Harworth Group Plc · LSE:HWG
Harworth — H1 2015 Earnings Presentation
26 slides from Harworth's earnings presentation, 2015
Slide 1: 2015 Half Year Results
2015 Half Year Results 1
Slide 2: Disclaimer
Disclaimer • These presentation slides may contain forward-looking opinions contained in or given during this presentation and statements with respect to the business, performance and no liability is accepted or incurred by any of them for or in financial condition of Harworth Group. By their nature
Slide 3: Business On Track
Business On Track • Progress with planning consents • Valuation gains of £8.2 million from several sources, plus profit on sales of £5.5 million • Good sales momentum achieved in the first half year • Starting to replenish the portfolio • Improved operating profit • Trading in line with management e
Slide 4: Successful Completion of March 2015 Transaction
Successful Completion of March 2015 Transaction • Re-acquisition of 75.1% of shares in Harworth Estates Property Group Limited (Harworth Estates) by Coalfield Resources plc (the ‘Transaction’) completed 24 March 2015 • Coalfield Resources plc renamed Harworth Group plc • Harworth Group now fully con
Slide 5: Financial Highlights
Financial Highlights • Operating Profit £6.8 million and Profit before Tax of £51.3 million • Exceptional gain arising on the purchase of the 75.1% of share in Harworth Estates of £44.2 million • Net Asset Value (NAV) at 30 June 2015 of £274.5 million. £282.9 million excluding the provision for defe
Slide 6: Strong Underlying Performance
Strong Underlying Performance Harworth Estates: Six months ended 30 June 2015 2015 2014 £000 £000 Profit from operations 1,068 768 Profit from disposals 5,525 3,149 Revaluation gains 8,186 10,428 Operating Profit 14,779 14,347 Profit from operations included revenues of £7,737k from rental, royalty
Slide 7: Reconciliation of Income Statement
Reconciliation of Income Statement Six months to 30 June 2015 Harworth Harworth Fair Value Fees Harworth Estates Estates Pre Adj’ments Group plc Acquis’n £000 £000 £000 £000 £000 Profit from Operations 1,068 (305) (297) (3)(2,394) (1,928) Profit on Disposal 5,525 (117) - - 5,408 Revaluation Gains 8,
Slide 8: Harworth Estates NAV Underlying Growth
Harworth Estates NAV Underlying Growth £000 Harworth Estates 31 December 2014 248,554 Profit from operations 1,068 Profit from disposals 5,525 Revaluation gains 8,186 Interest (1,824) Tax (1,537) 30 June 2015 259,972 Other Group Assets Cash 14,268 Other net assets 211 Harworth Group plc 274,451 8
Slide 9: Group Balance Sheet as at 30 June 2015
Group Balance Sheet as at 30 June 2015 £000 Investment Properties 306,993 • Group NAV per share 9.4 pence Other Non-Current Assets 1,883 • Group NAV of £274.5 million 308,876 • Investment properties revalued by Cash and Cash Equivalents 30,065 management to £307.0 million at 30 June 2015 Other Curre
Slide 10: Group Net Debt
Group Net Debt 30 June 2015 £000 Drawn bank borrowings (48,850) Infrastructure loans (11,182) Gross interest bearing debt (60,032) Cash and cash equivalents 30,065 Net debt (29,967) • Bank facilities are in the form of a five year, non-amortising £65 million revolving credit facility from the Royal
Slide 11: Operating Progress in the First Half Year
Operating Progress in the First Half Year Further Acquisitions: Including Alcan smelter site at Lynemouth Valuation Gains: Planning Consents and Cost Engineering - £8.2 million in H1 Sales Momentum: Residential and Commercial - £21.0 million in H1 Income Generation: Commencement of Gateway 36 scheme
Slide 12: Acquisition of Alcan smelter site in April 2015
Acquisition of Alcan smelter site in April 2015 • Strategic acquisition to provide development opportunities including income generation – suited to core regeneration skills • Located in Lynemouth, Northumberland, bordering existing Harworth land, at the former Lynemouth colliery • Salvage operation
Slide 13: Valuation Gains
Valuation Gains Six months ended 30 June 2015 £000 Business Parks Up-lifts at Asfordby and 1,900 Gascoigne driven by new and renewed rentals Major Developments Progress with planning 2,300 consents and cost engineering at all major sites Strategic Land 3,600 Planning consent at Gedling Other 386 Tot
Slide 14: Progress with Residential Planning Consents
Progress with Residential Planning Consents Secured applications Potential applications 8,029 1,200 317 8,969 4,915 After 5 years 3,015 Next 5 years 31 Dec 2014 New Sales 30 Jun 2015 Resolution to grant (plots) Granted (plots) Planning applications shown in appendix 14
Slide 15: Major Developments: Gedling (former deep mine)
Major Developments: Gedling (former deep mine) RESIDENTIAL CONSENT SECURED COUNTRY PARK OPENED Outline planning consent received in Gedling Country Park opened at the end March 2015 for up to 150 residential of March 2015, in partnership with units across 23.5 acres. Gedling Borough Council Creation
Slide 16: Disposals in First Half 2015
Disposals in First Half 2015 Proceeds • Total disposal proceeds £21.0 million, generating profit on disposal of £5.5 million 9% • Residential land sales on five sites to national and regional house-builders, realising average £37.1k per plot 21% 56% • All major transactions achieved with a gain to n
Slide 17: Exploiting Portfolio Opportunities
Exploiting Portfolio Opportunities • £0.9 million of new rental agreements, including existing Business Parks and Gateway 36 • Continuing to generate salvage and recycling income to help cover operating costs • Low Carbon Energy 17
Slide 18: Income Generation: Gateway 36 (South Yorkshire)
Income Generation: Gateway 36 (South Yorkshire) PROPOSED DEVELOPMENT ON PHASE 1B ROCKINGHAM PHASES 2 AND 3 • Further 111,000 sq. ft. of commercial • Success of Rockingham 1 provides development consented on Rockingham 1 a platform for Harworth Estates to • Conditional sale of pub/restaurant plot agr
Slide 19: Low Carbon Energy & STOR
Low Carbon Energy & STOR(2) • Rental and royalty income from third party energy companies • Annualised income approaching £1 million, expected to remain a growth area Coal Mine Energy from SOURCE Solar Wind STOR(2) Methane Waste(1) Operating 27MW 9MW 35MW - 38MW In Build 16MW 19MW - - - Consented 16
Slide 20: Outlook
Outlook • Harworth Group has entered second half of 2015 in a strong position • Trading conditions stable, with continuing demand from house-builders and commercial occupiers • Continued focus on building recurring income from Business Parks and Natural Resources • Selected acquisitions are under co
Slide 21: Appendices
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Slide 22: Planning Applications Pipeline: an update
Planning Applications Pipeline: an update Live Planning Applications Prospective Planning Applications (>5 years) Sites Plots Sq. ft Sites Plots Sq. ft Warmsworth Gate 375 - 4 sites - 4.7m Flass Lane 550 47,000 5 sites 4,915 - Cowie (TW) 380 - Daw Mill - 265,000 Welbeck - 140,500 Total 1,305 452,500
Slide 23: Summary of Investment Properties
Summary of Investment Properties £m 21.5 75.6 145 19 45.9 Major Developments Strategic Land Natural Resources Business Parks Agricultural Land 23
Slide 24: Group Cashflow for the Six Months to 30 June 2015
Group Cashflow for the Six Months to 30 June 2015 £000 Profit after Tax 50,761 Main acquisition elements Gain on Bargain Purchase (44,244) Profit on Disposal (5,408) Fair value of net assets £252.0 million, Revaluation Gains (3,356) less total consideration of £207.8 million (consideration transferr
Slide 25: Segmental Reporting for the first Half Year
Segmental Reporting for the first Half Year Capital Growth Income Unallocated 2015 2014 £000 Generation Total Total £000 £000 £000 £000 Six Months to 30 June Profit from operations (911) 4,005 (2,026) 1,068 768 Profit from disposals 2,102 3,423 - 5,525 3,149 Revaluation gains 5,900 2,286 - 8,186 10,
Slide 26: Final Slide
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