Harworth Group Reports Strong H1 2025 Results with EPRA NDV Growth and Strategic Acquisitions

Residential: demand holds for serviced land, but costs bite

Harworth sold 649 plots in H1, including 500 via Planning Promotion Agreements (PPAs) generating £4.0m of fees. Another 1,593 plots were conditionally exchanged or in legals at period-end. Management flags cost increases on certain mature residential sites impacting valuations and losses on sale (£6.3m overall), and expects a softer market potentially into 2026, pending clarity on the UK Budget and rate cuts.

Balance sheet: spending now to create saleable stock later

LTV rose to 19.0% as Harworth leaned into acquisitions and enabling works. Liquidity reduced to £59.8m, with a £240m RCF in place. The group plans to refinance its main RCF within six months and is reviewing interest-rate hedging (currently none on the RCF). Management guides to year-end LTV of 10%-15% as H2-weighted disposals and deferred consideration receipts come in.

NDV drivers and returns

EPRA NDV per share increased to 223.7p, with value gains of £15.5m comprising £21.7m of revaluation gains (largely I&L-driven) offset by £6.3m of losses on sale from higher site-wide costs on some mature residential developments. Total accounting return was 1.1% including 1.125p of dividends (period paid).

The land bank is the story

• I&L pipeline: 34.6m sq. ft (71% de-risked), up from 33.6m sq. ft at FY2024.
• Residential pipeline: 31,636 plots (44% de-risked).
• Strategic targets: EPRA NDV £1bn by end-2027, Investment Portfolio £0.9bn by end-2029, and 100% Grade A core IP by 2027.

This is classic “prepare the ground, then build/sell” execution. The step-up in enabling works is exactly what should precede a ramp in development and land sales from 2026 onwards, especially as planning consents land.

What looks positive

• Clear I&L momentum: portfolio growth, quality upgrades, letting uplifts and reversion yet to capture.
• Strategic acquisitions: Gateway 45 consolidation and the Church Commissioners JV add near-term visibility and scale.
• Planning and enabling: 8.1m sq. ft of I&L applications submitted in H1 and 3.3m sq. ft works underway support medium-term delivery.
• Dividend discipline: interim DPS up 10% to 0.538p, consistent with policy.

Where to keep a cautious eye

• Operating profit: £7.1m vs £21.1m in H1 2024 – softer half reflecting mix, valuation gains and residential cost pressures.
• Residential headwinds: management expects softness possibly into 2026; cost inflation on site-wide infrastructure needs managing tightly.
• Leverage and liquidity: LTV at 19.0% and liquidity at £59.8m are within guardrails, but de-risking depends on H2 sales completing on time.
• Interest-rate exposure: no current hedging on the RCF; refinancing is in train over the next six months.

Outlook and investment take

Harworth is doing the hard yards that tend to be underappreciated mid-cycle: buying well, unlocking planning, laying infrastructure, and steadily upgrading its income assets to Grade A. The near-term picture is more about conversion than discovery – converting a solid H2 sales pipeline, crystallising reversion in the investment portfolio, and securing key consents.

If management executes, the guide to a lower year-end LTV looks achievable, and the I&L platform should continue to support NDV growth. Residential is the swing factor, but Harworth’s de-risked serviced land model and PPA income help cushion that exposure.

Overall, a measured but credible half: NDV edged higher, I&L strengthened, and the business invested for future gains. For long-term investors in UK regeneration and logistics land, the thesis remains intact – with H2 deal flow and 2026-2027 delivery the next big markers.