Harworth Group (HWG) has a complicated family background. It started life as UK Coal, the parent company of the UK's largest coal miner, before changing its name to Coalfield Resources and splitting its business into separate property and mining entities. Three-quarters of the property business, known as Harworth Estates Property Group, was gifted to the trustees of the mining-business pension fund. At the same time, in December 2012, the corporate umbrella relinquished all control of the mining assets.
However, in March this year the company was listed on the London Stock Exchange and changed its name again after agreeing terms with the pension fund to buy back the three-quarter stake in Harworth Estates that it didn’t already own. The result is a development company with 27,000 acres of land on around 200 sites. Reflecting the group's history, the business model revolves around the regeneration of former coalfield and other brownfield sites.
The half-year financials are confused by the restructuring process. A modest first-half profit of £1.1m was inflated by a £44.2m accounting gain relating to the acquisition of the remaining stake in Harworth Estates. More pertinently, there was also a valuation gain of £8.2m generated from progress on planning consents, with permission secured on 230 residential plots. The group obtained resolutions to grant consent on a further 970 plots, bringing the consented land bank up to 8,969 plots.
Planning consent has also been secured for a 165,000 sq ft commercial development near Barnsley. Construction of a pre-let commercial property started in April.
| HARWORTH GROUP (HWG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 11.6p | MARKET VALUE: | £340m | |
| TOUCH: | 11.3-12p | 12-MONTH HIGH: | 14p | LOW: 5p |
| DIVIDEND YIELD: | nil | DEVELOPMENT PROP: | nil | |
| PREMIUM TO NAV: | 24% | |||
| INVESTMENT PROP: | £308m | NET DEBT: | 11% | |
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | na | 3.2 | 0.5 | nil |
| 2015 | 9.4 | 51.3 | 2.7 | nil |
| % change | - | +1526 | +446 | - |
Ex-div:- Payment:- | ||||
