Harworth Group Plc · LSE:HWG
Harworth — H1 2024 Earnings Presentation
33 slides from Harworth's earnings presentation, Sep 12, 2024
Slide 1: Half Year Results
Half Year Results 12 September 2024 Harworth Group plc | H1 2024 Results
Slide 2: Agenda
Agenda 1. Highlights & Strategic update 2. Portfolio overview 3. Financial performance 4. Outlook 5. Q&A Harworth Group plc | H1 2024 Results 2
Slide 3: Highlights & Strategic update
Highlights & Strategic update Lynda Shillaw, Chief Executive Harworth Group plc | H1 2024 Results
Slide 4: Highlights
Highlights Consistent returns, progress on planning, strong sales volumes and low levels of debt maintained EPRA NDV per share Total return Net loan to portfolio value (LTV) 212.3p 4.0% 9.8% +3.5% (Dec 2023: 205.1p) (H1 2023: 0.1%) (Dec 2023: 4.7%) Skelton Grange conditional land sale Operating prof
Slide 5: Operational progress
Operational progress Continue to deliver growth and well positioned for expansion of Industrial and Logistics portfolio Management actions drive enhanced value gains Strong sales volumes provide funding Value gains achieved across the Completed, exchanged, or Driven by continued Serviced land sales
Slide 6: Track record of strong returns
Track record of strong returns Harworth consistently delivers market leading returns and outperforms the sector H1 2024 Total Return Cumulative performance (%) Harworth: +4.0% 45 5 year growth 40 strategy launched during in 2021 35 30 25 20 15 10 5 0 -5 2019 2020 2021 2022 2023 Harworth Total Accoun
Slide 7: Strategy evolution
Strategy evolution Remain on track to deliver targets announced in 2021 with the strategy evolving to focus on growth in the income generating Industrial & Logistics portfolio 2024 progress(1) 2027 target Strategy evolution Optimised growth strategy 0.1 million sq. ft. complete and pre- 0.8 million
Slide 8: Portfolio overview
Portfolio overview Lynda Shillaw, Chief Executive Harworth Group plc | H1 2024 Results
Slide 9: Land and Property Portfolio
Land and Property Portfolio Significant embedded value still to be unlocked from the high quality extensive landbank, capable of delivering 38.8 million sq. ft. of Industrial & Logistics space plus 26,639 Residential plots INDUSTRIAL & LOGISTICS(2) RESIDENTIAL £285.7 million | 38.8m sq. ft. £275.9 m
Slide 10: Strategic Land
Strategic Land The strategic landbank enables the business to scale and creates value through planning success 1. Pre-Planning 2. Draft Allocation Industrial & logistics strategic land valuation (£m) 13.8m sq ft 18.8 123.6 4.5m sq ft 13,775 plots 3. Allocation 105.9 0.4 0.4 (1.9) 2,275 plots Achievi
Slide 11: Major Developments
Major Developments Focused on infrastructure investment to create serviced land and enable direct development of Grade A space to be retained for investment purposes Industrial & Logistics major developments valuation (£m) 18.7 1.0 1.9 6.5 162.1 136.0 Land sales provide funding for direct developmen
Slide 12: Momentum in Industrial & Logistics pipeline
Momentum in Industrial & Logistics pipeline Supporting Investment Portfolio growth to £0.9bn by 2029 • Significant planning progress year to date with planning achieved for 3.3 million sq. ft. alongside allocations or draft allocations for 5.7m sq. ft. • Expect Industrial & Logistics land and proper
Slide 13: Investment Portfolio
Investment Portfolio Targeting a £0.9 billion Investment Portfolio by the end of 2029 through increased direct development and selective acquisitions, with growth accelerating from 2026 Sector breakdown Strategy evolution to grow Investment Portfolio Other • On track to meet 2027 target of 100% Grad
Slide 14: Financial performance
Financial performance Kitty Patmore, Chief Financial Officer Harworth Group plc | H1 2024 Results
Slide 15: P&L
P&L Revenue increases with income from serviced land sales, contracted rent and build-to-suit income Income statement (£m) H1 2024 H1 2023 FY 2023 • Total Property Sales of £41.7m driven by residential serviced H1 24: Increased due to land sales Revenue 41.3 18.2 72.4 higher salary expenses from the
Slide 16: Balance Sheet
Balance Sheet EPRA NDV continues to increase following growth in property portfolio valuations • 3.5% increase in EPRA NDV to Balance sheet (£m) 30 Jun 2024 30 Jun 2023 31 Dec 2023 £687.0m, on track to reach the £1bn target by the end of 2027 Property portfolio(1) 772.5 700.3 734.8 H1 24: Increase d
Slide 17: Funding and liquidity
Funding and liquidity Net loan to value of 9.8%, within target levels and major facilities in place until 2027 Debt facility metrics 30 June 2024 30 June 2023 31 Dec 2023 Net debt (£m) 80.5 63.7 36.4 Weighted average cost of debt 6.9% 6.2% 6.9% Well within target of having a year-end net loan to por
Slide 18: Debt
Debt Significant debt and cash headroom in place to deliver growth strategy Net debt movement (£m) RCF Headroom RCF Headroom 145.0m 165.0m 22.1m (29.2m) 0.2m 3.3m 9.5m 2.2m 1.2m 32.1m 2.6m Cash, 9.2m Cash, 27.2m 80.5m 36.4m 31 Dec 2023 Development Acquisitions Loss excluding Interest and Investment
Slide 19: Outlook
Outlook Lynda Shillaw, Chief Executive Harworth Group plc | H1 2024 Results
Slide 20: Road map to £1 billion EPRA NDV
Road map to £1 billion EPRA NDV The path to £1 billion, and scaling beyond that, remains aligned to delivery of the strategic pillars Growth achieved: +33% in 3.5 years Since H2 2020, in an unstable economic environment £1 billion Growth targeted: +46% in the next 3.5 years to reach £1 billion EPRA
Slide 21: Summary and outlook
Summary and outlook On track to meet all strategic targets and well positioned for expansion in Industrial & Logistics Outlook Self-propelled growth strategy underpinned by our • Stability of Government with a focus on growth, housing delivery and strategic landbank and the skills or our people supp
Slide 22: Q&A
Q&A Harworth Group plc | H1 2024 Results
Slide 23: Appendices
Appendices Harworth Group plc | H1 2024 Results
Slide 24: Financial track record
Financial track record Income H1 2024 2023 2022 2021 2020 2019 Revenue (£m) 41.3 72.4 166.7 109.9 70.0 85.5 Gross profit (£m) 7.2 12.4 83.4 48.7 10.6 27.9 Operating profit (£m) 21.1 54.2 44.5 121.9 27.8 24.3 Dividend per share (p) 0.5 1.5 1.3 1.1 1.8(1) 0.3 Total Return (%) 4.0 5.1 0.1 24.6 3.0 7.8
Slide 25: Operational track record
Operational track record Capital growth H1 2024 2023 2022 2021 2020 2019 Residential plots sold 357 1,170 2,236 1,411 873 1,379 Direct development completed (m sq. ft) 0.0 0.2 0.4 0.1 - - 30 June 2024 31 Dec 2023 31 Dec 2022 31 Dec 2021 31 Dec 2020 31 Dec 2019 Industrial & logistics pipeline (m sq.
Slide 26: Industrial & Logistics opportunity
Industrial & Logistics opportunity Take up was up 54% Exploring the expansion into Industrial & Logistics in our regions on H1 2023 whilst availability fell 12% QoQ and prime rents increased QoQ by 2.4%(1) Markets(2) Pipeline North West Occupier take up in Q2 2024 hit highest level 8.1 million sq. f
Slide 27: Proven Business Model
Proven Business Model Transforming land and property into sustainable places where people want to live and work and consistently delivering market leading returns through the cycle Asset management Placemaking Direct development or plot sale Land remediation and infrastructure Planning approval deve
Slide 28: Sustainability
Sustainability The Harworth Way framework covers Planet, Communities and People and ensures sustainability principles are embedded across culture, strategy and the approach to development Reduction in Harworth’s operational carbon emissions(1) -24% Potential GVA to regional economies from Harworth’s
Slide 29: Top Industrial & Logistics sites
Top 10 Industrial & Logistics sites Total Sold or developed / development at Estimated GDV Forecast Name Region Location Planning or development phase consented / non- completion potential completion date consented (sq. ft.) (sq. ft.) 0.0m / 1.1m / 0.3m Skelton Yorkshire & Central Leeds, West Yorksh
Slide 30: Top Residential sites
Top 10 Residential sites Total Planning or development Sold / consented / development at Forecast completion Name Region Location phase non-consented (plots) completion date (plots) Remediation & Servicing Waverley Yorkshire & Central Rotherham, South Yorkshire 2,578 / 415 / 0 2,993 2025 Plot Sales
Slide 31: Valuation and ownership structure
Valuation and ownership structure Industrial & Logistics Development Classification Sq. ft Average value Ownership Stage Non-consented 30.7m £7 / Sq ft 47% 53% Strategic Land Consented 2.1m £15 / Sq ft 91% 9% Major Developments Consented 5.9m £30 / Sq ft 100% Non-A Portfolio(1) 1.6m £66 / Sq ft 100%
Slide 32: 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
Slide 33: Harworth Group plc
Harworth Group plc Head Office Birmingham Manchester Leeds Advantage House Waterloo House 6th Floor, Trinity 3rd Floor Poplar Way 20 Waterloo Street 16 John Dalton Street Nine Bond Court Rotherham Birmingham Manchester Leeds S60 5TR B2 5TB M2 6HY LS1 2JZ www.harworthgroup.com Harworth Group plc | H1