Programme to achieve cost savings
Summary by AI BETAClose X
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
FOR IMMEDIATE RELEASE
15 September 2026
Harworth Group plc
("Harworth")
Programme to achieve £7.4 million annualised cost savings by end 2028
On 9 September, the Harworth Board published its response document in relation to the unrecommended cash offer by Peel Bidco for Harworth at a price of 172.5p per Harworth Share (the "Response Document"). Capitalised terms used but not defined in this announcement have the meanings given to them in the Response Document.
Creating a simpler, lower-cost and higher-returning platform
In its Response Document, the Harworth Board set out its plan to accelerate key initiatives that would result in a simpler, lower-cost, higher returning platform. Once completed, the Harworth Board believes that it can deliver higher and more sustainable returns for Harworth Shareholders, targeting a low double-digit Total Accounting Return in the longer-term.
One of the key initiatives identified in the Response Document was the alignment of Harworth’s operating model and cost base with a pure play powered land and industrial & logistics approach. As trailed in the Response Document, the Harworth Board is today publishing a Quantified Financial Benefit Statement, as appended in full to this announcement, providing more details on the key components of future cost savings.
- By the end of the financial year ending 31 December 2028, the Harworth Board expects to achieve total annualised run rate cost savings of at least £7.4 million (the “Quantified Cost Savings”), of which £1.3 million has already been realised through a headcount reduction programme initiated earlier this year and 94% is planned to be achieved by the end of 2027.
- The expected annualised run rate savings at the end of financial years ending 31 December 2026, 2027, and 2028 are £3.2 million, £6.9 million and £7.4 million respectively.
- Based on Harworth’s administrative expenses of £36.3 million over the 12 months to 31 December 2025, the Quantified Cost Savings represent a 20.4% reduction in Harworth’s administrative expenses.
The Harworth Board aims to exceed the Quantified Cost Savings within the timeframes outlined above, noting that the Quantified Cost Savings exclude further efficiencies and value which the Harworth Board believes will arise from the full implementation of Harworth's digital transformation project, which has been implemented over the last two years and is due to complete later this year.
The timeline for achieving the Quantified Cost Savings is not the same as the timeline for completing Harworth’s transition to a pure play powered land and industrial & logistics specialist. The Harworth Board believes that costs can be reduced ahead of this transition being complete.
The Quantified Financial Benefits Statement, together with the bases of belief and principal assumptions, are set out in Part B of the Appendix to this announcement alongside reports from Harworth’s reporting accountants and financial advisers in Parts C and D of the Appendix respectively, as required under Rule 28 of the Code.
Continued rejection of the Unrecommended Offer
The Harworth Board remains unanimous and unequivocal in its rejection of the Unrecommended Offer, which, in its view, fundamentally undervalues Harworth and its near and longer-term prospects. The Response Document sets out in full the Harworth Board’s views on the Unrecommended Offer and the reason for the Harworth Board’s unanimous and unequivocal rejection of the Unrecommended Offer. Harworth Shareholders are strongly advised to read the Response Document in full before deciding what action to take in relation to their Harworth Shares.
THE BOARD RECOMMENDS UNANIMOUSLY THAT HARWORTH SHAREHOLDERS WHO HAVE NOT ACCEPTED THE UNRECOMMENDED OFFER DO NOT DO SO AND THAT HARWORTH SHAREHOLDERS WHO HAVE ALREADY ACCEPTED THE UNRECOMMENDED OFFER WITHDRAW THEIR ACCEPTANCES AS SOON AS POSSIBLE.
Enquiries
|
Harworth Group plc |
T: +44 (0) 114 349 3131 |
|
Lynda Shillaw (Chief Executive) |
E: investors@harworthgroup.com |
|
Kitty Patmore (Chief Financial Officer) |
|
|
Tom Loughran (Head of Investor Relations & Communications) |
|
|
Barclays (Joint Financial Adviser and Corporate Broker to Harworth) |
T: +44 (0) 20 7623 2323 |
|
Bronson Albery |
|
|
Callum West |
|
|
Nicola Tennent |
|
|
Mark Gunalan |
|
|
Peel Hunt (Joint Financial Adviser and Corporate Broker to Harworth) |
T: +44 (0) 20 7418 8900 |
|
Capel Irwin |
|
|
Michael Nicholson |
|
|
Chloe Ponsonby Henry Nicholls |
|
|
FTI Consulting |
T: +44 (0) 20 3727 1000 |
|
Dido Laurimore |
E: Harworth@fticonsulting.com |
|
Ed Knight |
|
|
Richard Gotla |
|
Allen Overy Shearman Sterling LLP is acting as legal adviser to Harworth.
Disclaimers
Barclays Bank PLC (“Barclays”), which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively for Harworth and no one else in connection with the Unrecommended Offer and will not be responsible to anyone other than Harworth for providing the protections afforded to clients of Barclays nor for providing advice in relation to the Unrecommended Offer or any other matter referred to in this announcement.
Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated by the Financial Conduct Authority in the UK, is acting exclusively for Harworth and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than Harworth for providing the protections afforded to clients of Peel Hunt nor for providing advice in connection with the matters referred to herein. Neither Peel Hunt nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Peel Hunt in connection with this announcement, any statement contained herein or otherwise.
No statement in this announcement is intended as a profit forecast or estimate for the purposes of Rule 28 of the Code for any period, and nothing in this document should be interpreted, or construed, to mean that future earnings for Harworth or future earnings per share of Harworth, as appropriate, for the current or future financial years will necessarily match or exceed historical published earnings for Harworth or per Harworth Share.
Except as expressly stated, nothing in this announcement constitutes a quantified financial benefits statement for the purposes of Rule 28 of the Code. The statements which are labelled as containing a quantified financial benefits statement relate to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies and which may in some cases be subject to consultation with employees or their representatives. As a result, the targets, cost savings and efficiency gains referred to may not be achieved, or may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who at the relevant time is interested (directly or indirectly) in 1% or more of any class of relevant securities of the offeree company or any securities exchange offeror must make a public Opening Position Disclosure (i) after the commencement of an offer period; and (ii) if later, after the announcement that first identifies any securities exchange offeror. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) of the Code applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is (or as a result of any dealing becomes) interested (directly or indirectly) in 1% or more of any class of relevant securities of the offeree company or any securities exchange offeror must make a public Dealing Disclosure if the person deals in any relevant securities of the offeree company or any securities exchange offeror during an offer period. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8 of the Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Code applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.
Where two or more persons act pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities, they will normally be deemed to be a single person for the purpose of this Rule 8.3 of the Code. Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the Code).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.
Publication on a website
In accordance with Rule 26.1 of the Code, a copy of this announcement will be available at www.harworthgroup.com/ unrecommended-offer-from-peel/ by no later than 12 noon London time on the business day following the date of this announcement. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.
APPENDIX
PART A
Quantified Financial Benefits Statement
This announcement contains a “quantified financial benefits statement” for the purposes of Rule 28 of the Takeover Code, which has been reported on in accordance with the requirements of the Takeover Code in the following form (the “Quantified Financial Benefits Statement”):
- The Harworth Board expects to achieve total annualised run rate cost savings of at least £7.4 million (the “Quantified Cost Savings”), of which £1.3 million has already been realised through a headcount reduction programme earlier this year and 94% is planned to be achieved by the end of 2027.
- The expected annualised run rate of savings at the end of financial years ending 31 December 2026, 2027, and 2028 are £3.2 million, £6.9 million and £7.4 million respectively.
- Based on Harworth’s administrative expenses of £36.3 million over the 12 months to 31 December 2025, the Quantified Cost Savings represent a 20.4% reduction in Harworth’s administrative expenses.
- The Harworth Board aims to exceed the Quantified Cost Savings within the timeframes outlined above, noting that the Quantified Cost Savings exclude further efficiencies and value which the Harworth Board believes will arise from the full implementation of Harworth's digital transformation project, which has been implemented over the last two years and is due to complete later this year.
- The Quantified Cost Savings are expected to arise principally from reductions in employee-related costs, together with broader overhead efficiencies and the simplification of Harworth's operating platform and delivery model. These actions reflect Harworth's more focused operating requirements following the planned exit from its residential portfolio and other lower-returning assets.
- The timeline for achieving the Quantified Cost Savings is not the same as the timeline for completing Harworth’s transition to a pure play powered land and industrial & logistics specialist. The Harworth Board believes that costs can be reduced ahead of this transition being complete.
- In its Half Year Results, Harworth disclosed that administrative expenses had increased by £0.8m (+4.9%) to £17.9m. The H1 administrative costs included £0.7 million of restructuring costs incurred as part of headcount and cost reduction measures, as well as an increase in IT costs primarily related to Harworth’s digital transformation project.
- In total, Harworth expects to incur one-off costs of £3.85 million in aggregate in order to implement the Quantified Cost Savings, of which £0.7 million has already been incurred as referenced above. Of the £3.1 million of one-off costs still to be incurred, £2.2 million is expected to be incurred in the financial year ending 31 December 2027 and £0.9 million is expected to be incurred in the financial year ending 31 December 2028.
PART B
Bases of belief and sources of information
The Group’s total reported cost base, being the administrative expenses as referenced in the audited accounts for the year ending 31 December 2025, was £36.3 million, and has been assumed as the addressable cost base for the cost savings plan.
The total addressable cost base excludes capital expenditure.
The cost savings estimates shown above are based on savings compared to the Group’s cost base for the year ending 31 December 2025.
The estimated cost savings have been prepared based on internal information on costs by function and type and detailed analysis of the future operating model. The estimates have been prepared by the Group’s Executive Directors and approved by the Harworth Board. Key sources of information used to develop these estimates include financial results for the year ended 31 December 2025.
In arriving at the Quantified Financial Benefits Statement, the Harworth Directors have assumed that:
- there will be no change in the ownership or control of the Group;
- there will be no material change to macroeconomic, political or legal conditions in the markets in which the Group operates which will materially impact on the implementation of or costs to achieve the proposed cost savings; and
- there will be no material change in regulatory requirements.
Reporting
As required by Rule 28.1(a) of the Code, Ernst & Young LLP (“EY”), as reporting accountants to Harworth, have provided a report (set out in Part C of this Appendix) stating that, in their opinion, the Quantified Financial Benefits Statement has been properly compiled on the basis stated.
In addition, Barclays and Peel Hunt as financial advisers to Harworth have provided a report (set out in Part D of this Appendix) stating that, in their opinion, and subject to the terms of the report, the Quantified Financial Benefits Statement, for which the Directors of Harworth are responsible, has been prepared with due care and consideration for the purposes of the Takeover Code.
Each of EY, Barclays and Peel Hunt have given and not withdrawn their consent to the publication of their reports in the form and context in which they are included.
PART C
ACCOUNTANT’S REPORT ON QUANTIFIED FINANCIAL BENEFITS STATEMENT
|
The Board of Directors Harworth Group Plc 1 Harworth Way, Unit 1, Harworth Way, Rotherham, S60 5GR
and
Barclays Bank PLC 1 Churchill place Canary Wharf London, E14 5HP
Peel Hunt LLP 100 Liverpool Street London, EC2M 2AT
|
15 September 2026
|
Dear Sirs/Madams
Report on Quantified Financial Benefits Statement by Harworth Group plc (the “Company”)
We report on the statement of quantified cost savings (the “Statement”) made by the directors of the Company (the “Directors”) in the announcement published on 15 September 2026 in connection with the bid defence circular dated 9 September 2026 (the “Announcement”), to the effect that:
The Harworth Board expects to achieve total annualised run rate cost savings of at least £7.4 million (the “Quantified Cost Savings”), of which £1.3 million has already been realised through the headcount reduction programme earlier this year and 94% is planned to be achieved by the end of 2027.
The expected annualised run rate of savings at the end of financial years ending 31 December 2026, 2027, and 2028 are £3.2 million, £6.9 million and £7.4 million respectively.
In total, Harworth expects to incur one-off costs of £3.85 million in aggregate in order to implement the Quantified Cost Savings, of which £0.7 million has already been incurred. Of the £3.1 million of one-off costs still to be incurred, £2.2 million is expected to be incurred in the financial year ending 31 December 2027 and £0.9 million is expected to be incurred in the financial year ending 31 December 2028.
This report is required by Rule 28.1(a)(i) of the City Code on Takeovers and Mergers (the “Takeover Code”) and is given for the purpose of complying with that requirement and for no other purpose.
Save for any responsibility that we may have to those persons to whom this report is expressly addressed or to the shareholders of the Company as a result of the inclusion of this report in the Announcement, and for any responsibility arising under Rule 28.1(a)(i) of the Takeover Code to any person as and to the extent therein provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with, this report or our statement, required by and given solely for the purposes of complying with Rule 23.2 of the Takeover Code by consenting to its inclusion in the Announcement.
Accordingly, we assume no responsibility in respect of this report to Peel Pepper (UK) Limited (the “Offeror”) or any person connected to, or acting in concert with, the Offeror or to any other person who is seeking or may in future seek to acquire control of the Company (an “Alternative Offeror”) or to any other person connected to, or acting in concert with, an Alternative Offeror.
Opinion
In our opinion, the Statement has been properly compiled on the basis stated.
The Statement has been made in the context of the disclosures set out in Part B of the Appendix to the Announcement setting out the basis of the Directors’ belief (including the principal assumptions and sources of information) supporting the Statement and their analysis and explanation of the underlying constituent elements.
Responsibilities
It is the responsibility of the Directors to prepare the Statement in accordance with the requirements of Rule 28 of the Takeover Code.
It is our responsibility to form our opinion, as required by Rule 28.1(a)(i) of the Takeover Code, as to whether the Statement has been properly compiled on the basis stated and to report that opinion to you.
Basis of preparation of the Statement
The Statement has been prepared on the basis stated in Part B of the Appendix to the Announcement.
Basis of opinion
We conducted our work in accordance with the Standards for Investment Reporting issued by the Financial Reporting Council in the United Kingdom. We are independent in accordance with the FRC’s Ethical Standard as applied to Investment Circular Reporting Engagements, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We have discussed the Statement, together with the underlying plans (relevant bases of belief/including sources of information and assumptions), with the Directors and Barclays Bank PLC ("Barclays") and Peel Hunt LLP ("Peel Hunt") (together, the "Financial Advisers"). Our work did not involve any independent examination of any of the financial or other information underlying the Statement.
We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Statement has been properly compiled on the basis stated.
Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in other jurisdictions and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices.
We do not express any opinion as to the achievability of the benefits identified by the Directors in the Statement.
Since the Statement and the assumptions on which it is based relate to the future and may therefore be affected by unforeseen events, we express no opinion as to whether the actual benefits achieved will correspond to those anticipated in the Statement and the differences may be material.
Yours faithfully
Ernst & Young LLP
PART D
REPORT FROM BARCLAYS AND PEEL HUNT
The Board of Directors
Harworth Group plc
1 Harworth Way
Rotherham
S60 5GR
15 September 2026
Dear Sirs/Madams,
We refer to the quantified financial benefits statement, the bases of belief thereof and the notes thereto set out in Parts A and B of the Appendix to the announcement (the “Announcement”) (the “Statement”), for which the board of directors of the Company (the “Directors”) are solely responsible under Rule 28.3 of the City Code on Takeovers and Mergers (the “Code”).
We have discussed the Statement (including the assumptions, bases of calculation and sources of information referred to therein) with the Directors and those officers and employees of the Company who have developed the analysis and financial projections underlying the estimated cost savings to which the Statement relates. The Statement is subject to uncertainty as described in the Announcement and our work did not involve an independent examination, or verification, of any of the financial, property, valuation or other information underlying the Statement.
We have relied upon the accuracy and completeness of all of the financial and other information provided to us by or on behalf of the Company, or otherwise discussed with or reviewed by us, in connection with the Statement, and we have assumed such accuracy and completeness for the purposes of providing this letter.
We do not express any view as to the achievability of the quantified financial benefits, whether on the basis identified by the Directors in the Statement, or otherwise.
We have also reviewed the work carried out by Ernst & Young LLP (“EY”) as reporting accountants to the Company for the purposes of Rule 28.1(a)(i) of the Code and have discussed with EY its opinion addressed to you and us on this matter and the accounting policies and bases of calculation for the Statement, which is set out in Part B of the Appendix to the Announcement.
This letter is provided pursuant to our engagement letters with the Company solely to the Directors in connection with Rule 28.1(a)(ii) of the Code and for no other purpose. We accept no responsibility to the Company or its shareholders or any person (including, without limitation, the board of directors and shareholders of Peel Pepper (UK) Limited) other than the Directors in respect of the contents of this letter. We are acting exclusively as financial advisers to the Company and no one else in connection with the matters referred to in the Announcement and it is for the purpose of complying with Rule 28.1(a)(ii) of the Code that the Company requested us to prepare this letter relating to the Statement. No person other than the Directors can rely on the contents of this letter, or on the work undertaken in connection with this letter, and, to the fullest extent permitted by law, we expressly exclude all liability (whether in contract, tort or otherwise) to any other person, in respect of this letter, its contents, its results, or the work undertaken in connection with this letter or any of the results or conclusions that may be derived from this letter or any written or oral information provided in connection with this letter, and any such liability is expressly disclaimed except to the extent that such liability cannot be excluded by law.
On the basis of the foregoing, we consider that the Statement, for which you as the Directors are solely responsible, for the purposes of the Code, has been prepared with due care and consideration.
Yours faithfully,
For and on behalf of For and on behalf of
Barclays Bank PLC Peel Hunt LLP
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
Latest directors dealings
- 8 hours ago Savannah Energy
- 10 hours ago Buccaneer Energy PLC
- 10 hours ago Savannah Energy
- 10 hours ago Carclo
- 10 hours ago Schroder Japan Growth Fund