Land and regeneration group Harworth has grown profits again in a year it says it has faced major changes in the market coupled with political uncertainty.
The Rotherham-based plc reported operating profits of £54.2m in 2023, up from £44.5m the year before, but still down on £121.9m in 2021. The firm said it had developed 193,000 sqft of industrial and logistics space during the year and had a remaining pipeline of 37.7m sqft as it described growth in market rents.
Strong interest from housebuilders for the group’s sites had helped it boost a key measure used by the group of European Public Real Estate Association net disposal value (EPRA NDV), by £29m to 205.1p per share. Chair Alistair Lyons said it was “deeply frustrating” for shareholders that Harworth share price was standing at a 34% discount to NDV, despite having picked up since a low point in October last year.
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Looking into 2024, chief executive Lynda Shillaw said continued uncertainty in the market was likely to weigh on businesses for some time yet, particularly in the case of house buyer confidence. Across the commercial market she said the drivers of demand were still intact though Harworth would focus on de-risking its activity by focusing on pre-let and build-to-suit opportunities, as well as land sales. Ms Shillaw said she was confident Harworth would become a £1bn business by 2027.
She said: “Harworth once again delivered another strong performance in 2023, ahead of the MSCI All Property Index and resulting in one of the sector’s leading total returns, while maintaining a low loan-to-value of just 4.7% and significant financial liquidity. We continue to benefit from the unique combination of our extensive landbank and the application of our specialist skillset to develop new market opportunities and realise the highest value from each of our sites. This saw us complete serviced land and property sales at prices broadly in line with book values before transaction costs, achieve lettings ahead of estimated rental values, and progress some exciting acquisitions as we build our future pipeline and continue to move sites through the planning system.”
She added: “So far in 2024, macroeconomic conditions remain challenging but there are signs of optimism. Our key markets remain characterised by structural undersupply and we are seeing good demand for our serviced residential land as well as high levels of occupier interest in our employment sites. We have a self-propelled growth strategy driven by our landbank and the skills of our people, and our long-term through-the-cycle approach means that, as well as securing and progressing opportunities to deliver long-term value to investors, we are well positioned to take the management actions that will generate further value gains from our portfolio in the year ahead.”
Original artice – https://business-live.co.uk/all-about/yorkshire-humber
