Harworth Group PLC AGM Statement (7111Z)

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RNS Number : 7111Z

Harworth Group PLC

21 May 2019

21 May 2019

LEI: 213800R8JSSGK2KPFG21

Harworth Group plc ("Harworth" or the "Company")

AGM Statement

Good progress maintained in 2019

Harworth Group plc ("Harworth" or the "Company"), a leading regenerator of land and property for development and investment, will hold its Annual General Meeting at 2pm today when it will provide shareholders with an update on its operational performance.

Owen Michaelson, Chief Executive, will make the following statement:

"Harworth has continued to make good operational progress in the first five months of the year on its in-year priorities, whilst also evolving its organisational structure to drive the delivery of its strategic objectives in its core regions. Demand for land for new homes and high-quality commercial space in our regions continues to remain solid and is weathering short-term political headwinds. Trading remains in line with the Board's expectations.

"Our focus remains consistent: maximising the value of our strategic land bank and major developments to deliver long-term value to shareholders; and growing and improving the quality of income through a combination of new lettings and the selective recycling of the income portfolio. We are maintaining financial headroom and low gearing to provide flexibility to support the continued growth of the business as we drive individual projects through value growth milestones.

"The recent appointment of our first Chief Operating Officer will maximise the opportunities for synergies between our Capital Growth and Income Generation teams, whilst also allowing me to focus on strategic business development opportunities and relationships, which help to identify and unlock added value in our portfolio.

"We look forward to the remainder of 2019 with confidence."

DEVELOPMENT PORTFOLIO

The Capital Growth team across our core regions of Yorkshire & Central, the North West and the Midlands has continued to deliver value growth, principally through planning progress and sales realisations.

The Company has applications for 1,715 residential plots and just over 1.4m sq. ft of commercial space now awaiting determination. Planning consent has been secured at Sinfin Business Park in Derby for an additional 87,500 sq. ft of commercial space. Applications for a further 3,050 residential plots and 30,000 sq. ft of commercial space are also being prepared, including for the former Ironbridge power station that was purchased in June 2018.

Selective disposals to crystallise value gains from the portfolio have also continued, with over 60% of budgeted sales for the year having already been completed or agreed, reflecting the underlying strength of the "beds and sheds" markets in which the business operates. Land totalling 45.5 acres at two sites that could deliver a total of 650 residential plots has been sold to national and regional housebuilders. This includes the sale of 26 acres of residential land at Swadlincote in Derbyshire, where Avant Homes has plans to build 400 new family homes from two separately branded outlets over the next five years and a sale to Strata Homes at Flass Lane in Castleford of 19.5 acres for 250 new family homes. In March, at Gateway 45 Leeds, our 50/50 joint venture development with Evans Property Group, 10 acres of fully serviced commercial land was sold to Leeds University for its new Institute for High Speed Rail and System Integration, whilst contracts were exchanged with UKLV in April for the sale of 43 acres of land to deliver 855,000 sq. ft of speculative distribution space. These transactions represent a total consideration of GBP30.3 million, Harworth's share of which will be reinvested into the wider portfolio.

Our move to a regional model has also started to bear fruit, with two strategic land acquisitions in the North West made for a total consideration of GBP4.3 million. Selected direct development on a pre-let and speculative basis is anticipated at the Advanced Manufacturing Park in Rotherham to support the continued growth of the income portfolio.

As a result of this activity, Harworth's consented portfolio now stands at 10,427 plots (31 December 2018: 11,077 plots) and 9.9m sq. ft (31 December 2018: 10.7m sq. ft) of commercial space.

INVESTMENT PORTFOLIO

The Income Generation team has continued to improve the resilience of Harworth's recurring income. 12 new and renewed lettings have been agreed across the Business Space portfolio in 2019, generating approximately GBP1 million per annum.

Harworth continues to dispose of assets which offer limited further value generating potential and non-core assets on a selective basis. The Company is also accelerating its programme of disposals of agricultural sites which offer limited development potential. This includes a number of sites in the North East, where the Company is continuing to reduce its number of legacy properties in order to free-up management time and capital to focus on those sites in its other regions with the highest value enhancement potential.

PEOPLE

In addition to the appointment of Ian Ball as Chief Operating Officer on 1 May, the search for a new Finance Director is progressing well and an update will be made in due course.

OUTLOOK

Demand for new affordably priced housing and commercial space, particularly for units under 100,000 sq. ft, remains solid within the Company's core regions of the North of England and the Midlands and our portfolio of approximately 21,000 acres of land provides significant latent value.

As in previous years, residential and commercial sales together with value gains are expected to be weighted towards the second half of the current financial year. Overall, trading remains in line with the Board's expectations.

-ENDS-

Enquiries:

Harworth Group plc

   Owen Michaelson                                                         T: 0114 349 3131 

Andrew Kirkman E: [e-mail]

Iain Thomson

FTI Consulting

   Dido Laurimore                                                              T: 020 3727 1000 

Richard Gotla E: [e-mail]

Eve Kirmatzis

NOTES TO EDITORS

About Harworth Group

Listed on the premium segment of the main market, Harworth Group plc (LSE: HWG) is a leading regenerator of land and property for development and investment which owns, develops and manages a portfolio of approximately 21,000 acres of land on around 120 sites located throughout the North of England and Midlands. The Group specialises in the regeneration of large, complex sites, in particular former industrial sites, into new residential developments and employment areas (harworthgroup.com).

FORWARD LOOKING STATEMENTS DISCLAIMER

This announcement includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "anticipates", "targets", "aims", "continues", "projects", "assumes", "expects", "intends", "may", "will", "would" or "should", or in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They include statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Company's result of operations, financial condition, prospects, growth strategies and the industries in which the Company operates. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. A number of factors could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements, including without limitation: conditions in the markets, market position, the Company's earnings, financial position, return on capital, anticipated investments and capital expenditures, changing business or other market conditions and general economic conditions. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained in this announcement are based on past trends or activities and should not be taken as a representation that such trends or activities will continue in the future.

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END

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May 21, 2019 07:00 ET (11:00 GMT)