Trading Update H1-2025
HARWORTH GROUP PLC
('Harworth' or the 'Group' or the 'Company')
Trading Update H1-20251
Positive operational momentum despite softer residential markets
Harworth Group plc, a leading land and property regenerator of sustainable developments, is publishing an operational update for H1 2025, ahead of the Half Year results scheduled for Tuesday 16 September 2025. See page 2* for abbreviations.
Lynda Shillaw, Chief Executive of Harworth, commented: "I am very pleased with the sustained operational momentum of the last six months and especially the consistency of delivery against milestones, including accretive acquisitions and strong a pipeline of Residential plot sales. With our extensive experience and specialist skills, our teams remain focused on the delivery of value-creating management actions to achieve our strategic targets of £1bn EPRA NDV by the end of 2027 and a £0.9bn I&L Investment Portfolio by the end of 2029.
"The quality of our land bank remains excellent, and we have an encouraging pipeline of potential deals, demonstrated by a strong level of interest across c. 1.2m sq ft of our I&L land and property portfolio. Notwithstanding, the length of time to conclude transactions remains elongated, pushing out the timing of value gains. These deals are more likely to materialise from 2026 onwards, in line with the timing of our strategic growth plan being back-end weighted from 2026 and 2027.
"Our focus sectors remain in structural undersupply, are aligned to Government policy, and are key to stimulating and supporting UK economic growth. The scale and importance of our key sites to regional pipelines and our through-the-cycle business model means that we continue to invest in infrastructure and the creation of serviced plots, having already enabled 2.4m sq ft with a further 1.1m sq ft of enabling works and 4.1m sq ft of infrastructure works underway across 2025.
"The macroeconomic challenges and volatility that I have highlighted previously have not abated, which when combined with domestic fiscal and policy agendas, contribute to weak UK economic growth. The current challenges across residential markets have also been well reported. Accounting for the positive operational momentum against the current market backdrop, we anticipate that gains across our I&L portfolio during the first half will be dampened by valuation headwinds and cost increases across some of our residential sites, resulting in H1-2025 EPRA NDV growth being flat to marginally up."
Highlights for the first half 2025:
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· Significant planning applications submitted: 4.9m sq ft I&L space (total 8.1m sq ft), and c. 1,200 Residential plots. In July, applications for a further 1.5m sq ft of I&L space and c. 2,800 Residential plots (total 4,900) were submitted. |
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· Tactical acquisitions underpinning future growth: completed acquisitions of 0.4m sq ft and 2,000 plots, included taking 100% control via the buyout of our joint-venture partner at Gateway 45 (Leeds) | YAC | I&L | MD, bringing an additional c. 0.4 sq ft of consented I&L space (ownership now up to 0.8 sq ft). |
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· Release of HS2 safeguarding lands adds to near-term momentum: With Gateway 45 being the biggest beneficiary of land released from HS2 safeguarding, this provides momentum to move our near-term plans forward, being adjacent to our Skelton Grange (Leeds) site, where we are undertaking remediation and enabling works on behalf of Microsoft for its proposed hyperscale data centre. |
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· New strategic partnership with Church Commissioners for England: conditionally exchanged on a new joint venture to deliver a significant mixed-use development in West Yorkshire, with a total site capacity at c. 1.2m sq ft of employment space and c. 1,500 Residential plots. |
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· Strong volume of residential plot sales: completed 649 Residential plots, including a notable level of Planning Promotion Agreements (PPAs). A further 1,593 Residential plots sales conditionally exchanged or are in legals demonstrating that the residential market continues to progress, despite headwinds. |
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· Further growth in Grade A quality of core I&L Investment Portfolio: the sale of a secondary I&L asset alongside practical completion and letting of one of units at the AMP (South Yorkshire) | YAC | I&L | IP further raised the quality of the portfolio to 48% Grade A by area and 65% by value (Dec 2024: 45% by area, 63% by value). |
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· Balance sheet strength deployed underpinned by flexible funding: we took advantage of particularly dry weather in H1 to tactically advance site delivery, enabling works and development, which are fundamental to deliver on our ambitious I&L development targets, partially drawing down of our revolving credit facility (RCF) to do so. This resulted in available liquidity of £59.8m and pro forma LTV of 20.9%, within our self-imposed target of up to 25% during the year. |
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· Delivering sustainable, innovative and scalable biodiversity net gain solutions: addressing developers' challenge to meet Biodiversity Net Gain (BNG) legislation, we have taken a sector leadership position, launching and managing our first registered Biodiversity Gain Site, issuing biodiversity units to meet our BNG obligations and allocate any surplus units to our other projects or sell to other developers. |
*We aim to create long-term, through-the-cycle value by focusing on:
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Two structurally undersupplied sectors: 1. Industrial & Logistics ('I&L') |
Two core products: 1. Serviced remediated land for sale |
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Three portfolios: |
Three regions: |
Our land bank stands at 33.8m s ft of I&L of which 71% is derisked2 (Dec 2024: 33.6m sq ft; 63% derisked) and 31,636 Residential plots of which 46% is derisked (Dec 2024: 31,264; 46% derisked).
Since 2021, we have received planning on 9.1m sq ft of I&L space with an estimated GDV of £1.3bn, we have concluded on cumulative sales of c. £590m, including. 7,200 Residential plots and we have bought or optioned I&L land totalling 14.3m sq ft, with an estimated Gross Development Value (GDV) of £2.1bn.
Notes:
1. All values are Harworth's share, unless noted otherwise
2. Pipeline with a consent or in the planning system
For further information
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Harworth Group plc |
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Lynda Shillaw (Chief Executive) Kitty Patmore (Chief Financial Officer) |
T: +44 (0)114 349 3131 |
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FTI Consulting |
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Dido Laurimore Richard Gotla Eve Kirmatzis |
T: +44 (0)20 3727 1000 |
About Harworth
Harworth Group plc (LSE: HWG), is a leading land and property regenerator of sustainable developments. We own, develop, and manage a portfolio of over 15,000 acres of Strategic Land over 100 sites located throughout the North of England and Midlands. We specialise in delivering long-term value for all stakeholders by regenerating large, complex sites, particularly former industrial sites, into new Industrial & Logistics developments and serviced Residential land to create sustainable places, support new homes, jobs and communities where people want to live and work. Visit www.harworthgroup.com for further information. LEI: 213800R8JSSGK2KPFG21
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