Planning delays amid changes in the political persuasions of local councils in May held-back developments for brownfield regeneration specialist Harworth (HWG) last year, which meant lower valuation gains on its strategic land. The total return to shareholders almost halved to 7.8 per cent, despite the dividend being raised a tenth. However, chief executive Owen Michaelson, who also announced his intention to retire at the end of the year, said the election of a government majority should put plans back on track.
The group completed 11 strategic land purchases for £22.6m, providing the potential for the development of around 2,900 homes and over 1.25 m sq/ft of commercial space. Mr Michaelson said the group would be taking stock over the next two-three months in light of the economic fallout of Covid-19, but said that it was “well-placed to pick-up opportunities” that may come to the market at distressed prices. Indeed, the net debt-to-portfolio ratio was just 12.1 per cent.
Analysts at house broker Peel Hunt forecast an adjusted NAV of 165p a share at the December 2020 financial year end, rising to 178p the same time the following year.
| HARWORTH (HWG) | ||||
| ORD PRICE: | 95p | MARKET VALUE: | £ 306m | |
| TOUCH: | 90-95.6p | 12-MONTH HIGH: | 160p | LOW: 95p |
| DIVIDEND YIELD: | 1.1% | TRADING PROP: | £11.3m | |
| DISCOUNT TO NAV: | 34% | |||
| INVESTMENT PROP: | £326m* | NET DEBT: | 15% | |
| Year to 31 Dec | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 103 | 77.6 | 3.1 | 0.51 |
| 2016 | 115 | 43.5 | 13.7 | 0.753 |
| 2017 | 127 | 41.8 | 15.8 | 0.828 |
| 2018 | 138 | 32.8 | 10.6 | 0.911 |
| 2019 | 144 | 30.3 | 7.9 | 1 |
| % change | +5 | -8 | -25 | +10 |
| Ex-div: | 30 Apr | |||
| Payment: | 29 May | |||
| *Includes investments in joint ventures | ||||
