Property developer Harworth says it is on track to become a £1bn business by 2027, despite a significant fall in operating profits.
The Rotherham-based plc told investors on the London Stock Exchange that operating profit was just £8m in the first half of the year, down from nearly £100m in the first half of 2022. But Harworth pointed to an uptick in valuations across its portfolio – partially offset by interest expenses, operating costs and tax – and its net disposal value (NDV) per share of 195.7p during the period, down from 224.7p last year.
The firm hailed a conversion of its investment portfolio into Grade A space which it has done by retaining its own developments and selling those it thinks it has maximised the value of. There was £52.1m of investment portfolio sales in the first half, with a further £17.9m of disposals completed after the period end.
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Through the six months to the end of June, Harworth said it had acquired 1.1million sqft of industrial and logistics space, as well as 700 residential plots. The firm has also made planning applications for 7.4million sqft of industrial and logistics space, and 1,641 housing plots.
Lynda Shillaw, chief executive of Harworth, said: “Harworth’s first half performance reflected good progress against strategic objectives, coupled with a strong operational delivery, which highlights the resilience of our through-the-cycle model, and sustained demand for our serviced residential land and industrial & logistics assets. In particular, the combination of sales of more mature industrial & logistics sites and our development of new high-specification space has accelerated the transition of our Investment Portfolio towards our goal of 100% Grade A.
“In residential, we continue to transact with a range of housebuilders, both national and regional, alongside progressing our alternative product offerings, including Build-to-Rent and Affordable Housing. Our management actions and sustained demand for our products have resulted in an uptick in valuations and EPRA NDV remaining broadly stable over the first six months of the year.
“The industrial & logistics market has stabilised over the period, albeit transactions are taking longer to complete, and the residential Build-to-Rent market is experiencing sustained demand. However, interest rate rises, cost inflation and planning delays are all impacting the housebuilders. House prices have remained reasonably resilient supported by reduced volumes of new build. While land buying is subdued and selective, we are seeing a good level of demand for our de-risked consented serviced land product.”
Original artice – https://business-live.co.uk/all-about/yorkshire-humber
