Harworth Group plc

("Harworth" or "the Company")

AGM Statement

Harworth Group plc, a leading regenerator of land and property for sustainable development and investment, provides the following update on its operational performance in advance of its Annual General Meeting, which will take place at 10am today. Further information on the AGM can be found at the end of this announcement. The Company will announce the results of its AGM following the conclusion of the meeting.

Lynda Shillaw, Chief Executive of Harworth, commented: "Harworth has had strong strategic and operational momentum so far in 2023, against a backdrop of robust demand for serviced and therefore de-risked residential land as well as industrial & logistics assets. We have made significant sales from our Investment Portfolio in line with December 2022 valuations which, combined with our direct development of new places, means we are making good progress towards transitioning this portfolio to 100% Grade A. Our sustained progress with acquisitions, planning and development across our landbank, as well as our strong financial position, means we are well positioned to continue to drive value for stakeholders and deliver sustainable places where people want to live and work."  

Harworth has made significant progress so far in 2023 against all four growth drivers of its strategy to reach £1bn of EPRA NDV⁽¹⁾ by 2027:

Increasing direct development of industrial & logistics stock:

·      110,000 sq. ft of Grade A space directly developed so far this year, at Gateway 36 in Barnsley, which is 35% let with strong occupier interest for the remaining space

·      On-site with a further 93,000 sq. ft at the Advanced Manufacturing Park ('AMP') in Rotherham, due to reach practical completion in autumn 2023

·      Construction will commence shortly of an additional 73,000 sq. ft pre-let and built-to-suit unit at the AMP, and preparation works are underway to deliver a further 1.8m sq. ft across the portfolio

·      Occupier interest remains strong across all direct development sites, with proposed rents in-line with December 2022 ERVs

Accelerating sales and broadening the range of residential products:

·      Completed, exchanged or in heads of terms on 74% of budgeted sales for the year across industrial & logistics and residential land portfolios, at prices in-line with, or at a premium to, book value

·      Demand for serviced and therefore de-risked residential land remains strong, with transactions progressing with a range of local and national housebuilders

·      Working towards exchange of contracts with the selected investment and construction partners for development of a single-family Build-to-Rent ('BTR') portfolio

·      Further diversification of residential products with the launch of an affordable home portfolio in May 2023, to be delivered through a forward-funding agreement

Scaling up land acquisitions and promotion activities:

·      Strategic land pipeline continues to grow, with acquisitions representing 1.1m sq. ft of industrial & logistics space completed in the year to date

·      Planning applications representing 2,040 housing plots and 7.4m sq. ft of space are currently progressing through the planning system and are awaiting determination

Repositioning our Investment Portfolio to modern Grade A:

·      Significant progress in transitioning portfolio by largely retaining directly developed assets and disposing of those where value has been maximised through the completion of asset management initiatives

·      Investment Portfolio sales completed so far this year total £48.4m, at prices in line with December 2022 valuations. Following these disposals, and transfers of completed developments of 110,000 sq. ft, the portfolio is now 27% Grade A (31 December 2022: 18%)

Harworth remains well capitalised with a strong balance sheet and financial position. As at 30 April 2023, net debt was £43.2m (31 December 2022: £48.4m), resulting in a pro-forma LTV of 6.0% (31 December 2022: 6.6%), based on 31 December 2022 valuations and adjusting for subsequent completed sales.

In April 2023, Harworth published its Net Zero Carbon Pathway Report, which outlines the steps that the Group will take to achieve its ambition of being operationally Net Zero Carbon ('NZC') by 2030 and NZC for all emissions by 2040, and a framework through which its progress can be measured. The report can be accessed at www.harworthgroup.com/sustainability.

Further AGM information

Harworth's AGM will be held today at 10:00 am at The Bessemer Conference Room, AMP Technology Centre, Advanced Manufacturing Park, Brunel Way, Catcliffe, Rotherham, S60 5WG.

This year, the Company is holding a partly virtual AGM, with the meeting being webcast live, which can be accessed via the following link: https://brrmedia.news/Harworth_AGM. Shareholders who view the AGM online will not be able to vote during the meeting, but can submit written questions via the webcast facility. 

(1) European Public Real Estate Association Net Disposal Value, an adjusted Net Asset Value metric which is one of Harworth's key Alternative Performance Measures.

For further information

About Harworth

Listed on the Premium Segment of the Main Market, Harworth Group plc (LSE: HWG) is a leading sustainable regenerator of land and property for development and investment which owns, develops and manages a portfolio of over 13,000 acres of land on around 100 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 and industrial & logistics developments. Visit www.harworthgroup.com for further information. LEI: 213800R8JSSGK2KPFG21