Harworth confident for long term despite profit drop

Lynda Shillaw, chief executive of the land and property group, said good progress had been made against strategic objectives in the first half of 2023, despite operating profits falling to £8m, down from £99.9m in H1 2022.

Projects in the Rotherham-headquartered group’s South Yorkshire heartland have been important in the year so far, with 110,000 sq ft completed at the Gateway 36 logistics scheme near Barnsley – 35% of which is let – and work progressing with 166,000 sq ft at Rotherham’s Advanced Manufacturing Park, which is 44% pre-let.

The group said at May’s AGM that a key objective is future-proofing its investment portfolio by shedding or improving older stock, a policy it is continuing to make good on – the portfolio is now 29% grade A, up from 18% at 2022’s end.

 Shillaw said: “Harworth’s first half performance reflected good progress against strategic objectives, coupled with a strong operational delivery, which highlights the resilience of our through-the-cycle model, and sustained demand for our serviced residential land and industrial & logistics assets.

“In particular, the combination of sales of more mature industrial & logistics sites and our development of new high-specification space has accelerated the transition of our Investment Portfolio towards our goal of 100% Grade A. In residential, we continue to transact with a range of housebuilders, both national and regional, alongside progressing our alternative product offerings, including Build-to-Rent and Affordable Housing.”

In residential, Shillaw said, the build-to-rent market saw sustained demand, but added that interest rate rises, cost inflation and planning delays were all impacting housebuilders, subduing land buying.  The group said interest in its affordable housing portfolio, launched this April, is strong.

She concluded: “Harworth is a long-term through-the-cycle business, and we remain confident that our strategy to become a £1bn business by 2027 will deliver long-term value. Our significant landbank, specialist skillset and strong balance sheet position us well to maximise the significant value embedded in our sites.”

Harworth continues to buy: acquisitions added 1.1m sq. ft of industrial & logistics space and 700 residential plots to the pipeline, while consent was secured for 397 residential units and 300,000 sq ft of industrial & logistics space

Applications for a further 7.4m sq. ft of industrial & logistics space and 1,641 residential plots progressing through the planning system.

As of 30 June 2023, net debt stood at £63.7m, compared to £48.4m in December 2022. Available liquidity is £163.6m, with no major refinancing due until 2027.