Trading Update

RNS Number : 7235T

Harworth Group PLC

10 January 2017

 

Harworth Group plc

Trading Update

Harworth Group plc ("Harworth" or the "Group"), the brownfield regeneration and property investment specialist, today updates the market on trading for its financial year ended 31 December 2016.

The Group has delivered further strong operational performance in the second half of the year. Coupled with the indicative outcome of the independent annual valuation of the property portfolio, the Group anticipates that its financial performance for the year ended 31 December 2016 will be ahead of the Board's expectations:

·    Value gains (revaluation gains and profit on disposal) are anticipated to be significantly ahead of expectations;

·   As a result, Group Net Asset Value (NAV) as at 31 December 2016 is anticipated to be moderately ahead of expectations; and

·    Profit from operations is anticipated to be in line with expectations.

Further strategic delivery has contributed to the strong second half operational performance and value gains achieved, notably:

·    Site disposals above book value for both residential and commercial uses, including the sale of 43.7 acres at Logistics North to Lidl for £22.5 million in December 2016 and the sale of land for 284 residential plots in aggregate to Taylor Wimpey, Harron Homes and Arch, the Northumberland economic development company; 

·    In addition, disposals of over £9 million of agricultural land have been made to improve the Group's focus on sites with greater value enhancement potential; and

·   Good progress has also been made in securing beneficial planning positions and improving lettings across the portfolio, helping to drive revaluation gains.

The Group also continues to ensure that it is well positioned for the future:

·   In the final quarter of the year, the Group acquired Four Oaks Business Park in Preston and Moorland Gate Business Park in Chorley for a combined total of £17.9 million as part of the Group's objective to replenish its strategic landbank and improve the quality of its income. These purchases, alongside improved lettings, the direct development and retained ownership of three small industrial warehouses across three flagship sites in Yorkshire and the North West, offset the previously flagged decline in coal fines sales;

·    Options and planning promotional agreements have also been signed on a total of nearly 1,500 potential residential plots.  This increases our long term landbank to over 17,000 plots, of which over 9,500 plots already have planning permission; and

·    Harworth is seeing, and actively targeting, further opportunities to build its strategic landbank.

Owen Michaelson, Harworth Chief Executive, commented:

"The Group had a positive first half of the year as highlighted at the time of our interim results in September 2016.  This momentum has continued into the remainder of the year and results are now expected to exceed expectations, with sales above book value and good progress on planning and lettings driving the improvement to the valuation of our portfolio.  This position reflects the underlying strength of our business and reinforces the Group's confidence in the long-term fundamentals of the regional markets in which we operate."

The Group is holding a Capital Markets Morning at The Tate Modern on Wednesday 25 January 2017.  Please contact Emma Crawshaw at Cardew Group if you would like to attend.

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The Company considers this announcement to contain inside information which is disclosed in accordance with the Market Abuse Regulation.

For further information:

Harworth Group plc	Tel: [phone]
Owen Michaelson, Chief Executive
Andrew Kirkman, Finance Director
Cardew Group	Tel: [phone]
Emma Crawshaw Shan Shan Willenbrock Emma Ruttle

Notes to Editors

Harworth Group plc (LSE: HWG) is a leading brownfield regeneration and property investment specialist which owns and manages a portfolio of around 22,000 acres of land across approximately 150 sites located throughout the Midlands and North of England. The Company specialises in the regeneration of former coalfield sites and other brownfield land into employment areas, new residential developments and low carbon energy projects. (http://www.harworthgroup.com/) 

 

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