DJ Harworth Group PLC Half-year Report
UNAUDITED INTERIM RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2016
Harworth Group plc (“Harworth” or the “Group”), the property regeneration and investment specialist, announces its interim results for the half year ended 30 June 2016.
Financial Highlights(1)
— Full year financial forecasts are in line with the Board's expectations
but, as usual, weighted towards the second half
Net asset value (“NAV”) of GBP303.0m (GBP1.04 per share), a 10.4% increase
from H1 2015 NAV GBP274.5m (93.9p) and 1.8% increase from 2015 full year
NAV GBP297.7m (GBP1.02)
EPRA net asset value per share rose to GBP1.08 per share (H1 2015: 96.8p)
Operating profit of GBP8.3m (H1 2015: GBP9.2m, underlying GBP14.8m),
which reflects a GBP2.9m impact from 2016 stamp duty changes
Earnings per share of 0.3p (H1 2015: 2.7p, adjusted 0.5p)
— Planned financing extension completed reflecting confidence in the future
and to accelerate strategy delivery
Existing RCF limit increased from GBP65m to GBP75m. No need to refinance
until February 2021 and infrastructure bonding secured with new surety
provider
Portfolio remains prudently geared with gross loan to value 20.0% (net
LTV 13.4%)
First interim dividend of 0.23p per share (GBP0.66m in total)
Strategic and Operating Highlights
— Clear strategic focus on Northern regeneration market with balanced portfolio
of geographies and sectors
Four acquisitions (GBP12.8m cost) made in the first half including 50%
purchase of The Aire Valley Land LLP, which owns Temple Green, Leeds'
largest live logistics development
Sold GBP13.3m of property as part of ongoing programme to increase our
focus on sites with higher value-add potential. The portfolio now comprises
the ownership or management of 22,295 acres across 144 sites
To address current market caution, future infrastructure spend will be
directly linked to anticipated sales
— Good ongoing operational performance with selective moves to develop and
hold sites to grow income and drive NAV growth
Three small, direct build commercial developments now being taken forward
across three different sites, totalling c.180,000 sq. ft
Excellent progress with the construction and letting of 2 units, totalling
400,000 sq. ft, at Logistics North in Bolton forward funded by M&G. These
will reach practical completion before year end
On residential: 335 plot sales, including Harron Homes and Avant Homes
at North Gawber; consent secured for 65 new units; applications submitted
for c.400 units since the end of the period; and applications progressing
for a further c.900 units for submission prior to the year end
Harworth's Chief Executive, Owen Michaelson, said:
“We have progressed well during the first half, seeing continued momentum in the business, which is reflective of the underlying strength of the Group. We selectively grew our direct commercial development capabilities, through schemes at Logistics North, the Advanced Manufacturing Park and Gateway 36, as well as making excellent progress with the forward funded M&G development.
“We have continued confidence in the economic potential of the regions in which we operate and the long term market fundamentals remains in place. Our strategy affords us flexibility to manage potential periods of uncertainty. Together with our strong balance sheet, we are robustly positioned to capitalise on new opportunities, both for development and income generation. Based on current market conditions, we expect our full-year performance to be in line with our expectations.”
Notes: (1.) 2015 NAV figures assume 2016's 1 for 10 share consolidation had occurred in 2015 and 2015 underlying figures assume that Harworth Estates Property Group Limited had been owned from the start of the year.