Harworth Group plc (“Harworth” or the “Group”), a leading regenerator of land and property for sustainable development and investment, announces its preliminary results for the year ended 31 December 2020.
|
Key Non-Statutory Measures (1) |
2020 |
2019 |
Key Statutory Measures |
2020 |
2019 |
|
Total return (%) |
3.0 |
7.8 |
Operating profit (£'m) |
27.8 |
24.3 |
|
EPRA NDV(2) per share (p) |
160.0 |
155.6 |
Net asset value (£'m) |
488.7 |
463.8 |
|
Value gains (£'m) |
22.3 |
44.0 |
Basic earnings per share (p) |
8.0 |
7.9 |
|
Profit excluding value gains (£'m) |
3.5 |
3.5 |
Total dividend per share (p) (3) |
1.8 |
0.3 |
|
Net loan to portfolio value (%) |
11.5 |
12.1 |
Net debt (£'m) |
71.2 |
70.9 |
Harworth's Chief Executive, Lynda Shillaw, said:
“O ur results for 2020 give us great confidence in the strength and resilience of our underlying business and our ability to grow and prosper, despite the disruption caused by COVID-19.
“I was delighted to join Harworth as Chief Executive in November and I am excited to be leading the business through its next phase of growth. During 2020 we again benefitted from the expertise of our specialist and highly experienced teams, a long track-record of building and developing a high quality strategic landbank, and an unrivalled focus on creating places where people want to live and work.
“Demand for our serviced land has remained strong and we continue to see this in the first few months of 2021 as we also make progress across the portfolio and explore potential acquisitions. Together with our strong balance sheet and opportunities in our core residential and logistics sectors, we are very well-placed to trade successfully through the pandemic and play a key role in delivering the infrastructure the country needs for regional economic recovery and long-term growth.”
CONTINUED GROWTH DURING 2020 SUPPORTING HIGHER DIVIDEND
• EPRA NDV per share growth of 2.8% to 160.0p (2019: 7.2% to 155.6p) reflecting continued progress, profitable sales across our sites and the robust fundamentals of the logistics and family-housing residential markets
• Operating profit increased by 14.4% to £27.8m (2019: £24.3m) and profit excluding value gains of £3.5m (2019: £3.5m)
• Recommended final dividend per share of 1.466p: reflecting underlying growth of 10% and supplemented to reflect the cancellation of the 2019 final dividend at the start of the pandemic(3), demonstrating the Board's confidence in the business
MASTER DEVELOPER EXPERTISE DEMONSTRATED IN PORTFOLIO RESILIENCE AND VALUATION UPLIFT
• Revenue from Capital Growth of £49.6m following completion of all major planned serviced land sales totalling 92.7 acres all at pricing ahead of, or in line with, 2019 book values
• Development progress during 2020 helped to drive increased value at major development sites
• Strong pipeline having secured planning consents for a further 1.1m sq. ft of industrial space and 300 residential plots
• As at 31 December 2020, planning applications for more than 1.3m sq. ft of employment space and over 2,500 residential plots had been submitted and were awaiting determination
• Post year end, submitted outline planning application for a further 2.9m sq. ft of employment space
• Substantial long-term pipeline of strategic land which stood at 30,668 plots and 27.3m sq. ft as at 31 December 2020
GROWTH OF INCOME PORTFOLIO THROUGH ACQUISITIONS AND ASSET MANAGEMENT
• Revenue from Income Generation of £20.4m (2019: £23.5m) predominantly made up of rental income
• Annualised rental and royalty income increased by 32.0% to £19.8m (2019: £15.0m) following acquisitions, lettings and lease re-gears
• Four Income Generation acquisitions made for a combined consideration of £40.0m, reflecting a blended Net Initial Yield of 8.4%.
• Demand for good quality industrial space remains strong with a low year-end portfolio vacancy rate of 4.5% (2019: 6.2%)
• Robust Business Space rent collection through active asset management with an average collection of 96% of rent due for the year
UNIQUELY POSITIONED TO CONTINUE DELIVERING SHAREHOLDER VALUE
• Appointment of Lynda Shillaw as Chief Executive Officer in November 2020 to position the business for further growth over the next decade
• Strategic focus remains on the 'beds and sheds' sectors in the North and the Midlands
• Well capitalised with Net Loan to Portfolio Value of 11.5% at the bottom of target range and substantial available liquidity of £62.7m as at 31 December 2020 providing firepower to execute on significant acquisition pipeline
• COVID-19 pandemic has highlighted more than ever the need and demand for well-designed, attractive and sustainable places for people to live and work in
• ESG is at the heart of our business, fundamental to how we operate and reflected in our Purpose to invest to transform land and property into sustainable places where people want to live and work
Footnotes:
(1) Harworth discloses both statutory and alternative performance measures (APMs). A full description and reconciliation to the APMs is set out in Note 2 to the financial information
(2) European Public Real Estate Association Net Disposal Value
(3) If the 2019 full year dividend had not been cancelled and included within the 2020 final dividend, the 2020 dividend would have been 1.102p per share, an increase of 10% on the original declared 2019 dividend