Harworth hails record year of acquisitions and property sales
Harworth Group, the brownfield land and property developer and investor, completed a record number of acquisitions totalling £57.9m and completed £93.2m of property sales in 2018- a year in which it built up revenues but saw pre-tax profits drop.
This morning publishing the annual results to December 31 2018, Harworth said revenues for the year grew to £78m, up from £53m in 2017; while pre-tax profits dropped to £32m from £41m in the previous year.
The Rotherham-headquartered listed firm said it had delivered double-digit total return for shareholders. EPRA NNNAV – net asset value adjusted to reflect the fair value of debt and derivatives and to include deferred taxation on revaluations – grew 13.3% (2017: 13.2%), which the firm said was ahead of its 10% long-run average target.
Harworth completed 11 acquisitions for a total of £57.9m (2017: £26m), with the potential for the development of 2,000 homes and over 1.5m sq. ft of commercial space. Two of the sites generate £3.1m of annual rental income.
Planning consent was secured for 778 new residential plots in the Midlands and Yorkshire.
In addition, planning permissions submitted in 2018 totalled 3.3m sq ft of commercial space (2017: 0.3k sq ft commercial) and nearly 1,000 residential plots (2017: 1,308 residential plots) with the majority due to be determined in 2019.
Harworth said it had achieved record property sales of £93.2m (2017: £54.8m) encompassing land sales of £72.7m and £20.5m of mature income generating sites. Residential and commercial sales comprised of 1,049 residential plots sold (2017: 622 residential plots), across nine parcels for £33.6m, at an average value of over £30,000 per plot. Sales also included 1.15m sq ft of consented commercial land sold on three sites (2017: 850,000 sq. ft), across four parcels for £30.9m, delivering a profit on sale of £1m.
Harworth secured over 300,000 sq ft of long-term lettings on eight new commercial buildings, to manufacturing and logistics occupiers during 2018.
Harworth’s Chief Executive, Owen Michaelson, said: “These are excellent results with Harworth again achieving its long-term objective of double-digit total return, reflecting our ability to seize opportunities to maximise the value of our existing portfolio. This has been achieved whilst simultaneously growing our regional land and property portfolio through selective acquisitions and new lettings, positioning us well for future growth.
“With the ongoing under supply of new homes and commercial space across the UK, our focus on the “beds and sheds” sectors in the North of England and the Midlands continues to address a clear economic and social need, evidenced by strong economic and consumer trends in those regions and reinforced by supportive central and local Government policy. This favourable backdrop coupled with our ability to execute a range of deals and our in-house technical expertise has been reflected in the record residential and commercial land sales realised in the year, alongside headline rents being achieved on commercial space that we have directly developed at our flagship sites at Waverley and Logistics North.
“2018 was a record year for acquisitions, with c.£60m of carefully selected purchases. These provided both additional long-term recurring income as we continue to improve the breadth and quality of our income base, and added further strategic land growing our pipeline of large complex sites, particularly those requiring regeneration, to deliver future value gains through our market-leading planning and development expertise.
“Momentum has been maintained, with a significant quantum of new planning applications already in the system awaiting determination and over 50% of expected 2019 full year sales already agreed. Whilst the outcome of Brexit negotiations remains uncertain, Harworth’s property portfolio and balance sheet are strong, resilient and well-positioned to provide a platform for future growth.”
Harworth also this morning announced the appointments of Ruth Cooke and Angela Bromfield as Non-Executive Directors. Cooke’s appointment will take effect on 19th March and Bromfield’s appointment will take effect on 1 April.
Cooke will join the Audit Committee and Bromfield will join the Remuneration and Audit Committees.Steven Underwood will cease to be a member of the Remuneration and Audit Committees with effect from 1 April.
Cooke was Finance Director (from 2008 to 2012) and then Chief Executive (from 2012 to 2018) of Midland Heart, the housing association group operating across central England. Prior to that, she held senior finance and resourcing roles at Knightstone, a housing association based in the South West, and Anchor Trust, a provider of housing and care to those aged 55 years old and above.
Bromfield has extensive commercial strategy, marketing and communications executive experience. She was Strategic Marketing & Communications Director at Morgan Sindall until 2013 and prior to that held senior roles at the Tarmac Group, Premier Farnell and ICI. She is a Non-Executive Director at Churchill China, where she chairs the Remuneration Committee, and at Zotefoams, where she chairs the Remuneration Committee and is a member of the Audit and Nomination Committees.
Alastair Lyons, Chairman of Harworth, said: “I am delighted to have Ruth and Angela joining our Board. Their appointment further develops the breadth of composition and depth of commercial and sectoral experience of our Board and I look forward to their wise counsel as Harworth continues to execute its strategy of focussed growth.”
