Harworth Group Plc · LSE:HWG

Harworth — Investor Meet Company presentation (April 2023)

24 slides from Harworth's conference presentation, Apr 17, 2023

  1. Slide 1: Investor Meet Company presentation

    FINAL DRAFT Investor Meet Company presentation 17 April 2023 Image: Bardon Hill and South East Coalville, Leicestershire

  2. Slide 2: Agenda

    Agenda 1. Introduction 2. Financial review 3. Operational review 4. Outlook & conclusion 5. Q&A 2

  3. Slide 3: A long-term, through-the-cycle business

    A long-term, through-the-cycle business 2022: A year of strong Management actions largely Focus markets remain strong, operational and strategic offset market-driven H2 2022 and we have significant progress valuation movements flexibility and firepower Record plot sales, direct development and acqui

  4. Slide 4: 2022: A year of operational and strategic progress

    2022: A year of operational and strategic progress Growth in industrial & Residential pipeline Single-family BTR Investment Portfolio logistics pipeline (sq. ft) remained stable (plots) portfolio launched transition underway 35.0m 29,596 30,668 30,804 29,311 Portfolio now 18% Grade A 28.2m 24.4m 27.

  5. Slide 5: Market fundamentals remain strong, despite challenging H2

    Market fundamentals remain strong, despite challenging H2 2022 the third-strongest year on record for industrial & logistics take-up Mortgage affordability improving following H2 challenges 60 7 ‘Mini- budget’ 50 6.5 Mortgage rate (%) 6 Sq. ft. (m) 40 5.5 30 5 20 4.5 10 2023 4 0 03-Feb 31-Mar 07-Oct

  6. Slide 6: Progressing our growth strategy

    Progressing our growth strategy Growth drivers 2015 - 2020 2021 2022 Ambition by 2027 1. Increasing direct 1.3m sq. ft 432,000 sq. ft completed during year 800,000 sq. ft development of industrial 51,000 sq. ft developed over developed on average & logistics space developed five years 203,000 sq. ft

  7. Slide 7: Financial Review

    Financial Review Kitty Patmore Chief Financial Officer

  8. Slide 8: EPRA NDV stable at 196.5p per share

    EPRA NDV stable at 196.5p per share  Broadly flat valuation and EPRA Balance sheet (£m) 31 Dec 2022 31 Dec 2021 NDV performance over the year as a result of: Property portfolio(1) 695.4 689.8  an increase in the valuation of Trade receivables & other assets 72.5 60.4 Investment properties (within

  9. Slide 9: Land sales and direct development drive higher revenues

    Land sales and direct development drive higher revenues  Revenue increased largely due to: Income statement (£m) 2022 2021  higher serviced land and property sales Revenue 166.7 109.9  growth in rental income due to completed Gross profit(1) 83.4 48.7 direct development  sale of Kellingley site

  10. Slide 10: Robust valuation performance despite market headwinds

    Robust valuation performance despite market headwinds 2022 2021 31 Dec 31 Dec  Industrial & Logistics: market Total 2022 2021 yields increased but value losses £m Profit/(loss) Revaluation Total value value Portfolio Portfolio largely offset by rising rental values on sale(1) gains/(losses)(2) gain

  11. Slide 11: Significant latent value in portfolio

    Significant latent value in portfolio Natural Resources Industrial & logistics Agriculture & other Strategic land: residential Residential £51m | 23,200 plots Industrial Investment Portfolio Residential £281m | 4.0m sq. ft & logistics (£/plot) (£/sq. ft) Investment Income Portfolio £70 generation 42

  12. Slide 12: £275m of cumulative value gains over the past five years

    £275m of cumulative value gains over the past five years Cumulative value gains (£m) 110.3 (113.2) 53 107.5 Closing valuation: £736.8m 45.5 32.9 (23.2) Starting valuation: 11.1 £462.9m 40.8 10.5 H1 18 H2 18 H1 19 H2 19 H1 20 H2 20 H1 21 H2 21 H1 22 H2 22 Average annual Total Return of 9.8% over five

  13. Slide 13: Net debt of £48.4m with £175.6m cash & debt headroom

    Net debt of £48.4m with £175.6m cash & debt headroom Net debt movement (£m) 27.5 (131.2) 4.0 17.7 6.0 RCF 13.4 (4.4) 1.2 Headroom 88.5 £164.0m RCF Headroom £116.0m Cash: 11.6m Cash: 12.0m 48.4 25.7 31 Dec 21 Development Acquisitions Profit excluding Investment in JVs Interest and Tax Dividends Cash

  14. Slide 14: Net loan to portfolio value remains low at 6.6%

    Net loan to portfolio value remains low at 6.6%  Net debt of £48.4m with a net LTV of 6.6% Gearing overview 31 Dec 2022 31 Dec 2021  Target year-end net loan to portfolio value of Net debt (£m) 48.4 25.7 <20% with a maximum of 25% in year  In March 2022, agreed a new senior debt Net loan to portf

  15. Slide 15: Operational Review

    Operational Review Lynda Shillaw Chief Executive

  16. Slide 16: Potential to deliver 35.0m sq. ft of space

    Industrial & logistics land portfolio Potential to deliver 35.0m sq. ft of space 2022 Highlights Main industrial & logistics sites (31 December 2022)  Acquisitions added 8.5m sq. ft to pipeline, including options on a site in Sold or developed / Estimated GDV Completion Name North Yorkshire (3.0m s

  17. Slide 17: Potential to deliver 29,311 homes

    Residential land portfolio Potential to deliver 29,311 homes 2022 Highlights Main residential sites (31 December 2022) Name Plots sold / consented or planned Completion date  Completed the sale of 2,236 plots (2021: 1,411 plots): pricing in-line with or ahead of Dec 2021 book values 1 Waverley 2,44

  18. Slide 18: Diversifying through mixed tenure

    Residential land portfolio Diversifying through mixed tenure Benefits for Harworth of mixed tenure delivery: Single-family BTR portfolio  Launched in May 2022: up to 1,200 Accelerates site development as can be delivered alongside  homes to be delivered across traditional housebuilder products Har

  19. Slide 19: Strong occupational market drives robust metrics

    Investment Portfolio Strong occupational market drives robust metrics Portfolio breakdown (31 Dec 2022) Key stats 31 Dec 2022 31 Dec 2021 Number of sites 19 18 Online retail Other Total area 4.0m sq. ft 3.7m sq. ft 1% 13% Automotive Annualised rent roll £19.7m £18.0m 6% Manufacturing 40% Gross yield

  20. Slide 20: Selected operational targets

    The Harworth Way Net Zero Carbon pathway 2022 2030 2040 Group targets Net Zero Carbon Net Zero Carbon for Net Zero Carbon pathway devised Scope 1, Scope 2 and for all emissions Scope 3 business travel emissions Selected operational targets 2022 2023 by 2025 by 2030 by 2040 All new commercial No new

  21. Slide 21: Energy & natural capital

    The Harworth Way Energy & natural capital  Natural Resources portfolio already includes sites used for a wide Energy/sustainability products currently being explored: range of energy production and extraction purposes  During the year, we devised an energy & natural capital strategy focusing on ho

  22. Slide 22: Outlook & conclusion

    Outlook & conclusion Market  Early signs of stability, but macroeconomic conditions remain uncertain: likely to remain so until interest rates reach their peak, and inflation falls back to manageable levels  Our focus market fundamentals remain intact: strong and diverse demand for products and co

  23. Slide 23: Harworth

    Harworth

  24. Slide 24: Disclaimer

    Disclaimer For the purpose of the following disclaimer, reference to this ‘presentation’ shall be deemed Actual results may differ materially from those expressed in forward-looking statements. As to include reference to the presentation slides, the presenters’ speeches, the question and such, you a

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