Slide 1: 2016 Preliminary Results
2016 PRELIMINARY RESULTS 6 MARCH 2017 Transforming - Regenerating - Revitalising
Slide 2: Business and Financial Overview
BUSINESS AND FINANCIAL OVERVIEW TRACK RECORD STRATEGY MARKETS Strong financial performance Delivering market leading NAV Proven and robust strategy Market fundamentals in the growth with confidence in the future regions remain strong In 2016 EPRA NAV grew by Dividend increased by 10% - Houses are we
Slide 3: 2016 Achievements
2016 ACHIEVEMENTS STRONG FINANCIAL PERFORMANCE Revaluation gains of nearly £35m helped drive EPRA NAV growth of 13.3% to 119.8p per share Financing extended by £10m to £75m and one year, to give headroom and drive income growth CONTINUED SALES OUTPERFORMANCE Profit on sale of c.£9m achieve
Slide 4: Vision, Strategy and Business Model
VISION, STRATEGY AND BUSINESS MODEL We want to be the UK’s leading We will accomplish this by: developer of brownfield land and 1. Progressively expanding our geographical reach into all regions of the UK that have regeneration partner of choice strong and stable markets, with initial focus on core
Slide 5: Our Regional Markets Provide Clear Opportunities
OUR REGIONAL MARKETS PROVIDE CLEAR OPPORTUNITIES RESIDENTIAL Housing Under Supply National housing under-supply is driving consistently strong demand for land Presumption remains in favour of residential development on brownfield land Government stimulus measures for purchasers remain in place
Slide 6: Significant Latent Value: Land Pipeline
SIGNIFICANT LATENT VALUE: LAND PIPELINE • Land sold for 619 new housing plots and over 500,000 sq. ft of commercial space in 2016 • Freehold ownership of land comprising 9,529 consented housing plots and 9.95m sq. ft of commercial space as at 31 December 2016 • Applications currently in the planning
Slide 7: Net Asset Value Growth
NET ASSET VALUE GROWTH NAV at 31 December 2016 was 114.6p (£334.9m) a 12.5% increase from 2015 101.9p (£297.7m) EPRA NAV at 31 December 2016 was 119.8p (£350.1m) a 13.3% increase from 2015 105.8p (£309.1m) 119.8p 120.0p 5.2p 0.8p 0.1p 0.7p 115.0p 1.3p 110.0p 14.9p 105.8p 105.0p 3.9p 0.8p 114.6p
Slide 8: Value Gains – Revaluation Gains and Profit on Disposal
VALUE GAINS – REVALUATION GAINS AND PROFIT ON DISPOSAL Twelve months to 31 December (£’m) 2016 2015 Profit on Revaluation gains1 Total Total disposal Management Market2 Major Developments Healthy profit on disposal from Lidl UK at Logistics North. Improved masterplan and tenant interest at 6.8 8.7 3
Slide 9: Income Statement
INCOME STATEMENT A Twelve months to 31 December 20151 Capital Income Central 2016 Revenue and (£’000) Total Growth Generation overheads Total cost of sales 2016 distorted by M&G build Revenue (rent, royalty and operations) 16,737 16,307 17,386 - A 33,693 costs Cost of sales (7,856) (15,966) (5,056)
Slide 10: Income Generation: Strategy, Progress and Trends
INCOME GENERATION: STRATEGY, PROGRESS AND TRENDS • The strategy remains to grow and improve the quality of recurring income to cover overheads (including strategic land promotion) and interest, and ultimately cover tax and dividends Revenue from Income streams Progress in 2016 Trend £35.0m Major Dev
Slide 11: Cash Flow
CASH FLOW Aim to balance cash flows Infrastructure spend and investment in acquisitions are essentially funded by disposals Infrastructure spend is assessed against, and matched with, the quantum and timing of expected disposals Transforming - Regenerating - Revitalising - 11 -
Slide 12: Financing
FINANCING Position as at 31 December 2016 £’000 Policy of prudent gearing Drawn bank borrowings – RBS RCF (37,991) As at 31 December 2016, gross Loan To Value (LTV) 13.1% and net LTV 9.9% Infrastructure loans (14,487) Harworth recognises the risk should operational Gross interest bearing debt
Slide 13: Our Portfolio: How We Create and Add Value
OUR PORTFOLIO: HOW WE CREATE AND ADD VALUE Asset Management £400.3m Plot Sale / Build Out Infrastructure Development Indicative Value Add Value Engineering & Land Remediation Planning Approval Competitive advantage comes from our ability to add value through Masterplanning management actions Acquisi
Slide 14: Acquisitions: Strategy and Process
ACQUISITIONS: STRATEGY AND PROCESS Open market advertising Opportunities identified 8% 49% 43% Off-market direct Soft marketing approaches to by agents landowners Due Diligence: Optimum deal structure identified Pricing discipline is key Corporate Opportunities for value acquisitions PPAs growth 5%
Slide 15: Acquisitions: Strong Progress Made in 2016
Asset management potential ACQUISITIONS: STRONG PROGRESS MADE IN 2016 Planning / development opportunities 6 NEW ACQUISITIONS (£31.6m) 4 NEW PLANNING PROMOTION AGREEMENTS 244 acres 67 acres 3.54m1 commercial sq. ft either built or consented 494 potential residential plots £2m of new income
Slide 16: Acquisitions: Pipeline of Signed Options
ACQUISITIONS: PIPELINE OF SIGNED OPTIONS RESIDENTIAL Encompasses former surface mine, coking works and agricultural land Garden village Fixed price option taken site, Derbyshire Option land equates to 21% of development area. Scheme envisaged as 3,500 home garden village 90 acres Further lan
Slide 17: Business and Financial Overview
BUSINESS AND FINANCIAL OVERVIEW TRACK RECORD STRATEGY MARKETS Strong financial performance Delivering market leading NAV Proven and robust strategy Market fundamentals in the growth with confidence in the future regions remain strong In 2016 EPRA NAV grew by Dividend increased by 10% - Houses are we
Slide 18: Appendices
APPENDICES 6 MARCH 2017 A brief history 19 Investment properties – Movement 23 Case study: Logistics North, Bolton 20 Investment properties – Portfolio detail 24 Case study: Thoresby Colliery, Nottinghamshire 21 Valuation methodology 25 Acquisitions: additional opportunities being 22 Summary of fina
Slide 19: A Brief History
A BRIEF HISTORY 2004-2012 2012-2014 2015 onwards Property division within Harworth Estates was Re-launched as Harworth UK Coal plc 24.9% owned by CfR plc Group plc • In 1994, RJB Mining (founded in • In December 2012, after a complex • In February 2015, Harworth Estates 1974) bought British Coal’s c
Slide 20: Case Study: Logistics North, Bolton
Infrastructure / Plot sale + build out CASE STUDY: LOGISTICS NORTH, BOLTON FEBRUARY 2015 FEBRUARY 2017 • Outline consent for 4m sq. ft of commercial space • MBDA, Joy Global, Lidl, Exeter Property Group, M&G Real Estate (Whistl) all confirmed as owners/occupiers • Infrastructure works completed to o
Slide 21: Case Study: Thoresby, Nottinghamshire
CASE STUDY: THORESBY, NOTTINGHAMSHIRE Masterplanning / planning approval PRESENT SITE PROPOSED DEVELOPMENT 500 acres at heart of Sherwood Forest in Planning application submitted in December 2016 for: Nottinghamshire: • Former Colliery closed in July 2015 • 800 plots on former pit yard site • Site s
Slide 22: Acquisitions: Additional Opportunities Being Explored
ACQUISITIONS: ADDITIONAL OPPORTUNITIES BEING EXPLORED FURTHER Terms agreed with the landowner for an option agreement at agricultural RESIDENTIAL value plus claw back on planning on a 263 acre strategic logistics and SITES residential development site located on a key motorway junction that could
Slide 23: Investment Properties – Movement
INVESTMENT PROPERTIES – MOVEMENT (INCLUDES JOINT VENTURES, AVAILABLE FOR SALE, OVERAGES AND OWNER OCCUPIED ASSETS) £400.3m Transforming - Regenerating - Revitalising - 23 -
Slide 24: Investment Properties – Portfolio Detail
INVESTMENT PROPERTIES – PORTFOLIO DETAIL TOP 10 SITES House plots Employment space Site Location Acres Consented Sold/Built Consented Built Waverley & AMP Yorkshire 587 3,890 740/600 2.1m sq. ft 1.2m sq. ft Rossington Yorkshire 344 1,200 170/35 0.1m sq. ft 0 sq. ft Logistics North North West 763 4.0
Slide 25: Valuation Methodology
VALUATION METHODOLOGY • Portfolio is valued twice yearly. Formal year end valuation by BNP Paribas and Savills, and half year valuation by management with review by BNP Paribas and Savills • Valuation is property by property on the basis of Market Value (RICS Red Book definition) given the highest a
Slide 26: Summary of Financing Facilities
SUMMARY OF FINANCING FACILITIES The table below summarises Harworth’s drawn facilities as at 31 December 2016 Amount drawn Lender Associated site Interest rate End date (£’k) 2.2% plus EU HCA Waverley 11,651 February 2022 Reference Rate 2.2% plus EU April 2018 but with an ability to extend if JESS
Slide 27: Disclaimer
DISCLAIMER For the purpose of the following disclaimer, reference to this set out in such statement or as to the accuracy, completeness or ‘presentation’ shall be deemed to include reference to the presentation reasonableness of any projections, targets, estimates, forecast slides, the presenters’ s