Harworth profits plummet in FY22 amid market downturn

Harworth, a leading regenerator of land and property for sustainable development and investment, has seen its operating profit plummet to £44.5m in FY22, down from £121.9m the prior year. The group blamed the decline on volatile market conditions over the period, adding that its markets have turned down materially since it last reported its results six months ago. In its latest update, it noted “how long this downturn will continue and what shape it will be is uncertain and dependent on events outside of our, and to a great extent the UK's, control”. Nonetheless, it continued to make “significant” operational progress during the year, delivering increased levels of direct development, accelerated land sales and targeted acquisitions in line with its strategy to become a £1bn business by 2027. Following a significant increase in valuations during the first half, it also saw market-driven outward yield shifts across its Investment Portfolio and more mature industrial and logistics development sites during the second half. Over the period, “robust” housebuilder demand and management actions drove significant growth in residential plot sales in line with, or ahead of, book value, with the potential to deliver a further 29,311 plots from pipeline. The group completed residential land sales representing 2,236 plots (2021: 1,411 plots) in total. Elsewhere, acquisitions further strengthened its pipeline, with several “significant” sites progressing through the planning system. Overall, acquisitions added 2,643 plots and 8.5m sq. ft to the pipeline. This included option agreements to deliver up to 3.0m sq. ft at a site in North Yorkshire, and up to 1.6m sq. ft adjacent to Junction 15 of the M1 in Northamptonshire. Harworth also secured planning permission for 248 residential units across four sites during the year, and for 278,000 sq. ft of industrial and logistics space after year-end across two sites. Lynda Shillaw, CEO of Harworth, said: "At this early stage in the year we remain cautious about the economic backdrop for 2023. While there have been some recent positive indicators, uncertainty is likely to remain in our markets until interest rates reach their peak, and inflation falls back to manageable levels, creating the conditions for growth and improved investor confidence.” “Against this backdrop, our focus markets of residential and industrial & logistics continue to be drivers of economic growth and have robust fundamentals, while there remains an acute shortage of high-quality consented land.” She added: "Harworth is a long-term through-the-cycle business, which means that we look through near-term market conditions. We control our landbank, where and when we invest, and have a highly experienced management team who are focused on execution. “We are confident that our strategy is the right one to deliver long-term value to stakeholders while progressing our Net Zero Carbon commitments, and our strong financial position, differentiated products, and the scale and mix of our portfolio, position us well to realise the full potential of our sites."

Harworth profits plummet in FY22 amid market downturn

It still continued to make ‘significant’ operational progress during the year, delivering increased levels of direct development, accelerated land sales and targeted acquisitions

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