add opportunities
for the Company to explore both within its existing portfolio of
approximately 21,000 acres of land and within our future
acquisition pipeline."
DEVELOPMENT
The Capital Growth team has continued to deliver value growth,
principally through planning progress and sales realisations. Since
the start of the year, planning consent has been secured for 530
new residential plots across three sites in the Midlands, with 445
of these from the Company's first two Planning Promotion Agreement
successes. Two large applications for a total of over 3m sq. ft of
commercial space will be submitted in the second half of 2018.
Progression of these sites through the planning process has been
complemented by the team selectively disposing of developments to
crystallise value gains from our portfolio, with 132 residential
plots sold to housebuilders generating an overall profit on sale.
In addition, over 80% of budgeted sales for the year have already
been completed or agreed. Harworth's consented portfolio now stands
at 10,846 plots and 12.13m sq. ft of commercial space.
INVESTMENT
The Income Generation team has continued to improve the
resilience of Harworth's recurring income. 14 new lettings and
re-gears have been agreed across its Business Space portfolio in
2018, generating in excess of GBP1.8m per annum. These have
included letting the remaining space at its 51,750 sq. ft
'R-evolution Phase 2' at the Advanced Manufacturing Park in
Rotherham and letting the first unit at 'Multiply Logistics North'
at Logistics North in Bolton, its joint venture with the Lancashire
County Pension Fund. This success has underpinned the Company's
decision to develop speculatively 'R-evolution Phase 3' at the
Advanced Manufacturing Park, totalling an additional 55,750 sq. ft
of commercial space, whilst also constructing 'Multiply Phase 2' at
Logistics North for a further 270,000 sq. ft of commercial
space.
To improve the quality, diversity and resilience of its
portfolio income, Harworth has committed to dispose of non-core
assets on a selective basis, commencing with the sale of Harworth
Business Park in North Nottinghamshire to a single owner-occupier
at book value. The Company is also accelerating its programme for
selling its remaining agricultural sites with limited development
potential to free-up management time and capital to devote to sites
with the highest value enhancement potential.
As a result of this operational activity and acquisitions, the
WAULT to expiry across the Business Space portfolio has now
increased to 14.7 years (from 7.5 years at 31 December 2017),
whilst the vacancy rate of the built space has reduced to 11% (from
13% at 31 December 2017).
ACQUISITIONS
The Acquisitions team continues to identify and acquire
attractive land and property opportunities within the Company's
core and adjacent regions. As announced at the start of May,
Harworth purchased four sites totalling 299 acres to grow the
strategic land bank for a total consideration of GBP45 million plus
acquisition costs. These sites provide the potential for the
development of up to 3,000 homes and over 1m sq. ft of commercial
space, whilst two of the sites generate recurring income of GBP3.1
million, reflecting net initial yields of 6.2% and 10.9%
respectively.
FINANCING
These acquisitions have been funded from internal cash reserves
and the Company's existing Revolving Credit Facility ("RCF"),
recently extended from GBP75 million to GBP100 million, with
Santander UK PLC providing an additional GBP25 million commitment
to sit alongside the existing commitment from The Royal Bank of
Scotland plc. The terms and covenants of the RCF remain unchanged
with a margin of LIBOR plus 210bps and expiry in February 2023.
PREMIUM LISTING
The workstreams to support the Company's application to transfer
its shares to the Premium List are nearing conclusion and the
Company expects to announce its intention to transfer very
shortly.
OUTLOOK
Demand for new affordably-priced housing and commercial space,
particularly for units under 100,000 sq. ft, remains strong within
the Company's core regions of the North of England and the
Midlands.
As in previous years, residential and commercial sales together
with value gains are expected to be weighted towards the second
half of the current financial year. Overall, trading remains in
line with management's expectations.
-ENDS-
Enquiries:
Harworth Group plc T: 0114 349 3131
Owen Michaelson, Chief E: omichaelson@harworthgroup.com
Executive T: 0114 349 3131
Andrew Kirkman, Finance E: akirkman@harworthgroup.com
Director T: 0114 349 3160 / 07825
Iain Thomson, Head of 860215
Communications
E: ithomson@harworthgroup.com
FTI Consulting
Dido Laurimore T: 020 3727 1000
Richard Gotla E: harworth@fticonsulting.com
Eve Kirmatzis
NOTES TO EDITORS
About Harworth Group
Listed on the main market, Harworth Group plc (LSE: HWG) is a
leading regenerator of land and property for development and
investment which owns, develops and manages a portfolio of
approximately 21,000 acres of land on around 140 sites located
throughout the Midlands and North of England. The Company
specialises in the regeneration of former coalfield sites and other
former industrial land into new residential developments and
employment areas.
http://www.harworthgroup.com/
FORWARD LOOKING STATEMENTS DISCLAIMER
This announcement include statements that are, or may be deemed
to be, "forward-looking statements". These forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "believes", "estimates", "plans",
"anticipates", "targets", "aims", "continues", "projects",
"assumes", "expects", "intends", "may", "will", "would" or
"should", or in each case, their negative or other variations or
comparable terminology. These forward-looking statements include
all matters that are not historical facts. They include statements
regarding the Company's intentions, beliefs or current expectations
concerning, among other things, the Company's result of operations,
financial condition, prospects, growth strategies and the
industries in which the Company operates. By their nature,
forward-looking statements involve risk and uncertainty because
they relate to future events and circumstances. A number of factors
could cause actual results and developments to differ materially
from those expressed or implied by the forward-looking statements,
including without limitation: conditions in the markets, market
position, the Company's earnings, financial position, return on
capital, anticipated investments and capital expenditures, changing
business or other market conditions and general economic
conditions. These and other factors could adversely affect the
outcome and financial effects of the plans and events described
herein. Forward-looking statements contained in this announcement
based on past trends or activities should not be taken as a
representation that such trends or activities will continue in the
future.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
AGMUKUARWSAVUAR
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May 29, 2018 07:26 ET (11:26 GMT)
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