Harworth leans on I&L as profits decline
The developer’s half year results for the first six months of 2025 shows lower returns and a hit on profits compared to H1 2024, however a resilient balance sheet, asset growth, and significant schemes in the works are providing stability for the company.
The finances
H1 of 2025 has seen a slowdown in performance for Harworth compared to the same period in 2024, with value gains dropping significantly from £47m to £15.5m.
Operating profit also declined sharply from £21.1m to £7.1m but despite this, the company’s EPRA Net Disposal Value and net assets per share have both grown modestly, indicating some improvement in Harworth’s assets.
Net debt more than doubled to £179.4m, liquidity shrank, and property sales and residential plot sales are down considerably from the prior period – which may explain part of the dip in profits.
Overall, the H1 results suggest a more cautious financial position this year, but a still-strong asset base and a focus on improving its industrial & logistics stock means Harworth has cause to be optimistic.
The projects
Harworth has been busy across Yorkshire, the North West, and the Midlands in H1 this year, with significant planning applications submitted across the three regions.
The company has acquired 1.2m sq ft and 2,000 plots in the last six months, which includes it taking 100% ownership at Gateway 45 in Leeds and thus adding an additional o.4m sq ft of consented I&L land to its portfolio.
In terms of enabling works being undertaken, Harworth is on site at the 1,1m sq ft Wingates in Bolton and the 1.5m sq ft Gascoigne Wood in North Yorkshire.
Progress continues to be made on Plot 2 at Skelton Grange, in support of the £53.2m second phase of the sale to Microsoft for its proposed hyperscale data centre, targeted for completion in 2026.
Harworth has completed enabling works at Chatterley Valley in Stoke, Gateway 36 in Barnsley, and the Advanced Manufacturing Park in Waverley, Rotherham, positioning the sites ready to deliver up to 2.4m sq ft of I&L space.
Planning applications have gone in for around 1,200 residential plots and 8.1m sq ft of I&L space, with one to highlight being the Northern Gateway in Greater Manchester – the largest planning application currently live in the North West.
Some of this has been in partnership with other companies, with Harworth’s share equating to a healthy 4.9m sq ft.
Since June, a further 1.5m sq ft of I&L space and around 4,900 residential plots have been submitted. Some of these have also been in partnership with other companies, with Harworth’s share equating to 2,800 plots.
Another highlight from H1 includes Harworth’s partnership with Church Commissioners for England, which will see the joint venture deliver a 1.2m sq ft of employment space and around 1,500 homes in West Yorkshire.
The future
As it stands, Harworth’s land bank has capacity to deliver up to 34.6m sq. ft of industrial & logistics space, and 31,636 residential plots, across the Midlands and the North of England.
The developer has completed 649 residential plot sales and is on track to exceed its annual target of 2,000, given that most sales will conclude in H2.
Harworth is also on track to refurbish all of its I&L investment portfolio to grade A standard, currently valued at £319.3m, which is up from the £297.2m figure from 2024.
Harworth’s land bank stands at 34.6m sq ft of I&L, of which 71% is de-risked, and 31,636 residential plots, of which 44% are de-risked.
Lynda Shillaw, chief executive of Harworth, commented: “Our sustained operational momentum is providing a strong platform for future growth and reflects the strength of our execution in progressing our land bank.
“A key highlight during the period was the timely acquisition of our joint venture partner’s shareholding at Gateway 45, which not only grows
our I&L pipeline, but also adds attractive near-term opportunities with the release of HS2 land from Government safeguarding.
“We are advancing the planning status and de-risking the delivery of our land bank, with significant investment in enabling works to open up our consented sites and increase our serviced land capacity by year-end.
“This, coupled with the submission of a number of significant planning applications totalling 8.1m sq ft, will add value as they move towards a consent, driving performance into the medium-term.
“Our teams are working hard to convert a strong transaction pipeline, with healthy demand across our I&L land and property portfolio.
“Whilst transaction timelines remain elongated, as occupier and investor sentiment continues to be impacted by macroeconomic weakness and soft UK growth, letting activity is beginning to crystallise and our de-risked serviced land products across both I&L and residential remain appealing, with a solid pipeline in the second half of the year.
“We are seeing sustained demand for our residential serviced land, although costs to deliver increased in some instances impacting valuations and the market seems to be softer, an outlook we consider may continue to 2026, particularly with uncertainty around the UK Budget and the timing of further rate cuts.
“Our I&L portfolio continues to perform well with good momentum and the ability to generate material value.
“Our land bank remains one of our superpowers and with our proven track record in unlocking its embedded value, we remain focussed on identifying and executing those opportunities that optimise returns and drive the business forward to reach our strategic goals of £1bn of EPRA NDV and the growth of our core Investment Portfolio to £0.9bn by the end of 2029.”
