Harworth's Northern strengths stand it in good stead

The ​Rotherham-based ​​c​ompany made six acquisitions in 2016 including the 50 per cent purchase of the investment vehicle that owns Gateway 45, Leeds’ largest live commercial development.

The group said regional markets have benefited from Government support and infrastructure investment and have not seen the volatility experienced in the London and South East property markets.

Harworth’s ​c​hief ​e​xecutive, Owen ​​Michaelson, said:​ “There are a number of developments that have been funded by Government initiatives in our core markets of Yorkshire, the Midlands and the North West. We are seeing the benefits of that.

​“Housing is very affordable in our areas, We are looking at families that are buying houses worth £200,000 or upwards of that. It’s their second or third home purchase.”

​The group reported ​ double-digit net asset value (NAV) growth of 12.5 per cent in the year to December 31 with a NAV of £334.9m at the year end.

Operating profit jumped from £37.9m to £45.8m.

“This is a strong financial performance,” said Mr ​Michaelson.

“We have a sound strategy, a supportive market and confidence in the future. We have a very experienced team and we will look at further recruitment this year.”

Chairman Jonson Cox added: “We have delivered another year of strong growth, despite the political events that overshadowed the property industry in 2016.”

The board is recommending a final dividend of 0.523p per share to give a total dividend of 0.753p per share for the year, a 10 per cent increase on last year’s annualised dividend.

“We said we’d grow the dividend in line with the business,” said Mr ​Michaelson.

“We are targeting to grow the business by double digits year on year.”

The group said that Gateway 45, a 2.5 million sq ft logistics development, is now open for business.

“To generate similar returns in the future, we are continuing to prioritise capital investment on our sites with the largest value enhancement potential, including the Advanced Manufacturing Park in Rotherham, Logistics North in Bolton and Gateway 45 in Leeds, to ensure that both land and property is available for immediate occupation,” said Mr ​Michaelson.

Analyst Daniel Cowan at Investec said: “Harworth’s strong 2016 results illustrate further how management continues to deliver on a well-defined strategy. In residential, the group sold 619 plots. Outline planning was granted for 1,560 plots with a further 1,200 plots submitted during the year. Overall, 9,529 plots have consent with 8,000 in the pipeline. In commercial, the highlight was the sale of 43.7 acres at Logistics North to Lidl for £22.5m.”

Analyst Chris Spearing at Canaccord said: ”The shares are up 13 per cent year to date, outperforming the UK property sector by 12 per cent.

Whilst Harworth is trading in line with peers the business significantly outperformed the wider UK commercial property market in 2016, with a capital return of circa 12 per cent.

“Harworth looks well placed to continue to outperform over the next 12 months.”