Harworth (HWG) may be in the right place at the right time, but as chief executive Owen Michaelson pointed out, it’s taken a lot of hard work to get there. Essentially, Harworth develops brownfield sites for housing and commercial premises. Starting out with land once used as coal mines, around a quarter of the 21,000 acres land bank is not a colliery site, evidence of Harworth’s focus on acquiring additional brownfield sites.
By spending on the infrastructure required, it is successfully crystallising the latent value held within the portfolio, and in the year to December 2017 adjusted net asset value (NAV) grew by 12.5 per cent to 128.9p per share.
Demand for oven-ready sites for housing remained brisk, with 622 residential plots and over 850,000 sq ft of consented commercial space sold during the year, and over half of this year’s expected full-year sales have already been agreed. Applications within the planning system include 1,308 residential plots and 325,000 sq ft of commercial space, and these form part of a wider pipeline of applications over the next three years that will cover more than 4,500 residential plots and 5.9m sq ft of commercial space.
Analysts at Peel Hunt are forecasting adjusted NAV per share at the December 2018 year-end of 137.5p.
| HARWORTH (HWG) | ||||
| ORD PRICE: | 109.5p | MARKET VALUE: | £352m | |
| TOUCH: | 108-111p | 12-MONTH HIGH: | 115p | LOW: 91p |
| DIVIDEND YIELD: | 0.8% | TRADING PROPERTIES: | £7.7m | |
| DISCOUNT TO NAV: | 14% | NET DEBT: | 8% | |
| INVESTMENT PROPERTIES: | £235m* | |||
| Year to 31 Dec | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 10 | 3.5 | 0.6 | nil |
| 2015 | 103 | 77.6 | 3.1 | 0.51 |
| 2016 (restated) | 115 | 43.5 | 13.7 | 0.753 |
| 2017 | 127 | 41.8 | 15.8 | 0.828 |
| % change | +11 | -4 | +15 | +10 |
| Ex-div: | 3 May | |||
| Payment: | 1 Jun | |||
| *Includes joint ventures | ||||
