Harworth Group H1 2025 Earnings Report

Harworth Group EPS Results

• Actual EPS: GBX 3
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Harworth Group Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Harworth Group Announcement Details

• Quarter: H1 2025
• Date: 9/16/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, September 16, 2025
• Conference Call Time: 4:30AM ET

Harworth Group (LON:HWG) is a leading sustainable regenerator of land and property for development and investment which owns, develops and manages a portfolio of over 14,000 acres of land on around 100 sites located throughout the North of England and Midlands. The Group specialises in the regeneration of large, complex sites, in particular former industrial sites, into new residential and industrial & logistics developments. Visit www.harworthgroup.com for further information.

Harworth Group H1 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Harworth’s industrial and logistics assets delivered an 8% property return in H1 2025, underpinning the group’s portfolio performance and future growth prospects.
• Positive Sentiment: The business achieved a 53% growth in gross assets to £945 million since end-2020, reflecting strong operational momentum and strategic landbank deployment.
• Positive Sentiment: EPRA NDV rose by 0.8% to £725 million in H1 2025, up 41% since 2020, keeping Harworth on track towards its £1 billion EPRA NDV target by end-2027.
• Negative Sentiment: Residential land and development sites saw a -5% property return in the period, driven by cost inflation and one-off site-specific infrastructure expenses.
• Neutral Sentiment: Net debt increased to £179.4 million at June 2025, with a loan-to-value of 19%, and is expected to fall to between 10% and 15% by year-end as sales proceeds materialize.

Presentation

[Lynda Shillaw, CEO at Harworth Group plc]

Okay, good morning everyone, and welcome to Harworth's 2025 half-year results presentation. We're delighted you could join us today, and I'm delighted that Kitty is back from maternity leave and here with me. Between us, we're going to present the results over the next 25 minutes or so, and then we'll open the floor to questions. We're going to take questions from everybody in the room here first, but for those joining online, please submit your questions, and we'll do our best to answer as many as possible. Turning to the highlights, I'm pleased with the progress that the business has made during the first half of the year. There's a lot going on across our portfolio, and we are continuing to make good, solid progress against our strategic objectives.

[Lynda Shillaw, CEO at Harworth Group plc]

The market backdrop remains tricky as businesses navigate through the impact of last October's budget and the market view on the economy, with any expected early improvement not quite there yet. That said, for Harworth, we're a through-the-cycle business with a clear strategy, strong execution, and our core sectors of industrial logistics and residential remain in structural undersupply, and we have a strong land bank to deliver into these markets. Through the year, we've been utilizing our balance sheet and investing across our sites to support both sales and future development. Strong operational momentum underpins progress against our strategy and has delivered solid growth at a gross assets level. Our industrial and logistics assets have performed well and are the main drivers of value at a portfolio level, delivering an 8% property return and are a key driver of future growth.

[Lynda Shillaw, CEO at Harworth Group plc]

Residential assets were stable at a headline level, though with some mixed valuation outcomes in this period, and this has impacted our total accounting return, which remains positive and moving us forwards towards our £1 billion of EPRA NDV target. Kitty will cover this in more detail as we move through the presentation. All of this is reflected in strong organic growth that we've driven at a gross asset level, up 53% to just shy of £945 million since the end of 2020. In the same period, we sold £607 million of land and property assets, reinvesting the capital whilst managing our leverage at one of the lowest levels in the sector. Our EPRA NDV is up by 41% to £725 million in the same period, consistently growing year on year through the volatile markets of, in particular, the last three years.

[Lynda Shillaw, CEO at Harworth Group plc]

For half one 2025, we've delivered a total accounting return of 1.1%. In the first half of 2025, we've invested just under £55 million in our industrial and logistics sites. £32.3 million was spent on development, largely infrastructure works across a range of sites, from moving the ASICs and starting enabling works at Wingates, which some of you will remember from the site tour in the summer, to completing the development platforms at Chatterley and building at Droitwich. Of course, we're making good progress enabling the Skelton Grange site for Microsoft. In the period, we've completed an 80,000 square foot development at the Advanced Manufacturing Park, which was pre-let to Technicut, and this asset has now transferred into our investment portfolio. Post-period end, we reached practical completion on a 169,000 square foot building at Droitwich.

[Lynda Shillaw, CEO at Harworth Group plc]

At Waverley, we also completed one of the final pieces of community infrastructure, opening our Olive Lane development, which provides a high street and community and health centers for the residents, students, and businesses across the site. At the end of quarter one, we invested £22.5 million in land assembly, including buying our JV partner's share of Gateway 45 for £20 million. Gateway 45 is adjacent to our Skelton Grange site on the edge of Leeds, and probably one of the best sites in West Yorkshire. It has outline planning consent for 800,000 square feet, with excellent offsite infrastructure already in place. A major win after four years of engagement with local and central government was the lifting of the high-speed T safeguarding in the summer, which now releases this site fully for development. We continue to progress a substantial volume of industrial and logistics product through the planning process.

[Lynda Shillaw, CEO at Harworth Group plc]

In half one 2025, we submitted applications for 4.9 million square feet, with our Northern Gateway joint venture and Junction 15 sites making up the bulk of this volume. 71% of our 34.6 million square foot pipeline now has planning consent or is in the planning process. Since period end, we've submitted further planning applications at Dysworth in the Midlands and Gonnerby Moor on the A1, which will unlock volume in our medium-term pipeline. At half year, 8.7 million of our industrial and logistics pipeline had a planning consent, and we were active across 66% of this part of the pipeline. As in 2024, we've continued to invest in enabling works to de-risk the site through delivery through H1 2025 and to make our sites as liquid as possible.

[Lynda Shillaw, CEO at Harworth Group plc]

These are crucial years in the delivery of our strategy as we create capacity from our consented land to deliver at scale into our regional markets. We're focused on putting the business in the best possible position to capitalize on opportunities as we continue to de-risk sites through planning and investment. At the period end, we progressed a sizable pipeline with 2.4 million square feet of enabling works completed at sites such as Chatterley Valley near Stoke, Gateway 36 at Barnsley, and the Advanced Manufacturing Park in Rotherham.

[Lynda Shillaw, CEO at Harworth Group plc]

We're currently on site with a further 3.3 million square feet at sites such as Gascoyne Wood, Wingates, and Skelton Grange in Leeds, where we're delivering both the second phase of serviced land to enable the remaining payment from Microsoft at £53.5 million, which is targeted for the end of 2026, but also the remaining 300,000 square feet of pipeline from the Harworth land. We remain on track to transform our investment portfolio to 100% Grade A by the end of 2027. At H1, 66% of assets by value are Grade A, up from 18% at the end of 2020. In the period, we've transferred over 80,000 square feet Grade A asset at the AMP into the portfolio, with a further 169,000 square feet from the Droitbridge development reaching completion post-period end.

[Lynda Shillaw, CEO at Harworth Group plc]

We continue to recycle capital by selling secondary assets, having sold 434,000 square feet in the year to date across two assets. Taking the post-period end activity into account, this will give us a pro forma of 71% of assets by value being Grade A and 58% by area. The eagle-eyed of you amongst you in the room will have noticed that the pro forma value number in the pack is different to that that's on the screen, but the percentages are correct. With that, I'll now hand over to Kitty. Thank you.

[Kitty Patmore, CFO at Harworth Group plc]

Thank you, Lynda, and good morning everyone. It's great to be back in the room and to see you all again. I seem to have been gifted some bugs from the back-to-school crew at home, so bear with me if I sneeze or cough or need a tissue or a drink. Let's get looking at the portfolio. Our overall portfolio was valued at £944 million as of 30th of June and is two-thirds weighted to industrial and logistics, including strategic land, major developments, and the investment portfolio. The industrial and logistics land bank, mostly through freehold land and options, has the potential to deliver 34.6 million square feet, and the residential land bank through freehold land and planning promotion agreements has the potential for over 31,000 plots.

[Kitty Patmore, CFO at Harworth Group plc]

Both plot numbers and square footage have increased since year end, as we aim to maintain our land bank duration, and all parts of the portfolio increased in value in the first half. These gains in value and scale reflect our active asset management and targeted acquisitions, resulting in a substantial portfolio with significant latent value. The investment portfolio was valued at £319 million and has performed well in the first half. Annualized headline rental income grew by 4.6% over the period. Leasing activity was 2% higher on a like-for-like basis, with renewals and rent reviews achieving on average a 16% uplift to previous passing rents. The investment portfolio is overall reversionary, with headline rental income 15% below year-end ERVs. As a proportion of Grade A assets increases, the rental tone has strengthened further, with rent per square foot rising 6.3%.

[Kitty Patmore, CFO at Harworth Group plc]

Vacancy levels have reduced through successful lettings and changes in portfolio mix, and I'm delighted to say that since period end, we have let the final unit at Gateway 36. Including this and taking out secondary assets sold since June, this would reduce vacancy further to 3.1%. In transfers on the graph, we completed the building for Technicut at the AMP, which included the incorporation of renewable energy through an innovative green lease structure, and this transferred into the investment portfolio during the period. This portfolio continues to provide a steady rental stream, supporting our overheads and offering opportunities to add value, and it remains a vital cornerstone of our funding strategy. Now looking ahead, we will maintain disciplined asset management, developing new Grade A properties to hold while selectively selling assets, ensuring a high-quality and liquid portfolio.

[Kitty Patmore, CFO at Harworth Group plc]

Turning now to residential, we submitted planning applications for 1,200 plots during the period. This included 900 plots at Kevin Park near Wrexham, and we submitted 300 plots at our Colville site, leveraging our prior infrastructure investment to increase available plots. Combined with applications made in 2024, we now have over 3,000 residential plots progressing through the planning system. The portfolio comprises over 31,000 plots, and alongside our freehold ownerships, we continue to add different structures, such as delivery partnerships and capital-light structures. Most recently, we've conditionally exchanged on a new strategic partnership with the Church Commissioners for England, where the joint venture will deliver a significant mixed-use development of 1.2 million square feet of employment space and around 1,500 residential plots. Importantly, 44% of the residential pipeline is either consented or actively moving through planning, an essential step in value creation and building a strong serviced land pipeline.

[Kitty Patmore, CFO at Harworth Group plc]

Following planning consent, residential land is serviced in phases to meet demand from house builders and mixed-tenure developers. Currently, 69% of land with planning consent has enabling works underway on site as part of our phased delivery. We've seen solid demand for land in the first half of the year. We sold 649 plots in half one, a mixture of planning promotion agreements and freehold land sales, and since period end, a further 146 plots have completed. We also have around 1,500 plots conditionally exchanged and in legal process for sale in the second half, and once these complete, we're on track to exceed our 2,000 plot sales target for the year. Alongside house builder sales, we remain active with our mixed-tenure proposition.

[Kitty Patmore, CFO at Harworth Group plc]

So far this year, we've reached practical completion on our first phase of affordable housing at Great Places, with homes now occupied, and we're active on delivering on two further sites. Accelerating residential sales supports our capital efficiency by recycling funds from mature sites into early-stage residential and industrial logistics developments. All our schemes have placemaking initiatives, and we've continued to be active throughout 2025, including achieving practical completion of two forest schools on our Thoresby Vale and Colville sites, opening in time for the new school year. Turning now to the financial performance of the group. Our key financial metric is EPRA NDV, which reflects our net assets adjusted to show the current value of our property portfolio as at June 30.

[Kitty Patmore, CFO at Harworth Group plc]

This value is independently assessed every six months and reported in our accounts, and in the first half of 2025, our EPRA NDV increased by 0.8% to £725 million. Growth was driven by rental income, fees, and development management revenue, which is included under net revenue on this slide, as well as valuation gains from management actions focused on maximizing the potential of our development sites. These gains were partially offset by operating costs, interest, and dividends, and this steady progress in NDV moves us closer to the £1 billion target for the end of 2027. Turning to the detail of value gains, the main component of the valuation movements, our industrial and logistics portfolio delivered a strong performance. Value gains reflecting a property return of 5% were driven by management actions in strategic land and major developments.

[Kitty Patmore, CFO at Harworth Group plc]

For example, at Wingates, heavy investment in servicing land combined with rising rents in the northwest market contributed to these gains, and at Droitwich, we were on site close to completing our Grade A building, all contributing to an 8% return in the land part of the portfolio. This moves us closer to our target of delivering 4 million square feet of built space or serviced land sales by 2027. Additionally, our investment portfolio saw value gains of 1.6% in the first half, supported by active asset management, successful lettings, and a rental market providing growth. Combined with the rent yield from this part of the portfolio, it gives a total property return of around 4.1% for this part in the first half.

[Kitty Patmore, CFO at Harworth Group plc]

Turning to the residential portfolio, one of its key roles, especially for more mature sites, is to generate cash through land sales, which are then reinvested into the business for value creation. The residential value performance this half was mixed. Strategic land was flat as planning applications were put into the system. These remain at the beginning of their planning journey and will generate value as approvals progress. In major developments, demand for serviced residential land remains strong, with 649 plots sold in period, and this was reflected in the headline valuations, which remained stable, with some sites increasing in value. We saw some rising delivery costs, some one-off, which led to a 3% reduction in valuation, and additionally, cost increases related to site-wide infrastructure works on prior sales reflected in losses on sale contributed to an overall -5% property return on residential land and development sites.

[Kitty Patmore, CFO at Harworth Group plc]

These cost increases were concentrated in two particular areas. Broadly, one-third was cost inflation in horizontal costs and professional fees, with two-thirds site-specific one-off costs that we do not expect to be repeated. Looking ahead, demand remains healthy, and we are optimistic about exceeding our 2,000 plot sales target for the year. Overall, the portfolio achieved value gains of £15.5 million in the first half, and this represents 2% growth across the entire portfolio. Activity across our industrial and logistics assets was the main driver of these gains, outperforming the market. Residential valuations were stable, impacted by some cost increases focused on a small number of sites. With a loan-to-value at 19% at half year, this remains within our longstanding guardrails of a maximum of 25% mid-year and a maximum of 20% at year-end.

[Kitty Patmore, CFO at Harworth Group plc]

Our net debt increased from £46.7 million at the end of 2024 to £179.4 million at June 2025. As Lynda's spoken about, the increase was mainly driven by development spend, as we progressed works on our sites to create value ahead of year-end sales. This year, the weather was particularly good for enabling works, even in the north, and we were able to move sites forward at speed. Additional factors include payment of tax following sales at the end of last year, and these increases were partly offset by proceeds of sale received during the period. As we entered the second half, we have £59.8 million in cash and available revolving credit facilities, which we've maintained over the summer, with development spend funded by sales proceeds.

[Kitty Patmore, CFO at Harworth Group plc]

Looking forward to year-end, with strong visibility on land and property sales, which is expected to reduce loan-to-value from the current 19% down to a range of between 10% and 15%. We will continue investing in our sites and making selective land assembly acquisitions in half two. Rent and fee income is expected to broadly cover our operating costs, and proceeds from serviced land and property sales, along with deferred consideration from prior sales, will generate a positive cash flow in the second half. This will come together to reduce net debt. This cash flow pattern I've spoken about before, which reflects our normal seasonal cycle, with higher facility drawdowns mid-year to fund site investments, balanced by repayments from property sales at year-end. This approach ensures we maintain financial flexibility to support growth going forwards. Our portfolio is entering an exciting new phase where site delivery is really now accelerating.

[Kitty Patmore, CFO at Harworth Group plc]

We remain committed to building strong partnerships, developing our substantial pipeline, and using capital efficiently to drive growth. We announced yesterday that I'll be expanding my role, and I'm excited to be leading our strategic and funding partnerships, refining our capital allocation, and aligning with our sustainability priorities, all key pillars for this next stage of growth. I'll now hand you back over to Lynda to take you through the outlook and the roadmap to reach £1 billion EPRA NDV.

[Lynda Shillaw, CEO at Harworth Group plc]

Thanks, Kitty. We're both going to have this cold by the end of this week. We've successfully grown our industrial and logistics land bank, progressing sites through planning and into delivery. We're investing to create a scalable platform, a deliverable pipeline, and a strong ability to respond to market opportunities. The growth in our plan accelerates in the latter years, as having invested significantly in enabling works in 2024 and 2025, we intend to deliver around 4 million square foot of capacity into the market as we go through the period 2025 to 2027. This will be delivered through a mix of build to hold, build to suit, forward funding, and service land sales. While this part of the portfolio is in delivery, we continue to invest in around 5 million square foot of enabling works to unlock significant development capacity in the coming years.

[Lynda Shillaw, CEO at Harworth Group plc]

The graphic, which may be familiar to those of you who saw our year-end results presentation, reminds you of the volume of enabling works and service land and development that we're targeting by the end of 2027. We're making really good progress, and as I've already mentioned, we've completed 2.4 million square foot of enabling works and are on site with a further 3.3 million square foot. This demonstrates that we're making good headway in creating the development pipeline to deliver our strategic objectives. In the year to date, we've completed the first two build-to-hold assets, which are now in the investment portfolio, illustrated by that tiny orange bar in the bottom right-hand corner. Over time, you'll see the bars on the right-hand side of the graphic fill up to reflect the progress as we accelerate through the next couple of years.

[Lynda Shillaw, CEO at Harworth Group plc]

We remain focused on scaling the business and investing to progress towards our billion EPRA NDV target. Since the end of 2020, we've delivered cumulative growth of 40.5%, which equates to a compound annual growth rate of around 7.7%. The chart illustrates the key elements driving us to a billion. Having built a deliverable pipeline, we have a line of sight on what we need to do to get there. There's no silver bullet. We continue to invest the cash that we generate to drive the land bank forward. It's a mix of these components and our ability to flex and respond to market conditions and pivot into opportunities that will deliver sustainable growth and value creation. In summary, we've opened up the next generation of sites in our portfolio, and we've built a scalable platform that supports value growth across all areas.

[Lynda Shillaw, CEO at Harworth Group plc]

Our land bank is one of our superpowers. We have sites with planning consents in strong locations across the regions that can deliver at scale. We continue to invest through the cycle to make our sites liquid, putting us in a strong position to both deliver capacity into the market as it improves and capitalize on emerging sectors. Our specialist skill set spans a number of these core growth sectors, and we have a strong track record of delivery. We have clear visibility of the pipeline opportunity presented by our sites, and we have confidence in delivering our strategic targets. Our long-term through-the-cycle business model means that we navigate short-term uncertainties and remain focused on creating long-term value for our shareholders. With that, I'd like to thank you for your continued support and attention, and we look forward to answering your questions. Thank you for listening.

[Bjorn Zietsman, Equity Research at Panmure Liberum Limited]

Hi, Bjorn Ziesman from Panama Liberum. Just a quick question on residential profit margins. You've mentioned the one-third, two-third split that you expect two-thirds are unrepeatable. On the one-third, do you expect any profit margin pressure on residential sites relative to where they were two years ago as a result of professional fees and other fees rising?

[Kitty Patmore, CFO at Harworth Group plc]

I think we've sort of seen those increases that have come through to half year, and it's important to think about the way that the valuations are put together. They're all independently done at the half year, and part of that involves a third-party view on the cost plans to deliver the sites. That's not just the costs as at now. What we do is project forward all of the remaining costs for the sites going forward. In effect, if you see inflation now, it's then applied across everything that's to come. I think it feels like inflation has been slowing this year. We still think there's probably maybe a little bit more to come in the second half, but at a more muted level than we've seen in previous periods. That's something that we bear in mind. In the numbers that we present today, we've taken a good chunk of that in.

[Lynda Shillaw, CEO at Harworth Group plc]

Labor cost inflation is probably something that everybody's watching in terms of as we go through the second half and into next year as well.

[Bjorn Zietsman, Equity Research at Panmure Liberum Limited]

Just a follow-on question, if I may, on the industrial and logistics demand and how that mix is shifting. Are you seeing more demand from manufacturing versus logistics, for example, and how is that progressing?

[Lynda Shillaw, CEO at Harworth Group plc]

The honest answer is we've always seen a mix. We've got a pretty heavy chunk of our investment portfolio and what we build is actually built for manufacturing. I think we've, in the trading statements in August, talked about having a line of sight on about 1.2 million square foot of demand. Some of that is Gateway 36, which was one of those things in the mix. That spans pre-lets and actually service land sales. It is pretty much a range of sectors, from 3PLs through to manufacturing. You're starting to see, certainly in the regions that we operate in, an awful lot of noise around defense, but also around power, power, mini-nuclear and actually where that will be manufactured. You're starting to see that manufacturing momentum start to rumble in terms of probably what's going to come forward over the next five years or so.

[Bjorn Zietsman, Equity Research at Panmure Liberum Limited]

Thank you.

[Colin Sheridan, Equity Analyst at Davy]

Thanks. Colin Jarden at Davey. Just a couple for me, if I can, maybe following up on the cost question first. Maybe just give us a little bit of a flavor of what those one-offs are, maybe a couple of anecdotes, if that's okay, just to give a feel for what they actually are. I guess what I'm trying to get a feel for really is, are these costs that are ultimately going to be paid by Harworth at some point in time, or are these costs that are a bit more downstream, let's say on the home builder side that are being put into the underwrite effectively by home builders in the future at some point in time? If you're seeing much of that separately. I guess on industrial and logistics, I guess a lot of talk about data centers, AI growth zones, things like that.

[Colin Sheridan, Equity Analyst at Davy]

I wonder maybe a quick comment on where your thoughts are at the moment on how that overlaps with the industrial and logistics portfolio in terms of opportunities.

[Kitty Patmore, CFO at Harworth Group plc]

Okay, super. Shall I say the first bit?

[Lynda Shillaw, CEO at Harworth Group plc]

You do the first bit.

[Kitty Patmore, CFO at Harworth Group plc]

I'll do the second. Within the one-off sort of costs, they probably fall into two different buckets. The first one we've seen just on two or three sites, some increased costs around some really specific pieces of infrastructure. An example would be around adopting drainage at Waverley, for example. Some of that drainage was put in place a while ago, and the costs of adopting that drainage now to a slightly higher standard are feeding through at a higher level than we originally anticipated when we sold the plots that were associated with that drainage. The second area is actually around acceleration on some of the sites. We've got planning in for additional units at both Colville and Ironbridge at the moment.

[Kitty Patmore, CFO at Harworth Group plc]

That happens because we get an initial planning approval, we work through the sites, we start to deliver it, and then we start to eye up how we might be able to get some more plots on site, whether that's on adjoining land at Ironbridge or within changing some of those allocations around. A quirk of the valuations as we move forward is that we've taken an additional cost at the half year associated with a higher risk with those units, and then associated with sale and Section 106 payments, which certainly at Ironbridge are still subject to viability tests later in the scheme. Those are absolutely the right things to be doing for the business.

[Kitty Patmore, CFO at Harworth Group plc]

Even though there are increased costs associated with that within the cost plans, putting additional plots on those sites is going to drive long-term value, and we would expect to see that come forward in the future. I don't think so much the feature that we're seeing at the moment is additional costs feeding through from the house builders. It's something that we are alive to. I think it's probably because when we sell the service land, it is serviced to a particular point. All of the costs of doing that are factored into our plans going forward, but absolutely remains something that we're alive to.

[Lynda Shillaw, CEO at Harworth Group plc]

Those serviced land valuations have been pretty stable, as we said in the presentation, actually. Picking up on your INL question and the data center AI growth zones, to be honest, power availability is the absolute key thing here. Whether it's all there at day one or can be underwritten and basically delivered over an acceptable period of time is really what will drive where data centers locate in the UK. I think we've said before when we've been asked questions about this, we continue to comb our portfolio and identify opportunities. We do believe we have sites that will actually deliver some capacity into the data center market. As I pulled out on the slide in terms of the market outlook, it's not just data centers now sitting alongside traditional INL.

[Lynda Shillaw, CEO at Harworth Group plc]

You've actually got the defense sector, which is expected to grow significantly over the next five to ten years. Infrastructure around power in particular, and things like food security, are all starting to feature in the market dynamics. You've got a fairly constrained supply of land coming through the planning system with a consent, a fairly constrained volume of sites that can actually deliver at scale, and a whole new group of emergent sectors that are basically going to feed into that demand.

[Colin Sheridan, Equity Analyst at Davy]

Thanks very much.

[Matthew Saperia, Real Estate Analyst at Peel Hunt]

Morning, it's Matt Saperia from Peel Hunt. Can I ask the question about the capital-light opportunities? Can you just talk us through, obviously, the one you've announced with the Church Commissioners for England, how the economics of that work, and how significant do you think this could be as a growth driver for the business going forwards?

[Kitty Patmore, CFO at Harworth Group plc]

Yeah, I suppose the Church Commissioners for England joint venture is sort of the second one in these sort of strategic partnerships that we've looked at, the first being one that we put in place back end of last year at Grimsby. The way that these have worked is a way of working with landowners who perhaps hold very big land banks but don't necessarily have the expertise to bring them forward through delivery of master planning, phased delivery, or the capital and balance sheet to bring them forward. It gives us the opportunity to work on some really amazing sites where effectively they bring the land, we bring our expertise and some of our balance sheet to deliver it, our expertise in bringing debt and other capital sources as well. There's a profit share as we work out the back end.

[Kitty Patmore, CFO at Harworth Group plc]

For us, it gives us the benefit we're not carrying the land all the way through that initial phase. We can come in, we can work through them relatively quickly, we can take a share of the profits and fees and upside for really being the ones to drive the scheme forwards. I think we see it in a particular part of the portfolio, Matt. It's not necessarily something that we'll pivot everything towards, but actually, we have the skill set in-house. It makes sense to leverage that and to use it across other sites. It's just a portion of the portfolio that will sit alongside our more normal acquisitions.

[Lynda Shillaw, CEO at Harworth Group plc]

It's fair to say it plays incredibly well into that master developer skill set because that really is what this is all about. We're a master developer, I would say par excellence, but also with a balance sheet that enables us to co-invest. You are going to see, I think, more different types of models actually emerge as landowners look to unlock some of their land bank opportunities. I think this has a really good place in it for us.

[Kitty Patmore, CFO at Harworth Group plc]

That was one on the end, I think.

[Sarim Chaudhry, VP at Jefferies]

Morning, Sarim Chaudhry from Jefferies. Just on the INL pipeline, on that 4 million square foot, how would you forecast, or I guess guide rather, on that 60% split between build to suit, forward funding, and serviced land? Is it a relatively even split or is there, I don't know, a greater focus on serviced land?

[Lynda Shillaw, CEO at Harworth Group plc]

It's probably going to be, it will be whatever drives the better returns. I mean, it's pretty brutal, I'm afraid. You know, the reality of it is, we know that we're targeting 40% of that to come into our investment portfolio as part of the transition to Grade A, but also the growth of it. That's, and you've seen sort of the first bit of that start to come in. The rest of it, one of the beauties of our portfolio is it is land, serviced land with planning consent that's sitting sort of in that £4 million bucket as we continue to work through these sites, which means we've got product that we can deploy into the market in a way that actually drives the best returns. We won't build it if it's not driving returns that we need.

[Lynda Shillaw, CEO at Harworth Group plc]

You've seen, as we sell sites like Amnesty, as we sell sites like Calling Me, do sites like the Microsoft deal. You sort of do those every day of the week if it was driving that level of returns because we can then redeploy really quickly into something else. It's probably pretty brutal, isn't it, from that perspective?

[Kitty Patmore, CFO at Harworth Group plc]

It absolutely is. I think the way sometimes I think about it is that 60% is all in effect forms of land sales. It's just sort of, you know, if you're selling sort of under a forward funding agreement or we're selling something to build a suit, there are additional revenue streams that we can, so additional layers of profit that we can take on it. It's a balance, isn't it, as Lynda says. If we're selling and we're taking that profit margin or development fee, that might make sense. Equally, a really stellar deal like a Microsoft deal, you're effectively getting that just within the service land sale as well. We'll always weigh up the opportunities, balance the risk across the portfolio, but it will be a combination of all three.

[Sarim Chaudhry, VP at Jefferies]

Thank you.

[Lynda Shillaw, CEO at Harworth Group plc]

They've got no questions online.

[Kitty Patmore, CFO at Harworth Group plc]

Great.

[Lynda Shillaw, CEO at Harworth Group plc]

Right, I think any more questions from the room? We're done, yeah? I think we're done. Thank you ever so much for your attention, everybody, and we'll see some of you as we go through the rest of the next couple of weeks. Thank you.

Participants

Executives

• Lynda Shillaw, CEO
• Kitty Patmore, CFO

Analysts

• Sarim Chaudhry, VP at Jefferies
• Matthew Saperia, Real Estate Analyst at Peel Hunt
• Bjorn Zietsman, Equity Research at Panmure Liberum Limited
• Colin Sheridan, Equity Analyst at Davy