Creating
sustainable
communities
Annual Report and Financial Statements
2024
Contents
Opposite page: Olive Lane, the new local centre at Waverley
Waverley, Rotherham | YAC | R | MD
Annual Report Key
Harworth regions
YAC: Yorkshire & Central
MID: Midlands
NOW: North West
Harworth sectors
l&L: Industrial & Logistics
R: Residential
NR: Natural Resources & Other
Harworth portfolio
IP: Investment Portfolio
MD: Major Developments
SL: Strategic Land
Harworth at a Glance
02
2024 Highlights
03
Strategic Report
2024 Year in review
04
Our strategic priorities
06
Key performance indicators
10
Chair's statement
14
Group at a glance
18
Growing our Investment Portfolio
20
Increasing our focus on Industrial & Logistics
22
Chief Executive’s review
24
Our business model
30
Our investment case
32
Our markets
34
The Harworth Way
38
Operational review
46
Financial review
48
Long-term viability statement
58
Section 172 statement
62
Effectively managing our risk
68
SECR disclosure
86
Task force on Climate-related
Financial Disclosures
88
Governance report
Governance at a glance
98
Chair’s introduction
100
Board of Directors
104
Statement of corporate governance
108
Nomination Committee report
122
Audit Committee report
132
ESG Committee report
140
Directors’ remuneration report
142
Directors’ report
180
Statement of Directors’ responsibilities
186
Financial statements
Independent auditor’s report to the members
of Harworth Group plc
189
Consolidated income statement
198
Consolidated statement
of comprehensive income
199
Consolidated balance sheet
200
Company balance sheet
201
Consolidated statement of changes in equity 202
Company statement of changes in equity
203
Consolidated statement of cash flows
204
Company statement of cash flows
205
Notes to the financial statements
206
Additional Information
Appendix
256
Glossary
261
Company Information
263
Strategic Report
Annual Report and Financial Statements
01
STRATEGIC REPORT
Contents
Harworth is a leading land and
property regenerator of sustainable
developments. We pride ourselves
on making a positive, lasting impact on
our planet, our communities, and our
people. Our purpose and expertise
lie in the transformation of land and
property into sustainable places
where people want to live and work.
We support new jobs, homes and
communities across our regions,
and deliver long-term value for all
our stakeholders.
Our ambitions are to grow EPRA NDV to £1bn by the end
of 2027 and our core Investment Portfolio to £0.9bn by
the end of 2029. These ambitions are underpinned by a
clear road map, our long-term, through-the-cycle business
model, our extensive land bank and our highly specialised
team with the skillset to deliver large-scale, complex
regeneration, and unlock the inherent value in our sites.
Who we are
We specialise in regenerating large, complex sites,
particularly former industrial sites, into new Industrial &
Logistics developments and serviced Residential land. We
own, develop and manage over 15,000 acres across around
100 sites in the North of England and the Midlands. We are
headquartered in Rotherham, South Yorkshire, where we
are constructing a new head office building at our flagship
Advanced Manufacturing Park (‘AMP’) in Waverley. We
also have regional offices in Birmingham, Manchester and
Leeds. Our shares are listed on the Main Market of the
London Stock Exchange (LSE: HWG) and we became a
constituent of the FTSE 250 in September 2024.
What we do
As a master developer, we create long-term value by
acquiring and assembling sites that are large, complex
and may require remediation, before transforming them
into sustainable Industrial & Logistics and Residential
developments, with a focus on placemaking to create new
communities and commercial hubs. Our team comprises
experts in transactions, planning, land remediation,
engineering and development, supported by central
functions and a highly experienced management team.
We have three regional teams – Yorkshire & Central,
North West and the Midlands – which bring further local
knowledge, expertise and relationships.
Our purpose, culture and values
Our ability to execute our strategy and deliver our purpose
is reliant on delivering against our sustainability framework,
‘The Harworth Way’, our recently updated values of ‘Build
the Future’, ‘Inspire Growth’, ‘Innovate & Create’, and our
‘One Harworth’ culture, ensuring we work together with
respect, where individuality is valued and appreciated.
HARWORTH AT A GLANCE
Harworth Group plc
02
2024 Highlights
1
Total Accounting Return (%)
EPRA2 NDV3 per share
9.1%
3.0
24.6
0.1
5.1
9.1
20
21
22
23
24
222.3p
160.0
197.6
196.5
205.1
222.3
20
21
22
23
24
2023: 5.1%
2023: 205.1p
Industrial & Logistics pipeline (sq. ft)
Residential pipeline (plots)
33.6m
27.3
28.2
35.0
37.7
33.6
20
21
22
23
24
31,264
30,668
30,804
29,311
27,190
31,264
20
21
22
23
24
2023: 37.7m
2023: 27,190
Potential value to local communities
Gross Value Added (‘GVA’)
Location-Based Scope 1, 2 & 34
carbon emissions (tCO2e)
£4.3bn
3.9
4.1
4.6
4.8
4.3
20
21
22
23
24
694
882
1,118
1,0415
8345
694
20
21
22
23
24
2023: £4.8bn
2023: 8345
1 Harworth discloses both statutory and alternative performance measures.
A full description of these is set out in Note 2 to the financial statements
with a reconciliation between statutory and alternative performance
measures set out in the appendix to the financial statements.
2 The European Real Estate Association
3 Net Disposal Value
4 Scope 3 emissions related to business travel, homeworking and
business waste.
5 2022 and 2023 figures have been restated (previously 2022: 1,054 tCO2e;
2023: 802 tCO2e) owing to more accurate data capture.
Strategic Report
03
Annual Report and Financial Statements
STRATEGIC REPORT
Harworth at a glance | 2024 Highlights
1
2
STRATEGIC REPORT
2024 Year in review
In 2024 we produced market leading results,
demonstrating our ability to deliver in challenging
markets and showcasing the agility and resilience
of our through-the-cycle business model.
Quarter 1
Quarter 2
January
C
FY23
Trading Update
March
M
Gateway 36 | I&L | IP
Letting of 20,400 sq. ft
unit to Dunelm
1 2
C
FY23 Results
announcement and
Investor Roadshow
April
C
FY23 Annual Report
published
C
NZC Pathway
Progress Report
and Communities
Framework
published
May
C
Annual General
Meeting and
Trading Update
C
Blueprint for
Growth launched
at UKREiiF1
1 2 3 4
June
M
Gascoigne Wood |
I&L | SL
Planning approval
for 1.5m sq. ft of
commercial space
1 2 4
M
Ironbridge | R | MD
£20m land sale to Taylor
Wimpey
3
M
Skelton Grange |
I&L | MD
Exchanged contracts
with Microsoft for
£106.6m land sale for
hyperscale data centre
3
C
Evolution in strategy
announced:
Focus on Industrial &
Logistics development
and growing the
Investment Portfolio
“
The last four years of
investment in scaling our
business to enable growth,
and of solid progress in meeting
our targets, are bearing fruit.
We are well-positioned in structurally undersupplied
sectors that are fundamental to the UK’s growth. Our
extensive consented pipeline, strong balance sheet,
and specialised skillset, position us well as we move
into 2025, providing an exciting platform for growth
in the second part of our strategic plan.”
Lynda Shillaw, Chief Executive
1 UK Real Estate Investment & Infrastructure Forum
Harworth Group plc
04
Capital Markets
Day 2024
The Industrial &
Logistics opportunity
3
4
Quarter 3
Quarter 4
July
M
Cinderhill | I&L | SL
Planning approval
for 1.5m sq. ft of
commercial space
1 2 4
M
Stopes Road
| R | MD
£9m land sale to
Taylor Wimpey
3
C
HY24 Trading
Update
August
H
Thoresby Vale
| R | MD
Opened 350-acre
country park
September
C
HY24 Results and
Investor Roadshow
C
FTSE 250 inclusion
October
M
AMP | I&L | IP
Practical completion
and letting of 73,000
sq. ft to Insight
1 2
M
Stewartby | R | SL
£30.6m acquisition
4
H
Chevington North
Planted 108,000 trees
across 200-acre site
M
Catalyst | I&L | IP
Acquisition of business
park opposite AMP
for £44m
1
C
Capital Markets Day
Including Yorkshire &
Central site visits
December
M
Skelton Grange |
I&L | MD
Completed Phase 1
land sale to Microsoft
for £53m
3
M
Ansty | I&L | SL
Completed sale of
full site to Frasers
Group for £54m for
its new headquarters
and campus
3
M
Residential portfolio
Completed 1,896
plot sales
3
H
Coalville | R | MD
Practical completion
and handover of
Forest School
H
Highthorne
Secured woodland
grant to fund planting
of 150,000 trees
M Management actions
H
The Harworth Way
C
Corporate
Strategic priorities
1 Repositioning our
core Investment
Portfolio to modern
Grade A
2 Increasing direct
development
of Industrial &
Logistics space
3 Accelerating sales
and broadening
the range of our
Residential products
4 Scaling up through
land acquisitions and
promotion activities
This page and opposite:
1. Unit 1 let to Dunelm: Gateway 36, Barnsley | YAC | I&L | IP
2. Gascoigne Wood, Selby | YAC | I&L | SL
3. Cinderhill, Derby | YAC | I&L | SL
4. Our Capital Markets Day incorporated site visits to Skelton Grange and Gascoigne Wood
05
Annual Report and Financial Statements
Strategic Report
STRATEGIC REPORT
2024 Year in review
Our strategic priorities
Our ambitious growth targets underpinned by an extensive
pipeline with substantial latent value.
Our strategy, first announced in 2021, builds on the skills
of our people and the strength of our portfolio to drive
growth, maximise returns to investors and grow the
business sustainably. We do this through the delivery of four
key strategic pillars.
In June 2024, halfway through our strategic plan, we
announced our new target to significantly grow our
Investment Portfolio by increasing the retention of directly
developed Industrial & Logistics space. In time, this is
expected to enable us to increase dividends paid to
shareholders.
Repositioning our core Investment
Portfolio to modern Grade A
Ambition by the end of 2027
100% Grade A
(by area)
Rationale
Our Investment Portfolio is integral to the way that we
fund our business, providing opportunities for capital and
income growth through asset management. The portfolio
is increasingly focused on Grade A space that we both
develop and selectively acquire.
Delivery
We are repositioning our core Investment Portfolio by
retaining the majority of the Industrial & Logistics assets
that we directly develop and selectively acquiring strategic
Grade A stock, while disposing of existing properties
where we have maximised value with the aim of growing
a sustainable, high-quality Grade A portfolio, with good
access to infrastructure and proximity to urban centres, and
that meets the needs of modern occupiers.
Progress
2020
<10%
2023
37%
2024
45%
Link to KPIs
Total Accounting Return
Net asset value, EPRA NDV per share and LTV
Industrial & Logistics space directly developed
Total Industrial & Logistics pipeline
Potential GVA
Scope 1, Scope 2 and Scope 3 business travel emissions
Link to principal risks
Planning
Supply chain cost inflation and constraints
Supply chain and delivery partner management
Commercial markets
Organisational development and design
Availability of appropriate capital
NZC pathway
1
£1bn
£0.9bn
Grow EPRA NDV to £1bn
by the end of FY27
Grow Investment Portfolio to £0.9bn
by the end of FY29
06
Harworth Group plc
2
Increasing direct development
of Industrial & Logistics stock
Ambition by the end of 2027
800,000 sq. ft
run-rate of completed space (average p.a.)
Rationale
We have a strong track record of delivering high quality
developments, having built 1.7m sq. ft of Industrial &
Logistics space since 2015. Looking ahead, our consented
pipeline is capable of delivering a further 8.4m sq. ft, of
high-quality sites in strong locations, that are attractive to
both investors and occupiers.
Delivery
Our strategy is to undertake the direct development of
much of our consented pipeline, scaling up to an average
run-rate of 800,000 sq. ft per annum by the end of 2027.
We manage the market risk associated with development
by focusing on pre-let, build-to-suit and forward funding
opportunities including the potential of joint ventures and
other funding models. These, alongside land sales, will be
deployed when the market appetite is less certain.
Progress
2020
200,0001
sq. ft
2023
401,000
sq. ft
2024
377,000
sq. ft
0.4m
sq. ft
1.5m
sq. ft
1.3m
sq. ft
I&L vertical development completed or started in year
Enabling works completed to facilitate the start of
I&L developments
1 Annual Average 2015 - 2020. Completed only.
Link to KPIs
Total Accounting Return
Net asset value, EPRA NDV per share and LTV
Industrial & Logistics space directly developed
Total Industrial & Logistics pipeline
Proportion of Investment Portfolio that is Grade A
Scope 1, Scope 2 and Scope 3 business travel emissions
Link to principal risks
Commercial markets
Organisational development and design
Availability of appropriate capital
NZC pathway
£575.9m
£662.9m
£719.5m
£1.0bn
Target
FY27
FY24
FY23
FY20
Grow EPRA NDV to £1bn
£221.4m
£297m
£0.9bn
Target
FY29
FY24
Grow Investment Portfolio to £0.9bn
FY23
£0.9bn core IP target announced 2024.
FY23 used as baseline.
£1bn EPRA NDV target announced 2021.
FY20 used as baseline.
Annual Report and Financial Statements
07
Strategic Report
STRATEGIC REPORT
Our strategic priorities
Our strategic priorities continued
Delivery of
Simpson Park
accelerated
in 2024.
Simpson Park,
Doncaster
| YAC | R | MD
3
Accelerating sales and broadening
the range of our Residential products
Ambition by the end of 2027
2,000 plots
(sold on average p.a.)
Rationale
Our land bank is significant and has the ability to deliver
around 31,264 plots into the market with 4,568 of those
already consented, meaning we are well-positioned to
support the UK government’s housing targets. While strong
demand remains for the traditional build-to-sell product
offered by housebuilders, there is increased consumer
and investor appetite for mixed tenure products, including
single-family, Build-to-Rent ('BtR') and affordable housing.
Delivery
Our sites are well-suited to delivering institutional quality
mixed tenure products. Our current annual average since
the target was set in 2021 is 1,800 plot sales, setting us up
well to achieve our ambition of 2,000 plot sales per annum
by the end of 2027.
Progress
2020
862
1
plots
2023
1,170
plots
2024
2,385
plots
1 Annual Average 2015 – 2020
Link to KPIs
Total Accounting Return
Net asset value, EPRA NDV per share and LTV
Number of plots sold to housebuilders
Total Residential pipeline
Potential GVA
Scope 1, Scope 2 and Scope 3 business travel emissions
Link to principal risks
Planning
Supply chain cost inflation and constraints
Supply chain and delivery partner management
Statutory costs of development
Residential markets
Organisational development and design
Availability of appropriate capital
NZC pathway
08
Harworth Group plc
In 2024 we
acquired the
former Stewartby
brickworks for
£30.6m, adding
c.1,000 Residential
plots to our pipeline.
Stewartby, Bedford
| MID | R | MD
4
Scaling up through land acquisitions
and promotion activities
Ambition by the end of 2027
12-15 years
Maintain land supply pipeline
Rationale
Our extensive land bank underpins our ability to deliver our
ambitions and growth targets. We take a long-term view to
replenishing our land bank, with a focus on acquiring and
assembling land through a strategic mixture of freeholds,
options, and planning promotion agreements ('PPAs'), and
applying our expertise to unlock significant value as we take
brownfield sites through land assembly, masterplanning,
remediation and planning.
Delivery
We aim to maintain a 12 to 15-year land supply at any
time, taking account of our annual direct development
volume and land parcel sales ambitions. Organic growth
of the pipeline will be supplemented by developing
key partnerships to assemble and deliver large-scale
regeneration schemes. Controlling a large land bank with
sites at various stages in the development cycle allows us to
enhance and smooth returns as well as providing flexibility,
allowing us to manage risk and be opportunistic.
Progress
2020
27.3m
sq. ft
30,668
plots
2023
37.7m
sq. ft
27,190
plots
2024
33.6m
sq. ft
31,264
plots
Total Industrial & Logistics pipeline at year-end
Total Residential pipeline at year-end
Link to KPIs
Total Accounting Return
Net asset value, EPRA NDV per share and LTV
Total Industrial & Logistics pipeline
Total Residential pipeline
Potential GVA
Link to principal risks
Availability of and competition for strategic sites
Planning
Statutory costs of development
Organisational development and design
Availability of appropriate capital
Annual Report and Financial Statements
09
Strategic Report
STRATEGIC REPORT
Our strategic priorities
Key Performance Indicators
Financial track record
Growth in EPRA NDV during the year in addition to dividends paid, as a
proportion of EPRA NDV at the beginning of the year.
2024 performance commentary
Our total accounting return of 9.1% was the result of a 8.5% increase in EPRA
NDV during the year, as well as payment of 1.511p in dividends.
An EPRA metric that represents a net asset valuation where development
property is included at fair value rather than cost and deferred tax,
financial instruments and other adjustments are calculated to the full
extent of their liability.
2024 performance commentary
The increase in EPRA NDV was driven by profit on sales during the year as
well as increased valuations reflecting management actions, in particular
progressing sites through the planning process.
The value of our assets less the value of our liabilities, based on IFRS1 measures,
which excludes the mark-to-market value of development properties.
2024 performance commentary
Net asset value included the impact of crystallising valuation gains through
development property sales during the year in addition to increases in the value
of investment properties, driven by management actions.
Net debt as a proportion of the aggregate value of properties and investments.
2024 performance commentary
Our loan to value (‘LTV’) slightly increased during the year but remained well
within our target of less than 20% at year-end as we continued to manage
carefully our levels of net debt.
Total Accounting Return (%)
EPRA Net Disposal Value per share
Net asset value
Net loan to portfolio value (%)
3.0
24.6
0.1
5.1
9.1
20
21
22
23
24
Link to strategic priorities:
1 2 3 4 £
Link to strategic priorities:
1 2 3 4 £
Link to strategic priorities:
1 2 3 4 £
Link to strategic priorities:
1 2 3 4
1 International Financial Reporting Standards.
160.0p
197.5p
196.5p
205.1p
222.3p
20
21
22
23
24
£488.7m
£578.0m
£602.7m
£637.7m
£691.7m
20
21
22
23
24
11.5
3.4
6.6
5.4
4.7
20
21
22
23
24
Harworth Group plc
10
Strategic track record
£ Group targets
Read about Our Group targets on pages 167 to 169
H The Harworth Way
Read more about The Harworth Way on pages
38 to 45
Strategic priorities link key
1
Repositioning our core
Investment Portfolio to
modern Grade A
2
Increasing direct
development
of Industrial &
Logistics stock
3 Accelerating sales and
broadening the range
of our Residential
products
4 Scaling up through
land acquisitions and
promotion activities
Read more about Our strategic priorities on pages 6 to 9
The proportion of our Investment Portfolio by area that could be classified as
modern Grade A Industrial & Logistics space. Grade A is a widely-used industry
term that is understood to mean ‘best in class’ space which is new or relatively
new, high-specification and in a desirable location, allowing the unit to attract
a rent that is above the market average.
2024 performance commentary
The proportion of our Investment Portfolio that is Grade A significantly
increased due to the completion of pre-let development at the AMP, Rotherham
and the acquisition of Catalyst, a 285,000 sq. ft Grade A urban logistics estate
adjacent to the AMP.
The amount of Industrial & Logistics space developed by Harworth, either
speculatively or on a build-to-suit basis for an end occupier or investor,
achieving practical completion during the year.
2024 performance commentary
Our level of completed direct development reduced due to a focus on pre-
let and build to suit schemes in 2024, but we made significant progress with
enabling works (1.3m sq. ft enabled during the year and another 1.8m sq. ft of
works underway at year-end) and were on site at the year end with 270,000 sq.
ft of direct development all due to complete in 2025.
The total amount of Industrial & Logistics space that could be delivered from
our land bank, including freehold land, options and PPAs.
2024 performance commentary
Our Industrial & Logistics pipeline decreased primarily due to the landmark
sales of our Strategic Land site at Ansty, Rugby to Frasers Group, and land at
Skelton Grange, Leeds to Microsoft.
Repositioning our core Investment Portfolio to modern Grade A (%)
Industrial & Logistics space direct development (sq. ft)
Total Industrial & Logistics pipeline (sq. ft)
9
11
18
37
45
20
21
22
23
24
Link to strategic priorities:
1 2 H £
Link to strategic priorities:
1 2 H £
Link to strategic priorities:
1 2 4 H £
27,000
51,000
432,000
193,000
107,000
20
21
22
23
24
27.3m
28.2m
35.0m
37.7m
33.6m
20
21
22
23
24
11
Annual Report and Financial Statements
Strategic Report
STRATEGIC REPORT
Key Performance Indicators
Key Performance Indicators continued
Strategic track record continued
Strategic priorities link key
1
Repositioning our core
Investment Portfolio to
modern Grade A
2
Increasing direct
development
of Industrial &
Logistics stock
3 Accelerating sales and
broadening the range
of our Residential
products
4 Scaling up through
land acquisitions and
promotion activities
Read more about Our strategic priorities on pages 6 to 9
The number of Residential plots sold to housebuilders or registered providers
during the year.
2024 performance commentary
The number of plots sold achieved a record level in 2024 reflecting the
acceleration of development of our Residential sites, the strong demand for
our serviced land product, and the broadening of Residential products through
mixed tenure sales.
The total number of Residential plots that could be delivered from our pipeline
including freehold land, options and PPAs.
2024 performance commentary
Our Residential pipeline increased with the acquisition of a development at
Stewartby with Residential potential and Harworth’s share of an allocated site
near Grimsby in partnership with a local landowner.
Number of Residential plots sold
Total Residential pipeline (plots)
873
1,411
2,236
1,170
2,385
20
21
22
23
24
Link to strategic priorities:
3 H £
Link to strategic priorities:
3 4 £
30,668
30,804
29,311
27,190
31,264
20
21
22
23
24
£ Group targets
Read about Our Group targets on pages 167 to 169
H The Harworth Way
Read more about The Harworth Way on pages
38 to 45
Harworth Group plc
12
Environmental, economic and social track record
1 Prior year figure has been restated (previously 2022: 1,054 tCO2e; 2023: 802 tCO2e) owing to more accurate data capture.
Calculated by Ekosgen, an economic impact consultancy, on our behalf. This
estimates the total contribution that our portfolio could make to the economy
once fully built out.
2024 performance commentary
The potential GVA that could be delivered from our portfolio decreased during
the year due to landmark sales at Ansty, Rugby and Skelton Grange, Leeds from
the Industrial & Logistics pipeline, together with a record number of Residential
plot sales, only partially offset by acquisitions.
Emissions that are captured by our target to be operationally Net Zero Carbon
(‘NZC’) by 2030. During the year, the scope and availability of our emissions
data increased, and therefore figures for 2022 and 2023 have been restated to
achieve a like-for-like comparison with 2024.
2024 performance commentary
Our emissions decreased during the year, driven by the use of alternative fuels
for direct plant operations, and increased use of electric vehicles by staff.
The proportion of employees who said they were “proud to tell people that I
work for Harworth” in our annual employee survey.
2024 performance commentary
Levels of staff satisfaction remained very high, as we continued our work to
ensure Harworth is an employer of choice, with initiatives aimed at promoting
employee engagement, wellbeing and equity, diversity & inclusion.
Potential GVA that could be delivered from our portfolio
Location-based Scope 1, Scope 2 and Scope 3 business travel emissions (tCO2e)
Employee pride (%)
£3.9bn
£4.1bn
£4.6bn
£4.8bn
£4.3bn
20
21
22
23
24
Link to strategic priorities:
H
Link to strategic priorities:
H £
Link to strategic priorities:
H
882
1,118
1,0411
8341
694
20
21
22
23
24
93
97
100
100
98
20
21
22
23
24
13
Annual Report and Financial Statements
Strategic Report
STRATEGIC REPORT
Key Performance Indicators
Chair’s Statement
2024 has been a landmark year for
Harworth:-
– We achieved our largest ever
sale of regenerated brownfield
land, concluding a £106.6m
agreement with Microsoft for the
development of a hyperscale data
centre in Leeds, a deal that had
been more than 18 months in the
making. Taking all stages of that
transaction together, this should
realise a profit of some £78.2m.
– Over the year we sold a record
2,385 plots for Residential
development, materially ahead of
the 1,170 sold in 2023 and ahead
of our strategic target of 2,000 per
year on average, as we accelerate
through sites by broadening the
range of our Residential products.
– Four years after Lynda Shillaw
joined us as Chief Executive, we
announced the next stage in the
evolution of the four growth drivers
of the strategy she first outlined
in 2021, increasing our focus on
Industrial & Logistics development
and retaining more prime Grade
A properties in our Investment
Portfolio. This is now targeted
to grow to £0.9bn by the end of
2029, at which point we expect
our balance sheet to be weighted
over 85% towards Industrial &
Logistics assets compared to its
current 63%. In turn, we expect the
increase in recurring earnings from
the significantly larger Investment
Portfolio to allow increased
dividends to be declared in
future years.
– Positive market sentiment towards
the consistency of our operational
performance and the evolution
of our strategy drove our share
price to 179p on 13 September
after the interim results, 46%
ahead of the start of the year. We
entered the FTSE 250 for the first
time, a significant milestone for
the business and a testament to
our people and ability to deliver
against our strategic objectives.
The institutional buying associated
with entering the index drove us to
a high of 194.5p. Whilst, as would
be expected, the share price has
settled back somewhat, we have
maintained a narrower discount
to NDV.
We are pleased to see that the
strategic pivot of our business
towards the development, and
retention, of Grade A Industrial &
Logistics has resonated with investors.
Residential land sales and our mixed
tenure products remain an important
source of funding for the business,
in particular for the growth in direct
development of our Industrial &
Logistics portfolio, and we shall
continue to seek out opportunities to
acquire sites that have the potential
to be developed into serviced parcels
of Residential land – indeed, we
acquired the potential for 4,404 such
plots during the year. It is also likely
that some of the sites we acquire,
given their typical scale, will offer
the potential for both commercial
and Residential development.
Our recent development of other
tenures, alongside private sales to
housebuilders, increases our ability to
accelerate through such Residential
developments, thereby achieving an
accelerated capital turn.
“
We are pleased to see
that the strategic pivot
of our business towards the
development, and retention, of
Grade A Industrial & Logistics has
resonated with investors, thereby
creating shareholder value.”
Alastair Lyons, Chair
Alastair Lyons,
Chair
Harworth Group plc
14
As Lynda’s Chief Executive report
details, alongside our success in
accelerating Residential sales we also
made strong progress against each of
the other elements of our strategy:
– With the practical completion
of 107,000 sq. ft of directly
developed Grade A commercial
space and acquisition of
the 285,000 sq. ft Grade A
Catalyst urban logistics estate
in Rotherham, 45% of our core
Investment Portfolio is now Grade
A. Enabling works for direct
development are underway on
several of our Major Development
sites and all of the Grade A space
in progress over the next 12
months is expected to be retained
in our Investment Portfolio.
– We have maintained our objective
of holding a 12 to 15-year forward
pipeline of sites at varying stages
of planning and development
having secured control of further
sizeable land holdings during
the year, with these adding the
potential for 1.0m sq. ft of Industrial
& Logistics space and 4,404
Residential plots.
The speed at which we can realise
the overall potential in our pipeline of
33.6m sq. ft of Industrial & Logistics
space and 31,264 Residential plots
is substantially dependent upon
developments in the macro-economy
and what results from planning
reforms. The course of the global
economy, and in particular of interest
rates, is very uncertain with a new
administration taking power in the
US, political and economic instability
in the EU, and areas of major active
conflict. At home, businesses and
consumers are still digesting the
implications of the new government’s
first budget, and the Bank of England
is trying to chart a course for UK
interest rates having regard to global
interest rates, movements in sterling,
and how UK inflation develops.
Uncertainty depresses and
delays business demand for new
development and society’s demand
for new homes, whilst interest rates
staying higher for longer compounds
consumers' wariness and suppresses
both returns and the potential for
yield compression. These in turn are
compounded by planning delays,
reflecting both the lack of clear
direction that followed the previous
government’s December 2023
planning reforms and local authority
resource constraints. Overall, the
new government’s commitments
to a planning system that supports
economic growth in key sectors and
significantly increases housing supply
should be strongly supportive of our
own potential for new development.
However, the reforms that marked the
first stages of the extensive planning
legislation agenda will take time
to become embedded in practical
decision-making. Whilst, therefore,
we continue to make steady progress
towards the achievement of £1bn
EPRA NDV by the end of 2027, the
outlook for 2025 is more challenging
than when we reported at our 2024
interim results in September 2024.
The other prime determinant of the
speed at which we can progress is
the availability of the necessary skills,
experience, and relationships within
the people who make up Harworth.
In my past reports I have focused
consistently on the criticality of having
the right team of the necessary size
to the achievement of our objectives
– to see the potential of undeveloped
land; to create masterplans that
maximise that
Members of the Midlands team mark the ground breaking for the Coalville forest school
Coalville, Leicester | MID | R | MD
Annual Report and Financial Statements
15
Strategic Report
STRATEGIC REPORT
Chair’s Statement
Chair’s Statement continued
Opposite page: Aerial view of Skelton Grange including the soon to be operational energy from waste plant on land
sold to Enfinium, alongside land sold to Microsoft for a hyperscale data centre: YAC | I&L | MD
potential; to negotiate with planners
and communities to turn those
masterplans into detailed planning
consents; to manage the detailed
implementation of the resulting
developments; to identify how best
to market those developments; and
to nurture the relationships that in turn
lead to successful transactions. As
Harworth grows, both in the number
of developments it has ongoing at any
time, and in the size of its Investment
Portfolio, so too must its available
resource grow. As we are a long-term
through the cycle business, what we
plan to be achieving as outcomes in
two to three years’ time, and even
longer-term, will depend on what
we are creating as inputs today. It is,
therefore, inevitable that we have
to grow our resource ahead of the
planned future growth of the business.
It is also critical that we attract and
retain the leadership talent we need
to achieve our strategic ambitions. The
changes that, following considerable
thought and extensive engagement
with our shareholders, we are
proposing to the Remuneration Policy
that will apply for the next three years
are designed with this in mind.
As last year, alongside our Annual
Report, we are publishing our
latest report of the progress we
made over the last 12 months along
our NZC Pathway. Considerable
further progress has been made in
understanding our carbon footprint,
in particular the Scope 3 emissions
of the contractors and suppliers who
are upstream of our developments,
and of the downstream tenants in our
Investment Portfolio. This allows us
to work with both to reduce those
emissions with changes to structural
design and construction methods
and materials, alongside helping
our tenants to reduce their own
emissions through measures such as
the installation of solar panelling and
sourcing renewable energy. We have
also seen carbon pricing becoming
an integral part of planning policy,
with net zero targets embedded into
the Greater Manchester Combined
Authority planning policy, Places
for Everyone, and whole life carbon
assessments and detailed energy
assessments, becoming a required
part of planning applications within
the areas covered by nine of the
Greater Manchester local authorities.
The focus we have placed on
understanding our own NZC Pathway,
and developing the supporting
detailed assessment methodology,
stands us in good stead to present
for approval ourselves developments
that are strongly aligned with planning
objectives.
ESG is firmly embedded in all aspects
of our business: every decision
we make has regard to its ESG
implications and its support of our NZC
commitment. In an area of complex,
and sometimes conflicting, reporting
requirements we now understand
what we are going to report, and
how to deliver the related reporting
obligations. Our NZC Pathway is
well-defined, and its components
measured and independently verified.
ESG is, therefore, mainstream for our
business and as such we have decided
that its oversight and related decisions
should move to being considerations
of the main Board in which all Directors
participate, rather than scrutinised
by a separate committee. The
oversight of ESG reporting, itself now
being embedded into international
accounting standards, will become the
responsibility of our Audit Committee.
I have two particular thank yous – to
Steven Underwood who retired at the
end of last year as our longest serving
non-executive director, having first
joined the board in August 2010. With
his in-depth insight into real estate
development in the North of England,
as Chief Executive of the Peel Group,
he has made a great contribution to
Board decision-making and will be
much missed. We shall, however, not
lose touch given Peel’s position as
our second largest shareholder. We
are actively seeking to appoint a new
Non-Executive Director with similar
experience and capability within the
real estate sector. I would also express
our appreciation of the contribution
Ruth Cooke has made since she joined
as a Non-Executive Director in March
2019. As we have developed our
mixed tenure Residential proposition
her experience and insight as Chief
Executive of one of the largest housing
associations has been of great value.
She will be retiring from the Board at
this year’s Annual General Meeting.
More generally, my grateful thanks go
to all those within Harworth, and to
our partners, advisers, suppliers and
contractors, who have contributed to
our continuing successful growth and
increase in value. A business is like a
jigsaw – it cannot achieve its objective
unless every element is in place and
achieving its purpose: every individual
is critical to us and is valued by us.
Alastair Lyons
Chair
17 March 2025
16
Harworth Group plc
Strategic Report
STRATEGIC REPORT
Chair’s Statement
2
1
6
7 10
11
9
8
3
4
5
1
2
9
8
7
6
5
4
3
Yorkshire & Central
Midlands
North West
An extensive pipeline
We have an extensive Industrial &
Logistics and Residential portfolio
in the North of England and the
Midlands, ranging from recently
assembled Strategic Land to
completed major manufacturing
and logistics hubs, and housing
developments.
Regional footprint
Across our three operating regions of Yorkshire & Central, the
Midlands and the North West, our regional teams, based at
our Head Office in Rotherham, and our regional offices in
Birmingham, Manchester and Leeds, harness local knowledge
and relationships.
The adjoining map plots the location of some of our key
Industrial & Logistics and Residential developments and
our offices.
I&L SL
I&L MD
Harworth Offices
R SL
R MD
KEY DEVELOPMENTS
Industrial & Logistics
Residential
No.
Site name
No.
Site name
1
AMP, Rotherham
1
Waverley, Rotherham
2
Gateway 36, Barnsley
2
Thoresby Vale, Nottingham
3
Chatterley Valley, Stoke
3
Staveley, Chesterfield
4
Cinderhill, Derby
4
Rossington, Doncaster
5
Wingates, Bolton
5
Stewartby, Bedford
6
Skelton Grange, Leeds
6
Ironbridge, Telford
7
N Yorkshire site
7
Coalville, Leicester
8
Junction 15, Northampton
8
Diseworth, East Midlands
9
Rothwell, Coventry
9
Cinderhill, Derby
10
Gascoigne Wood, Selby
10
Grimsby West, Grimsby
11
Northern Gateway, Greater Manchester
18
Harworth Group plc
10
Creating value through the lifecycle
Significant embedded value is still to be unlocked from our high quality landbank, capable of delivering
33.6m sq. ft of Industrial & Logistics space and 31,264 Residential plots.
£223.8m
Residential
Strategic Land
£61.0m
Other
£28.8m
I&L
Strategic Land
£109.7m
Investment
Portfolio
£297.2m
I&L
Major
Developments
£138.1m
Residential
Major
Developments
£858.8m
31 Dec 2023: £768.1m
INDUSTRIAL & LOGISTICS
AVERAGE
VALUE
(PER SQ. FT)1
Grade A Investment Portfolio
£146
Major Development
£30
Consented Strategic Land
£12
Non-Consented Strategic Land
£8
RESIDENTIAL
AVERAGE
VALUE
(PER PLOT)1
FY 2024 Serviced Land (Sold)
£50k
Major Development
£49k
Consented Strategic Land
£23k
Non-Consented Strategic Land
£7k
1 Historic average headline value.
INDUSTRIAL & LOGISTICS
RESIDENTIAL
12.5m sq. ft
17,035 plots
2.9m sq. ft
2,275 plots
4.9m sq. ft
5,250 plots
4.9m sq. ft
2,136 plots
8.4m sq. ft
4,568 plots
De-risking through the planning process
The strategic land bank enables the business to scale up and create value through planning success.
1. Pre-planning
2. Draf Allocation
4. Await Determination
3. Allocation
5. Consented
Annual Report and Financial Statements
19
Strategic Report
STRATEGIC REPORT
An extensive pipeline
Growing and transitioning
our Investment Portfolio
The value of our Investment Portfolio
increased 34% year-on-year to £297.2m,
with Grade A space now at 45%
In June 2024, we announced our intention to grow our Investment
Portfolio to £0.9bn by the end of 2029, through a combination of direct
development and selective acquisitions. This means tripling
the value of the portfolio.
Growing the portfolio
The majority of the increase in
value of the Investment Portfolio in
FY24 came from the acquisition of
Catalyst, Rotherham, which added
a 285,000 sq. ft Grade A urban
logistics asset, located adjacent to
our flagship AMP. This expands the
portfolio to 2.8m sq. ft. The balance
of movements came from practical
completion of space at the AMP and
positive valuation movements on the
balance of the portfolio.
Improving portfolio quality
The quality of the Investment Portfolio
continues to improve, with 45% by
area now Grade A, up 8 percentage
points from 2023. Occupancy has
improved as we continue to lease
up space at improved rents. Average
passing rents are up 28% on 2023,
from £4.60 psf to £5.90 psf, and the
average Grade A estimated rental
value ('ERV') of £9.10 psf illustrates the
potential for significant further uplifts
in rents as we move the portfolio
to 100% Grade A and lease up to
market rents.
1 Passing rental income.
2 Weighted average unexpired lease term.
FY24 core portfolio metrics
Grade A (by area)
45%
(FY23: 37%)
Weighted average rent1
£5.90 psf
(FY23: £4.60 psf)
WAULT2 to break/expiry
10.1 yrs/11.4 yrs
(FY23: 11.9 yrs/12.9yrs)
EPRA vacancy rate
5.6%
(FY23: 9.9%)
Net initial/reversionary yield
4.8%/6.5%
(FY23: 5.0%/6.3%)
Journey to Grade A and £0.9bn portfolio value
£227.6m
£277.5m
£280.9m
£221.4m
£297.2m
Target:
£0.9bn
Target:
100%
core
Grade A
2020
£4.40
2021
£4.50
2022
£4.69
2023
£5.75
2024
£6.57
ERV psf
Average IP headline rent psf
2025
2026
2027
2028
2029
Grade A value
Direct development of
consented I&L pipeline
Increased
retention of
completed
I&L
properties
Non-Grade A value
20
Harworth Group plc
9
2
10
12
8
5
6,7
11
4
1,3
Yorkshire & Central
Midlands
North West
Investment Portfolio
No.
Site name
1
AMP, Rotherham
2
Bardon Hill, Leicester
3
Catalyst, Rotherham
4
Wyke Lane, Bradford
5
Saturn, Liverpool
6
Logistics North, Bolton
7
Multiply, Bolton
8
Brierley Hill, Birmingham
9
Gateway 36, Barnsley
10
Moor Lane, Leeds
11
Etherow, Manchester
12
A19 Business Park, Selby
Construction of 80k pre-let unit at the AMP, to be occupied
by Technicut, will reach practical completion in H1 2025.
AMP, Rotherham | YAC | I&L | IP
8%
Retail
4%
Other
25%
Manufacturing
35%
3rd party
logistics
8%
Wholesale
19%
Automotive
£17.5m
headline rent
Selective acquisition of 285k Grade A business park
adjacent to the AMP
Catalyst, Rotherham | YAC | I&L | IP
Harworth Offices
Annual Report and Financial Statements
21
Strategic Report
STRATEGIC REPORT
Growing and transitioning our Investment Portfolio
2.9m
12.5m
4.9m
4.9m
8.4m
Pre-planning
Draft allocation
Allocated
Awaiting
determination
Consented
Planning
risk
reduces
Increasing our
focus on Industrial & Logistics
We expect Industrial &
Logistics to make up 85%
of the Group’s overall land
and property portfolio by
the end of 2029.
Our exposure to Industrial & Logistics across our Investment
Portfolio, Major Developments and Strategic Land stands
at £545m or 63% of our total land & property portfolio. Our
extensive land bank is capable of delivering 33.6m sq. ft of
Industrial & Logistics space of which 63% is either consented
or at some stage in the planning system. The graphic
opposite illustrates the composition of this pipeline. As
schemes are progressed through the planning system,
planning risk reduces – read more about this on page 60.
We are focused on enabling works to create serviced land
to facilitate the direct development of Grade A space which
will feed our Investment Portfolio, growing it to our £0.9bn
target by 2029. The table below identifies the key sites in
our near-term development pipeline, which will contribute
to meeting our 2027 and 2029 strategic targets. Where
viable, we will also pursue redevelopment of our secondary
assets, an example of which is shown in the case study on
the opposite page.
33.6m
sq. ft pipeline
SITE
PIPELINE
PLANNING STATUS
DIRECT DEVELOPMENT STATUS
AMP, Rotherham
0.3m sq. ft
Consented
Enabling works completed.
Development underway.
Gateway 36, Barnsley
1.1m sq. ft
0.6m consented
0.5m pre-planning
Enabling works completed.
Development underway. Planning promotion.
Chatterley Valley, Stoke
1.2m sq. ft
Consented
Enabling works completed. Development
scheduled to commence within 12 months.
Wingates, Bolton
2.9m sq. ft
1.0m consented
1.9m allocated
Enabling works underway on consented phase.
Land assembly and planning promotion on
allocated phase.
Skelton Grange, Leeds
0.8m sq. ft
Consented
Enabling works underway.
Cinderhill, Derby
1.5m sq. ft
Consented
Land assembly.
Gascoigne Wood, Selby
2.0m sq. ft
1.5m consented
0.5m pre-planning
Enabling works scheduled to start within
12 months. Planning promotion.
Northern Gateway
2.0m sq. ft
Allocated
Land assembly and planning promotion.
North Yorkshire site
3.3m sq. ft
Pre-planning
Planning promotion.
Rothwell, Coventry
1.8m sq. ft
Awaiting determination
Planning promotion.
Junction 15, Northampton
1.5m sq. ft
Pre-planning
Planning promotion.
63%
Consented or
in the planning
system
22
Harworth Group plc
CASE STUDY
Droitwich, Worcester
Redeveloping an existing asset to Grade A
At Droitwich, Worcester (MID | I&L | IP) we
have demolished a 112k sq. ft secondary unit,
previously let to DHL, and are replacing it with
a 170k sq. ft Grade A Industrial & Logistics unit,
practical completion of which is scheduled for
Q3 2025.
The financial and environmental rationale for
doing so was compelling.
The new asset is expected to deliver a
development yield in excess of 7% and has had
strong occupier interest during the early stages
of construction. It is currently being marketed
at a headline rent of c.£1.7m (£9.75 per sq. ft),
which compares favourably to the headline rent
of £450k (£4.00 per sq. ft) on the secondary
asset it has replaced.
The new unit will benefit from Harworth’s high
sustainability specification, which includes:
– BREEAM Excellent status.
– Grade A+ EPC.
– Exceptionally high levels of thermal insulation,
exceeding the stringent requirements in the
2024 Building Regulations.
– Structural and electrical capacity to support
full solar coverage to the available roof space,
which can be tailored by an occupier to
optimise on-site energy generation.
– Heating/cooling via air source heat pumps,
with zero reliance on gas, enabling an
occupier to purchase 100% renewable energy
from the grid if needed.
Following practical completion we will finalise
a whole-life carbon assessment for the full
lifecycle of the scheme, utilising data captured
during demolition, construction and through to
occupation.
CGI of Droitwich
Droitwich secondary unit, before demolition
Above: Construction of a new Grade A logistics unit at
Droitwich, following demolition of secondary asset
Droitwich, Worcester | MID | I&L | IP
Annual Report and Financial Statements
23
Strategic Report
STRATEGIC REPORT
Increasing our focus on Industrial & Logistics
2020
2021
2022
2023
2024
2025
2026
2027
£1bn EPRA NDV
Target
Cumulative 39.5% EPRA NDV growth
in unstable economic environment
£719.6m
£515.9m
//
Through-the-cycle business model
Progress
planning
Increase
direct
developments
Unlock high
value uses
Optimise
masterplans
+
+
+
+8.7%
4 year CAGR delivered
+11.6%
3 year CAGR targeted
Lynda Shillaw
Chief Executive
Chief Executive’s review
Our 2024 results translate into an impressive total account
return of 9.1%, demonstrating our ability to deliver in
challenging markets and showcasing the agility and
resilience of our through-the-cycle business model. I could
not have asked more of our teams in achieving sector-
leading results ahead of the MSCI All Property Index, whilst
maintaining significant financial liquidity and a low year
end LTV of just 5.4%. 2024 saw us deliver a record level of
land sales, undertake selective strategic acquisitions, and
progress our lettings ahead of estimated rental values.
This translated to significant growth in value through both
valuation gains and profits on sales. We offer a unique
combination: an extensive land bank that is proving
strategically significant to the UK’s infrastructure needs for
both Residential and Industrial & Logistics, coupled with
our specialist skillset to uncover new market opportunities,
invest in our developments, and unlock material underlying
value as we continue to move our sites through the planning
system, positioning us well as we move into 2025.
“
Our ambitions to grow EPRA NDV to £1bn by the end of 2027 and our core investment
portfolio to £0.9bn by the end of 2029 are underpinned by a clear road map.”
Lynda Shillaw, Chief Executive
Road map to £1bn EPRA NDV
Harworth Group plc
24
Operational performance
Our ambitions to grow EPRA NDV to £1bn by the end of
2027 and our core Investment Portfolio to £0.9bn by the
end of 2029 are underpinned by a clear road map and
the significant progress we have made since launching
our strategy in 2021. We remain confident in achieving
our goals by accelerating the delivery of our sites whilst
achieving our NZC ambitions, drawing on our highly
specialist expertise to work through our extensive strategic
land bank. The table below shows our progress to date
against our four key growth drivers.
GROWTH DRIVERS
20201
2023
PROGRESS IN 2024
AMBITION BY
THE END OF 2027
Repositioning our core
Investment Portfolio to
modern Grade A
<10% Grade A at
year-end
37% Grade A at
year-end
45% Grade A at year-end
100% of core
Investment Portfolio
to be Grade A
Increasing direct
development of
Industrial & Logistics
stock
200,000 sq. ft
completed2
0.4m sq. ft of
enabling works
193,000 sq. ft
completed
208,000 sq. ft
started
1.5m sq. ft of
enabling works
107,000 sq. ft completed
270,000 sq. ft started
1.3m sq. ft of enabling works
completed
1.8m sq. ft of enabling works
underway at year-end
800,000 sq. ft run-
rate of completed
space (average
per annum)
Accelerating sales and
broadening the range
of our Residential
products
862 plots sold2
1,170 plots sold
2,385 plots sold
2,000 plots sold on
average per annum
Scaling up through
land acquisitions and
promotion activities
Land supply of 12 to 15 years
Maintained 12 to 15-year
land supply through
acquisitions representing
1.0m sq. ft and 4,404 plots
Maintain a land
supply of 12 to
15 years
Targets
Grow EPRA NDV
£515.9m3
£662.9m
£719.5m
£1bn
Grow core Investment
Portfolio
£221.4m4
£297.2m
£0.9bn by end
of 2029
1 Targets announced 2021. FY20 used as baseline.
2 Annual average 2015 to 2020.
3 EPRA NDV at 31 December 2020.
4 Target announced H2 2024. FY23 used as baseline.
We are making significant progress repositioning our core
Investment Portfolio to modern Grade A specification. It
now stands at 45% Grade A, compared to 11% in 2021,
when we announced our ambition. This was driven by
significant sales, where we had already maximised value
through asset management or re-development initiatives,
as well as through our development and letting of new
space, and the selective acquisition of the Catalyst urban
logistics estate in Rotherham. We are confident in our
ability to reach our 100% Grade A target, underpinned by
the combination of our direct developments, and further
selective acquisitions alongside our sales programme.
We completed a record 2,385 Residential plot sales during
the year, across 13 transactions, demonstrating the depth
of demand for our de-risked serviced land product, and
the strong relationships cultivated by our teams with
housebuilders, BtR developers and housing associations.
Residential sales were completed at a headline sales value
of £104.1m, at prices that were broadly in line with or
ahead of HY24 book values before transaction costs. The
average plot sales since setting our 2021 target sit at 1,800,
positioning us well to hit our 2,000 average plot sales
by 2027.
Annual Report and Financial Statements
25
Strategic Report
STRATEGIC REPORT
Chief Executive’s review
Our Industrial & Logistics Major
Developments portfolio consists
of 12 sites at various stages of
development, from early enabling
works to near-complete Grade A
units. We developed 107,000 sq. ft of
modern Grade A Industrial & Logistics
space in 2024, of which 73,000 sq.
ft went into our core Investment
Portfolio and the remainder was built
for an owner occupier. We started
on a further 270,000 sq. ft in the
period, with one-third of this space
already pre-let. In order to achieve
our aim of an 800,000 sq. ft run-rate
of completions by 2027, we need
to scale up our enabling works to
at least three times this level on an
annual basis. Our programme to 2027
is back-end weighted and at year-
end, enabling works were underway
for 1.0m sq. ft of development at
Wingates (Bolton).
Our strategic land bank is
fundamental to our business model
and scaling up our land bank through
acquisitions and promotions is one
of our key skillsets to maintain a land
supply of 12 to 15 years. During the
year, we made land acquisitions
representing 1.0m sq. ft of potential
Industrial & Logistics space and a
further 4,404 Residential plots.
The Harworth Way
As a specialist regenerator and
placemaker, a commitment to our
communities, our people and our
planet is at the heart of everything we
do. Critical to this is having a lasting
positive impact on the communities
we serve, supporting new homes,
jobs and infrastructure. The Harworth
Way is our framework for ensuring
this happens.
During the year we published our
first NZC Progress Report, providing
an update on progress, challenges,
and opportunities in meeting our
NZC Pathway. Against our 2030
Commitment to be NZC for our
business operations, operational
emissions reduced by 17% in the year
and by 33% since 2022, through the
continued use of alternative fuels
in our site preparation works, the
increased use of electric vehicles, and
the transition of our core Investment
Portfolio to Grade A. In collaboration
with the Forestry Commission, we
completed a woodland planting
scheme of 108,000 trees at
Chevington North (Northumberland),
whilst also commencing further
planting of more than 150,000 trees
at Highthorn (Northumberland).
In April 2024 we published
our Communities Framework,
which explains our approach to
delivering social value throughout
the regeneration process and the
developments we create. During
2024 we developed our processes
to allow the Framework to be
incorporated into our Gascoigne
Wood (Selby) scheme, which
received resolution to grant planning
permission for 1.5m sq. ft of Industrial
& Logistics space, and we will
continue to roll out the Framework
throughout the business in 2025.
It has been another very active year in
delivering for our communities with
a wide range of community events
and local club sponsorship, from fun
runs to food festivals and community
planting. We completed the
construction of the new forest school
at Coalville (Leicester), providing
420 new primary school places in an
energy efficient, modular building,
integrated into the new community.
At Thoresby Vale a wonderful opening
event marked the completion of the
country park providing more than 100
acres of restored heathland, home to
unique wildlife, alongside 4.2km of
active travel infrastructure all set within
the growing residential community.
Over 2024, we once again
commissioned Ekosgen, an
independent economic research
consultancy, to appraise the social
and economic benefits of the
regeneration and developments we
have delivered and plan to deliver,
and it found that our portfolio has
the potential to deliver £4.3bn of
GVA, support up to 66,800 jobs and
generate up to £72.5m in business
rates, underscoring the huge potential
of our activities to benefit society.
Chief Executive’s review continued
“
I could not have asked
more of our teams
in achieving sector-leading
results.”
Lynda Shillaw, Chief Executive
Opposite page:
The emergence of Olive Lane (pedestrianised area towards the bottom right of the photo)
as the community hub connecting the AMP and Waverley
AMP and Waverley, Rotherham | YAC | I&L and R | MD
26
Harworth Group plc
Strategic Report
STRATEGIC REPORT
Chief Executive’s review
Chief Executive’s review continued
Our people
The long-term sustained growth
and prosperity of Harworth can
only be delivered by providing
an environment which cultivates
a high-performance culture. Our
high talent retention, engagement,
and happiness rates reflect the
growing effectiveness of our people
strategies, which are consciously
designed to enable people to do their
best work for the benefit of all our
stakeholders, including investors.
We continuously review and enhance
our Total Reward package to ensure it
meets the evolving needs of a diverse
workforce and remains attractive
in a continuously challenging skills
and talent market. Our diversity
picture is one of steady progress
and in the context of our sector
a very encouraging one and an
important indicator within our recently
developed Culture Dashboard.
In 2024 our Culture programme
delivered several important
milestones, such as our new corporate
values and behaviours framework and
the inclusion of cultural indicators
within our recently launched Enabling
Excellence Framework.
Looking ahead, we are excited
about the prospect of securing an
Investors In People accreditation
this year and delivering further
important milestones such as the
next generation of our Learning &
Development Programme and further
enhancing the productivity of our
people and efficiency in process
through our Digital Transformation
agenda.
Outlook
Harworth is a long-term through-the-
cycle business. Regeneration of large,
complex sites that may take a decade
or more to move from inception to
completion, underpinned by our
significant land bank and proven
skillset in being able to unlock value
through our management actions,
is what sets Harworth apart. Since
2021, when we stepped into our
strategy, we have not only been
focused on growing our business and
accelerating delivery across our sites,
but have invested in our planning
teams to progress more applications
through the system, our development
teams to ramp up delivery, and
our acquisitions teams to build our
land bank.
For the Industrial & Logistics market,
the structural drivers of demand
remain particularly strong, with
increased infrastructure needs from
online retail, cloud computing and
Artificial Intelligence ('AI'), and a
relatively constrained supply of
suitable sites and power capacity
in our regions. Our portfolio can
contribute solutions to these
infrastructure gaps. That said, given
short-term economic uncertainties in
the year ahead, we will continue to de-
risk our development by focusing on
pre-let and build-to-suit opportunities
and land parcel sales. For Residential,
while affordability challenges remain
for house buyers, our increasingly
diversified range of Residential
products alongside constrained supply
of development-ready land, improves
our confidence that our consented,
de-risked serviced land will continue
to appeal strongly to a wide range of
housebuilders, developers and social
housing participants, providing us with
exposure to markets that continue to
grow regardless of the cycle.
As we move into the second half of
our delivery strategy, we have an
8.4m sq. ft consented Industrial &
Logistics pipeline that is capable
of delivering c.£0.6bn of Gross
Development Value (‘GDV’) by
the end of 2027. We continue to
explore other use classes, including
the development of data centres
and energy assets on our Industrial
& Logistics sites and senior living
opportunities on our Residential sites.
Together these factors will ensure
we realise the full potential of our
33.6m sq. ft Industrial & Logistics
portfolio, which has an estimated
GDV of c.£5bn, and our 31,264 plot
Residential pipeline, while delivering
for our people, our planet and our
communities.
Whilst we remain cautious about the
near-term macro-economic outlook,
I continue to be excited about our
prospects as a business and the
significant growth and embedded
value across our portfolio, including
our ability to reach £1bn of EPRA NDV
by the end of 2027 and grow our core
Investment Portfolio to £0.9bn by the
end of 2029.
I would like to say a huge thank you
to my colleagues across the business,
who work tirelessly to deliver on the
ambition of our strategy and have
achieved a strong year of progress,
and to our investors who have
continued to support what we do.
Our significant financial performance
and operational progress illustrate
the dedication, determination, skills,
and teamwork that make us proudly
Harworth.
Lynda Shillaw
Chief Executive
17 March 2025
28
Harworth Group plc
“
The year saw significant progress on
planning approvals, adding further capacity
to our near-term Industrial & Logistics pipeline and
driving a strong revaluation performance.”
Lynda Shillaw, Chief Executive
Lynda and the Board join colleagues and representatives from Strata Homes and Great Places on a site visit to Riverdale Park
Riverdale Park, Doncaster | YAC | R | MD
Annual Report and Financial Statements
29
Strategic Report
STRATEGIC REPORT
Chief Executive’s review
Strategic Land
Major Developments
Value creation
E
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BUSINESS MODEL
Creating economic, social
and environmental value
Our people
A collaborative, ambitious
and innovative culture.
Our land bank
Over 15,000 acres of
development potential.
Our key markets
A portfolio focused on the
Industrial & Logistics and
Residential sectors.
Our people
100% of employees are
“proud to tell people that
I work for Harworth”.
Investors
Strong financial returns,
with a target to reach £1bn
of EPRA NDV by the end
of 2027.
Communities
Sustainable places where
people want to live and
work, with green and blue
space and amenities.
OUTPUTS
Remediation & infrastructure
Once planning consent has been obtained,
our in-house teams ensure completion of
land remediation works, construction of
necessary infrastructure such as roads, and
creation of development platforms for the
site's proposed use.
Planning approval
Once a strategic vision for a site has been
determined, our planners work with local
authorities to progress this through the
planning system. We have a very high success
rate of securing planning consents, while
working collaboratively with local stakeholders.
Acquisition &
land assembly
Our acquisition teams
work across our regions to
identify new sites to add
to our portfolio, through
freehold purchases, options
or PPAs. Larger sites are often
assembled over a number of
years through the acquisition
of smaller land parcels.
Masterplanning
Working with local
authorities and other
stakeholders, we create a
strategic vision for a site
which addresses local
needs for employment
space or housing in an area.
Our sites often complement
or contribute to the wider
strategic aims of local and
central government.
INPUTS
Harworth Group plc
30
Investment Portfolio
PLANET
PEOPLE
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COMMUNITIES
PLANET
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Financing
Our strong financial position gives us
flexibility and firepower.
The Harworth Way
Delivering on our purpose,
with a lasting positive impact.
Read more on pages 38 to 45
Suppliers
Strong partnerships based
on trust, fairness, and shared
values.
Customers
Developing high-quality
products and delivering on
our promises.
Funders
An open dialogue, with
regular updates on our
operational and financial
performance.
Government
A trusted partner in
delivering jobs, homes
and opportunities across
our regions.
Read more about Our
approach to stakeholders
on pages 62 to 67
Asset management
We retain some of the Grade
A Industrial & Logistics units
that we directly develop and
let these to a diverse range of
occupiers. This generates a
recurring income and allows us
to derive further value from the
high standards of placemaking
and environmental
specifications at our sites.
Placemaking
We invest in our sites,
alongside plot sales and direct
development, to provide
additional infrastructure,
amenities and green and
blue spaces. This investment
creates a sense of community
that improves the wellbeing of
residents and those working
there, and enhances the
attraction and value of our sites.
Plot sales & direct development
At our Industrial & Logistics sites, we sell
serviced land to developers and develop
buildings ourselves for occupiers and owners.
At our Residential sites, we either sell serviced
plots to housebuilders or enter into forward-
funding agreements with selected partners to
deliver alternative tenures such as BTR homes
and affordable housing.
31
Annual Report and Financial Statements
Strategic Report
Strategic Report
STRATEGIC REPORT
Creating economic, social and environmental value
OUR INVESTMENT CASE
Unique skillset
We have unrivalled in-house
expertise as a specialist regenerator
of large, complex sites alongside a
depth of experience in acquisitions,
remediation, planning, development
and placemaking. Our insight and
long-term approach mean that we
are able to unlock the potential of
challenging sites where others have
struggled or avoided them altogether.
Number
of employees
(at 31 December 2024)
138
Comprising experts in transactions,
planning, land remediation,
engineering and development,
supported by central functions
and a highly experienced senior
management team.
Extensive land bank
We own over 15,000 acres of land
with the potential to develop over
33m sq. ft of employment space
and enable over 30,000 homes
across the North of England and the
Midlands. We have grown this land
bank over time through targeted
acquisitions. This scale, combined
with our preference for freehold
ownership provides us with significant
opportunities and flexibility.
Estimated
potential GDV
of portfolio
£4.3bn
Demonstrating significant latent value
for us to unlock.
Undersupplied markets
Our core focus markets of Industrial &
Logistics and Residential have strong
structural tailwinds and are critical
to the growth of the UK economy.
Within the Industrial & Logistics
sector we focus on developing and
owning Grade A space that meets the
evolving needs of occupiers, while
our Residential products are focused
on de-risked serviced land for
housebuilders, including mixed
tenure and affordable housing.
2024 Grade A I&L occupier
take-up (100k+ sq. ft units)
was up 6% to
22.6m sq. ft
Outperforming the pre-pandemic
average of 21.2m sq. ft.
Creating value for our investors
We have a strong track record of consistently
delivering market‑leading returns.
Our specialised skillset enables us to unlock and deliver
significant long-term potential value from our existing
consented pipeline, which has the ability to deliver
c.£0.6bn of GDV by the end of 2027 just from our
consented Industrial & Logistics pipeline, and from our
extensive Strategic Land portfolio. Our Residential plot
sales, which saw record volumes in 2024, provide a steady
cashflow for reinvestment into our Industrial & Logistics
development programme, where we have proved we can
deliver high value uses such as our most recent land sale at
Skelton Grange, Leeds to Microsoft.
32
Harworth Group plc
-10
0
10
20
30
40
50
2024
2023
2022
2021
2020
2019
Cumulative returns (%)
5 year growth
strategy launched
during 2021
Harworth Total Accounting Return
MSCI All Property Index Total Return1
1 Source: MSCI
Regional exposure
Our focus regions of Yorkshire
& Central, the Midlands and the
North West are areas where supply
of industrial and logistics space is
more constrained than the national
average and demand for housing is
more resilient, mainly due to better
affordability. These areas are sources
of significant untapped potential and
are also the focus of initiatives and
investment aimed at “levelling up”
the economy.
Of the nationwide
occupier take-up for
I&L space in 2024
74%
was within Harworth's core regions,
with 58% in the Midlands.
Strong financial position
We have consistently maintained a
strong financial position, with low
gearing and significant available
liquidity. Combined with having no
major refinancing requirements until
2027, this provides us with significant
flexibility and firepower. We seek
to maintain balanced cash flows by
funding the majority of infrastructure
expenditure through disposal
proceeds, while allowing for growth
in the portfolio.
Net LTV
value
of
5.4%
one of the lowest in our sector.
Responsible business
Our purpose is to invest to create
sustainable places where people want
to live and work. We aim to have a
lasting positive impact by supporting
new homes, jobs and communities,
and delivering long-term value. We
have ambitious targets that underline
our commitment to sustainability,
including to be operationally NZC
by 2030 and NZC for all emissions
by 2040.
Industrial & Logistics
portfolio has the potential
to support
66,800 jobs
in our regional economies.
Annual Report and Financial Statements
33
Strategic Report
STRATEGIC REPORT
Creating value for our investors
Our markets
We focus on Industrial & Logistics and Residential,
two structurally undersupplied sectors fundamental to
delivering growth to the UK economy and requiring key
infrastructure delivery to ensure their success.
Both are a priority for this government and set to benefit
from recent government policy objectives. In December
2024, the UK government announced its planning overhaul
via the National Planning Policy Framework to accelerate
housebuilding and deliver 1.5m homes before the next
General Election.
More recently, the Prime Minister announced his blueprint
to turbocharge AI, in which data centres and the delivery
of key infrastructure will play a critical part. Our own
Industrial & Logistics portfolio is well placed to contribute
to this rollout.
Industrial & Logistics
Demand continues to be driven by structural factors,
including growth of online retail, cloud computing,
the dramatic proliferation of AI, and the increased
infrastructure requirements that come with all three. Take-
up for Grade A industrial and logistics space of 100,000
sq. ft units and larger was up 6% in 2024, to 22.6m sq. ft,
outperforming the pre-pandemic average of 21.2m sq. ft,
according to JLL. Three-quarters of this take-up was of new,
rather than secondhand, space indicating business focus
on new facilities. A fall in the level of build-to-suit space
was more than offset by an increased level of speculative
take-up of 7.4m sq. ft, which compares to the average
pre-pandemic speculative take-up levels of 4.5m sq. ft,
as shown in the Chart below.
0
5
10
15
20
25
30
35
40
2018
2019
2021
2022
2023
2024
UK Grade A take-up1
2020
m sq. ft
New Grade A
Avg 2015-19 take-up
Secondhand
Avg 2015-2019 spec take-up
22.6m
Source: JLL Research
1 units of 100,000 sq. ft +
34
Harworth Group plc
Despite occupiers remaining active, the market is not
seeing a corresponding impact on net absorption and
overall vacancy as occupier demand is being driven by
more strategic reasons than business growth alone, which
is resulting in deals taking longer to complete and older
space coming back into the market. Notwithstanding, H1
2025 requirements are forecast to be up year-on-year with
a focus nationwide on units of 100,000-200,000 sq. ft.
The Chart opposite shows the distribution of 2024 UK
take-up, where 74% of demand was within our regions
and the Midlands made up the lion’s share at 58%.
Prime yields were broadly stable across 2024, but the
volatility in bond markets is expected to impact Q1 2025
transaction appetite, as investors and vendors wait to see
how the market settles down. Investors and developers
are increasingly focused on strategic acquisitions and
developments that meet occupier needs and sustainability
requirements, and are best placed to benefit from rental
growth.
UK prime headline rents enjoyed 6% growth over 2024 and while this is down year-on-year and materially below the
pandemic peak of almost 18% in 2021, it is still above average pre-pandemic levels of 4.1% as shown in the Chart below.
74%
in Harworth
regions
Greater
South East
20%
Wales
2%
Scotland
1%
East
Midlands
38%
North
West
11%
South
West
3%
UK Grade A logistics take up: 22.6m sq. ft1
West
Midlands
21%
Yorkshire &
the Humber
4%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
2017
2019
2021
2022
2023
2024
UK prime headline rental growth
2020
Avg 2014 -20 rental growth 4.1%
2014
2015
2018
2016
6.0%
5.25%
UK prime I&L yield,
end of 2024
Source: Knight Frank
6.2%
2024 average UK I&L
transaction yield
1 units of 100,000 sq. ft +
Source: JLL Research
Annual Report and Financial Statements
35
Strategic Report
STRATEGIC REPORT
Our markets
Data centres
The UK data centre market is in a material growth phase, with
more recent interest outside of London and the South East.
While different commentators have varying projections of
the state of the UK market and potential growth, consensus
is clear that the market is set to experience a double-digit
CAGR out to 2030, driven by growing adoption of multi-
cloud computing and network upgrades required to support
the roll out of 5G alongside the need for more data storage
and transmission from ecommerce, digital content, social
media and the Internet of Things.
Currently, London is the largest data centre market in
the EMEA and the second largest globally, with 1.14GW
in operation, a 15% increase year-on-year, according to
Cushman & Wakefield. Data from JLL shows that capacity
in the London market is set to double, including 504MW in
development and 677MW in planning, driven by growth
in multi-tenant data centres, hyperscale data centres and
edge computing, coupled with a focus on energy efficiency
and eco-friendly solutions. Emerging regional markets and
remote campuses sitting outside the established metro areas
are also beginning to reshape the data centre landscape
as the emergence of AI and cloud computing facilities are
becoming increasingly location agnostic, driven by power
availability and site deliverability. This is evidenced by our
own land sale for data centre use in Leeds and other market
transactions across the North West and North East.
Limited availability of land and power, together with
sustainability regulations, and their impact on cost and time
to deliver, are the pressing issues for both operators and
investors in the UK and globally. Since the start of 2024,
Savills has tracked over 415 acres of UK land deals to data
centre operators that were, in the main, previously promoted
for industrial and logistics use. This has had the effect of
removing, on average, close to one year’s worth of potential
industrial and logistics supply from the market.
Support for the sector has been underpinned both by
the UK government and significant private investment.
Government initiatives to ensure the viability of the sector
include investment to boost the grid capacity through new
measures in the Planning and Infrastructure Bill, classifying
data centres as critical national infrastructure, strengthening
resilience and regulatory support. These were followed up
by the launch of the AI Action Plan and associated planning
reforms, to boost sectors that are critical to powering the
economy and the long-term growth of the UK. Government
actions have been significantly bolstered by private sector
investments, including Microsoft’s announcement that, in
addition to its contracting to acquire 48 acres at our Skelton
Grange (Leeds) site for a hyperscale data centre, it was
proposing a new data centre campus on a site in North
Yorkshire to create a data centre campus; DC01UK’s £3.75bn
investment in Europe’s largest data centre in Hertfordshire;
Amazon Web Services’ plans to invest £8bn building,
operating and maintaining data centres in the UK; and Latos
DC’s plans to open 40 purpose-built data centres across the
UK by 2030.
Skelton Grange, where we have agreed to sell 48 acres of land to Microsoft which plans to build a hyperscale data centre campus:
Skelton Grange, Leeds | YAC | I&L | MD
Our markets continued
Industrial & Logistics
c.1 year
supply of I&L
removed owing to
data centre land deals
Source: Savills.
£3.75bn
Investment in
Europe’s largest data
centre in the UK
Source: DC01UK.
36
Harworth Group plc
Residential
Residential volumes remained subdued in 2024, with the
market in the early stages of recovery. Front and centre of
government policy are bold ambitions to increase housing
activity, delivering 1.5m new homes by the next General
Election, with planning reform at the heart of supporting
this and wider economic growth. It’s fair to say that
delivery against this target will be back-end loaded, with
housebuilder volumes in 2024 still not recovering to 2022
levels and new government initiatives to drive up volumes
being mobilised.
Local housing targets have been reintroduced and the
presumption in favour of development strengthened with
government task forces formed to unlock the ’grey’ belt.
While planning reform is still expected to be a relatively
protracted process, the shift to drive growth and develop
new homes is a positive signal to the sector and, from a
supply side perspective, positive also for strategic land.
However, the returns for landowners need to remain
attractive for land to come forward to meet the scale of
what is proposed.
The ambition to build more affordable homes is no silver
bullet, and while demand exists, the financial capacity of
Housing Associations remains weak and viability remains an
issue for developers where the mix is skewed to affordable
tenures. Where investor markets are concerned, the stamp
duty surcharge announced in the October Budget is likely
to suppress the appetite of buy-to-let landlords and tip
towards larger, wealthier and institutional landlords.
With interest rates easing and, subject to global dynamics,
showing signs of a further downward trajectory in 2025
this is positive for homebuyers, however rental reform
through the Renters Rights Bill and residual building safety
issues and regulation are weighing on parts of the sector.
Savills forecasts house price growth of 20% to 25% over
the next five years with 4% growth predicted for 2025.
Rental values are forecast to increase by over 17% in the
same period with 4% growth predicted for 2025.
0
20
25
30
35
40
5
10
15
‘000
Number of BTR homes under construction
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Source: BPF, Molior, Savills.
London
Regions
BTR under construction
UK mainstream house price and rental forecasts
0
5
10
15
20
25
House
prices
Rental
values
+4.0%
+4.0%
+5.5%
+3.5%
+5.0%
+4.0%
+3.0%
+3.0%
+3.0%
+3.0%
Source: Savills Research
Total
(compound)
+23.4%
Total
(compound)
+17.6%
2025
2026
2027
2028
2029
Annual Report and Financial Statements
37
Strategic Report
STRATEGIC REPORT
Our markets continued
The Harworth Way
Our integrated approach
to sustainability and social value
The Harworth Way is our
framework for integrating
sustainability and social value
into both our business and the
developments we create. It
ensures these principles are
embedded across our culture,
strategy and, most importantly,
our approach to development
from concept to completion.
The Harworth Way is critical to
our making a lasting positive
impact on the environment
and our communities. This
commitment to integrate
sustainability and social value
into our business is delivered
through the five pillars of The
Harworth Way: the Impact Pillars
of Planet, Communities, People,
and the Supporting Pillars of
Governance and Partners.
The Harworth Way is a continually
evolving framework. It is
responsive to the ever-changing
needs of the environments and
communities we work within and,
alongside our strategy, guides
how we create sustainable places
where people want to live and
work. Our approach recognises
that we cannot deliver our
developments in isolation:
working with all our stakeholders
at all stages of the process
is fundamental to achieving
our aims.
PEOPLE
G
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n
a
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c
e
P
a
r
t
n
e
r
s
COMMUNITIES
PLANET
Governance
Read more in the Governance
Report on pages 98 to 187
Peter Henry, Director of
Sustainability, explains The
Harworth Way to representatives
of Strata Homes and Great Places
Partners
Read more in the Section 172
statement on pages 62 to 67
People
Read more on
pages 44 and 45
Planet
Read more on
pages 40 and 41
Communities
Read more
on pages
42 and 43
THE HARWORTH WAY PILLARS
FOCUS IMPACT AREAS
BUILDING BLOCKS
Minimising environmental
impact, building in climate
resilience and promoting
biodiversity
PLANET
Driving building
efficiency & integrating
energy into development
Improving energy
efficiency in our
Investment Portfolio
Circular
economy &
whole life
carbon
Developing
responsibly
& building in
climate resilience
Protecting
& promoting
biodiversity
Net Zero
Carbon
pathway
Driving building
efficiency & integrating
energy into development
Whole life
carbon
assessment
Commercial
building solar
strategy
Building regulations
review & commercial
building specification
Green lease
terms & occupier
guides
Development
energy
strategies
Sustainability
planning
stage
framework
PEOPLE
G
o
v
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n
a
n
c
e
P
a
r
t
n
e
r
s
COMMUNITIES
PLANET
PEOPLE
FOCUS IMPACT AREAS
Promoting
engagement
& happiness
3
8
10
Prioritising
health & safety
3
8
10
Wellbeing
3
Being socially
responsible
8
10
Employee
experience
8
10
Culture
8
10
COMMUNITIES
FOCUS IMPACT AREAS
8
10
3
9
11
3
10
11
3
9
11
8
10
11
3
10
Promoting
healthier
lifestyles
Holistic
travel
planning
Creating sustainable
communities &
preserving heritage
Creating
inclusive
spaces
Supporting
jobs
Growing
economies
PLANET
FOCUS IMPACT AREAS
Improving energy
efficiency in our
Investment
Portfolio
Driving building
efficiency &
integrating energy
into development
Developing
responsibly &
building in
climate resilience
Protecting &
promoting
biodiversity
Net Zero
Carbon
pathway
Circular
economy &
whole life
carbon
9
11
12
11
9
11
12
9
11
12
9
11
12
9
12
The Harworth Way model
The Harworth Way provides an overarching framework
to deliver an integrated approach to sustainability across
the business through the interlocking model.
The Harworth Way has three Impact Pillars which each
comprise six Focus Impact Areas, representing the key
drivers for delivering each pillar. Each Focus Impact Area
is divided further into Building Blocks, which are the key
workstreams to be undertaken within the business, in
order to deliver a set of outputs. The Focus Impact Areas
and Building Blocks will evolve over time to reflect our
progress and the priorities of The Harworth Way.
Delivering for our planet, communities and people
Harworth is a supporter of the
United Nations (‘UN’) Sustainable
Development Goals (‘SDGs’) and a
signatory to the UN Global Compact.
We have selected six primary SDGs,
which are most closely aligned to our
strategy and operations, and where
we believe we can make the biggest
impact as a business. These have
been mapped to our focus impact
areas, as indicated to the right.
Further information about our Impact Pillars, including a more detailed explanation of the Focus Impact
Areas for each Pillar and mapping against the SDGs, can be found in the Sustainability section of
our website: www.harworthgroup.com/sustainability/. The following pages of the Annual Report
highlight examples of the progress we made in 2024 on those Focus Impact Areas.
Annual Report and Financial Statements
39
Strategic Report
STRATEGIC REPORT
The Harworth Way
The Harworth Way continued
Planet
Driving building
efficiency &
integrating
energy into
development
Renewable Energy
During 2024 we continued to incorporate
renewable energy into our Industrial &
Logistics buildings by fitting rooftop solar
panels. We have worked with occupiers
to build in flexibility for future expansion
through additional panels and battery
storage capability. We installed rooftop
solar to 16 more units across four sites,
with generating capacity of 1.4 MWp from
6,500 m2 of solar panels.
There is the potential to expand coverage on these
units to over 21,000 m2, and we will explore these
opportunities further with occupiers as they continue
to understand better their operational needs. Since the
start of 2023, this brings rooftop solar installations to 2.8
MWp from 13,500 m2 of solar panels across seven sites,
with the potential to extend coverage to 60,000 m2.
Improving
energy
efficiency in
our Investment
Portfolio
Nature Recovery
Nature recovery has long been a
key component of our approach to
regeneration, with >1,000 acres of nature
recovery undertaken over the past decade.
With the introduction of our NZC Pathway
to guide our approach to development,
and of Biodiversity Net Gain (‘BNG’) into
the wider planning framework, we have
continued to expand and adapt our work in
this area.
During 2024, working with the Great
Northumberland Forest and local partners,
we planted more than 100,000 trees at
Chevington North, and began planting a further 150,000
trees at Highthorn, alongside 100 acres of wetland
protection and recovery to expand native woodland,
and support local ecology.
We entered into a Conservation Covenant with a
Responsible Body for the delivery of our first habitat
bank to deliver BNG alongside the development of 300
new homes at Killamarsh. This agreement commits us
to steward the land, in line with an agreed management
and monitoring plan, for a minimum of 30 years across an
area of 41 acres and sets the template for our approach
to BNG as a master developer.
Net Zero
Carbon
Pathway
Reducing Emissions
As part of our commitment to be
operationally NZC by 2030 we have
implemented a range of measures that have
led to an overall reduction in emissions
during 2024 by 17% from 834 tCO2e to
694 tCO2e:
– Alternative fuels: the conversion of our
pulverised fuel ash recovery plant at
Ironbridge from diesel to hydrotreated
vegetable oil, leading to a 329 tCO2e
reduction in emissions for the site
operations in the year.
– Electric vehicle uptake: an increase in electric vehicle
use from 15% to 18% of our total business travel over
the course of the year (based on distance travelled),
and a significant reduction in fuel usage resulting from
the removal of fuel cards for personal vehicles. These
factors led to an overall 26% reduction in business
travel emissions year-on-year notwithstanding a 15%
increase in staff numbers.
– Transition to Grade A: we are making significant
progress in repositioning our core Investment
Portfolio to Grade A specification, which stood at
45% of the portfolio at the end of 2024, compared to
11% in 2021, when we announced our ambition.
More information can be found in the Streamlined
energy and carbon ('SECR') reporting disclosure
on pages 86 and 87
40
Harworth Group plc
CASE STUDY
Chatterley Valley
The Chatterley Valley project spans approximately 45 hectares of
former agricultural land, previously disturbed by coal mining activities,
in a sensitive environmental setting. This area is home to vulnerable
watercourses and protected species. We are developing Industrial & Logistics
units across five plots, supported by integrated measures for recycling
materials and ecological enhancement including:
Minimising Waste: re-use of 1.1m m3 of soil and
rock excavated during earthworks with virtually
zero waste transferred to landfill.
Recycled Materials: more than 4,000 tonnes
of 6F2 grade recycled hard materials were
produced on-site by segregating and crushing
rock boulders and concrete. This avoided
the need to import equivalent materials and
resulted in a carbon footprint saving of over 400
lorry movements.
Topsoil Management: 250,000 tonnes
of topsoil were stripped, segregated, and
preserved for re-use in landscaping, eliminating
the need for imported topsoil.
Ecological Enhancements:
– Wildlife Protection: wildlife kerbs and escape
locations were installed, to help preserve the
great crested newt population, alongside log
pile and hibernacula habitats, to encourage
breeding and provide shelter for other
indigenous species.
– New Habitats: >7 hectares of translocated
ephemeral perennial habitat and tussock
grassland habitat were retained and
relocated to cultivate rare grasses and plants,
enhancing biodiversity on-site.
– Wildflower Meadow Habitat: 2.25 hectares
of wildflower meadows were created to
attract pollinators and enhance the visual
appeal of the site.
– Wetland Meadow: 1.14 hectares of wetland
meadow were established to filter water and
support biodiversity.
Planting: 937 trees were planted across
the site, alongside >20,000 hedge plants,
and >1,700 aquatic and marginal plants were
installed around water features to improve water
quality and support aquatic life.
Circular
economy &
whole life
carbon
Protecting &
promoting
biodiversity
Strategic Report
STRATEGIC REPORT
The Harworth Way
Communities
Supporting
jobs
Growing
economies
Placemaking
We remain committed to regeneration
which has a positive economic and social
impact on our regions, by supporting jobs,
investment and innovation. In 2024 we
completed or commenced construction
of 370k sq. ft of employment space,
which will support thousands of high-
skill jobs, and substantially completed
the construction of Olive Lane, a new
convenience, healthcare, retail and leisure
destination at Waverley. We also delivered
a new forest school at South East Coalville,
providing 420 new primary school places
in an energy-efficient, modular building,
integrated into the new community.
Overall, we entered into 32 construction
contracts in 2024, supporting both
national and local jobs in the construction
and professional services sectors.
As in previous years, we commissioned Ekosgen, an
independent economic research consultancy, to appraise
the social and economic benefits of the regeneration and
development Harworth has delivered and plans to deliver.
Holistic
travel
planning
Promoting Holistic Travel
During 2024 we continued to work with
our Sustainable Travel Plan Managers
to understand the travel needs of
communities across our development sites.
We work with wider stakeholders to deliver
sustainable travel options and improve connectivity
for our developments with action plans in place across
a wide range of our schemes. We have undertaken
travel surveys across our Major Development sites,
undertaking 100+ meetings and events with local
stakeholders, giving us a valuable resource and guiding
the design of our future developments.
Creating
inclusive
spaces
Activating Communities
Our experience of long-term development
shows that new communities need support
to establish themselves. We help this process
by organising events, working with local
schools, and supporting residents’ groups.
In an exciting year for our Communities
and Placemaking Team, we organised
and supported communities at our
developments across a wide range of
community events and activities including:
– Organising Park Runs and bike sessions
at Cadley Park, Prince of Wales and
Rossington.
– Creating community days, Christmas events and
food festivals across Waverley, Cadley Park, Coalville,
Thoresby Vale, Prince of Wales and Simpson Park.
– Donating to local sports teams, encouraging
participation in football, swimming, archery and
cycling at Coalville, Simpson Park, Thoresby,
Waverley, Prince of Wales and Rossington.
– Working with local schools to provide educational
visits at our development at Thoresby, Coalville and
Simpson Park.
All whilst continuing to build residential community
groups, and working closely with parish councils and
local politicians to create thriving new communities.
The Harworth Way continued
Our portfolio has the potential to:
Support up to
66,800
jobs
(2023: 76,500)
Generate up to
£72.5m
in business rates
(2023: £85.2m)
Deliver
£4.3bn
Gross Value Added
(2023: £4.8bn)
Deliver up to
£57.7m
in council tax receipts
(2023: £54.8m)
Year-on-year reductions are substantially attributable to the landmark
sales of our Ansty site and land at Skelton Grange from the Industrial
& Logistics pipeline, together with record Residential plot sales, only
partially offset by acquisitions.
42
Harworth Group plc
Creating
sustainable
communities &
preserving
heritage
Promoting
healthier
lifestyles
CASE STUDY
Thoresby Vale Country Park
After many years of careful planning and restoration, in 2024 we
opened the new 350-acre country park at Thoresby Vale, Nottingham,
in the heart of Sherwood Forest. The regeneration of the former Thoresby
Colliery is now home to a thriving community where Harworth is enabling up
to 800 new homes, alongside commercial and leisure spaces, and delivering a
forest primary school.
The new country park, formerly the spoil heap
for the old Thoresby Colliery, features over
100 acres of restored heathland, which is now
one of the most threatened habitats in the
UK, and home to wildlife unique to heathland
habitats. The park also benefits from a picnic
area alongside 4.2 km of paths for walking
and cycling.
Over the year community engagement
has included:
– July: The country park opening involving
local community groups including Welbeck
Archers, Girl Guides, St. John’s Ambulance,
Tuck’s Brewery and Thoresby Colliery Band.
– October half-term: a programme of events
for school-age children, including ecologist-
led conservation walks, two forest school
sessions and a bulb planting day.
– December: residents’ Christmas event
including installation of a Harworth-funded
Christmas tree and lights.
– Community Fund donations to the Girl
Guides, Robin Hood Colts football team, and
Welbeck Archers.
Strategic Report
STRATEGIC REPORT
The Harworth Way
People
At Harworth, our people are our most valuable asset. Their passion, creativity and commitment
drive our success and define our future.
Employee
experience
Training and Development
In 2024, we redefined our approach to
performance, reward and development, which
we have termed Enabling Excellence.
The philosophy underpinning Enabling
Excellence is to support everyone at Harworth
to establish clear career goals and pathways,
understand the skills and competencies needed
for current and future roles, learn from past
outcomes to improve future performance,
appropriately reward achievement, and build
stronger, more collaborative relationships at and
between every level of the workforce.
The Harworth Academy continues to evolve
to support effective talent development,
incorporating foundation levels of hard and
soft skills training which colleagues need to
undertake before being considered ready for
progression and promotion, together with
access to a broad range of “off the shelf” and
bespoke training options which are targeted
at specific roles and individuals with identified
development needs.
Reward
During 2024 we also undertook a comprehensive
review of our Total Reward proposition to ensure
we are best placed to attract and retain the
best talent with competitive remuneration and
benefits which incentivise the correct behaviours.
Total Reward captures the complete reward
package we offer to our employees beyond
salary and benefits, including flexible working,
enhanced maternity and paternity pay, and
opportunities for development.
Our Total Reward offer now includes externally
benchmarked salaries based on consistently
applied role evaluation criteria, performance-
based bonuses calculated via transparent
scoring methodology and moderation process,
long-term incentives such as the Restricted
Share Plan together with opportunities to build
up a meaningful shareholding in the Company
via the Share Incentive Plan and Save As You
Earn Scheme, and a highly competitive range of
benefits and policies designed to support the
wellbeing of our employees.
Recruitment and Retention
This year, we onboarded 37 new employees,
strengthening our talent pool in various
departments. Our focus on creating an inclusive
and dynamic work environment has resulted in a
voluntary turnover rate of just 5.5% per annum,
a testament to our commitment to employee
satisfaction and career development. Latest
CIPD figures suggest that average attrition levels
are 30-35% per annum for the real estate and
construction sectors, demonstrating that our
turnover levels are much lower than national
sector trends.
Promoting
engagement
& happiness
Employee Engagement
Our Employee Forum was re-launched in June
2024. With 20 active members, employees
connect, share experiences, and influence
transformation projects across the organisation.
The Forum was instrumental in 2024 in delivering
the culture transformation project (see opposite
page).
Our internal monthly Newsletter was also
refreshed in 2024, celebrating individual and
collective achievements, sharing business and
personal news stories, and promoting various
initiatives and important operational updates in a
more engaging manner.
The Harworth Way continued
44
Harworth Group plc
CASE STUDY
Culture Transformation Project
Our culture transformation project aims to translate the concept of culture
into a demonstrable “asset”: giving us visibility of the levers which we need to
pull to preserve the positive aspects of, and continually improve, our culture,
which is borne out not just in what we do, but also how we do it.
The project is structured into several phases:
1. Insight Phase: completed in 2023, this phase
involved data gathering and analysis to identify
strengths and opportunities to improve aspects of
the Harworth culture.
2. Design Phase: completed in 2024, this phase
focused on articulating a new Vision, Values,
and Behaviours Framework in consultation with
employees.
3.Embed Phase: commenced in Q3 2024 and
continuing into 2025, the core objective of this
phase is to ensure the outputs from the Design phase
“stick”. This involves a combination of measures:
training employees on what the Behaviours
Framework means in practice; incorporation of our
updated Values and Behaviours into our Enabling
Excellence and Reward framework; and creation of a
“Culture Dashboard”, which uses metrics to track the
cultural measures.
Culture
Our new Values reflect Harworth’s
commitment to sustainability, growth,
innovation and collaboration.
Build the Future: We are
committed to creating a legacy
that promotes sustainability.
Inspire Growth: We set
ambitious goals and embrace
change.
Innovate & Create: We
constantly evolve, explore
possibilities, and innovate to
deliver lasting results.
One Harworth: We work
together with respect, where
individuality is valued and
appreciated.
Employees participate in a Culture Project consultation event
45
Annual Report and Financial Statements
Strategic Report
STRATEGIC REPORT
The Harworth Way
Operational review
Industrial & Logistics
Land Portfolio
At year end, the Industrial and
Logistics pipeline totalled 33.6m sq.
ft (2023: 37.7m sq. ft) comprising a
consented pipeline of 8.4m sq. ft
(2023: 6.1m sq. ft) and a further 4.8m
sq. ft in the planning system awaiting
determination. The pipeline was 50%
owned freehold by the Group, with
the remainder controlled through
joint venture arrangements, options
or PPAs (2023: 57% / 43%).
l Freehold 50%
l JV/Option/PPA 50%
Land assembly
During the year, freehold acquisitions
added 1.0m sq. ft to the pipeline.
These included:
– Wingates, Bolton: freehold
acquisition adding 400,000 sq. ft
to our existing development site,
of which 1.0m sq. ft is consented
and 1.9m sq. ft has an allocation for
commercial use. This increases the
area under our control to 2.9m sq.
ft, of which 86% is under freehold
ownership and 14% held via
options agreements.
– Gateway 36, Barnsley: Strategic
Land capable of delivering
546,000 sq. ft was acquired under
an option agreement, which brings
the development land under our
control for future development to
1m sq. ft.
Planning
Planning approvals were secured for
6.8m sq. ft of Industrial and Logistics
space across four sites, bringing total
consents to 8.4m sq. ft. Allocations
were received for 3.5m sq. ft (total
allocated now 4.9m sq. ft) and draft
allocations for 0.7m sq. ft (total
benefiting from draft allocation now
2.9m sq. ft) as sites continue to move
through the planning system.
Applications totalling 4.8m sq. ft
are in the planning system awaiting
determination.
Direct development
During the year, we completed
107,000 sq. ft at the AMP, Rotherham,
of which 73,000 sq. ft was let to
Insight, the solutions and systems
integrator, and retained as part of
our core Investment Portfolio. The
remaining 34,000 sq. ft was built on
behalf of an owner-occupier.
At 31 December 2024, we were on
site with 270,000 sq. ft. of direct
development, 34% of which is pre-let.
A further 386,000 sq. ft of I&L space
is expected to commence during
the next 12 months, all of which is
expected to be retained within the
core Investment Portfolio. The units
will all be delivered to Harworth’s
sustainable commercial building
specification.
Enabling works are a critical
component of our pipeline to reach
our direct development targets.
During the year, we completed a
significant level of works, enabling
future delivery of up to 1.3m sq. ft
of I&L space. A further 1.8m sq. ft of
enabling works were underway at the
year-end.
Land sales
Sales completed in 2024 included:
– Skelton Grange, Leeds, where
we completed the sale of 27 acres
of unserviced land to Microsoft,
alongside a development
agreement, and conditionally
exchanged on a further 21 acres
for a total consideration of
£106.6m, of which £53m is set
to be received in H1 2026 upon
completion. The transaction is
expected to generate an IRR above
40%, with further potential from
the delivery of the 16 acres of
‘Retained Land’.
– Ansty, Rugby, where we sold
278 acres for £53.5m, reflecting a
premium to June 2024 book value.
Investment Portfolio
The Investment Portfolio comprises
assets we have acquired and,
increasingly, directly developed
and retained.
Acquisition
We acquired Catalyst, Rotherham,
a newly developed Grade A urban
logistics estate, for £43.7m, reflecting
a net initial yield of 5.4%. This
prime 285,000 sq. ft scheme was
completed in 2023 and is located
adjacent to the AMP, where we expect
to benefit from strong occupier
demand to fill up the existing 28,000
sq. ft vacancy. Once fully let, the
scheme will generate £2.5m of
headline rental income.
Ansty, Rugby
MID | I&L | SL
46
Harworth Group plc
Lettings
During the year, 146,000 sq. ft of
leasing deals were completed, with
total leasing activity adding a net
£1.3m of headline rental income
(2023: 462,000 sq. ft, adding £2.1m).
New lettings, renewals and reviews
were completed at an average 4.3%
premium to ERVs.
At year end, the Investment Portfolio
was valued at £297.2m, up 34% on
the prior year, and with a target to
grow to £0.9bn by year-end 2029, a
required CAGR of 25% over the next
five years.
Residential Land
Portfolio
The Residential pipeline totalled
31,264 plots at year end (2023:
27,190 plots) comprising a consented
pipeline of 4,568 plots (2023: 5,296
plots) and a further 2,136 plots
in the planning system awaiting
determination (2023: 1,774 plots).
Development continues to progress
on the first mixed tenure sites sold by
way of forward funding agreements.
The pipeline was 41% owned freehold
by the Group, with the remainder
controlled through joint venture
arrangements, options or PPAs
(2023: 49% / 51%).
l Freehold 41%
l JV/Option/PPA 59%
Acquisition & land assembly
During the year, freehold acquisitions
added 4,404 Residential plots to the
pipeline. These included:
– Stewartby, Bedford: we acquired
this iconic former brickworks
site in Bedfordshire for total
consideration of £30.6m payable
over 2 years. This is a near-term
opportunity which has outline
planning permission for the
delivery of 1,000 plots, offering the
ability to create value and generate
cash to fund the broader direct
development programme.
– Grimsby West, Grimsby: we
entered into a uniquely structured
joint venture for Harworth where,
once planning permission is
secured, we will hold a c.75% profit
share in the scheme which has the
capacity to deliver 3,979 plots.
Planning
Planning approvals were secured for
818 Residential plots.
At Hale Gate Road, Widnes,
planning approval was secured for
500 Residential plots under a PPA and
separately, an allocation was received
for 1,200 homes on another site in the
North West.
A draft allocation was secured for
Diseworth West, East Midlands
Airport for 2,275 Residential plots,
as part of a mixed use development.
At year-end, 2,136 plots across five
sites continue to progress through
the planning system awaiting
determination.
Land sales
Record sales of 2,385 Residential
plots were completed at a headline
sales value of £104.1m (broadly in line
with or ahead of HY24 book values
before transaction costs).
Sales were made to national and
regional housebuilders and registered
social affordable housing providers,
including our third forward funded
development agreement with Great
Places, validating the robust demand
for our de-risked Residential service
land across different tenures.
Natural Resources
Portfolio
The Natural Resources portfolio
comprises sites used for a wide
range of energy production and
reforestation schemes, delivered as
part of our Energy & Natural Capital
strategy. Our aim is to grow this
portfolio, alongside strategic partners
where appropriate, by developing
renewable energy generation
solutions and other sustainability
initiatives across all of Harworth’s
sites, to maximise energy availability
and resilience,create economic value,
and help fulfil our NZC ambitions.
At the year-end, the Natural
Resources portfolio had a value of
£21.5m (2023: £21.6m) and headline
rental income of £2.1m (2023: £1.8m).
AMP, Rotherham
YAC | I&L | MD
Stewartby, Bedford
MID | I&L | MD
Highthorn,
Newcastle
YAC | NR
Annual Report and Financial Statements
47
Strategic Report
STRATEGIC REPORT
Operational review
Financial review
Overview
Our primary metric, Total Accounting
Return, for 2024 was 9.1%,
representing an increase from 5.1%
in 2023. This Total Accounting Return
reflected positive contributions
from all areas of the Group, with
management actions delivering
value through planning success, and
progressing infrastructure and direct
development, along with completing
the landmark sales at Skelton
Grange and Ansty. These actions,
alongside completions of direct
development, securing sales, and
asset management initiatives across
our Investment Portfolio, resulted in
EPRA NDV per share increasing by
8.4% to 222.3p (2023: 205.1p). Our
2024 performance reflected strong
operational delivery while continuing
to progress against our strategic
objectives. Looking forward, the
structural undersupply within our
chosen markets continues to provide
a strong foundation for the Group’s
future growth.
Sales of serviced land and property,
in addition to income from rent,
royalties and fees, resulted in Group
revenue of £181.6m (2023: £72.4m).
The increase in the year reflected
£47.9m of revenues recognised from
the successful phase 1 sale at Skelton
Grange to Microsoft. Revenue from
the sale of Residential serviced land
also increased during the year to
£92.2m (2023: £38.0m), reflecting
strong demand for the Group’s de-
risked land products. Lower rental
income during the year reflected the
timing of Investment Portfolio asset
sales during 2023 and the early part
of 2024 offset by rental revenue
from letting completed directly
developed assets, and the acquisition
of Catalyst during October 2024.
Total property sales, which included
proceeds from the sales of investment
properties, assets held for sale
('AHFS') and overages, amounted to
£215.8m (2023: £125.9m), reflecting
both the increased development
property sales and the sale of the
Ansty Strategic Land site for £53.5m.
Rental income collection has been
consistently strong and like-for-
like income increased through
management actions, including
lettings of completed direct
developments at the Advanced
Manufacturing Park (Rotherham) and
rent reviews. The £181.6m of revenue
also included PPA and development
revenue totalling £19.3m (2023:
£1.7m), with the increase year-on-
year being driven by completion of
a UK head office for a customer at
the Advanced Manufacturing Park,
Rotherham, as well as development
for Microsoft at Skelton Grange. In
2025, we have already completed
headline sales of £10.4m and remain
confident in our ability to achieve the
2025 budgeted sales targets.
Kitty Patmore,
Chief Financial Officer
Dougie Maudsley,
Interim Chief
Financial Officer1
1 Dougie Maudsley, Director of Finance,
undertook the role of Interim Chief Financial
Officer for a period whilst Kitty was on
maternity leave.
“
I am delighted to say that
operational success has
translated through to the Group's
financial performance.”
Dougie Maudsley
Interim Chief Financial Officer
Harworth Group plc
48
The Investment Portfolio increased to
£297.2m at the end of 2024 (2023:
£221.4m) reflecting the impact
of increased valuations driven by
management actions, market rental
growth, and the £43.7m acquisition
of Catalyst, a 285,000 sq. ft, Grade A,
urban logistics estate in Rotherham,
South Yorkshire adjacent to the
Group’s established Advanced
Manufacturing Park. The Group is
targeting a core Investment Portfolio
of approximately £0.9bn by the end
of 2029, through a combination of
retained developments and selective
acquisitions with the target of this
becoming 100% Grade A by the end
of 2027.
BNP Paribas, Jones Lang LaSalle and
Savills, our independent valuers,
completed a full valuation of our
portfolio as at 31 December 2024,
resulting in full-year revaluation gains
of £86.0m (2023: gains of £64.9m),
including the movement in the market
value of development properties.
These external independent
valuations have regard to conditions
in the residential and industrial
and logistics markets as well as
the positive factors resulting from
management actions at our sites.
Outside the valuation movements,
profits on sales were £11.2m (2023:
losses of £6.8m). Overall, this led to
total value gains of £97.2m (2023:
£58.1m gains).
The fair value of investment properties
increased by £60.8m (2023: £71.4m
increase), which fed through to an
underlying operating profit of £74.6m
(2023: £54.2m) and profit after tax of
£57.2m (2023: £38.0m).
Over the year, the net asset value of
the Group grew by 8.5% to £691.7m
(31 December 2023: £637.7m). With
EPRA adjustments for development
property valuations included,
EPRA NDV at 31 December 2024
increased by 8.5% to £719.5m
(31 December 2023: £662.9m)
representing a per share increase of
8.4% to 222.3p (31 December 2023:
205.1p).
The Group remains well capitalised
and, at 31 December 2024, had
available liquidity of £192.4m
(31 December 2023: £192.2m).
Net debt was £46.7m
(31 December 2023: £36.4m) resulting
in an LTV at 31 December 2024
of 5.4% (31 December 2023:
4.7%). Following the repayment
of development loans, none of the
Group’s drawn debt was subject to
fixed rates (31 December 2023: 35%).
Presentation of financial
information
As our property portfolio includes
development properties and joint
venture arrangements, Alternative
Performance Measures (‘APMs’)
can provide valuable insight into
our business alongside statutory
measures. In particular, revaluation
gains on development properties are
not recognised in the Consolidated
Income Statement and the Balance
Sheet. The APMs outlined below
measure movements in development
property revaluations, overages and
joint ventures. We believe that these
APMs assist in providing stakeholders
with additional useful disclosure on
the underlying trends, performance
and position of the Group.
Our key APMs are:
– Total Accounting Return: the
movement in EPRA NDV plus
dividends per share paid in the
year expressed as a percentage of
opening EPRA NDV per share.
– EPRA NDV per share: EPRA NDV
aims to represent shareholder
value under an orderly sale of the
business, where deferred tax,
financial instruments and certain
other adjustments are calculated
to the full extent of their liability
net of any resulting tax. EPRA NDV
per share is EPRA NDV divided by
the number of shares in issue at the
end of the period (less shares held
by the Employee Benefit Trust or
Equiniti Share Plan Trustees Limited
to satisfy Restricted Share Plan,
Share Incentive Plan and Deferred
Share Bonus awards).
– Value gains: the realised profits
from the sale of properties and
unrealised profits from property
valuation movements including
joint ventures, and the mark-to-
market movement on development
properties and overages.
– Net LTV: Group debt net of cash
held expressed as a percentage of
portfolio value.
Annual Report and Financial Statements
49
Strategic Report
STRATEGIC REPORT
Financial review
A full description of all non-statutory measures is set out in the appendix to the financial statements and reconciliations
between all statutory and non-statutory measures are provided in the appendix to the consolidated financial statements.
From 2025 the Group plans to report on an additional APM, Total Property Return, calculated in line with the MSCI Property
Index Methodology. This will provide increased information to shareholders on the Group’s relative performance and
support the implementation of relative operational performance measures for the short-term and long-term incentive
schemes under the revised Remuneration Policy.
Our financial reporting is aligned to our business units of Capital Growth and Income Generation, with any items that are
not directly allocated to specific business activities held centrally and presented separately.
Income Statement
2024
2023
Capital
Growth
£m
Income
Generation
£m
Central
Overheads
£m
Total
£m
Capital
Growth
£m
Income
Generation
£m
Central
Overheads
£m
Total
£m
Revenue
160.1
21.5
–
181.6
49.0
23.4
–
72.4
Cost of sales
(145.8)
(4.7)
–
(150.5)
(54.0)
(6.0)
–
(60.1)
Gross profit
14.2
16.8
–
31.1
(5.0)
17.4
–
12.4
Administrative expenses
(6.4)
(1.1)
(25.7)
(33.2)
(5.1)
(3.1)
(19.2)
(27.4)
Other gains/(losses)
59.7
18.4
–
78.1
65.2
4.3
–
69.4
Other operating
expense
–
–
(1.4)
(1.4)
–
–
(0.1)
(0.1)
Operating profit/(loss)
67.5
34.1
(27.1)
74.6
55.1
18.5
(19.3)
54.2
Share of profit / (loss)
of JVs
(0.7)
2.2
–
1.5
0.9
0.7
–
1.6
Net interest credit /
(expense)
2.9
0.1
(9.7)
(6.7)
0.5
–
(6.5)
(6.0)
Profit/(loss) before tax
69.7
36.5
(36.8)
69.4
56.4
19.2
(25.8)
49.8
Tax charge
–
–
(12.1)
(12.1)
–
–
(11.9)
(11.9)
Profit/(loss) after tax
69.7
36.5
(48.9)
57.2
56.4
19.2
(37.7)
38.0
Note: There are minor differences on some totals due to roundings.
Revenue in the year was £181.6m (2023: £72.4m), of which Capital Growth contributed £160.1m (2023: £49.0m) and
Income Generation contributed £21.5m (2023: £23.4m).
Capital Growth revenue, which primarily relates to the sale of development properties, increased by £111.1m as a result
of higher sales of Residential serviced land, as well as the completion of the phase 1 sale at Skelton Grange to Microsoft
for which revenue of £47.9m was recognised during the year. Capital Growth revenue also includes fees from PPAs and
development management revenue.
Revenue from Income Generation mainly comprised property rental and royalty income from the Investment Portfolio,
Natural Resources and Agricultural Land. Revenue of £21.5m (2023: £23.4m) was lower than last year reflecting the 2023
sale of investment properties and the successful sale of a site at Flaxby in early 2024, offset by income from our Catalyst
Grade A urban logistics site, acquired in October 2024. Like-for-like headline rent from the Investment Portfolio increased
by 4.9% during 2024 following new lettings, lease re-gears and rent reviews on our existing assets. Taking into account
the acquisition of the Catalyst Grade A urban logistics site and the letting of assets that practically completed during the
year, the total headline rental income for the Investment Portfolio increased by 24% to £17.5m at the year-end, (2023:
£14.1m). Cost of sales comprises the inventory cost of development property sales, costs incurred in undertaking build-
to-suit development and both the direct and recoverable service charge costs of the Income Generation business. Cost of
sales increased to £150.5m (2023: £60.1m), of which £132.0m related to the inventory cost of development property sales
(2023: £47.3m). In the year, we saw a decrease in the net realisable value provision on development properties of £5.7m
(2023: £4.4m increase) following the valuation process as at 31 December 2024.
Financial review continued
50
Harworth Group plc
Administrative expenses increased in the year by £5.8m (2023: £5.3m increase). This was due to higher salary expenses,
resulting from increased employee numbers recruited to deliver future value creation as we step into the next phase of the
strategy, higher bonus costs incurred reflecting the strong performance, coupled with inflationary cost pressures, IT spend
increasing automation, and costs incurred as part of progressing strategic objectives.
The strong EPRA NDV growth shows the actions of the teams creating value as they work on sites and progress transactions
to a conclusion. Administrative expenses expressed as a percentage of operating profit excluding administrative expenses
was lower than the previous year at 31% (2023: 34%).
Other gains comprised a £60.4m net increase (2023: £71.1m net increase) in the fair value of investment properties and
assets held for sale (‘AHFS’) combined with the profit on sale of investment properties, AHFS and overages of £17.7m
(2023: £1.7m loss), driven primarily by the sale of the Ansty Strategic Land site following receipt of planning permission
during the year.
Other operating expense includes a settlement loss incurred following the Group entering a trustee agreed Buy-In
Agreement with respect to the Blenkinsopp Pension scheme during the year. The agreement secures all remaining
liabilities in the scheme by way of an insurance contract. The costs of £1.4m represent a settlement loss preceding buyout
arrangement and as such are expensed through the Income Statement.
Joint venture profits of £1.5m (2023: £1.6m profits) were the result of net rental income and valuation gains at Multiply
Logistics North, offset by a small reduction in value of the Aire Valley Land joint venture increasing costs of development.
Value gains/(losses) on a non-statutory basis are outlined below.
Non-statutory value gains/(losses)
Value gains/(losses) are made up of profit on sale, revaluation gains/(losses) on investment properties (including
joint ventures), and revaluation gains/(losses) on development properties, AHFS and overages. A full description
and reconciliation between statutory and non-statutory value gains can be found in Note 2 and the appendix to the
consolidated financial statements.
2024
2023
31 Dec 24
31 Dec 23
£m
Category
Profit /
(loss) on
sale
Reval.
gains/
(losses)
Total
Profit /
(loss) on
sale
Reval.
gains/
(losses)
Total
Total
valuation
Total
valuation
Capital Growth
Residential Major
Developments
Development
(2.9)
20.3
17.4
(5.4)
(9.0)
(14.4)
223.8
210.5
Industrial & Logistics
Major Developments
Mixed
0.7
5.8
6.5
0.1
43.1
43.2
138.1
136.0
Residential
Strategic Land
Investment
–
8.6
8.6
(0.1)
6.1
6.0
61.0
51.6
Industrial & Logistics
Strategic Land
Investment
12.6
31.4
44.0
(0.1)
18.4
18.3
109.7
105.9
Income Generation
Investment Portfolio
Investment
0.8
19.6
20.4
(1.4)
6.2
4.8
297.2
221.4
Natural Resources
Investment
–
0.5
0.5
0.1
–
0.1
21.5
21.6
Agricultural Land
& other
Investment
(0.1)
(0.3)
(0.4)
–
0.1
0.1
7.5
21.1
Total
11.2
86.0
97.2
(6.8)
64.9
58.1
858.8
768.1
Notes: There are some minor differences on some totals due to roundings. Profit/(loss) on sale is stated net of the impact of transaction fees incurred.
Annual Report and Financial Statements
51
Strategic Report
STRATEGIC REPORT
Financial review
Profit on sale of £11.2m (2023: £6.8m loss) reflected the impact of the sale of the Ansty Industrial & Logistics Strategic
Land site alongside wider sales reflecting pricing broadly in line with book value before transaction costs, the impact of
discounting deferred consideration at present value, and retentions not recognised on completion. Revaluation gains were
£86.0m (2023: £64.9m gains) and are outlined in the table below.
2024
£m
2023
£m
Increase in fair value of investment properties
60.8
71.4
Decrease in value of assets held for sale
(0.4)
(0.3)
Movement in net realisable value provision on development properties
1.3
(6.2)
Contribution to statutory operating profit
61.7
64.9
Share of profit of joint ventures
1.5
1.6
Unrealised (losses)/gains on development properties and overages
22.7
(1.6)
Total non-statutory revaluation gains
86.0
64.9
Note: There are minor differences on some totals due to roundings
The principal revaluation gains and losses across the divisions reflected the following:
– Industrial & Logistics:
– Across Major Developments and Strategic Land, there were value gains relating to planning progress, including at
Gascoigne Wood and Ansty, as well as progressing the sale of land for data centre use at Skelton Grange through the
agreement with Microsoft.
– The industrial and logistics market continued to benefit from rental growth supporting our Industrial & Logistics Major
Development sites, Strategic Land sites and the Investment Portfolio alongside the impact of management actions.
– Regional investment yields remained stable between December 2023 and December 2024, according to JLL. Value
gains were primarily driven by management actions, particularly from renewals and rent reviews, securing new leases,
and providing renewable energy to tenants, combined with incentive period completions.
– Residential:
– Masterplan optimisation at our Residential Major Development sites drove value gains, through our responding
flexibly to increasing local housing needs and reducing future costs by working with stakeholders and re-engineering
development solutions.
– Strategic Land gains included the impact of sites progressing through the planning system as well as re-allocating
land to Residential where changes in local markets could drive greater value through acceleration.
– Residential land sales on our Major Development sites at good pricing levels demonstrated the demand for our
serviced land product underpinning valuations.
– The residential market saw house prices increase by 4.7% over the year; however, new house completions remained
low and significantly below the UK government target of 300,000 a year. Despite this the demand for short term and
serviced land continued to be strong across Harworth sites supporting both sales and underpinning valuations.
– Natural Resources: valuations remained broadly stable with valuation increases resulting principally from higher royalties
from wind assets.
– Agricultural Land and Other experienced a small valuation decrease during the year.
The net realisable value provision on development properties as at 31 December 2024 was £8.5m (31 December 2023:
£14.1m). This provision is held to reduce the value of seven (31 December 2023: nine) development properties from their
deemed cost (the fair value at which they were transferred from an investment to a development categorisation) to their net
realisable value at 31 December 2024. The transfer from investment to development property takes place once planning is
secured and development with a view to sale has commenced.
Financial review continued
52
Harworth Group plc
Cash and sales
Group revenue from property sales in the year of £215.8m (2023: £125.9m), resulted in an overall profit on sale of £11.2m
(2023: loss £6.8m). Revenue from sales comprised Residential plot sales of £97.2m (2023: £44.1m), Industrial & Logistics
land sales of £101.0m (2023: £11.5m), sales of Investment Portfolio properties of £13.3m (2023: £70.0m) and receipt of
overages of £4.3m (2023: £0.3m).
Cash proceeds from sales in the year were £172.3m (2023: £132.0m) as shown in the table below:
2024
£m
2023
£m
Total property sales
215.8
125.9
Less deferred consideration on sales in the year
(57.8)
(21.9)
Add receipt of deferred consideration from sales in prior years
14.3
28.0
Total cash proceeds
172.3
132.0
The increase in Residential headline sales to £104.1m (2023: £52.1m) resulted in higher levels of deferred consideration.
Where deferred payment terms are agreed to, security is maintained to mitigate credit risk.
Tax
The income statement charge for taxation for the year was £12.2m (2023: £11.9m), which comprised a current year tax
charge of £6.0m (2023: £5.8m) and a deferred tax charge of £6.1m (2023: £6.0m).
The current tax charge resulted primarily from profits from the sale of development properties, investment property, AHFS,
profit on the rental of investment property, royalties and other fees after taking into account overheads and interest costs.
The increase in deferred tax largely relates to unrealised gains on investment properties. The deferred tax balance has been
calculated based on the rate expected to apply on the date the liability is crystallised.
At 31 December 2024, the Group had deferred tax liabilities of £37.4m (31 December 2023: £30.6m) and deferred tax
assets of £1.5m (31 December 2023: £0.5m). The net deferred tax liability was £35.9m (31 December 2023: £30.1m).
Basic earnings per share and dividends
Basic earnings per share for the year increased to 17.7p (2023: 11.8p) reflecting the increase in the valuation of investment
properties in 2024, increased profits from sales during the year, coupled with reduced rental income following the
successful sale of investment property during 2023 and early 2024.
In addition to the interim dividend of 0.489p, the Board has declared a final dividend of 1.125p (2023: 1.022p) per share,
bringing the total dividend for the year to 1.614p (2023: 1.466p) per share. The recommended 2024 final dividend and
2024 total dividend represent a 10% increase in line with our dividend policy.
Annual Report and Financial Statements
53
Strategic Report
STRATEGIC REPORT
Financial review
Financial review continued
Property categorisation
Until sites receive planning permission and their future use has been determined, our view is that the land is held for a currently
undetermined future use and should, therefore, be held as investment property. We categorise properties and land that have
received planning permission, and where development with a view to sale has commenced, as development properties.
The table below sets out our top 10 sites by value, which represent 54% of our total portfolio, split according to their
categorisation, including currently consented Residential plots and commercial space:
Top 10 sites by value
SITE
REGION
USE
TYPE
CATEGORY
PROGRESS TO DATE
Ironbridge (Telford)
MID
R
R
MD
SL
Dev. prop
Inv. prop
1,000 Residential units consented, land sold representing
312 units, further enabling works underway
Continue to progress master planning for the scheme in
collaboration with the Local Authority
Advanced
Manufacturing Park
(AMP) (Rotherham)
YAC
I&L
I&L
MD
IP
Inv. prop
Inv. prop
2.1m sq. ft of Industrial & Logistics space consented, 1.7m
sq. ft built or sold, with 0.1m sq. ft nearing completion
0.4m sq. ft of Grade A held in Investment Portfolio
Bardon Hill (Leicester)
MID
I&L
IP
Inv. prop
0.3m sq. ft of fully-let Grade A held in Investment Portfolio
Coalville (Leicester)
MID
R
MD
Dev. prop
2,016 Residential units consented, land sold
representing 977 units
Catalyst (Rotherham)
YAC
I&L
IP
Inv. prop
Acquisition of 0.3m sq. ft Grade A urban logistics estate
Wyke Lane (Bradford)
YAC
I&L
IP
Inv. prop
0.3m sq. ft fully-let
Logistics North
(Bolton)
NOW
I&L
I&L
IP
IP
Inv. prop
JV
104k sq. ft owned freehold retained in Investment
Portfolio
87k sq. ft controlled through joint venture retained in
Investment Portfolio
Stewartby (Bedford)
MID
R
MD
Inv. prop
Outline consent for 1,000 Residential units
Wingates (Bolton)
NOW
I&L
I&L
MD
SL
Inv. prop
Up to 1m sq. ft of I&L space consented on Phase 1 and
enabling works started
The wider scheme allocation under Greater Manchester's
Places for Everyone will see a further planning application
for 1.9m sq. ft submitted later this year
Waverley
(Rotherham)
YAC
R
I&L
MD
MD
Dev. Prop
Inv. Prop
Consent for up to 3,000 Residential units, land sold
representing 2,578 units
Olive Lane, a new mixed-use development reached
practical completion in March 2025 and will be retained
in Investment Portfolio (20k sq. ft)
As at 31 December 2024, the balance sheet value of our development properties was £190.9m (2023: £250.0m) and
their independent valuation by BNP Paribas was £221.9m, reflecting a £31.0m cumulative uplift in value since they were
classified as development properties. In order to highlight the market value of development properties, and overages,
and to be consistent with how we state our investment properties, we use EPRA NDV, which includes the market value of
development properties and overages less notional deferred tax, as our primary net assets metric.
54
Harworth Group plc
Net asset value
31 Dec 2024
£m
31 Dec 2023
£m
Properties1
821.6
734.7
Cash
117.4
27.2
Trade and other receivables
98.2
48.6
Other assets
15.3
13.8
Total assets
1,052.5
824.4
Gross borrowings
(164.1)
(63.6)
Deferred tax liability
(35.9)
(30.1)
Other liabilities
(160.9)
(93.0)
Statutory net assets
691.7
637.7
Mark to market value adjustment on development properties and
overages less notional deferred tax
27.8
25.2
EPRA NDV
719.5
662.9
Number of shares in issue less Employee Benefit Trust &
Equiniti Share Plan Trustees Limited-held shares
323,640,852
323,154,373
EPRA NDV per share
222.3p
205.1p
1 Properties include investment properties, development properties, AHFS, occupied properties and investment in joint ventures.
EPRA NDV at 31 December 2024 was £719.5m (31 December 2023: £662.9m), which includes the mark to market
adjustment on the value of the development properties and overages. The total Portfolio Value at 31 December 2024
was £858.8m, an increase of £90.6m from 31 December 2023 (£768.2m). The Group’s share of gains from joint ventures
of £1.5m (2023: £1.6m), alongside net investment, resulted in investments in joint ventures increasing to £33.6m
(31 December 2023: £30.7m). Trade and other receivables include deferred consideration on sales as set out previously.
At 31 December 2024, deferred consideration of £72.9m (31 December 2023: £28.1m) was outstanding, of which 61.0% is
due within one year, with the increase driven by the higher level of Residential land sales completed during 2024; where
deferred payment terms are agreed, the Group maintains security in order to mitigate credit risk.
Financing strategy
Harworth’s financing strategy remains to be prudently geared. The Income Generation portfolio provides a recurring
income source to service debt facilities and this is supplemented by proceeds from sales. The Group has an established
sales track record that has been built up since re-listing in 2015, with 2024 reflecting a substantial increase in total property
sales compared with 2023.
To deliver its strategic plan, the Group has adopted a target LTV at year-end of below 20%, with a maximum of 25% in-year.
As a principle, the Group seeks to maintain its cash flows in balance by funding the majority of infrastructure expenditure
through disposal proceeds, while allowing for growth in the portfolio.
Debt facilities
The accordion option within the RCF was exercised during 2024, increasing the total RCF to £240m. The RCF is provided by
NatWest, Santander and HSBC and is aligned to the Group’s strategy, providing significant liquidity and flexibility to enable
us to pursue our strategic objectives. The interest rate on the RCF is based on an LTV ratchet mechanism with a margin
payable above SONIA in the range of 2.25% to 2.50%. The Group has no refinancing requirements until 2027.
As part of its funding structure, the Group also uses infrastructure financing provided by public bodies and site-specific
direct development loans to promote the development of major sites and bring forward the development of Industrial &
Logistics units.
Annual Report and Financial Statements
55
Strategic Report
STRATEGIC REPORT
Financial review
Financial review continued
The Group had borrowings and loans of £164.1m at 31 December 2024 (2023: £63.6m), being the RCF drawn balance (net
of capitalised loan fees) of £164.1m (2023: £33.8m) and infrastructure or direct development loans (net of capitalised loan
fees) of £nil (2023: £29.7m). The Group’s cash balances at 31 December 2024 were £117.4m (2023: £27.2m) reflecting sales
proceeds received in late December 2024. The resulting net debt was £46.7m (2023: £36.4m).
Net debt increased with property expenditure and acquisitions mainly offset by the completion of serviced land and
property sales. The movements in net debt over the year are shown below:
2024
£m
2023
£m
Opening net debt as at 1 January
(36.4)
(48.4)
Cash inflow from operations
42.6
17.4
Property expenditure and acquisitions
(116.5)
(54.9)
Disposal of investment property, AHFS and overages
80.0
69.6
Net investments in joint ventures
(1.3)
0.7
Interest and loan arrangement fees
(7.7)
(4.5)
Dividends paid
(4.9)
(4.4)
Tax paid
(0.5)
(10.2)
Other cash and non-cash movements
(2.0)
(1.7)
Closing net debt as at 31 December
(46.7)
(36.4)
The Group’s hedging strategy to manage its exposure to interest rate risk is to hedge the lower of around half its average
debt during the year or its net debt balance at year-end. Following the repayment of the infrastructure financing outside
the RCF during the year, at 31 December 2024, none of the Group’s drawn debt was subject to fixed rate interest rates
(31 December 2023: 35%), with no hedging instruments in place on the floating rate debt. Projected drawn debt and
hedging requirements remain under active review with any new hedging to be aligned to future net debt requirements.
Due to the timing of sales towards the end of December 2024, the Group held a higher year end cash balance of £117.4m
(31 December 2023: £27.2m) of which £90.0m was used to repay RCF debt in the first week of January 2025. This higher cash
and gross debt balance impacted the gross debt ratios at 31 December 2024. As at 31 December 2024, the Group’s gross LTV
was 19.1% (31 December 2023: 8.3%) and its net LTV was 5.4% (31 December 2023: 4.7%). If gearing is assessed against the
value of the core income generation portfolio (the Investment Portfolio and Natural Resources portfolio) only, this equates to
a net loan to core income generation portfolio value of 15.7% (31 December 2023: 15.9%). Under the RCF, the Group could
withstand a material fall in portfolio value, property sales or rental income before reaching covenant levels.
At 31 December 2024, Group liquidity of £192.4m (31 December 2023: £192.2m) included undrawn capacity under the
RCF of £75.0m (31 December 2023: £165.0m) in addition to the year-end cash balance of £117.4m (31 December 2023:
£27.2m). Going forwards the RCF, alongside selected use of development and infrastructure loans where appropriate, will
continue to provide the Group with sufficient liquidity to execute our growth strategy.
Dougie Maudsley
Interim Chief Financial Officer
17 March 2025
Opposite page: Serviced platforms ready for vertical development
Chatterley Valley, Stoke | NOW | I&L | MD
56
Harworth Group plc
Strategic Report
STRATEGIC REPORT
Financial review
Viability period and rationale
The Directors have assessed
the prospects of the Group and
its principal risks over a longer
period than the period required
by the Going Concern Statement
(see the Statement of Directors’
Responsibilities on pages 186 to 187).
The Board conducted a review
for a period of five years ending
31 December 2029. This period was
selected for the following reasons:
– the Group’s strategic plan covers a
five-year period;
– for a major scheme five years is a
reasonable approximation of the
time taken from obtaining planning
permission and remediating the
site to letting property on and/or
developing material parts of the
site; and
– most leases contain a five-year
rent review pattern and therefore
five years allows for forecasts to
include the reversion arising from
such reviews.
The final two years of the period are
by their nature less certain and are
less detailed in their projections.
Resilience of business model
The Group’s strategy focuses on
continued growth through increasing
direct development of Industrial
& Logistics buildings, accelerating
land and property sales, broadening
the range of Residential products,
growing our Strategic Land portfolio,
and repositioning our core Investment
Portfolio to modern Grade A. When
repositioned, the Investment Portfolio
will continue to provide a diversified
portfolio of income-producing assets
for the Group to support coverage
of operating and financing costs.
This enables the Group to create
value in modern Industrial & Logistics
buildings while supporting the
transition to NZC. Major development
sites could be active with phases of
development combining to be fifteen
years or more and plans for sites can
be adapted to the market conditions
at the time.
Projections have been prepared in
the context of the Group’s Strategy
and its principal income streams,
which are:
– sales of Residential and
commercial serviced land, for
which there are plans reaching out
to 2029;
– rental income from income-
producing properties which, at
31 December 2024, had a vacancy
rate of 5.6%, a WAULT of 11.4 years
and a rent collection of 98%; and
– development and investment
management, planning promotion
and investment fees.
Regular income from the income-
producing portfolio with low vacancy
rates helps to support cost coverage.
The income-producing properties
within the Industrial & Logistics and
Natural Resources sectors have a
diverse range of tenants. The land
and property portfolio is spread
across all stages of our business
model which gives the opportunity, if
required, to advance sites at an earlier
stage (through master-planning
and planning promotion). While
the market as a whole continued
to be impacted by higher interest
rates and low growth in 2024, the
residential market has a fundamental
undersupply of housing and demand
for our Residential serviced land
remained strong during 2024.
Over this time, the industrial and
logistics market saw increasing
rents and resilient demand, despite
low economic growth coupled
with businesses adapting to the
implications of the UK autumn budget
impacting the length of occupier
decision-making cycles. Having teams
in Yorkshire, the Midlands and the
North West balances the Group’s
exposure to any one region.
Adequacy of financial resources
Net debt at year-end of £46.7m
represented a 5.4% net LTV. The
accordion option within the RCF was
exercised during 2024, increasing
the Group RCF to a £240m facility.
The RCF is provided by NatWest,
Santander and HSBC and is aligned
to the Group’s strategy, providing
significant liquidity and flexibility
to enable us to pursue our strategic
objectives. The interest rate on
the RCF is based on an LTV ratchet
mechanism with a margin payable
above SONIA in the range of 2.25%
to 2.50%.
The Group RCF matures in 2027,
and it is assumed that the Group
facilities will be refinanced on similar
terms to the existing facility in line
with the requirements of the Group’s
strategy. The Group’s lenders remain
supportive, most recently approving
the increase in the facility to £240m
during Q4 2024.
Principal risks and uncertainties
Reporting on the Group’s viability
requires the Directors to consider
those principal risks that could impair
the solvency and liquidity of the
Group. Over the last 12 months, the
Board has kept the Group’s principal
risks under regular review and
updated them to reflect the macro-
economic environment as well as the
strategic progress of the Group. The
principal risks and uncertainties that
the Board considers could impair
solvency and liquidity relate to
adverse changes in: residential and
commercial markets; the availability
of appropriate capital; and planning
promotion risk, with consideration
also given to impacts relating to the
NZC Pathway and wider business
risks as identified in the 'Effectively
managing our risk' section of this
Report on pages 68 to 85.
Long-term viability statement
58
Harworth Group plc
Assessment of long-term
prospects and sensitivities
The five-year strategic plan focuses
on the expected growth of the
business primarily in terms of EPRA
NDV and Total Accounting Return
including dividends. The strategic
plan also incorporates the Group’s
projected valuations, recurring
income, cash flows, covenant
compliance, financing headroom and
other key financial ratios over the
period. These metrics are subject to
sensitivity analysis which involves
flexing the main assumptions
underlying the forecasts both
individually and in unison.
The key risks and the scenarios
considered as part of the sensitivity
analysis are set out below. Throughout
the strategic plan period, the Group
expects to continue to transform land
and property into sustainable places
where people want to live and work.
Whilst under the sensitivity analysis
EPRA NDV growth plus dividend
as well as the Group’s headroom
within its facilities could be impacted
temporarily, the long-term business
model is expected to remain resilient
throughout the cycle, enabling
Harworth to continue to deliver the
Group’s Purpose in a sustainable
manner.
RISK
SCENARIO
MITIGATION AND FURTHER ANALYSIS
Markets:
Residential and
commercial
markets
– A downturn in industrial and
logistics and/or residential
market conditions could lead
to a fall in property values or
reduced sales.
– Notwithstanding strong rent
collection, an economic
downturn could impact on
some tenants’ ability to pay
rent and lead to loss of rent
or restructuring of rental
payments.
– As a result, expenditure
on new land and property
acquisitions could be
restricted.
– The portfolio provides a spread of sites across the Group’s three core
regions and properties are diversified across the Residential and Industrial
& Logistics sectors, both of which have strong underlying demand
fundamentals. This helps to mitigate the impact of market movements.
– Pursuant to our strategy, we are working to mitigate any potential
downturn by introducing new products at our Residential sites,
repositioning our core Investment Portfolio to modern Grade A, aligning
the speed of our direct development to market conditions and de-risking
development through pre-let or forward funding agreements where
appropriate.
– The Group actively manages rent collection by working closely with
tenants in its Investment Portfolio on payment terms that support
both parties.
– If necessary, development expenditure can be reduced and rephased to
match more closely market demand and conserve cash.
Finance:
Availability of
appropriate
capital
– A market downturn reducing
sales volumes would lower
income.
– Short-term downward
valuation movement and
lower income receipts could
be experienced which would
reduce headroom under the
financial covenants in the RCF.
– Higher interest rates would
reduce headroom within
interest cover covenants.
– Inability to access appropriate
equity and/or debt funding to
support the strategy.
– At year-end, the Group had low gearing, good liquidity with debt
headroom and cash resources providing sufficient financial flexibility to
continue to operate across its sites. Adequate headroom on facility limits
and financial covenants is projected throughout the five-year period.
– The RCF provides a £240m facility which expires in 2027. It is assumed
that the Group facilities will be refinanced on similar terms in line with
the requirements of the Group’s strategy. A review of future financing
options, including continuing with the RCF structure, has commenced
and the Group will enter discussions with lenders well in advance of the
RCF expiry to ensure continuity in funding of the Group’s activities.
– The RCF can be supplemented by project-specific funding where
relevant. All outstanding infrastructure loans were repaid in 2024 using
RCF headroom. We continue to pursue and unlock grant funding and
site- specific loans where appropriate.
– The Group continues to actively review the risk of interest rate increases
and consider hedging requirements with respect to projected drawn
debt balances. At 31 December 2024 the Group’s only drawn debt
was on the RCF facility which incurs interest at SONIA + a margin. No
hedging was in place at 31 December 2024, but this remains under
review, with the Group’s hedging strategy to hedge the lower of around
half its average debt during the year or its net debt balance at year-end.
– Reduced activity on sites as set out above would reduce development
expenditure and conserve cash resources.
– The Group continues to review portfolio and project-specific
financing options.
Annual Report and Financial Statements
59
Strategic Report
STRATEGIC REPORT
Long-term viability statement
RISK
SCENARIO
MITIGATION AND FURTHER ANALYSIS
Sustainability:
Managing
climate change
transition
– Failure to manage transitional
risks associated with climate
change covering both
operational activity and
reporting.
– Potential impact of climate
change on our sites, slowing
development programmes
and reducing sales.
– Risks associated with Harworth’s sustainability framework were overseen
by the ESG Committee in 2024. As our sustainability framework, practices
and reporting have evolved, and the framework is now wholly integrated
into our business strategy, the Board has decided that the ongoing
oversight of sustainability-related risks, opportunities, strategies and
performance should move to being considerations of the main Board,
with oversight of ESG reporting becoming the responsibility of the Audit
Committee. See further in the ESG Committee Report on pages 140 to 141.
– A Non-Executive Director with a strong background in sustainability was
appointed to the Board in 2022.
– We have undertaken initial high-level scenario modelling covering NZC
pathway and transition risks.
– Development of an Energy and Natural Capital strategy, which includes
opportunities for carbon sequestration, biodiversity net gain, carbon
trading and use of renewable energy.
– All buildings delivered in 2024 met our NZC Pathway targets for
embodied emissions and operational energy use in commercial buildings,
allowing the Group to mitigate its Scope 3 emissions.
– The continued transition of our Investment Portfolio towards Grade A
offering all new tenants green leases since 2023, mitigates the Group’s
environmental impact.
Planning
– Planning promotion risk
including uncertainty around
local and national changes
to planning regime with
potential for adverse effect on
promotion activity, progress
on sites and EPRA NDV
growth.
– Strong relationships with local planning authorities and key local
stakeholders, supplemented by local political advisers where appropriate,
supports the Group’s ability to adapt to changing requirements.
– Land assembly undertaken using option agreements mitigates planning risk
through limiting capital outlay prior to planning being achieved, typically
enabling land acquisition at a discount to post-planning market value.
– The potential impact of planning reforms is modelled in project appraisals
ahead of acquisition.
Other risks
including
project
delivery and
organisational
development
and design
– Supply chain pricing pressures
and constraints resulting in
development cost increases
and delays and/or default
by and/or insolvency of
counterparties.
– Legislative reforms which
have the effect of levying
an additional cost on
development.
– Insufficient and/or
inappropriate resources,
resulting in increased staff
costs or reduced productivity.
– We undertake rigorous tender processes and utilise market intelligence
regarding contractors’ commitments and workload.
– Our central technical team monitors contractor “concentration risk” and
promotes consistencies and knowledge-sharing across our portfolio.
– We continually review changes in legislation alongside potential future
changes, building the impacts into future site and strategic planning.
– Detailed forward planning and consideration of the appropriate
organisational design mitigates the risk of misalignment between
resources and targeted strategic outcomes.
– There are high levels of employee satisfaction within the business as
reported on page 13.
Viability statement
Based on the results of this analysis and having considered the established controls and available mitigation actions for
principal risks and uncertainties, the Directors have a reasonable expectation that the Company and the Group will be able
to continue in operation and meet their liabilities as they fall due over the period of assessment.
Long-term viability statement continued
Opposite page: Gareth Thomas, Development Director, presents to guests at an open day for the new forest school at
Coalville, Leicester | MID | R | MD
60
Harworth Group plc
Strategic Report
STRATEGIC REPORT
Long-term viability statement
In this section, we identify our key stakeholders and explain how we have engaged with them
and had regard to their interests when making strategic and significant operational decisions
during 2024.
Whilst the Board recognises its
statutory obligation under Section
172(1) of the Companies Act 2006, its
engagement and collaboration with
stakeholders are not merely matters
of statutory compliance. Doing so
keeps us informed of their evolving
needs, which is key to delivering
against our Purpose and to drive long-
term sustainable growth.
The Board’s engagement with, and
regard for, stakeholders is both direct
(most notably our people and investors)
and via management reporting to the
Board on stakeholder engagement
activity. This includes the appraisal of
stakeholder impact in Board project
appraisals to focus discussion on:
– how each new project supports the
delivery of our Purpose and aligns
with our strategy, including review
of financial performance metrics;
– the environmental and societal
impact of each project in the
context of the key pillars of
The Harworth Way: Planet,
Communities and People; and
– the impact of each project on
our external stakeholder groups
including a review of risks and
opportunities.
Our People
WHY WE ENGAGE
HOW WE ENGAGE
Our people at Harworth are key
to the current and future success
of the Company. It is their skills,
experience and hard work that
allow us to create high-quality,
sustainable places where people
want to live and work.
The Board engages with staff directly through various formats, including employee
lunches, site visits, regional team dinners, office visits and the Employee AGM held
biennially. The Board also undertakes an annual review of our employee survey
results and of employee engagement across the business, and receives feedback
from the Chief Executive on people matters at each Board meeting.
See more on page 112.
THEIR KEY INTERESTS
HOW DO WE RESPOND? EXAMPLES OF ACTIONS TAKEN IN 2024
To work on market-leading projects
with pride and enjoyment.
To work in, and contribute to,
an innovative, collaborative and
diverse culture.
To be supported in their career
and personal development,
appropriately rewarded and
recognised for their contribution.
A sustainable work-life balance.
To feel valued and have their views
heard and taken into account in
decision-making.
We are committed to making Harworth an employer of choice. Our people strategy,
which supports our business strategy, is subject to ongoing review, particularly
to reflect the growth of the business. The Board, Remuneration Committee, and
Nomination Committee receive various updates from the Group Resources and
Transformation Director, whose responsibility it is to evolve the people strategy.
During 2023, and into the first half of 2024, the Company undertook an in-depth
cultural review with the aim of continuing the positive evolution of Harworth’s
culture. This review sought input from colleagues across all areas of the business
and resulted in an evolved Harworth vision, mission and values along with the
introduction of a behavioural competency framework. The Board was kept appraised
throughout the culture review process, and will continue to have oversight of the
rollout and promotion of the new values and behavioural competency framework
with the support of a 'culture dashboard'.
The Board approved the development of a new Head Office at its AMP Waverley
site in Rotherham to allow Harworth to deliver an architecturally significant, fit
for purpose, sustainable workspace that can attract, motivate and retain staff and
showcase the Group’s building delivery services within the heart of one of its
flagship sites. The office is expected to be ready for occupation in early 2026.
Section 172 statement
62
Harworth Group plc
Investors
WHY WE ENGAGE
HOW WE ENGAGE
Building trust and securing the
long-term support of current
and prospective shareholders
are both important to raise and
maintain market appetite for the
Company’s shares, ultimately
delivering returns to shareholders
through growth of the share price.
To that end, it is critical that we
understand and provide the level
of visibility of our operational
and financial performance that
investors need to make informed
investment decisions. It has also
become increasingly important
to demonstrate to investors how
Harworth makes a positive
societal impact.
Management meets regularly with existing and prospective investors, and with
brokers and analysts, including after publication of the Company’s full-year
and interim results. The Chair meets periodically with our largest shareholders
and, if material changes to Executive remuneration are proposed, our Senior
Independent Director also meets these stakeholders.
We provide business updates regularly via trading statements, investor
presentations and regulatory releases, including on material operational
milestones, such as significant site acquisitions and disposals and progress in
obtaining planning consents.
The full-year and interim results, Annual Report and other regulatory
announcements, together with the www.harworthgroup.com website, are the
Company’s principal means of communication with all shareholders during
the year. The results and Annual Report are reviewed in detail by the Board to
ensure they articulate clearly and effectively both the Company’s strategy and the
progress it achieves in delivering its strategic objectives.
Each year, the Board reviews and approves an investor relations plan for the
year ahead.
One of our Non-Executive Directors, Martyn Bowes, is a conduit for engagement
with one of our largest shareholders.
THEIR KEY INTERESTS
HOW DO WE RESPOND? EXAMPLES OF ACTIONS TAKEN IN 2024
Long-term returns.
A business that considers and
delivers a positive environmental
and societal impact.
An effective governance framework
to support the successful delivery
of our strategy.
In response to feedback from existing and prospective investors, we have further
enhanced our financial and operational disclosures both in our Annual Report and
our regulatory releases.
We hosted investors and analysts at a Capital Markets Day in October 2024, which
comprised a presentation by members of the management team, focused on the
Group’s growth opportunity in Industrial & Logistics, its capabilities and track
record of successful delivery and its intention to retain more directly developed
Grade A space in its Investment Portfolio. This was followed by an interactive
Q&A session providing further opportunities to respond to feedback and a tour of
Skelton Grange and Gascoigne Wood, two of Harworth’s large-scale Industrial &
Logistics developments that will deliver positive outcomes to the local economy
once completed.
Our Chief Executive and Chief Financial Officer held a live presentation via the
Investor Meet Company platform, which was open to all existing shareholders and
potential investors but was particularly targeted at our retail investors, giving them
the opportunity to submit questions before and during the event.
We also undertook an extensive shareholder consultation exercise as part of
formulating our revised Remuneration Policy, which will be tabled for approval at
our 2025 AGM.
Annual Report and Financial Statements
63
Strategic Report
STRATEGIC REPORT
Section 172 statement
Communities
WHY WE ENGAGE
HOW WE ENGAGE
By understanding the
characteristics people want in the
communities where they live and
work, we are able to create thriving
communities and make a positive
and sustainable contribution to
local areas.
Consultation and collaborative working with the local communities where we
are transforming sites are fundamental components of a successful project.
These include: integrating principles and measures into our masterplans
which align with The Harworth Way and our Communities Framework; early
and ongoing engagement with the public on masterplans and all planning
applications; liaison with key community groups as developments mature;
and careful management of the shared public open space on our sites, often
in collaboration with local residents.
THEIR KEY INTERESTS
HOW DO WE RESPOND? EXAMPLES OF ACTIONS TAKEN IN 2024
The creation of sustainable places
where people want to live and
work. Each site is unique; however,
key interests for those living and
working on our sites typically
include: housing or places of work
with a high design specification;
supporting infrastructure, which
has been carefully designed,
delivered and 'future-proofed';
skilled employment; thoughtfully
constructed blue and green
spaces, which have a positive
ecological impact and promote
wellbeing; education provision;
and comprehensive fit for purpose
local amenities.
Consideration of the placemaking proposals for, and the impact on local
communities of, each project are key components of our appraisals.
The ESG Committee reviewed the evolution of Harworth’s sustainability
framework, with a focus on the “Communities” pillar of The Harworth Way,
culminating in the publication of a Communities Framework in April 2024, which
lays out our commitment to creating new, and supporting existing, communities.
A range of initiatives were undertaken to support the implementation of the
Framework including on travel planning and community engagement.
We expanded our Communities & Placemaking team who have successfully
delivered several community engagement events across our developments, all of
which positively encourage community cohesion. Harworth also set up resident
mailing lists and resident committees to improve communication, as well as
redirected some employee volunteer days to focus on supporting activities that
are identified as priorities by the local communities themselves.
We opened a new 350 acre country park at our Thoresby Vale development in
Nottinghamshire. This benefits from a purpose-built forest-style school alongside
commercial and leisure spaces, as well as over 100 acres of restored heathland.
Section 172 statement continued
As part of the opening of the learn-to-ride cycle track at our Waverley development in Rotherham, pupils from Waverley Junior Academy
enjoy a demonstration of the site's pump track by Team GB Junior BMX racer George Hunt. Waverley, Rotherham | YAC | R | MD
64
Harworth Group plc
Customers
WHY WE ENGAGE
HOW WE ENGAGE
Our principal customers are:
tenants; commercial developers;
purchasers of our serviced land
products including housebuilders;
and in the case of mixed tenure
products, investors and/or
registered providers. As a master
developer, we want to ensure
there is long-term demand for our
developments, and hence need
to understand what our customers
are looking for when they assess
their respective investment and/or
operational criteria.
We maintain regular contact outside deal cycles with housebuilders and
commercial developers to understand their requirements for ongoing land and
development opportunities. We engage pro-actively with commercial tenants
to establish their appetite for pre-let commitments and work in partnership with
occupiers who engage us for build-to-suit development.
As we progress our mixed tenure projects, including our BTR and Affordable
Housing portfolios, we are engaging with selected investment partners that have
demonstrated a willingness to participate in portfolio specific and long-term
forward funding and investment opportunities.
Typically, day-to-day engagement with our existing tenants is via our managing
agents who help identify where direct involvement and engagement from our
investment team are needed.
THEIR KEY INTERESTS
HOW DO WE RESPOND? EXAMPLES OF ACTIONS TAKEN IN 2024
A collaborative and reciprocal
relationship with Harworth in which
they trust us to deliver a high-
quality, sustainable product on
time, and, for our tenants, a longer-
term relationship in which they are
treated fairly and their operational
needs are understood and met.
Harworth delivers as a leading regenerator of brownfield land by optimising our
masterplans, deploying timely and effective investments into remediation and
infrastructure, and creating schemes that attract a range of industries, evidenced in
June 2024 by the conditional sale of two land parcels to Microsoft for a hyperscale
data centre. Following exchange, we worked closely with Microsoft to complete
the sale of plot 1 in December 2024, and will continue to engage with Microsoft
and other key stakeholders as we focus on the full remediation and servicing of the
site to enable the second tranche of the sale.
Our energy-efficient Grade A Industrial & Logistics units provide our tenants with
a high-quality product. As at 31 December 2024, 45% of the core Investment
Portfolio comprised Grade A properties (31 December 2023: 37%). To support
and align our sustainability aspirations with those of our tenants, during the year
we completed EPC and CRREM reviews for all Investment Portfolio assets to
inform discussions with tenants on renewable energy provision as part of creating
individual NZC pathways for our assets.
We continued to maintain a close interaction with both existing and prospective
national and regional housebuilder customers and saw strong demand for our de-
risked serviced Residential land product.
Annual Report and Financial Statements
65
Strategic Report
STRATEGIC REPORT
Section 172 statement
Suppliers
WHY WE ENGAGE
HOW WE ENGAGE
The successful and timely delivery
of our developments depends on
strong relationships with suppliers
who are professional, trusted and
share our values. Understanding
their levels of, and approach to,
reducing carbon emissions is a
vital component of our own
journey to NZC.
We apply a consistent “take-on” approval process for all suppliers and maintain
regular communication. Whilst we operate a long list of approved suppliers, we
usually engage small groups of trusted consultants and contractors on a repeat
basis, fostering strong, long-term relationships.
THEIR KEY INTERESTS
HOW DO WE RESPOND? EXAMPLES OF ACTIONS TAKEN IN 2024
A long-term partnership with
Harworth in which they are treated
fairly, maintain good visibility of our
future requirements, and receive
timely payment, while contributing
to Harworth’s success.
Ahead of the delivery of each of the BTR and affordable housing portfolios and
direct development projects approved during the year, the Board undertook a
review of delivery risk including counterparty due diligence undertaken by the
management team on all delivery partners.
The Board undertook a visit to Wheatley Hall Road, Doncaster focusing on
the development at the site of mixed tenure (affordable rent) properties and were
joined by senior representatives of Strata Homes, Harworth’s delivery partner
for the site.
We continued to engage with suppliers to understand CO2 emissions arising from
our major construction contracts allowing the Group to report on a wider set of
Scope 3 emissions.
To date we have monitored emissions from 42 construction projects, providing
the foundations to a comprehensive database to guide our NZC Pathway whilst
allowing us to build the knowledge base of our suppliers. During the year,
considerable progress was made to expand our approach into the delivery of
Residential buildings alongside our delivery partners.
We improved our supply chain and procurement management framework, which
will be rolled out during 2025, principally to facilitate relationship management
with our key project delivery partners to support the significant increase in
construction activity. This underpins the delivery of our development pipeline and
will improve engagement across our supply chain.
Section 172 statement continued
66
Harworth Group plc
Central and Local Government
WHY WE ENGAGE
HOW WE ENGAGE
Harworth has an important part to
play in supporting the new Labour
government’s main priorities over
the coming years, both at a national
and regional level, in particular
targets to build 1.5m homes,
promoting economic growth and
supporting the energy transition.
We actively participate in central government consultation exercises on policy
proposals, both directly as well as through industry bodies such as the British
Property Federation. We also engage proactively with senior political figures
and civil servants on national matters of significance such as the industrial
strategy, devolution proposals and infrastructure priorities, as well as on site-
specific matters.
We engage with local government, including existing and emerging Mayoral
Combined Authorities, and work collaboratively with officers and members from
local planning authorities ahead of planning application submissions and on the
discharge of planning conditions. We also work with local authorities to promote
long-term Strategic Land, and to secure loan or grant funding where available to
deliver maximum public benefit from our developments.
THEIR KEY INTERESTS
HOW DO WE RESPOND? EXAMPLES OF ACTIONS TAKEN IN 2024
Environmental, societal and
economic priorities, both national
and local, the achievement of
which we can help support.
During the year, we engaged with the leaders and other senior officers from
local authorities and Mayoral Combined Authorities across our regions, working
collaboratively to deliver local and regional priorities via our current projects and
future pipeline.
We responded positively and constructively to several significant consultations
launched by the new Labour government, as it seeks to ensure the UK’s economic
security and growth. Of particular note was our response to the consultation on
the proposed reforms to the National Planning Policy Framework launched shortly
after the election.
National housing shortages and the need for infrastructure investment continued
to be important factors that inform our project appraisals, as well as demand
for places and spaces that enable growth-driving sectors, such as advanced
manufacturing, to thrive in the UK. We continue to engage proactively across
government to identify opportunities to accelerate the delivery of our sites and the
value that they can create for the economy and wider society.
In May 2024 we published our ‘Blueprint for Growth’, which proposes seven
policy reforms aimed at establishing a more supportive business environment
that encourages development and enables broader regional economic growth.
We undertook an extensive engagement programme around its launch inviting
key public sector and central government stakeholders to explore whether
solutions could be embedded as part of any legislative revisions to existing
policies. These discussions inform, enhance and complement our ongoing wider
stakeholder engagement plans.
Harworth Group plc
A Blueprint for Growth by Harworth
Improving life
outcomes through
regeneration
Annual Report and Financial Statements
67
Strategic Report
STRATEGIC REPORT
Section 172 statement
Effective risk management is a key focus for the Board and directly informs our strategy. It helps us
create value and deliver positive outcomes for our stakeholders in support of our purpose:
to transform land and property into sustainable places where people want to live and work.
In this section, we explain how the
Board has been assured of, and is
satisfied with, the effectiveness of
Harworth’s risk management and
internal control system. We present
our approach to risk and set out
the Board’s analysis of the Group’s
principal risks and uncertainties, in the
context of our strategy.
Our risk management framework
In 2024, we took significant steps
to transform our risk management
framework, focusing on two key
objectives: maintaining a continuous
improvement culture responsive
to an evolving risk landscape and
preparing for the future, notably
Provision 29 of the 2024 Corporate
Governance Code (‘Code’) set to take
effect for periods starting on or after
1 January 2026. Whilst aspects of our
existing risk management framework
represented a good foundation for
satisfying the new requirements
introduced by the revised Code,
in January 2024 we established an
Enterprise Risk Management (‘ERM’)
function which has subsequently
developed a comprehensive
roadmap to enhance and standardise
practices across the organisation. A
maturity assessment was completed,
and clear goals and proportionate
targets were set to strengthen our
approach. The roadmap ensures full
engagement from the Board and the
wider business, driving alignment
towards a shared vision of consistent
methodology and enhanced visibility,
equipping our teams with the tools
to identify, quantify, and address risks
effectively and with agility.
Unified risk register system
At the core of this enhancement is
the introduction of improved and
standardised operational risk registers
and a consistent lens through which
we view and report risks across
all business functions. This unified
approach will:
– Establish cohesive risk language
throughout the organisation.
– Facilitate more effective cross-
functional risk communication.
– Provide a structured foundation for
our principal risks register.
– Strengthen overall risk oversight
and decision-making processes.
Our approach to risk management
remains centred on being transparent
about our risk appetite, appraising
risk as a fundamental part of decision-
making, and responding quickly
to changes in our risk profile. As
outlined below, we have clear roles
and accountabilities regarding risk
management.
We recognise that not all risks can be
eliminated or sufficiently mitigated
at an acceptable cost and that there
are some risks which, having regard
to the nature of Harworth’s business
and the track record and experience
of the team, we are prepared to
accept. Our focus is to ensure an
awareness of risk throughout the
organisation with a framework in place
to respond effectively to changes in
risk profile whilst making the most
of our opportunities. Our insurance
programme also plays an important
role when we cannot eliminate certain
specific risks.
Effectively managing our risk
Construction of homes by Ashberry Homes (a trading division of Bellway Homes Ltd) on a 13.9-acre land parcel, located in the
Swinfen Vale region of the Coalville development, following its purchase from Harworth.
Coalville, Leicester | MID | R | MD
68
Harworth Group plc
RISK FRAMEWORK
INFORMING
REPORTING
The Board
The Board is responsible for determining the Group’s risk appetite, monitoring its risk profile, and ensuring
that measures and controls are in place to identify and manage risk effectively. Its focus is on principal and
emerging risks.
Audit Committee
The Audit Committee supports the Board in managing risk and is responsible for reviewing the appropriateness
and effectiveness of risk management activities and internal control processes.
Group Leadership Committee (‘GLC’)
The GLC plays a critical role in identifying operational risks, implementing and monitoring risk response
strategies, and ensuring the effectiveness of key controls to safeguard the business.
In 2024, with support from the ERM function, targeted risk workshops were conducted with GLC members focusing on
key control areas linked to principal risks. These workshops were integral to our continuous review and enhancement
of the principal and operational risk framework, reinforcing our commitment to robust risk management across the
organisation.
We conducted cross-functional deep dives to analyse key risk triggers, revisiting and refining key controls to address
existing challenges and new initiatives across the business. Key risk indicators were also reassessed to ensure alignment
with these triggers and controls, enabling the early identification of shifts and trends before they escalate, further
enhancing our proactive risk management capabilities.
The ERM function
The ERM function supports the business in identifying, assessing, managing, and reporting risks that could impact
its objectives. The function is overseen by the Board and other governance committees in the business, who
ensure the effectiveness of the ERM framework.
The key purposes of the ERM function as outlined in The Orange Book (published by the UK Government’s HM Treasury
and widely referenced in corporate and private sector risk management practices) include:
1. Providing a structured approach to risk
2. Enhancing risk awareness and culture
3. Supporting governance and compliance
4. Facilitating risk identification and assessment
5. Enabling risk response and mitigation
6. Monitoring and reporting on risks
7. Supporting decision-making and resilience
(see following page)
Annual Report and Financial Statements
69
Strategic Report
STRATEGIC REPORT
Effectively managing our risk
Internal audit
The Internal Audit function acts as an independent and objective assurance function by evaluating the appropriateness
and effectiveness of our risk management and internal control processes through independent review, with a direct
reporting line to the Audit Committee, including regular contact with the Audit Committee Chair. The Head of Audit
and Assurance is responsible for designing and delivering a 36-month rolling internal audit programme, with support
from a co-sourced partner. In November 2023, the Audit Committee approved the 2024 internal audit programme.
This is a risk-based programme with consideration given to all functions fundamental to business operations. It is
designed to provide assurance to the Board over the effectiveness of material controls in place to mitigate key risks
to the business. The findings and recommendations from these audits were reported to senior management and to
the Audit Committee throughout the year and followed up with action owners to ensure recommendations were
addressed in a timely manner. The Audit Committee also reviews annually the effectiveness of the Internal Audit
function. See further in the Audit Committee Report on page 132.
Risk owners and champions
At the operational level, risks are managed daily by designated risk owners and supported by risk champions
from each business function, with additional oversight from the ERM function.
Looking ahead, we are enhancing our risk management framework by introducing improved and consistent operational
risk registers across all business functions. This will provide a structured foundation feeding into the principal risks
register, strengthening our overall risk oversight.
A key workstream within this layer, supporting the development teams across the business, is the creation of a
standard 'project risk register' format for each Strategic Land and development site, which incorporates consistent
risk assessment methodology to identify key risks and threats to each project. The risk registers will also enhance the
visibility and understanding of the project risk profiles when reviewed and appraised by the Investment Committee
and Board for the purposes of our delegated authorities regime. The new project risk register model incorporates a
risk quantification tool that helps teams quickly assess if an emerging risk is material based on the thresholds in our
operational approvals policy, Environmental Health and Safety metrics, and other financial and non-financial metrics,
which set the risk appetite of the business when it comes to project delivery.
While this initial phase focuses on our Strategic Land and development sites, our roadmap includes plans to extend
similar support to the asset managers of our Investment Portfolio and other critical business functions. This phased
approach ensures:
– Tailored risk management solutions for each functional area.
– Continuous improvement and adaptation of our risk framework.
– A holistic and integrated approach to organisational risk management.
By implementing these enhancements, we are ensuring risk management resilience as we scale up our activities.
Effectively managing our risk continued
Opposite page: Highway realignment marks the commencement of enabling works at Wingates
Wingates, Bolton | NOW | I&L | MD
70
Harworth Group plc
Strategic Report
STRATEGIC REPORT
Effectively managing our risk
Following a detailed review undertaken by management and presented to the Audit Committee
before this report was published, the Board is assured that the Group’s systems of risk
management and internal control, including all material financial, operational, compliance and
reporting controls, are effective.
Principal risks and uncertainties
The Board is responsible for identifying and evaluating the Group’s principal and emerging risks that could potentially
impact the execution of our strategy, business model, future performance, solvency, liquidity or reputation. The Board
receives a report on these principal and emerging risks at each meeting. During 2024, the Board continued to assess
principal risks closely, particularly in light of the strategic 'pivot' towards Industrial & Logistics development and investment
announced during the year, and external factors such as the election of, and rollout of policies by, the new UK government,
and persistent geopolitical instability and macroeconomic headwinds throughout the year.
In addition, during H2 2024, in-depth principal risk workshops were conducted by the ERM function with business risk
champions, further strengthening the 'top-down/bottom-up' review process. During 2025, the Board will undertake a
comprehensive review of principal risks, informed by the strategic pivot, the resultant scaling up of development activity
and of the Investment Portfolio, and the early outputs from the enhancement and standardisation of our 'bottom-up'
operational risk management framework.
Below are the changes made to our principal risks since the 2023 Annual Report. For a detailed explanation of each
principal risk, see pages 74 to 85.
RISK
WHAT HAS CHANGED DURING THE YEAR
Risk 2 – Planning
Although the risk profile outlined in this report remains unchanged, we recognise that the
planning reforms proposed by the new government should have a positive overall impact on
Harworth’s planning promotion activities. However, implementation of these reforms, and
realisation of their full effects, will take time. Consequently, we anticipate that the residual risk
profile will trend downwards in the short-to-medium term.
Risk 7 – Residential and
commercial markets
The analysis of this principal risk has been undertaken against a backdrop of challenging and
uncertain market conditions. At the time of writing, there are some early signs which suggest
that the external economic landscape may improve over the course of the balance of the year,
notably if there are further cuts in interest rates. That said, there also remains downside risk in
the economic and political environment.
Risk 12 – Digital
resilience
This risk has been renamed from ‘cyber security’ to ‘digital resilience’ with changes to
the risk description, broadening the risk scope beyond cyber-attack. It now includes the
mismanagement of information by employees or suppliers, recognising and articulating that
internal actions and third-party relationships also pose a risk alongside malicious threats.
The revised statement also recognises a more comprehensive articulation of the potential
impact of this risk, including intellectual property theft or loss, financial loss, reputational
damage and/or business interruption.
The residual risk rating has moved from 'low' to 'medium'. These changes result from the
growing threat, both with increased malicious activity by third parties, and with Harworth,
now a FTSE 250 Company, being more likely to be targeted. The digital resilience controls in
place and, being bolstered, will improve Harworth’s overall security posture, and keep pace
with and support the rollout of our digital transformation project.
Effectively managing our risk continued
72
Harworth Group plc
The Group Principal Risk Register
The register incorporates the principal
risks the Board has identified. Each
risk is subject to a consistent risk
assessment methodology, the outputs
of which are reflected in a principal
risk dashboard which details:
– the scope of, and commentary on,
the status of each risk;
– inherent risk, residual risk, and
risk appetite scores to evaluate
the changing status of each risk
and monitor the alignment (or
misalignment) of risk appetite and
risk profile;
– mitigation measures that have
either been implemented, are in
progress, or are planned;
– Key Risk Indicators (‘KRIs’) used to
measure the profile of each risk:
whilst this aspect remains under
development, the ERM function
aims to improve the quantity and
quality of KRIs, and to develop a
KRI dashboard for continuous real
time monitoring of KRIs where
possible.
Assurance over the key controls in
place to mitigate principal risks to
an acceptable level is obtained via
various sources covering all three
lines of defence. The Head of Audit
and Assurance manages an assurance
map which identifies what assurance
is taken over the effectiveness of
material controls. These controls are
in place to mitigate to an acceptable
level not only principal risks but also
other key financial, operational,
compliance, and reporting risks.
Any gaps in assurance identified
are used to inform the 36-month
rolling internal audit programme
(see page 138).
Very high
High
Medium
Low
D
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I
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at
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Re
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s
Ac
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e
Sa
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ty
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an
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ts
1
1
3
3
4
4
6
5
6
5
7
8
8
9
9
10
10
11
11
12
12
2
2
7
Inherent risk (before mitigating actions)
Residual risk (after mitigating actions)
Principal risks
Acquisitions
1. Availability of and competition for
strategic sites
Project Delivery
2. Planning
3. Development supply chain
4. Counterparties: investment partners
and service providers
5. Power infrastructure capacity
6. Statutory costs of development
Markets
7. Residential and commercial markets
People
8. Organisational development
and design
Finance
9. Availability of appropriate capital
Safety and Compliance
10. Health and safety
Sustainability
11. NZC pathway
Systems and Information Resources
12. Digital resilience
See our principal risks tables on the following pages for how we report on
and mitigate our principal risks
The risk heat map below illustrates the status of our principal risks at the
date of this report, both before and after mitigating actions.
Annual Report and Financial Statements
73
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STRATEGIC REPORT
Effectively managing our risk
Effectively managing our risk continued
RISK 1
COMMENTARY
Availability of and
competition for
strategic sites
The availability of, and competition for, financially viable strategic sites are influenced
by several factors, including land scarcity, which, combined with the impact of
other principal risks to the viability of prospective new schemes, create challenges
to securing schemes which meet our financial return aspirations. These factors are
partially offset by Harworth’s significant embedded value to be unlocked from our
high-quality extensive land bank, capable of delivering c.33.6m sq. ft of Industrial
& Logistics space and over 30,000 Residential plots. We continue to leverage our
relationships with key stakeholders in the market, enhancing strategic partnerships,
market intelligence and financial analysis to secure prime locations, optimise
developments, and ensure long-term environmental and regulatory compliance.
DESCRIPTION
MITIGATION
ADDITIONAL MEASURES PLANNED
FOR 2025
Failure to acquire strategic
land at appropriate prices
due to constrained supply or
competition.
– Developing and maintaining our relationships
with land agents and land owners.
– Developing strategic partnerships to secure
first access to prime locations whenever
possible.
– Gathering market intelligence.
– Engaging with valuers before major
acquisitions and conducting extensive
financial analysis to ensure acquisition prices
yield appropriate returns.
– Optimising master plans and enhancing
organic scheme value growth, focusing on
locations with existing infrastructure and
strong market potential.
– Conducting comprehensive evaluations
of prospective new sites, which are
informed by price and non-price-based
risks and opportunities throughout the
development cycle.
– Brand awareness: Optimising Harworth’s
brand value as a master developer and
existing reputation for tackling complex
projects.
– Deploying alternative structures to
support land assembly, including via
strategic partnerships.
– Re-evaluate the long-term Strategic
Land and development pipeline in light
of the strategic pivot to the Industrial
& Logistics sector and undertake a gap
analysis of the existing pipeline to inform
an updated acquisitions strategy.
Current residual risk status
MEDIUM
Change in residual risk in the year
Link to strategic priorities
3 £
Key to change in residual risk in the year
No change
Increase
Decrease
£ Group targets
H The Harworth Way
Strategic priorities
1 Repositioning our core
Investment Portfolio to
modern Grade A
2 Increasing direct
development
of Industrial &
Logistics space
3 Accelerating sales and
broadening the range
of our Residential
products
4 Scaling up through
land acquisitions and
promotion activities
74
Harworth Group plc
RISK 2
COMMENTARY
Planning
The UK planning challenges include delays from an inefficient system, resource
constraints within local authority planning departments, and frequent changes to
government policy. Proposed reforms are, on the whole, but not exclusively, positive
for Harworth: they aim to streamline processes, bolster local authority resources,
restore housing targets, and boost sustainable development, with goals including the
delivery of 1.5m new homes over the next five years and critical infrastructure projects.
However, significant impacts are unlikely until later in the parliamentary term. Industry
engagement and stability are essential for progress, while private sector projects
remain constrained by economic uncertainty and the cost of debt. Added complexities
come in the form of land value capture, Greater Manchester’s carbon tax, greenbelt
and BNG policies, with uncertainties around how these will be implemented in
practice (these also inform the profile of Risk 6: statutory costs of development).
Harworth employs a comprehensive approach to project underwriting, incorporating
detailed planning permission strategies, stakeholder mapping, and market analysis
to guide investment decisions and optimise outcomes. This includes monitoring
greenbelt exposure, local planning applications, and market trends, engaging with
political advisers and industry peers, and actively participating in consultations to
influence planning policies.
DESCRIPTION
MITIGATION
ADDITIONAL MEASURES PLANNED
FOR 2025
Planning promotion risk,
including uncertainty
around local and national
changes to planning regime
with adverse effects on
promotion activity and/or
financial returns.
– Project underwriting proposals include
detailed planning permission strategies
(including competing sites analysis and
BNG considerations), informed by project
stakeholder mapping, which continue to be
monitored via site project plans.
– At every Investment Committee and Board
meeting, we review greenbelt exposure at a
portfolio level.
– Awareness and monitoring of local authority
planning resources and outcomes guide
our long-term decisions on where Harworth
should invest.
– We have developed regional political
engagement strategies with support from
local political advisers.
– The Investment Committee’s decision-making
process is informed by representation at key
planning forums, engagement with industry
peers, and an in-house and selected panel of
external planning promotion experts.
– We undertake horizon scanning for planning
policy changes and respond to consultations
on emerging planning policy in our own
capacity and via representative groups, such
as the British Property Federation.
– Developing strategic plans to foster
relationships with senior political
stakeholders, positioning Harworth as a
trusted partner with planning authorities.
Current residual risk status
HIGH
Change in residual risk in the year
Link to strategic priorities
1 2 3 £
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Effectively managing our risk
RISK 3
COMMENTARY
Development supply chain
Following a sustained period of materials cost inflation and constrained capacity
across the construction sector, the cost of materials has stabilised, and pricing is further
benefiting from increased competition between contractors. That said, labour costs
remain high and set against a subdued and unstable macroeconomic backdrop; the
UK construction industry is experiencing a significant increase in insolvencies. In the
year to June 2024, 4,303 construction firms became insolvent, accounting for 17%
of all insolvencies in England and Wales (source: DLA Piper). This rise in insolvencies
heightens the risk of disputes, defaults, and project delays. Harworth continues to
focus on robust and efficient procurement, rigorous due diligence and management of
contractors, and fostering resilient supplier relationships.
DESCRIPTION
MITIGATION
ADDITIONAL MEASURES PLANNED
FOR 2025
Exposure to development
supply chain leading to
greater exposure to pricing
pressures and labour
constraints, and risk of
disputes with and/or default
by and/or insolvency of
supply chain partners.
– Rigorous tender processes (extensive financial
checks and interviews with contractors’
Financial Directors where necessary).
– Due diligence on contractors – screening
contractors before the appointment and
ongoing Group-wide review of contractor
“concentration risk” and financial health.
To this end, we utilise market intelligence
regarding contractors’ commitments and
workload.
– We have established a suite of legal
precedents to promote consistency in
land remediation and direct development
procurement and have improved the
protections in those precedents to increase
our speed of intervention in the event of
insolvency.
– Performance bonds sought to support all
major contracts.
– External review of contractor insurance
packages for every direct development
project.
– We are looking to enhance our control
of geotechnical validation data in real-
time should the unforeseen occur with a
contractor.
– We are exploring the prospect of
procuring our own performance bond
insurance, further mitigating the risk of
delay in gaining access to performance
bonds in the event of contractor
insolvency.
– We are also exploring step-in rights
on sub-contracting packages should a
principal contractor become insolvent.
Current residual risk status
MEDIUM
Change in residual risk in the year
Link to strategic priorities
1 2 £
Key to change in residual risk in the year
No change
Increase
Decrease
£ Group targets
H The Harworth Way
Effectively managing our risk continued
Strategic priorities
1 Repositioning our core
Investment Portfolio to
modern Grade A
2 Increasing direct
development
of Industrial &
Logistics space
3 Accelerating sales and
broadening the range
of our Residential
products
4 Scaling up through
land acquisitions and
promotion activities
76
Harworth Group plc
RISK 4
COMMENTARY
Counterparties: investment
partners and service
providers
We face increased exposure to investment partners (JVs, forward funders, strategic
investors) as we continue to grow and develop our sites, seeking opportunities with
partners in connection with land assembly, direct development and delivery of alternative
Residential products. Our governance and ways of working continue to mature to counter
this increased exposure. As our activity levels increase, we are also carefully monitoring
critical dependencies amongst our service providers (beyond those in our project
delivery supply chain), which could increase our vulnerability to disputes with and/or
defaults by and/or insolvencies of those providers. To mitigate these risks, Harworth
conducts thorough due diligence and diversifies its partnerships. As we grow and work
with investment partners, our governance and management system evolve to address
increased exposure. Continuous improvements in our supply chain management system
also mitigate our dependency on strategic service providers.
DESCRIPTION
MITIGATION
ADDITIONAL MEASURES PLANNED
FOR 2025
Increase in exposure to
investment partners and
critical dependencies on
certain service providers,
leading to increased risk
from disputes with and/or
default by and/or insolvency
of these counterparties.
– A consistent process is followed for selecting
and “onboarding” counterparties.
– Project underwriting proposals include
detailed consideration of counterparty risk,
where appropriate.
– Due diligence to support the appraisal of
credit counterparty risk and counterparties’
ability to meet their financial commitments
is particularly rigorous for new investment
partners.
– Development of relationships with
counterparties and ongoing assessment of
their delivery of obligations.
– Transition to a new supply chain
management and procurement target
operating model.
– Implementation of an enhanced
relationship management regime for
existing JV partners.
Current residual risk status
MEDIUM
Change in residual risk in the year
Link to strategic priorities
1 2 3 £
Annual Report and Financial Statements
77
Strategic Report
STRATEGIC REPORT
Effectively managing our risk
RISK 5
COMMENTARY
Power infrastructure
capacity
Securing power for development sites in the UK has become increasingly challenging,
leading to uncertainties, potential cost increases and project delays. The rising demand
for renewable energy has strained grid infrastructure, resulting in longer connection
timelines. In response, National Energy System Operator (‘NESO’) is undertaking the
Great Grid Upgrade comprising 17 major infrastructure projects to upgrade existing
networks.
In December 2023, the National Grid Electricity System Operator (‘NGESO’), now
NESO, published final recommendations to reform the grid connection application
process. These changes aim to streamline connections but also introduce new
challenges.
The “first ready, first connected” approach with regard to transmission and generation
applications is now in place. The next phase of the connection reform is a pause in
connection applications, which began in January 2025 to allow NESO to implement the
new application process. Harworth is actively monitoring the situation as it progresses. We
are in regular communications with the relevant Distribution Network Operators (‘DNOs’)
whose feedback has been that demand projects will continue to be processed as normal
to support economic growth and development. We are hopeful the NESO reforms will
help mitigate risks associated with connection delays, ultimately lowering this risk.
DESCRIPTION
MITIGATION
ADDITIONAL MEASURES PLANNED
FOR 2025
Challenges in securing
power for our sites
resulting in potential
for adverse impact and
uncertainty as to cost
and programme for
development.
– We are actively engaging with NESO with regard
to the progress of the Great Grid Upgrade to
monitor the effect on our development sites with
a view to seizing opportunities that may arise
from these upgrades.
– Analysis of power capacity and upgrade potential
and timing as part of acquisition analysis.
– Early engagement with DNOs and NESO to
identify the availability of power capacity,
formulate procurement strategy, and seek
earlier connection offers and “reservation of
capacity” for long-term projects.
– Alignment with broader energy system plans
via monitoring publicly available information on
DNO Geographic Information Systems.
– Entry into reservation commitments to secure
Harworth’s position, where appropriate.
– Continuing to monitor the proposed
changes to, and implementation of, the
reformed connections system and future
application requirements.
Current residual risk status
MEDIUM
Change in residual risk in the year
Link to strategic priorities
1 2 £
Key to change in residual risk in the year
No change
Increase
Decrease
£ Group targets
H The Harworth Way
Effectively managing our risk continued
Strategic priorities
1 Repositioning our core
Investment Portfolio to
modern Grade A
2 Increasing direct
development
of Industrial &
Logistics space
3 Accelerating sales and
broadening the range
of our Residential
products
4 Scaling up through
land acquisitions and
promotion activities
78
Harworth Group plc
RISK 6
COMMENTARY
Statutory costs of
development
There persists an upward trend in statutory costs of development in the UK, including the
cumulative impact of land value capture via Section 106 obligations and the Community
Infrastructure Levy (‘CIL’), with the prospect of greater capture via the government’s
planning reforms, the Residential Property Development Tax, the Building Safety Levy,
the costs of meeting increasing sustainability requirements including BNG obligations
and emerging carbon tax regimes within local planning policy.
Despite these challenges, the government’s commitment to reform the planning
system and improve infrastructure delivery offers a potential counterbalance. Proposed
adjustments to housing targets and enhanced collaboration between developers and
local authorities could also help manage statutory obligations more effectively.
In response, we undertake horizon scanning, model statutory cost sensitivities during
acquisitions, and engage proactively on emerging policies both directly and through
strategic collaboration with stakeholders. This approach positions us to navigate these
complexities while maintaining a focus on sustainable and profitable development.
DESCRIPTION
MITIGATION
ADDITIONAL MEASURES PLANNED
FOR 2025
Legislative reforms which
do, or may, impose a tax
or levy on development or
have the effect of levying
an additional cost on
development.
– Enhanced horizon scanning regime.
– Sensitivity to statutory costs modelled when
assessing acquisitions.
– Responding to emerging policy both in our
own capacity and through key stakeholder
groups.
– None planned.
Current residual risk status
MEDIUM
Change in residual risk in the year
Link to strategic priorities
2 3 £
Annual Report and Financial Statements
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STRATEGIC REPORT
Effectively managing our risk
RISK 7
COMMENTARY
Residential and
commercial markets
The UK residential and commercial property markets are still expected to (at least begin
to) recover in 2025, but the pace of that recovery is likely to be materially slower than
previously anticipated as a result of stagnating economic growth and 'higher for longer'
gilt and interest rates. A recovery, even if delayed and/or slower, should still present
opportunities for Harworth across both of our core sectors, supporting increases in
residential property values and a rebound in commercial investment activity.
In 2024, we made notable progress in progressing our short, medium, and long-
term Industrial & Logistics pipeline, advancing our strategy to grow our Investment
Portfolio to £0.9bn by 2029. Key achievements included securing planning permission
for 6.8m sq. ft and allocations or draft allocations for an additional 4.2m sq. ft. With
these milestones, Harworth is well-positioned to move into the development phase,
supported by stabilising market conditions and a near-term pipeline capable of
delivering c.£0.6bn of GDV by the end of 2027.
Our strategy has evolved to prioritise growth in income-generating Industrial &
Logistics assets, ensuring long-term resilience and value creation for our stakeholders.
We remain confident of achieving our strategic objectives.
DESCRIPTION
MITIGATION
ADDITIONAL MEASURES PLANNED
FOR 2025
Downturn in Industrial &
Logistics and/or Residential
market conditions leading to
falls in property values
– Advisers regularly supplement generic market
commentary by providing feedback on the
status of Residential and Industrial & Logistics
markets in our core regions.
– Our delivery teams and the Investment
Committee regularly review site project plans,
informed by prevailing market conditions.
– Collaborating with a firm of architects to evolve
our building specifications, which are updated
every six months in line with current/future
market movements and occupier demand.
– Management actions to drive value and adapt
to prevailing market conditions, including
periodic reviews of business strategy,
including funding models.
– Introduction of mixed tenure products to
support accelerated realisation on Residential
development sites.
– Available market data on tenants and proactive
engagement with key/high-risk tenants, which
may impact cash flow.
– We will continue to implement our
strategy, informed by evolving market
conditions.
– Expand our network of external
advisers who proactively gather and
provide market insights and data on
emerging opportunities and risks. This
will strengthen our strategic market
perspective and further enhance
decision-making.
Current residual risk status
MEDIUM
Change in residual risk in the year
Link to strategic priorities
1 2 4 £
Key to change in residual risk in the year
No change
Increase
Decrease
£ Group targets
H The Harworth Way
Effectively managing our risk continued
Strategic priorities
1 Repositioning our core
Investment Portfolio to
modern Grade A
2 Increasing direct
development
of Industrial &
Logistics space
3 Accelerating sales and
broadening the range
of our Residential
products
4 Scaling up through
land acquisitions and
promotion activities
80
Harworth Group plc
RISK 8
COMMENTARY
Organisational
development
and design
As the workforce continues to grow to support strategy execution and resultant scaling
up of activity volumes and pace, the Board recognises the importance of, and continues to
monitor closely, a structured change management approach. This approach encompasses
organisational development – focusing on culture and values – and organisational design,
addressing operations and governance to ensure scalable and sustainable evolution.
In 2024, we made considerable progress on our culture and values initiative, gaining
valuable insights as we continue to shape our desired organisational culture. Parallel
advancements were achieved in operations and governance, with key mitigation activities
outlined below.
While these achievements mark important milestones, we recognise that organisational
development and design require persistent focus. Addressing key risks, such as recruiting
and retaining critical skills, remain central to navigating the changes necessary to align with
our strategic ambitions and the increasing scale and pace of our activities.
DESCRIPTION
MITIGATION
ADDITIONAL MEASURES PLANNED
FOR 2025
Misalignment of
workplace culture,
capability, systems and/
or controls with what
the business requires to
deliver the strategy.
– Through annual and pulse surveys focusing on
engagement, wellbeing and happiness, we continue
to gain valuable insights into our organisational
culture and progress toward our desired state.
– Behavioural Competency Framework: a newly
introduced framework integrated into roles,
supporting excellence, learning and development,
and a refined reward strategy.
– Reward and Recognition: ongoing reward
benchmarking, a comprehensive reward evaluation
project covering pay and benefits, and the
execution of transparent Pay, Bonus and Retention
Policies.
– Diversity, Equity, and Inclusion (‘DE&I’): regular
measurement, reporting, and publication of DE&I
metrics to ensure accountability.
– Recruitment and Leadership: transparent
recruitment practices and enhanced leadership
development programmes to attract and retain top
talent.
– Organisational Improvements: streamlined
communication channels, updated performance
management systems, and improved cross-
functional collaboration processes to enhance
operational efficiency and cohesion.
– Digital transformation project: we have completed
the 'review' phase, which identified the
improvements we need to make to our technology
systems to ensure that they are 'future-proofed' to
support the operational growth of the business.
– We will review our Target Operating
Model to align with our evolving
strategic objectives and ensure it
supports growth and operational
efficiency.
– We will continue advancing key aspects
of our Culture Project, focusing on
enhancing recruitment practices, refining
reward strategies, and improving the
workplace environment.
– Further development of the Harworth
Academy will prioritise critical skills
analysis, identification of skills gaps, and
the delivery of targeted learning and
development programmes to build a
future-ready workforce.
– Our Talent Management Project will
progress by implementing tailored
development plans, clearly defined
career pathways, and robust succession
planning for critical roles.
– We will implement the first phase
of initiatives within our digital
transformation project, leveraging
technology to optimise processes and
drive innovation across the business.
Current residual risk status
MEDIUM
Change in residual risk in the year
Link to strategic priorities
1 2 3 4 H
Annual Report and Financial Statements
81
Strategic Report
STRATEGIC REPORT
Effectively managing our risk
RISK 9
COMMENTARY
Availability of appropriate
capital
The increase in pace and scale of activity under our strategy, in turn, has the potential
to require additional capital. The £200m RCF, signed in early 2022 and increased
to £240m through exercising the accordion option in late 2024, supplemented by
project-specific funding where appropriate, currently supports the funding needs of
the business. Headroom is projected to remain compliant with all covenants, and the
business could withstand a material fall in valuations without breaching covenants.
Interest rates appear to have peaked but may reduce more slowly than previously
expected. To leverage our growing development pipeline, we are likely to need to
supplement the RCF with additional capital in future years. Any opportunity to raise
additional equity to fund accelerated development, which we keep under review,
would be informed by a multitude of factors, including our share price, appetite
amongst existing and prospective shareholders, and wider market impact on capital
deployment opportunities.
DESCRIPTION
MITIGATION
ADDITIONAL MEASURES PLANNED FOR
2025
Inability to access
appropriate equity and/or
debt funding to support the
strategy.
– Regular review of financing strategy to
complement our business strategy, supported
by external consultants where required.
– Forecasting process: covenant forecasting,
short-term and medium-term cashflow
forecasting accompanying longer-term
Strategic Plan forecasting.
– In 2022, we signed a new RCF comprising
a five-year £200m revolving credit facility
together with a £40m accordion facility,
which was exercised during 2024, providing
a £240m facility. This is supplemented by
accessing project-specific funding where
relevant.
– Strong relationships with lenders.
– We continue to pursue and unlock grant
funding and review additional funding options.
– Continue to identify scheme-specific and
grant funding.
– Progress the review of funding options.
Current residual risk status
MEDIUM
Change in residual risk in the year
Link to strategic priorities
1 2 3 4 £
Key to change in residual risk in the year
No change
Increase
Decrease
£ Group targets
H The Harworth Way
Effectively managing our risk continued
Strategic priorities
1 Repositioning our core
Investment Portfolio to
modern Grade A
2 Increasing direct
development
of Industrial &
Logistics space
3 Accelerating sales and
broadening the range
of our Residential
products
4 Scaling up through
land acquisitions and
promotion activities
82
Harworth Group plc
RISK 10
COMMENTARY
Health and
Safety
We prioritise the health, safety and wellbeing of everyone involved in or impacted by our activities,
including site visitors and workers. Above all else, we want everyone undertaking activity on our sites
to be safe. This commitment extends across all our sites and operations, from horizontal and vertical
development projects to our Investment Portfolio and our office environments. The risks which we
proactively manage can be organised into three 'baskets': those which arise by virtue of our land and
property ownership, those which arise as a result of our development activity, albeit typically via third-
party contractors and consultants, and those which arise in Harworth’s capacity as an employer.
Our dedicated Environment, Health & Safety (‘EHS’) function, which operates as a 'second line of defence'
as well as undertaking an advisory and support role, oversees a robust risk and compliance management
framework encompassing defined roles and responsibilities, policies, systems and processes, and reporting.
During 2024, to ensure our health and safety risk management across the business is resilient to the
forecast growth in volume and acceleration in the pace of our activities, we undertook a comprehensive,
strategic review of our EHS function and framework, covering roles and responsibilities of both 'first
line' and 'second line of defence' resourcing; policies; systems, processes and controls; governance and
reporting. Reflecting our commitment to continuous improvement, we have identified some gaps in
future resource needs, which we have started to fill, changes we should make, and new initiatives we plan
to introduce to 'future-proof' our health and safety risk management capabilities.
DESCRIPTION
MITIGATION
ADDITIONAL MEASURES PLANNED FOR 2025
A health
and safety
incident
causing
injury and/
or death
resulting
in liability,
penalties,
and/or
reputational
damage.
– Policies include a Safety, Health and Environmental Management
System (‘SHEMS’) Policy and Employee Health and Safety Policy.
– Our portfolio is subject to a site inspection programme. This is
currently undertaken by both operational and EHS functions.
– Our construction projects are subject to desktop and physical
health and safety inspections, supported by an EHS 'second
line' audit programme, ensuring that we conscientiously
discharge our responsibilities as Client under Construction
Design and Management (‘CDM’) regulations.
– Risk registers document the risk profile of each site, reflecting
hazards, operational activity and incidents.
– We use a cloud-based SHEMS platform, which supports the
site inspection programme and incident tracking. Proactive
and reactive remedial actions are managed via this platform,
which also supports reporting.
– We have a panel of external EHS advisers who support our
Project Delivery teams to monitor proactively the management
of health and safety across all our development activities,
typically in our capacity as client under CDM.
– EHS Legal Register: The EHS Team keeps a log of existing, changing
and upcoming legislation and organises training sessions.
– EHS Committee meetings are held quarterly and attended by the
Executive and senior management from all delivery functions.
These are supplemented by a programme of attendance by EHS
team members at delivery team operational meetings.
– We host compulsory health and safety training for all
employees every two years, supplemented by an annual
schedule of mandatory online learning.
– We have a programme of health and wellbeing initiatives for
employees, including access to internal physical and mental health
first aiders and an external Employee Assistance Programme.
– EHS reports are made to the Executive, Board and members of
the EHS Committee monthly, and the Head of EHS provides a
detailed strategic and operational update to the Board annually,
including proposed changes to the SHEMS Policy.
– An updated EHS strategy was approved
by the Board in December 2024, which
will ensure future resilience in our EHS risk
management capabilities. Examples of the
initiatives it identified included the following:
– We will be recruiting additional resource into
both the EHS function and our operational
teams, to ensure scalable capacity to
discharge 'first line' and 'second line' EHS
responsibilities.
– Updates to our EHS roles and responsibilities
matrix to align with changes to our
operating model.
– Our site inspection programme will be
updated to (A) implement a more traditional
'first line' and 'second line' assurance regime
and (B) reflect better the risk profile of
sites, supported by improvements to the
formulation of our site Risk Registers.
– Technical enhancements to, and a
comprehensive awareness programme for,
our SHEMS cloud-based platform.
– Improvements to our reporting of both
'leading' and 'lagging' EHS risk indicators, with
greater emphasis on the former.
– Improvements to our contractor applications
and selection process.
Current residual risk status
LOW
Change in residual risk in the year
Link to strategic priorities
£ H
Annual Report and Financial Statements
83
Strategic Report
STRATEGIC REPORT
Effectively managing our risk
RISK 11
COMMENTARY
Net Zero Carbon pathway
The NZC agenda means transformational change for all businesses. It has a wide-ranging
impact on the Group, from our investment case to shareholders through to operational
activity, including the need to embed NZC principles into all projects while remaining
profitable. It also embraces external factors such as industry and stakeholder metrics
and the approach taken by Local and Combined Authorities on, e.g., carbon tax, BNG
and social value measures. In April 2023, we published our first NZC Pathway report
and, subsequently, our first NZC Pathway Progress Report for 2023 alongside the 2023
Annual Report, as well as our Communities Framework. We consider it crucial that our
approach is understandable and deliverable. An NZC Pathway Progress Report will be
published alongside this Annual Report for 2024.
DESCRIPTION
MITIGATION
ADDITIONAL MEASURES PLANNED
FOR 2025
Failure to develop,
manage and meet our
NZC commitments and/or
NZC regulations, resulting
in financial loss, reduced
availability of funding and/
or reputational damage.
– Development of The Harworth Way and NZC
Pathway with targets identified and progress
report published annually.
– Continued transition of our Investment Portfolio
to 100% modern Grade A.
– Improvements to the capture and analysis of
environmental data (including from our supply
chain and tenants) with measures in place for
verification of the same.
– New leases are offered to existing and new
tenants on “green” lease terms.
– Switched energy procurement for our
Investment Portfolio to a new renewable energy
tariff.
– Work closely with prospective occupiers of our
new developments to offer tailored renewable
energy provision.
– Project appraisals include detailed sustainability
analysis.
– Development of Harworth’s commercial and
Residential building specifications.
– We are a member of the UK Green Building
Council, which facilitates the sharing of
knowledge and best practices.
– Continue to improve the capture and
analysis of environmental data.
– Continued development of a carbon
accounting system, including appropriate
accreditation.
– Continued development of an Energy
and Natural Capital strategy.
Current residual risk status
MEDIUM
Change in residual risk in the year
Link to strategic priorities
1 2 3 4 £ H
Key to change in residual risk in the year
No change
Increase
Decrease
£ Group targets
H The Harworth Way
Effectively managing our risk continued
Strategic priorities
1 Repositioning our core
Investment Portfolio to
modern Grade A
2 Increasing direct
development
of Industrial &
Logistics space
3 Accelerating sales and
broadening the range
of our Residential
products
4 Scaling up through
land acquisitions and
promotion activities
84
Harworth Group plc
RISK 12
COMMENTARY
Digital resilience
Cyber threats pose an ever-evolving risk to all businesses. Those operating in the real
estate sector, which are often engaged in high-value transactions and project-based
activities and rely on valuable information relating to land, property and projects, are
particularly vulnerable to ransomware attacks, intellectual property theft, business
email compromise and invoice fraud. The materialisation of any one of these threats, or
self-harm via careless handling of commercially sensitive information, could prejudice
business continuity and/or give rise to significant financial losses and/or serious
reputational harm. As Harworth’s portfolio, activities and profile grow, so will its
vulnerability to cyber threats. It is also important that digital resilience security keeps
pace with the changes we are implementing as part of our digital transformation project,
referred to in the context of Risk 8 above. Against that backdrop, we consider that the
residual risk profile of this Risk 12 has increased from 'low' to 'medium'. Towards the
end of 2024, we instructed an external digital resilience audit and will implement its
recommendations alongside and in support of the rollout of the digital transformation
project. As these improvements are made, we will reassess the risk profile to ensure that
it is aligned with our risk appetite.
DESCRIPTION
MITIGATION
ADDITIONAL MEASURES PLANNED
FOR 2025
A successful cyber-attack
and/or the mismanagement
of information by an
employee or supplier
threatens business
continuity and/or results in
intellectual property loss
or theft and/or gives rise to
financial loss.
– Identity and data access management: ensuring
secure and controlled access to sensitive data
and systems.
– Data backup strategy: implementing a backup
plan to safeguard critical business data.
– Network monitoring and defence: utilising
network monitoring and defence systems to
detect and prevent security threats.
– Malware defence systems: deploying malware
defence mechanisms to protect against
malicious software.
– External IT support and cyber security expertise:
We work with an external IT support provider
that stays vigilant in the evolving cybersecurity
landscape, complemented by a retained
cybersecurity specialist.
– Cyber risk insurance: we maintain cyber risk
insurance to mitigate the financial impact of
potential security breaches.
– Penetration testing and security simulations:
we conduct biennial penetration tests, regular
phishing simulations, and continuous IT system
vulnerability scanning to identify and address
weaknesses proactively.
– Business Continuity and Disaster Recovery Plan:
Our Business Continuity Plan includes a robust
Disaster Recovery Plan to ensure operational
resilience during a cyber-attack or system failure.
– Audit Committee oversight: as part of our
assurance process, the Audit Committee
receives biannual updates on digital resilience
risks and mitigation strategies.
– During Q4 2024, we instructed a
comprehensive external audit of digital
resilience security. That audit covered
all aspects of information security,
comprising the framework for protecting
all information at Harworth, including
cyber security as a crucial subset of
that framework. The audit identified
opportunities to improve Harworth’s
overall security 'posture', which will be
implemented to support the rollout of
our digital transformation project.
Current residual risk status
MEDIUM
Change in residual risk in the year
Link to strategic priorities
H
Annual Report and Financial Statements
85
Strategic Report
STRATEGIC REPORT
Effectively managing our risk
Streamlined Energy and Carbon
Reporting ('SECR') disclosure
We report here our greenhouse gas emissions (‘GHG’) and energy consumption in compliance
with the requirements of The Companies (Directors’ Report) and Limited Liability Partnerships
(Energy and Carbon Report) Regulations 2018.
Aligned with our financial reporting, the GHG emissions data below relates to our financial
year ended 31 December 2024. Restated emissions data from the financial years ended
31 December 2022 and 31 December 2023 has been provided for comparison.
Unless otherwise stated, our
emissions data is calculated using the
GHG Protocol Corporate Accounting
and Reporting Standard (revised
edition) and emissions factors
from the UK Government’s GHG
Conversion Factors for Company
Reporting 2024. We follow the
Environmental Reporting Guidelines,
including the Streamlined Energy and
Carbon Reporting guidance March
2019 in all instances.
Harworth uses the operational control
boundary method to calculate GHG
emissions, whereby we report on
sources of environmental impact for
areas over which we have control.
Occupiers’ and contractors’ individual
energy usage and emissions are not
included in our Scope 1 and Scope 2
reporting boundary, as they are not
deemed to be within our operational
control, but we disclose these in
the NZC Pathway Progress Report
2024, where we have also published
an extensive methodology which
outlines our approach to carbon
reporting. As Harworth’s operations
are wholly based in the UK, 100% of
our reported energy consumption
and emissions relates to the UK.
We continue to improve our data
collection processes, enabling us
to capture a more accurate and
complete data set for 2022 and
2023, as well as the current year. As a
result, we have restated the 2022 and
2023 figures to allow a year-on-year
comparison.
Improvements in 2024 include a
review and restatement of recharge
arrangements at our multi-let
investment properties and the
inclusion of business travel paid
for using Company credit cards
(October 2024 onwards). More
information on our approach can be
found in the NZC Pathway Progress
Report 2024.
Progress in 2024:
TOTAL
SCOPE 1
SCOPE 2
SCOPE 3
– Overall year-on-year
reduction in Location-
Based Emissions of
-17% and Market-Based
Emissions of -57%
in 2024.
– Overall increase in Total
Scope 1 & 2 energy use
in kWh of +12% with
the main increase being
in Scope 1 fuel usage.
This increase in use was
more than offset by
the emission-reduction
measures referenced
under Scope 1 and
Scope 2, resulting in
the overall reduction in
emissions noted above.
– Significant reduction
in site fuel emissions
driven by the use of
alternative fuels at our
Ironbridge site in place
of diesel.
– Continuation of our
transition from diesel
to electric leased
vehicles and the
associated impact
on leased vehicle
emissions.
– Overall reduction in
Scope 2 emissions
resulting from the
ongoing business
strategy transition to a
more energy efficient
Grade A portfolio.
– We have continued
to transition
our electricity
procurement to
Renewable Energy
Guarantees of Origin
(REGO) backed
green electricity, thus
reducing our Market-
Based Emissions,
and will continue this
approach in 2025.
– Business travel emissions
decreased as a result of the
removal of fuel cards for personal
vehicles and an increase in electric
usage for personal business
travel from 15% to 18% based on
distance driven.
– Renewal of life expired water
assets to reduce overall water
consumption.
– A significant reduction (-70%)
in waste resulting from the
disposal of assets and updated
UK Government GHG conversion
factors, correcting an error
within these conversion factors
in transport emissions associated
with disposal of waste.
Harworth Group plc
86
* The 2023 figures have been restated from 802 tCO2e to 834 tCO2e following the receipt of more accurate data during 2024.
† The 2023 figures have been restated from 984 tCO2e to 1015 tCO2e following the receipt of more accurate data during 2024.
1 Fuel used for leased plant on Harworth sites where Harworth directly controls the operation.
2 Includes consumption at owned offices, leased offices, landlord-controlled areas of leased assets, vacant units, and other Harworth assets.
3 Fuel and electricity used in vehicles leased by Harworth.
4 Includes consumption at owned offices, leased offices, landlord-controlled areas of leased assets, vacant units, infrastructure, other Harworth assets and
electricity used to charge electric vehicles on our sites.
5 Includes business travel in all employee-owned and leased vehicles and public transport. Where possible we have used vehicle specific CO2e emission
factors to increase accuracy of reporting. Business travel does not include employee commuting.
6 Working hours from home for all employees.
7 Includes waste from landlord-controlled areas of leased assets and head office. Calculated emissions are based on waste weight, type and disposal method.
8 Includes consumption at owned offices, leased offices, landlord-controlled areas of leased assets, vacant units and other Harworth assets.
9 Energy produced and exported to the national grid generated by the solar photovoltaic panels at Harworth's head office.
HARWORTH GROUP PLC
UNIT
2024
2023
Scope 1
Site Fuel¹
tCO2e
19
70
Natural Gas²
149
126
Leased Vehicles³
5
12
Total
173
207
Scope 2
Location Based
Leased Vehicles³
3
1
Assets4
389
450
Total
393
451
Market Based
Leased Vehicles³
6
2
Assets4
128
630
Total
134
632
Total Scopes 1 & 2
Location Based
566
658
Market Based
308
839
Selected Scope 3
Business Travel5
89
121
Homeworking6
29
27
Waste Disposal7
0
2
Water Supply8
5
13
Water Treatment8
6
14
Total
128
176
Total Emissions
Location Based
694
834*
Market Based
436
1015†
ENERGY CONSUMPTION
Scope 1
kWh
2,142,089
1,425,752
Scope 2
1,895,696
2,175,646
Total Scopes 1 & 2
4,037,785
3,601,398
Renewable Energy Exported to the National Grid9
-9,790
-14,677
REVENUE INTENSITY RATIO
Total Scopes 1 & 2: tCO2e / £m Rev
7.8
9.1
Greenhouse Gas Emissions (tCO2e)
87
Annual Report and Financial Statements
Strategic Report
STRATEGIC REPORT
Streamlined Energy and Carbon Reporting ('SECR') disclosure
Task Force on Climate-Related
Financial Disclosures
Harworth is committed to implementing the recommendations of the Task Force on
Climate‑Related Financial Disclosures (‘TCFD’). The TCFD aims to provide investors and
other stakeholders with useful information on climate-related risks and opportunities that are
relevant to our business.
Listing Rules
In this context, we have considered
our “comply or explain” obligation
under the Financial Conduct
Authority’s Listing Rules, and
confirm that we have made
disclosures consistent with the
TCFD Recommendations with the
exception of certain items, which are
summarised below:
– Strategy, Recommended
Disclosure b) in relation to
financial planning: We continue
to work towards a quantitative
assessment of the impact on our
financial planning and performance
of the short, medium and long-
term risks and opportunities that
we have identified in our 2°C
and 4°C scenarios. We expect
to continue to address data
limitations, as Harworth invests in
systems and resourcing to capture
more data in preparation for
meeting the requirements of the UK
Sustainability Reporting Standards,
as these are fully defined and
implemented.
– Metrics & Targets,
Recommended Disclosure b)
in relation to Scope 3 GHG
emissions: We have made
further progress over the year
to consolidate the range of
measurement and understanding
of our Scope 3 GHG emissions. The
measurement of Scope 3 emissions
is reliant on the disclosure of data
to us by suppliers and customers.
Scope 3 emissions reporting for
2024, as published in our NZC
Pathway Progress Report 2024,
covers a significant proportion
of our overall Scope 3 emissions.
In 2024 we undertook a spend
based materiality study and
implemented further measures
to capture emissions data from
our major construction contracts,
incorporating updates to industry
guidance on measurement of
emissions and from energy use
within our Investment Portfolio.
Over the course of 2025 we will
continue to grow this data set, as
outlined in our 2024 NZC Pathway
Progress Report, with a view to the
future standardisation of emissions
reporting through the UK
Sustainability Reporting Standards
when they are fully introduced.
Further information on The Harworth
Way and the Group’s NZC Pathway
can be found on pages 38 to 45 of
this Annual Report, and Harworth’s
standalone NZC Pathway Progress
Report 2024, which has been
published at the same time, and
is available on our website. GHG
emissions data can be found in
our Streamlined Energy & Carbon
Reporting disclosure on pages
86 to 87.
Governance
Board oversight of climate-
related risks and opportunities
The Chief Executive has overall
responsibility for climate-related
risks and opportunities. The
Board is updated regularly on our
sustainability and climate-related
performance and has overall
accountability for and oversight
of risk, undertaking a biannual
assessment of principal risks,
which include climate-related
risks. After each meeting of the
ESG Committee, the Committee
Chair provides an update to the
Board on sustainability matters. The
Board assesses the climate-related
risks and opportunities inherent in
material projects, as part of the Board
underwriting appraisal process and
when assessing business plans, major
capital expenditures, acquisitions
and sales. The appraisal framework
considers the embodied and
operational carbon content of direct
development projects, in line with the
NZC Pathway and industry guidance.
It continues to evolve and will be
developed further in respect of the
Focus Impact Areas of The Harworth
Way and specifically the requirements
of the NZC Pathway.
Since 2022, ongoing oversight of
climate-related issues has been
carried out by our ESG Committee,
chaired by Angela Bromfield and
also comprising the Chair of the
Board, Chief Executive, Chief
Financial Officer and two other
Non-Executive Directors, Martyn
Bowes and Marzia Zafar. Our Director
of Sustainability is a permanent
attendee. The Committee has met
at least quarterly and provided the
senior forum for oversight of the
development and implementation
of the Company’s sustainability
strategy and commitments. The ESG
Committee has supported the Board
88
Harworth Group plc
in the assessment and management of
climate-based risks and opportunities.
The ESG Committee has been
responsible for overseeing the
setting of Harworth’s ESG targets
and progress towards meeting them.
It also provided oversight of the
formulation of the NZC Pathway. It has
monitored external climate-related
issues and emerging policy and best
practice through regular updates from
the Director of Sustainability, which
has guided decisions on strategy and
ongoing risk management. During the
year, the ESG Committee reviewed
and recommended for approval to the
Remuneration Committee the Group
ESG Targets to be incorporated into
the annual bonus Group Targets for all
employees.
Our approach to sustainability,
articulated through the Harworth
Way, is central to Board decision-
making. That being so, following
recommendations from the
internal Board effectiveness
review conducted in Q4 2024, the
Board decided that, from 2025,
the oversight of sustainability-
related risks, opportunities,
strategies, performance and related
decisions should move to being
considerations of the main Board
in which all Directors participate,
rather than scrutinised by a separate
ESG Committee. The oversight of
ESG reporting, itself now being
embedded into international
accounting standards, will become
the responsibility of the Audit
Committee. This evolution of our ESG
governance framework will be fully
implemented in April 2025.
Management’s role in assessing
and managing climate-related
risks and opportunities
The ESG Committee has been
supported by Harworth’s sustainability
team, which was established in 2022
following the appointment of Peter
Henry as Director of Sustainability,
reporting directly to the Chief
Executive. The sustainability team
works with members of the Executive
and representatives from teams across
the business to share knowledge,
develop policies and guidance, and
consider how best to address climate-
related issues in our operations. The
sustainability team has reported
progress and proposed policies and
actions to the ESG Committee. It will
continue to perform this role, reporting
directly to the main Board and Audit
Committee from April 2025.
For our three identified Group
climate-related risks outlined below,
we continue to allocate a risk owner
and risk champions who monitor
climate-related risks at portfolio level
and brief the Executive on material
movements in risk profile.
RISK
RISK OWNER
RISK CHAMPIONS
Net Zero Carbon pathway
Chief Financial Officer
Director of Sustainability
Climate change and biodiversity
adaptation and resilience
Chief Financial Officer
Director of Sustainability
Director of Technical, Engineering & Delivery
Head of Environment, Health & Safety
Head of Investment Portfolio
Creating sustainable communities
Chief Financial Officer
Director of Sustainability
Director of Technical, Engineering & Delivery
Head of Investment Portfolio
We consider stakeholder impact in
our project underwriting appraisals,
and all underwriting proposals
must factor in the environmental
and societal impact of each
project in line with The Harworth
Way. Currently these are largely
qualitative assessments, but it is
our intention to increase over time
our quantitative measurement of
impact in our appraisals, budgeting
and forecasting. As part of this
process, during 2024 we undertook
a wide range of analysis in relation
to understanding carbon pricing
mechanisms that could assist our risk
management and decision making
during our development projects.
The management team engages with
several external bodies, including
the UN Global Compact, UK Green
Building Council, the British Property
Federation, 3Ci (the Cities Commission
for Climate Investment), Future Homes
Hub and the Construction Industry
Research and Information Association,
as well as local authorities, to enhance
its understanding and management of
Annual Report and Financial Statements
89
Strategic Report
STRATEGIC REPORT
Task Force on Climate-Related Financial Disclosures
Task Force on Climate-Related
Financial Disclosures continued
climate change risks and opportunities.
The team monitors external climate-
related issues and emerging policy and
best practice, including via a horizon
scanning regime led by our in-house
Legal team, with support from our legal
panel firms.
The management team also works
closely with suppliers including
consultants, contractors and
manufacturers in relation to climate-
related issues, emerging policy and
best practice affecting development
projects, whilst liaising with tenants
on energy use and energy monitoring.
Strategy
Overview of climate-related
risks and opportunities
We continue to consider our relevant
time horizons to be short-term (to
2027), medium-term (2028–2040);
and long-term (2040–2060). Our
short-term time horizon is aligned
to our growth strategy outlined in
September 2021 to become a £1bn
business by 2027. Our medium-
term time horizon corresponds to
approximate development timelines
for the majority of our current Major
Development and Strategic Land
sites. Our long-term time horizon
corresponds with the development
timeline for those Strategic Land sites
which are earliest in their lifecycle.
Our assessment of climate risks and
opportunities in the short, medium
and long-term assumes a scenario
in which a global temperature rise
is limited to 2°C by 2100 (aligned
to Representative Concentration
Pathway (‘RCP’) 2.6 as outlined by the
Intergovernmental Panel on Climate
Change, but we have also considered
the impact of a scenario in which a
global temperature rise reaches 4°C
(RCP 8.5). The table below identifies
our main assumptions relating to the
UK in each scenario, using forecasts
from the Climate Change Committee.
When identifying the risks and
opportunities outlined in this section,
and their impact on our financial
planning and performance, we have
considered the likelihood of the risk
based on current and forecast market
data and trends, and the potential
impact based on the type, condition
and location of our portfolio assets.
Given the complex nature of our sites,
a qualitative review is undertaken that
considers the type and condition of
our portfolio assets and their location.
This is followed by a detailed
discussion held with ESG Committee
to consider the potential impacts,
financial, strategic, operational
and reputational on the Group. We
have also considered the mitigation
measures that we currently and could
potentially implement, which have
informed our risk assessment outlined
on page 84. In addition, through the
planning and delivery phases, all
developments follow the regulatory
and legislative requirements for
assessing and implementing
measures to mitigate climate change.
Together, these factors determine the
prioritisation of individual risks and
opportunities in our asset and group-
level financial planning.
HARWORTH’S
ASSUMPTIONS FOR UK
2°C SCENARIO
4°C SCENARIO
Transition approach
The UK and other nations largely meet
their currently pledged decarbonisation
commitments, and Harworth follows its
NZC Pathway
The UK and other nations take only very
limited steps to meet their currently pledged
decarbonisation commitments, but Harworth
still follows its NZC Pathway
Physical impacts by
c.2050
Annual average temperatures: +0.6°C from present
Mean sea level rise: +3cm to +37cm from present
Heavy rainfall: +10% increase from present
– UK heatwaves “like summer 2018 (the joint hottest on record)”: 50% chance each year
Physical impacts by
c.2100
– Annual average temperatures:
+0.7°C from present
– Mean sea level rise:
+5cm to +67cm from present
– Heavy rainfall:
+20% increase from present
– UK heatwaves “like summer 2018”:
50% chance each year
– Annual average temperatures:
+3.0°C from present
– Mean sea level rise:
+27cm to +112cm from present
– Heavy rainfall:
+50% to +70% increase from present
– UK heatwaves “like summer 2018”:
90% chance each year
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Harworth Group plc
Short-term risks (to 2027)
2°C scenario
RISK
IMPACT ON BUSINESS, STRATEGY AND FINANCIAL PLANNING
Transition risks
Policy & Legal: Minimum Energy
Efficiency Standards (‘MEES’) and
the introduction of “energy in-use”
performance ratings could result in
increased costs, a loss of rental income
and valuation declines if our Investment
Portfolio assets do not meet minimum
standards.
We plan to transition our Investment Portfolio to Grade A by 2027. In 2023,
we completed Carbon Risk Real Estate Monitor assessments for the majority
of our Investment Portfolio, and during 2024, commenced the formulation
of a NZC Pathway for every investment asset that we own, with the intention
to have these completed and in place by the end of 2025. A workstream
reviewing Energy Performance Certificates (‘EPCs’) and the potential
impact of MEES is also ongoing. The outcomes of these reviews will feed
into our approach to quantitative assessment of climate risk on an asset-by-
asset basis.
Policy & Legal: Increased one-
off and operating costs across our
Major Development sites arising
from regulation and changes to
policy in areas such as green energy
procurement, electric vehicle charging
point installation and BNG.
Our developments already often exceed minimum building regulations and
incorporate high-quality placemaking features. We believe this approach
improves the sustainability of our assets, and this is reflected in their
valuation and rental profile. We have also reviewed our energy tariffs and
transferred a significant proportion to REGO backed tariffs, which should
provide an opportunity to lower our Scope 2 Market-Based Emissions. We
do, however, recognise that the key focus should be on Location-Based
Emissions. In 2024, we implemented our first BNG schemes, ahead of
mandatory UK legislation requirements, and we have made significant
progress during 2024 in implementing BNG requirements into our master
developer process. The outcomes of this will feed into our approach to
quantitative assessment of nature-based risk and into our development
processes.
Market: There could be challenges in
acquiring the materials and equipment
needed to manage our transition in a
timely and cost-effective way, due to
significant demand across the market
and constrained supply chains.
We will continue to monitor the market, while undertaking rigorous tender
processes, and utilise market intelligence regarding supplies of such
materials or equipment. By taking action ahead of regulatory deadlines,
we will potentially avoid procurement during peak times of demand and
constrained supply.
Market: An increase in energy
efficiency specifications, both through
regulation and increased expectations
of occupiers and home buyers, would
require additional expenditure on
development and fit-out, which could
depress land values.
We work with our suppliers and housebuilder partners to deliver high-quality
products, which already exceed market expectations, and have developed
a commercial building specification to improve environmental performance.
In 2024, we worked closely with our housebuilder partners to understand
better the carbon emissions related to the construction process in delivering
energy-efficient homes. The outcomes of this work should be reflected in the
valuation, pricing and rental profile of our land and assets.
Market: The introduction of carbon
pricing on high-emission material and
activities, or through wider regulation,
and premiums for and/or availability of
lower-carbon alternatives, could impact
the costs of procuring raw materials for
remediating and preparing land across
our sites.
Our procurement approach and costs associated with land remediation and
enablement are considered early in project planning, and we undertake
rigorous tender processes. We conduct ongoing monitoring of material
costs and use technical resource to mitigate any impact of rising prices. In
2024, planning policy introduced in Greater Manchester included specific
NZC requirements. We are assessing the impacts of these requirements on
our development appraisals and valuations alongside increasing levels of
industry guidance.
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Strategic Report
STRATEGIC REPORT
Task Force on Climate-Related Financial Disclosures
Task Force on Climate-Related
Financial Disclosures continued
2°C scenario
RISK
IMPACT ON BUSINESS, STRATEGY AND FINANCIAL PLANNING
Reputation: Investor and other
stakeholder requirements in respect
of sustainability performance increase,
creating a risk of reputational damage
where expectations are not met, and
impacting our ability to raise capital or
create new partnerships.
Harworth utilises its environmental reporting processes to monitor
sustainability performance. Our NZC Pathway and Communities Framework
provide a framework for measuring progress against our objectives. We
continue to engage closely with investors, other stakeholders and industry
bodies to ensure our environmental reporting continues to develop and
meet evolving sustainability assessment and reporting expectations.
Reputation: Communities that are
impacted by climate-related events
such as flooding on or close to our
developments may perceive Harworth
to be contributing or not doing enough
to mitigate any impacts.
We will continue to monitor the potential impact of climate-related events
at our sites and the surrounding area, and engage with local authorities
and community groups to ensure they understand Harworth’s role and
responsibilities. In our master developer role, we seek to mitigate climate-
related risks through each stage of project delivery.
Physical risks
Some increases in the incidence of
acute physical risks, such as heatwaves,
storms and flooding, could result in
increased costs to create, repair, replace
and future-proof infrastructure across
our Major Development sites and the
buildings in our Investment Portfolio.
Resilience is already factored into our development design, for example
through developing sustainable urban drainage systems (‘SUDS’) and
sustainable cooling and heating systems for industrial units. We maintain a
flood risk register for all sites and undertake a flood risk assessment as part
of the masterplanning promotion process.
4°C scenario
Short-term transition and physical risks would be largely unchanged from the 2°C scenario.
Short-term opportunities (to 2027)
2°C scenario
OPPORTUNITIES
IMPACT ON BUSINESS, STRATEGY AND FINANCIAL PLANNING
Products & services: By increasing direct development
and transitioning our Investment Portfolio to Grade A
by 2027, we can provide market-leading Industrial &
Logistics space with a high environmental specification.
Grade A assets would be expected to be in higher demand
from occupiers, and, therefore, generate higher rental
income and valuations. Harworth has committed that all
its new Industrial & Logistics developments will be NZC in
construction and operation by 2030 and to transition our
Investment Portfolio to Grade A by 2027.
Resilience: Our commercial building specification for
new direct development will deliver future-proofed
assets that require less maintenance and transition
costs in the future. Across our sites we promote public
transport use, create cycle paths and walkways,
undertake biodiversity improvements and use SUDS to
mitigate flood risk.
Our commercial build specification includes minimum
standards in relation to EPC, Building Research
Establishment Environmental Assessment Method
(‘BREEAM’) and carbon emissions. An environmental
assessment is integrated into all project appraisals, and we
engage with stakeholders to ensure best practice and to
identify new opportunities. This improves the desirability of
our sites, driving land values higher.
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Harworth Group plc
2°C scenario
OPPORTUNITIES
IMPACT ON BUSINESS, STRATEGY AND FINANCIAL PLANNING
Resilience: By accelerating the transition to
low‑carbon energy generation and storage across our
developments, we can improve energy security and
mitigate the impact of energy price rises and volatility.
Our Energy & Natural Capital strategy aims to leverage
energy generation and storage opportunities across our
portfolio. We continue to review the portfolio to identify
these opportunities.
Energy efficiency: Reducing energy consumption through
low-carbon transport, encouraging flexible working and
energy-saving measures such as timed and LED lighting.
As part of our NZC Pathway, we are introducing several
measures to improve energy efficiency, which will reduce
costs and improve productivity.
Energy source: Our portfolio is well-placed to meet
increased demand for land for renewable energy
schemes and offsetting, particularly on parts of our sites
where other types of development would not be viable.
The scale of our sites means it is often easier and more
cost effective to implement on-site renewable energy
generation than in other settings where space is more
constrained, such as urban areas.
The Energy & Natural Capital team supports all areas of
the business in identifying opportunities to introduce
energy generation and storage into our schemes, providing
additional revenue streams and an opportunity to offset
emissions from within our portfolio.
4°C scenario
Short-term opportunities would be largely unchanged from the 2°C scenario.
Medium-term risks (2028–2040)
2°C scenario
Transition risks will continue and
intensify, with stricter regulation
on energy efficiency and planning,
potentially with a greater focus on
the retrofitting and future-proofing
of older assets, which may increase
the costs of direct development and
those borne by our housebuilder
customers. Occupier expectations
of sustainability will also increase,
particularly amongst small and
medium-sized businesses, which
may not have previously had the
resources, financial capacity, or
regulatory requirement to focus on
this issue. Infrastructure obsolescence
due to changes in demand for
climate-resilient technologies could
result in shorter asset lifecycles
and impose additional costs on the
business. Harworth will mitigate the
impact of these changes through
the transition of our Investment
Portfolio to modern Grade A, and our
commitment to be NZC in operation
and construction on new commercial
developments by 2030.
The development of carbon taxes
may increase the costs of remediating
and preparing strategic land sites due
to the amount of energy use required.
This could impact the viability or
profitability of progressing some
sites through the planning system,
and, therefore, the valuation of our
land bank.
Investors will become less tolerant of
environmental underperformance as
they face pressure to decarbonise their
own portfolios to achieve NZC goals.
Harworth’s response to this risk is to
ensure our environmental performance
improves through our decarbonisation
strategy, and that our disclosures
evolve in line with best practice.
Additional physical risks may
emerge, with slight rises in river peak
flows and associated flood losses.
Summers will become warmer with
an increased risk of heat stress,
leading to minor increases in the cost
of cooling buildings and adaptation
measures at our sites to protect those
most vulnerable.
4°C scenario
Under this scenario, the physical risks
outlined in the 2°C scenario may
intensify further and become more
frequent, increasing the speed of
infrastructure obsolescence and the
cost of adaptation measures.
Medium-term opportunities
(2028–2040)
2°C scenario
Opportunities may arise from cheaper
and more effective technologies to
achieve energy efficiency, allowing
Harworth to generate more of
its operating energy from on-site
renewables. There is also likely to
be a greater promotion of public
transport, for example bringing old
railway lines back into use with new
low carbon and automated transport
technologies. Harworth’s status as
master developer will allow us to
include these features in our sites and
mitigate challenges from the outset.
This will benefit the connectivity and
land value of our sites, many of which
have former railway sidings and lie
adjacent to major road networks.
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Strategic Report
STRATEGIC REPORT
Task Force on Climate-Related Financial Disclosures
Task Force on Climate-Related
Financial Disclosures continued
There may also be greater demand
for land used for offsetting, as buyers
approach their own NZC deadlines
and implement BNG requirements,
which would provide additional
opportunities for our significant
land bank and portfolio. Harworth
has an advantage in being a master
developer, as this allows us to
mitigate challenges through our own
site planning and design.
4°C scenario
Under this scenario, demand for
adaptation measures, low-carbon
transport and land for offsetting are
all likely to decrease, owing to less
focus on climate transition risks. This
lower demand would be reflected
in the valuation of Harworth sites.
There may be fewer opportunities to
achieve energy efficiencies and cost
savings through new technologies
than under a 2°C scenario, as it
is assumed there would be less
investment and fewer incentives to
encourage the development of these
technologies.
Long-term risks (2040–2060)
2°C scenario
The prevalence of physical risks
is likely to be higher. These could
include material increases in the
frequency of acute risks such as
flooding, particularly in low-lying
areas of Yorkshire & the Humber,
such as Doncaster. This could lead
to significant decreases in land
values and increased costs of repairs,
mitigation measures and insurance
premiums at our sites in these
areas. Chronic risks such as hotter
summers will also mean increased
energy consumption in our buildings
and maintenance costs, due to
increased demand from occupiers
for air cooling technologies, and
adaptation measures to ensure
adequate rainwater collection and
storage at our sites. There is also the
potential for fundamental changes in
construction methods and materials,
which could increase building costs
and thereby depress land values.
Transition risks will also intensify,
with even higher environmental
specifications for Industrial &
Logistics assets and housing. The
expectations of investors and
other stakeholders with regards to
environmental performance will
increase further, particularly as 2050
decarbonisation targets expire.
4°C scenario
Physical risks could be significantly
higher. The Met Office’s UK Climate
Projections 2018 predict that UK sea
levels could rise by over a metre by
2100 in this scenario, which could
significantly increase flooding risk
in low-lying parts of Yorkshire &
the Humber, such as Doncaster.
Average summer temperatures for
the Yorkshire & Humber, North West
and East Midlands regions are likely
to rise on average by over 3°C by
2100 under this scenario, which could
lead to increased costs in cooling
and repairing buildings, and those
costs arising sooner than under a 2°C
scenario. These increased physical
risks could have significant impacts
on the economy in general, leading
to lower levels of economic output
and higher unemployment, impacting
demand for our sites and our ability to
raise finance.
Long-term opportunities
(2040–2060)
2°C scenario
Access to secure and sustainable
sources of energy and water,
and reliable transport and
communications infrastructure
will become critical for ensuring
the resilience of residential and
industrial and logistics developments.
Harworth’s expertise in future-
proofing and resilience in the design
of its developments will allow us
to be at the forefront of meeting
these needs, making our sites more
attractive. There is also the potential
for technological advances to make
future-proofing of buildings more
cost effective, thereby reducing the
costs of adaption.
4°C scenario
As physical risks could be significantly
higher, the demand for future-
proofing and resilience in the design
of developments is likely to be
greater, meaning we could realise
land value increases sooner than in a
2°C scenario.
Conclusions of risks and
opportunities analysis
Our assessment of climate risks and
opportunities in the short, medium
and long-term, using different global
temperature rise scenarios, has
concluded that, based on information
currently available, the Group’s
strategy is set up well to manage risks,
mitigate impacts on the business,
strategy and financial planning, and
enhance the business as opportunities
arise. Although the impact could be
high under certain scenarios, our
approach to masterplanning our
sites and development will allow us
to reflect changing environmental
conditions and underpins the
resilience of the business model to
climate-related risks.
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Harworth Group plc
Risk management
Identifying and assessing
portfolio-level risk
The Board reviews the Group’s
principal and emerging risks formally
at the half-year and year-end and
monitors the profile of these risks
throughout the year. ‘Net Zero Carbon
Pathway’ is considered by the Board
to be a principal risk. ‘Climate change
and biodiversity adaptation and
resilience’ and ‘Creating sustainable
communities’ are considered to be
operational risks. All Principal Risks
are monitored and managed through
the Principal Risk Dashboards.
The Principal Risk Dashboards are
our main tool for monitoring the
principal risk profile of the business,
including identifying inherent risk to
the business and the key controls in
place to mitigate these risks down
to an acceptable residual risk level.
The effectiveness of these controls
is assessed throughout the year
with strong second-line functions
performing ongoing monitoring, and
third and fourth-line independent
assurance obtained where necessary
via Internal Audit and third party
experts. The adequacy of the
assurance given to the management
team and Board is monitored via an
assurance map maintained by the
Head of Audit & Assurance which
identifies weakness and gaps in
assurance which are subsequently
addressed. This assurance map and
the Principal Risk Dashboards are
dynamic documents and remain
subject to continuous review and
evolution. Further information on
these risk management processes can
be found on page 69.
For our Group climate-related risks
we consider inherent risk (before
factoring in the mitigation measures
in place), to be high, but view
residual risk (after factoring in our risk
mitigation and controls) as medium.
Identifying and assessing
asset-level risk
All project appraisals must factor
in the environmental risks inherent
in each project. Currently, these
are largely qualitative assessments,
but we intend to begin quantified
measurement of their impact for
acquisitions and direct development
from 2025 onwards.
Managing risks
Portfolio-level risk management is
undertaken through the Principal
Risk Dashboards, informed by
ongoing monitoring of portfolio-
specific data, investor and other
stakeholder expectations and market
developments. We engage closely
with industry bodies such as the UK
Green Building Council and receive
periodic updates on sector activity
from our suppliers. At an asset-level,
risk management is undertaken
through project appraisals and site
reports.
Steps taken to manage and mitigate
our Climate transition risks include:
– One of our key strategic objectives
is to transition our Investment
Portfolio to modern Grade A
by 2027.
– We have developed a commercial
building specification: new
buildings will target BREEAM
Excellent and EPC rating A whilst
meeting prescribed emissions and
energy targets.
– We will continue to develop
disclosure of climate-related
metrics to demonstrate progress
and address stakeholder
expectations.
– We will maximise opportunities
for on-site renewable energy
generation.
– We will continue to implement
energy efficiency measures,
including use of electrical
infrastructure and installation
of automatic and energy saving
lighting.
– We will utilise our land portfolio
to maximise opportunities in
relation to carbon sequestration
and biodiversity enhancement in
line with our Energy and Natural
Capital Strategy.
Steps taken to manage and mitigate
our climate physical risk include:
– More efficient infrastructure
delivery methods and adaptation
measures such as SUDS installed
across sites.
– Regular flood risk assessments and
proactive responses to any issues
arising.
An outline of our processes for
mitigating, transferring, accepting,
or controlling risks can be found on
pages 68 to 85.
Annual Report and Financial Statements
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Strategic Report
STRATEGIC REPORT
Task Force on Climate-Related Financial Disclosures
Task Force on Climate-Related
Financial Disclosures continued
Metrics & targets
Metrics used to assess climate-related risks and opportunities
CURRENT METRICS USED
2024
2023
2022
TARGET
Transition
risks
GHG emissions data: Scope 1, Scope 2² and
categories of Scope 3 emissions associated with
our business operation
GHG emissions data can be found in our
Streamlined Energy and Carbon Reporting
disclosure on pages 86 to 87.
% Investment Portfolio that is EPC Grade C or above
82%
75%
66%
100% by 2027
Proportion of commercial building space developed in
year incorporating renewable energy provision
100%
100%
–%1
100%
from 2023
Proportion of energy consumed by Harworth
operations that is generated from renewable sources
82%
70%
–%1
100%
by 2025
Proportion of Group targets for our annual bonus
scheme for all employees relating to ESG factors
10%
10%
10%
n/a
Score achieved for the ESG element of our Group targets
100%
100%
90%
At least 50%
Physical risks
Proportion of development taking place on land
designated by the Environment Agency as flood zone 1
(low probability) or flood zone 2 (medium probability)
following any mitigation measures
100%
100%
100%
Maintain
at 100%
Opportunities
% Core Investment Portfolio that is Grade A3
45%
37%
18%
100% by 2027
Acreage of Harworth-owned land used for
sequestration or offsetting
160
acres
120
acres
0
acres
390 acres
1 Not measured in 2022.
2 Scope 2 emissions, including consumption at Company offices, landlord-controlled areas of leased assets, vacant units, infrastructure, other Harworth assets
and electricity used to charge electric vehicles.
3 Grade A is a widely-used industry term that is understood to mean “best in class” space which is new or relatively new, high-specification and in a desirable
location, allowing the unit to attract a rent that is above the market average.
Further details on the methodologies
used to calculate NZC targets are
set out in our NZC Pathway Progress
Report and methodology statement.
Group targets and scores are set out in
the Directors’ Remuneration Report.
Additional metrics currently
being explored from 2024
Transition risks:
– Data on remaining categories of
Scope 3 emissions
– % sites with EV charging capabilities
– Cost of offsetting and kg CO2
offset per annum
Physical risks:
– Spending on infrastructure
projects that will reduce risks of
physical climate impacts at sites
Opportunities:
– Cost savings from improved
energy efficiency and sourcing
– % of Company shares held by
ESG-focused funds
Targets to measure climate-
related risks and opportunities
Harworth’s NZC Pathway is our
commitment to reaching NZC by
2030 for Scope 1, Scope 2, and
those Scope 3 emissions relating
to business travel and employee
commuting, and to reaching NZC
by 2040 for all emissions. More
information can be found in our NZC
Pathway Progress Report 2024, which
has been published alongside our
Annual Report.
The Strategic Report has been approved by the Board of Directors and signed on its behalf by:
Chris Birch
General Counsel and Company Secretary
17 March 2025
Opposite page: Harworth colleagues and conference attendees
gather outside the Harworth Regeneration Pavillion at UKREiiF.
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Harworth Group plc
Contents
Governance at a glance
98
Chair’s introduction
100
Board of Directors
104
Statement of corporate governance
108
Nomination Committee report
122
Audit Committee report
132
ESG Committee report
140
Directors’ remuneration report
142
Directors’ report
180
Statement of Directors’ responsibilities
186
Governance
Report
Annual Report and Financial Statements
97
Governance Report
GOVERNANCE REPORT
Contents
Governance is a supporting pillar of The Harworth Way. High standards of corporate governance underpin the effective
operation of the business and the long-term sustainable success of the Company, for the benefit of all stakeholders. We aim
to evolve and improve our governance structures continually in alignment with industry best practice.
A snapshot of our leadership
and the Board’s focus in 2024
GOVERNANCE AT A GLANCE
How the Board spent its time in 2024
KEY:
Operations and governance
People and culture
Strategy
Financial
Stakeholder engagement
(excluding people)
Risk management
Sustainability
January
Update from Brokers
Culture project update
Annual update on
digital strategy
Approval of Board
Reserved Matters Policy
March
Approval of 2024 Budget
Midlands regional update
Site visits to Isley Woodhouse
and Cinderhill
Approval of 2023 full year
results announcement
April
Sign off on publication
of Net Zero Carbon (‘NZC’)
Pathway Progress
Report for 2023 and
Communities Framework
Feedback from full year
investor roadshow
Employee AGM
Approval of new Head Office
Review of Enterprise Risk
Management roadmap
June
Strategy Day
(leading to announcement
of our evolved strategy)
Final approval for £106.6m
serviced land sale to Microsoft
at Skelton Grange (Leeds) for
development of a hyperscale
data centre, representing
Harworth’s largest land sale
to date
North West regional update
July
Principal risks workshop
August
Approval for the acquisition
of Catalyst, a 285,000 sq. ft
modern Grade A Industrial &
Logistics park neighbouring
the Group’s existing flagship
Advanced Manufacturing Park
in Rotherham
September
Approval of 2024 interim
results announcement
Annual update on
progress against Net Zero
Carbon Pathway
November
Yorkshire & Central
regional update
Site visit to Wheatley Hall Road
The Board were joined by
Strata Homes (Harworth’s
delivery partner)
Feedback from half year
investor roadshow
Culture project update
Review of employee
survey results
Internal Board effectiveness
review report
December
Investor relations
strategy and timetable
for 2025
Review of draft 2025 Budget
Annual update on Environment,
Health and Safety
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Harworth Group plc
Board and Committee meetings1
Name
Board
Rem Co
Audit Co
Nom Co
ESG Co
Alastair Lyons
7/8
6/6
2/2
4/4
Lynda Shillaw
8/8
2/2
4/4
Kitty Patmore2
6/8
3/4
Angela Bromfield
8/8
6/6
2/2
4/4
Ruth Cooke
8/8
5/5
2/2
Lisa Scenna
8/8
6/6
4/5
Patrick O’Donnell Bourke
8/8
5/5
Marzia Zafar
8/8
4/4
Steven Underwood3
7/8
Martyn Bowes
8/8
2/4
1 There were eight scheduled Board meetings, including the Strategy Day, during 2024. There were also Board calls to sign off the 2023 full-year results, and
to approve certain transactions, which are not reflected in the table above.
2 Kitty Patmore commenced maternity leave in September 2024. Dougie Maudsley was appointed as Interim Chief Financial Officer during this period;
however, he did not assume a role as a statutory Director.
3 Steven Underwood served as a Director during the year and retired from the Board with effect from 31 December 2024.
Board composition statistics
Independence
Chair
1
Executive Directors
2
Independent
5
Non-Executive Directors
Non-Executive
Directors
1
Tenure
0–3 years
1
3–6 years
7
6+ years
1
Gender diversity
Female
6
Male
3
Annual Report and Financial Statements
99
Governance Report
GOVERNANCE REPORT
A snapshot of our leadership and the Board’s focus in 2024
Chair’s Introduction
Dear shareholder,
On behalf of the Board, I am pleased to present this year’s
Corporate Governance Report.
The Board’s primary focus during
2024 was on the evolution, proposed
by management, of the strategy
originally outlined by Lynda Shillaw
in 2021, and on the plans developed
to implement this evolved direction
following its agreement by the Board.
As I comment in my Statement,
within the four growth drivers of the
strategy we are increasing our focus
on Industrial & Logistics development
and intend to retain more prime
Grade A properties in our Investment
Portfolio. We shall continue to seek
out opportunities to acquire sites that
have residential potential in order to
provide a steady funding platform for
the direct development of Industrial
& Logistics sites. Whilst continuing to
target the achievement of £1bn EPRA
NDV by the end of 2027, we have
added the objective of growing our
Investment Portfolio to £0.9bn by the
end of 2029, with 85% of our balance
sheet being in Industrial & Logistics.
All the operational considerations
brought to the Board by management
are judged in the context of their
contribution to these goals, and the
Board has been equally focused on
assessing the external risks to their
achievement and the adequacy and
appropriateness of the resources
planned by management to enable
their delivery.
The Board maintains its oversight
of the Company’s progress through
the management reports presented
to the Board, the detailed scrutiny
undertaken by the Board committees,
and its informal engagement with the
business through site visits, meetings
with management, and employee
engagement. In so doing, the Board
seeks to uphold high standards of
corporate governance and ensure
that the Company meets its legal and
regulatory obligations. As is evident
from my and Lynda’s Statements,
and the Operational and Financial
Reviews, the Company made notable
progress during 2024 in each of its
four strategic pillars, notwithstanding
that a challenging and uncertain
macroeconomic and geopolitical
environment persisted throughout
the year. The Board remains
confident that, with the support of an
established and effective corporate
governance structure, and with a
highly competent and committed
management and workforce, the
business is well-placed to navigate
challenges and capitalise on
opportunities through the property
cycle in pursuit of its strategic
objectives.
The areas identified below are
developed in more detail in the
Strategic Report (pages 4 to
96) and in the balance of this
Corporate Governance Report,
which comprises: the Statement
of Corporate Governance, the
Nomination Committee Report, the
Audit Committee Report, the ESG
Committee Report, the Directors’
Remuneration Report, the Directors’
Report, and the Statement of
Directors’ Responsibilities.
”
The Board seeks to uphold
high standards of corporate
governance and ensure that the
Company meets its legal and
regulatory obligations.“
Alastair Lyons, Chair
Alastair Lyons,
Chair
Harworth Group plc
100
Implementing our strategy
The increased focus on Industrial & Logistics development that underlies the
evolution of our strategy reflects the opportunity, identified by management,
to deliver product into a sector which is key to UK economic growth and where
there is critical undersupply of high-quality space. Aligned with this evolution of
the strategy, the Board approved the following key operational decisions during
the period:
1
3
Repositioning our core Investment
Portfolio to modern Grade A
– Acquisition of Catalyst, a 285,000
sq. ft modern Grade A Industrial
& Logistics park neighbouring
the Group’s existing flagship
Advanced Manufacturing Park in
Rotherham.
Accelerating sales and
broadening the range of
our Residential products
– Conditional £106.6m serviced
land sale to Microsoft at Skelton
Grange (Leeds) for development
of a hyperscale data centre,
representing Harworth’s largest
land sale to date.
2
4
Increasing direct development of
Industrial & Logistics space
– Direct development of 107,000 sq.
ft of modern Grade A Industrial &
Logistics space, of which 73,000
sq. ft went into our Investment
Portfolio.
– Enabling works underway for 1m
sq. ft of development.
Scaling up through land
acquisitions and promotion
activities
– Acquisition of Strategic Land
which will support 1m sq.
ft of Industrial & Logistics
development, such that the
long-term pipeline now has the
potential to deliver 33.6m sq. ft
of Industrial & Logistics space.
– Acquisition of part of an allocated
site near Grimsby for 3,044 plots
in strategic partnership with a
local landowner.
Sustainability
Harworth’s commitment to
sustainability is embedded in
the Group’s culture, strategy and
operations as we continue to focus
on making a lasting positive impact
on the planet and the communities
in which we operate. As I comment
in my Statement, our approach
to sustainability, articulated as
The Harworth Way, is central to
Board decision-making, and as
such we have decided that the
oversight of sustainability related
risks, opportunities, strategies
and performance should move
to being considerations of the
main Board in which all Directors
participate rather than scrutinised
by a separate ESG Committee.
The oversight of ESG reporting,
itself now being embedded into
international accounting standards,
will become the responsibility of
our Audit Committee. This evolution
of our ESG governance framework
reflects recommendations from our
internal Board effectiveness review
conducted in Q4 2024, and will be
fully implemented in April 2025.
During the year, several elements
of The Harworth Way have evolved.
These include the growing maturity of
the “Planet” and “Communities” pillars
and the expansion of the “People”
pillar. (See further on pages 38 to
45, and see also the NZC Pathway
Progress Report for 2024, which has
been published alongside this Annual
Report and can be found on the
Company’s website.)
Annual Report and Financial Statements
101
Governance Report
GOVERNANCE REPORT
Chair’s Introduction
Risk and assurance
During the year, the Board held two
risk workshops to consider the status
and profile of the Group’s principal
risks. The Board remains confident in
the resilience of Harworth’s business
model, financial position, and risk
management systems. A detailed
explanation of those systems, of
the principal risks and uncertainties
affecting the Group, and the steps we
are taking to mitigate these risks, can
be found on pages 68 to 85.
An Internal Audit function was
established at the start of 2023 to
introduce a more programmatic
third line of defence assurance of
internal controls. At the end of 2023,
an internal audit plan for 2024 was
agreed with the Audit Committee,
and subsequently implemented
by the Internal Audit function with
support from a co-sourced internal
audit partner, RSM. At the start of
the year, we further strengthened
our risk management resources
by establishing an Enterprise Risk
Management (‘ERM’) function
designed to perform a second-
line assurance role supporting risk
owners in identifying and appraising
operational risks; setting risk
appetite; developing operational and
compliance controls; and designing
risk reporting. The Enterprise Risk
Manager also supports the Board in
its ongoing assessment of principal
risks. The Audit Committee Report
(page 132) outlines the progress
made by the ERM function during
2024. The establishment of internal
audit and enterprise risk functions
over the last two years represent
important milestones for the business
and evidence the increasing maturity
of our governance structure, forming
part of our preparation for the
implementation of revisions to the
UK Corporate Governance Code
(‘Code’) with respect to the Board’s
role in monitoring and reviewing the
Company’s risk management and
internal control framework. (See
further details in the Audit Committee
Report on pages 137 and 138).
People and culture
Employee engagement is always
high on the Board’s agenda, with the
Board undertaking regional and site
visits, joining employees for informal
lunches and dinners, and continuing
to receive feedback at each Board
meeting from the Chief Executive
on matters affecting our people.
A successful Employee AGM was
held in April 2024, which provided
an opportunity for all employees
to engage directly with the Non-
Executive Directors. Not only was
this an opportunity for the Board
to gain an insight into the work of
our employees and the challenges
they face, it also allowed staff to ask
questions of, share feedback, and
raise any concerns with, the Board.
As part of the Employee AGM, our
Non-Executive Directors held small
“town hall” sessions directly with
staff without the presence of senior
executives.
During 2023, and into the first half
of 2024, the Company undertook an
in-depth cultural review with the aim
of continuing the positive evolution of
Harworth’s culture and its alignment
with the business strategy, while
maintaining an outstanding employee
experience. This review sought input
from colleagues across all areas of the
business and resulted in an evolved
Harworth Group vision, mission and
values along with the introduction
of a behavioural competency
framework. The Board was kept
appraised throughout the culture
review process, and will continue to
monitor the rollout of, and adherence
to, the new values and behavioural
competency framework with the
support of a “culture dashboard”.
(See further on the culture project in
the “People” section of the Strategic
Report on page 45).
Remuneration
During the year, the Remuneration
Committee undertook the triennial
Remuneration Policy (‘Policy’)
review with the assistance of our
remuneration consultants, Deloitte
LLP. This review had regard to
the development of the business
since the last Policy review, and
our evolved strategy, and was
supported by external benchmarking.
The Committee consulted with,
and received feedback from, the
Company’s largest shareholders
and several proxy advisers. The new
Policy was recommended to, and
approved by, the Board in February
2025 and will be tabled for approval
at this year’s Annual General Meeting
(‘AGM’). The Policy is set out in full on
pages 150 to 162, and an explanation
of the rationale for the proposed
changes to the Policy is on pages 143
to 148.
Board composition
The Nomination Committee regularly
reviews the composition of the
Board and its Committees. At the
2024 AGM, Steven Underwood was
proposed for re-election but in the
knowledge that he would be retiring
with effect from 31 December 2024,
given that by then he would have
served almost 14.5 years as a
Director (starting as a representative
Director of the Peel Group, a material
shareholder of the Company, and
remaining on the Board in a personal
Chair’s Introduction continued
102
Harworth Group plc
capacity following the reduction of
Peel Group’s shareholding). On behalf
of the Board, I offer my thanks
to Steven for his commitment to
Harworth, enabling the Company to
benefit from his extensive experience
in real estate development in the
North of England. Given the evolution
of Harworth’s strategy to focus on
Industrial & Logistics development
and investment, and Ruth Cooke’s
primarily residential real estate
background and expertise, Ruth will
be retiring from the Board at the
2025 AGM.
Notwithstanding the retirements of
Steven and Ruth, the proportion of
independent Non-Executive Directors
on the Board remains compliant with
the Code. That said, having regard
to the evolution of the strategy,
the Nomination Committee has
determined that Steven’s retirement
will leave a gap in skills, experience
and knowledge on the Board. As a
result, during the second half of 2024,
the Nomination Committee started
a recruitment process to identify
and appoint another independent
Non-Executive Director with in-depth
experience in industrial and logistics
real estate development. When made,
this appointment will be announced
in accordance with UK Listing
Rule 6.4.6R.
Subject to this appointment, the
Nomination Committee concludes
that the composition of the Board is
appropriately balanced, and, on the
recommendation of the Committee,
the Board proposes the re-election of
all other Directors at the 2025 AGM.
Board performance review
I led an internal review of the Board’s
effectiveness in Q3 2024, following
which a short action plan to implement
recommendations was agreed by the
Board (see further in the Statement of
Corporate Governance on page 108).
The Company’s next external Board
effectiveness review will take place in
H2 2025, and the recommendations
from this review will be reported in the
2025 Annual Report.
Annual General Meeting
Our AGM will be held at 10.00 am on
Monday 19 May 2025 at The Brearley
Room, AMP Technology Centre,
Advanced Manufacturing Park, Brunel
Way, Waverley, Rotherham, S60
5WG. Along with the Chief Executive,
Chief Financial Officer and Company
Secretary, I will be at this location
in person, with our other Directors
joining online. I very much look
forward to welcoming shareholders
to the meeting.
Alastair Lyons
Chair
17 March 2025
Danieli is the latest occupier at the AMP, joining the likes of Boeing and McLaren, following practical
completion by Harworth of a bespoke, build-to-suit unit: AMP, Rotherham | YAC | I&L | MD
Annual Report and Financial Statements
103
Governance Report
GOVERNANCE REPORT
Chair’s Introduction
Alastair Lyons
Chair
Date of Appointment
07/03/2018
Length of service
7 years
Independent
Yes
Committee membership
N Chair R
Skills and Experience
Alastair is Chair of Vitality UK, and until
31 December 2024 he was Chair of Welsh
Water. He was Chair of the Admiral Group
from 2000 to 2017, Deputy Chair of Bovis
Homes from 2008 to 2018, Chair of Serco
from 2010 to 2015 and of Towergate
Insurance from 2011 to 2015. Previously
in his executive career, Alastair was Chief
Executive of the National Provident
Institution and the National and Provincial
Building Society, Managing Director of
the Insurance Division of Abbey National
plc and Director of Corporate Projects
at National Westminster Bank plc. He
has a broad base of business experience
with a particular focus on the real estate,
outsourcing, water, and insurance sectors.
He was awarded the CBE in 2001 for
services to social security having served
as a Non-Executive Director of the
Department for Work and Pensions and
the Department of Social Security, and he
was also a Non-Executive Director of the
Department of Transport.
External appointments
Chair of Vitality UK.
Lynda Shillaw
Chief Executive
Date of Appointment
01/11/2020
Length of service
4 years 4 months
Independent
No
Committee membership
N D
Skills and Experience
Prior to Lynda’s appointment as Chief
Executive, she was Group Property
Director at Town Centre Securities plc,
where she led the management of its
land and property and its development
pipeline. Before that, she was Divisional
CEO, Property at the Manchester Airports
Group (‘MAG’), where she was responsible
for MAG’s investment portfolio and
development land bank, including its
“Airport City” joint venture. This followed
a long career managing both investment
and development real estate portfolios for
BT and Co-operative Group before joining
Lloyds Banking Group as Global Head of
its real estate lending division.
Lynda was a Non-Executive Director of The
Crown Estate from 2018 until 2021, and a
Non-Executive Director of Vivid Housing
Association from 2017 to 2023. She
currently chairs the BPF Regional Policy
Committee.
External appointments
None.
Katerina (Kitty) Patmore
Chief Financial Officer
Date of Appointment
01/10/2019
Length of service
5 years 5 months
Independent
No
Committee membership
D Chair
Skills and Experience
Prior to joining Harworth, Kitty was
Director with responsibility for Finance
and Operations at Harwood Real Estate,
which managed one of the largest private
rented housing investment portfolios
in the UK. She led the finance function
with responsibility for investor relations
and capital markets, including leading
an LSE Main Market fundraising process.
Kitty started her career in banking at
Barclays specialising in structured real
estate finance before moving into real
estate mezzanine finance across the UK
and Europe for a private debt fund, DRC
Capital.
Kitty is also a Non-Executive Director of
LondonMetric Property plc and chairs its
Audit Committee.
External appointments
Non-Executive Director of LondonMetric
Property plc.
Board of Directors
Harworth Group plc
104
Angela Bromfield
Senior Independent Director
Date of Appointment
01/04/2019
Length of service
5 years 11 months
Independent
Yes
Committee membership
R Chair N
Skills and Experience
Angela is a Non-Executive Director
at Marshalls plc, where she chairs
the Remuneration Committee, is the
designated employee engagement
Non-Executive Director, and is a
member of the ESG, Nomination and
Audit Committees. Angela is also a
Non-Executive Director at C&C Group
plc, where she chairs the Remuneration
Committee and is a member of the
Nomination Committee. Between 2016
and 2022, Angela was a Non-Executive
Director at Churchill China plc.
Angela has extensive commercial
strategy, marketing and communications
executive experience. She was Strategic
Marketing & Communications Director at
Morgan Sindall plc until 2013 and prior
to that held senior roles at Tarmac Group,
Premier Farnell plc and ICI plc.
External appointments
Non-Executive Director of Marshalls plc
and of C&C Group plc.
Patrick O’Donnell Bourke
Non-Executive Director
Date of Appointment
03/11/2020
Length of service
4 years 4 months
Independent
Yes
Committee membership
A Chair
Skills and Experience
Patrick is a Non-Executive Director and
currently Chair of the Audit Committee of
Pantheon Infrastructure plc (‘Pantheon’). He
is due to be taking on the role of Chair of
Pantheon following its AGM in 2025. Patrick
was also Chair of Ecofin US Renewables
Infrastructure Trust plc from 2020 until 2025,
a Non-Executive Director of Calisen plc from
2020 to 2021, and a Non-Executive Director of
Affinity Water Limited from 2013 to 2020.
Patrick has significant senior international
experience in investing in, and managing,
infrastructure and utilities. His most recent
executive role was that of Group Finance
Director for John Laing Group plc from 2011
to 2019. Prior to that, he was Group Finance
Director of Viridian Group plc from 2000
to 2006, before becoming Group Chief
Executive from 2007 to 2011 after Viridian
was taken private. Previously, he was Group
Treasurer for Powergen plc and spent nine
years in investment banking with Barclays
de Zoete Wedd and Hill Samuel, having
qualified as a chartered accountant with
Peat Marwick (now KPMG).
External appointments
Non-Executive Director of Pantheon
Infrastructure plc.
Ruth Cooke
Non-Executive Director
Date of Appointment
19/03/2019
Length of service
6 years
Independent
Yes
Committee membership
N A
Skills and Experience
Ruth is currently Chief Executive
of GreenSquareAccord, a housing
association operating across the North,
Midlands and South West. Before that, she
was Finance Director (from 2008 to 2012)
and then Chief Executive (from 2012 to
2018) of Midland Heart, a Birmingham-
based housing association. Prior to that,
she held senior finance and resourcing
roles at Knightstone, a housing association
based in the South West, and Anchor
Trust, a provider of housing and care
to those aged 55 and above. Ruth has
held a number of voluntary and non-
executive positions in the social housing
and retirement community sector. She
is currently Vice-Chair of the National
Housing Federation and Vice-Chair of
the West Midlands Housing Association
Partnership. She is also a member of the
Institute of Chartered Accountants and a
corporate treasurer.
External appointments
Chief Executive of GreenSquareAccord.
Vice-Chair of the National Housing
Federation and Vice-Chair of the West
Midlands Housing Association Partnership.
Key
A Audit Committee
D
Disclosure Committee
N Nomination Committee
R Remuneration Committee
Annual Report and Financial Statements
105
Governance Report
GOVERNANCE REPORT
Board of Directors
Lisa Scenna
Non-Executive Director
Date of Appointment
01/09/2020
Length of service
4 years 6 months
Independent
Yes
Committee membership
R A
Skills and Experience
Lisa is a Non-Executive Director of Genuit Group plc, where she
is the Senior Independent Director, chairs the Remuneration
Committee and is a member of the Nomination and Audit
Committees. She is also a Non-Executive Director of Gore Street
Energy Storage Fund plc, where she is a member of the Audit,
Remuneration, Nomination and Management Engagement
Committees.
Lisa is also a Non-Executive Director of Cromwell Property Group,
an Australian listed company. In May 2024, she was appointed as
a Non-Executive Director of Ingenia Communities Group, another
Australian listed company, where she chairs the Remuneration
Committee and is a member of the People and Culture Committee.
Lisa is also a Non-Executive Director of one of Dexus’s fund
management platforms (based in Australia).
Lisa has over 30 years’ experience working at executive level in
large multinational corporations, with a strong background in real
estate development and asset management.
External appointments
Non-Executive Director of Genuit Group plc and of Gore Street
Energy Storage Fund plc. Non-Executive Director of Cromwell
Property Group and Ingenia Communities Group (both listed
in Australia). Non-Executive Director of Dexus Capital Funds
Management Limited (based in Australia).
Marzia Zafar
Non-Executive Director
Date of Appointment
01/06/2022
Length of service
2 years 9 months
Independent
Yes
Skills and Experience
Marzia is Deputy Director for Strategy & Decarbonisation at
Ofgem. Prior to this, she was Director of Sustainability & Policy at
Kaluza Technologies.
Marzia brings to Harworth a wealth of experience in sustainability,
having spent over 20 years working on policies and strategies to
enable energy transition for regulators, businesses and not-for-
profit sectors. She was Director of Insights at the World Energy
Council (the UN-accredited global energy body) and worked with
business and government leaders to facilitate global, national
and regional energy strategies. Prior to that, Marzia spent 11 years
with the California Public Utilities Commission, initially as a Senior
Energy Policy Adviser, and then as Director for Policy and Planning.
In this role, Marzia contributed to drafting California’s Energy
Action Plan to make greater use of renewable energy and led the
strategy for the deployment of smart meters.
External appointments
Deputy Director for Strategy & Decarbonisation at Ofgem.
Board of Directors continued
Harworth Group plc
106
Chris Birch
General Counsel & Company Secretary
Date of Appointment
06/06/2016
Length of service
8 years 9 months
Independent
No
Committee membership
D
Skills and Experience
Chris trained with Eversheds LLP (now Eversheds Sutherland LLP),
where he qualified as a solicitor in 2005 and spent 12 years as a
corporate restructuring lawyer, before joining Harworth as General
Counsel and Company Secretary in June 2016.
External appointments
None.
Martyn Bowes
Non-Executive Director
Representing the Pension Protection Fund
Date of Appointment
24/03/2015
(Previously Non-Executive Director of Harworth Estates Property
Group Limited (‘HEPGL’) from 19 March 2013)
Length of service
10 years (12 years including appointment to HEPGL)
Independent
No
Skills and Experience
Martyn spent much of his early career in banking, including
Barclay’s Capital as Managing Director, Real Estate Finance from
2001 to 2007. Since leaving Barclays he has pursued a portfolio
business career, which in 2012 involved a takeover with fellow
Directors of the South of England based Welbeck Land real estate
business. Martyn now acts as Finance Director for Welbeck Land
and also maintains other interests in real estate (including as an
advisor to the Manhattan Loft Corporation) and healthcare.
External appointments
Director of multiple private limited companies predominantly
within the Welbeck Land Group.
Steven Underwood served as a Director during the year and retired from the Board with effect from 31 December 2024.
Ruth Cooke will not be seeking re-election at the 2025 AGM and will retire from the Board with effect from that date. Marzia Zafar will
replace Ruth on the Audit Committee, with a wider review of Committee membership to be undertaken in 2025.
During the year, Angela Bromfield chaired the ESG Committee, and its other members were Alastair Lyons, Marzia Zafar, Martyn Bowes,
Lynda Shillaw and Kitty Patmore. As set out in the ESG Committee Report, sustainability oversight and decisions will move to being
considerations of the main Board, and oversight of ESG reporting will become the responsibility of the Audit Committee, to be fully
implemented in April 2025.
Key
A Audit Committee
D
Disclosure Committee
N Nomination Committee
R Remuneration Committee
Annual Report and Financial Statements
107
Governance Report
GOVERNANCE REPORT
Board of Directors continued
Statement of
Corporate Governance
The UK Corporate Governance Code
In January 2024, the FRC published a revised version of the Code, effective from accounting periods beginning on or after
1 January 2025. The 2024 Code can be found on the Financial Reporting Council’s website at www.frc.org.uk. During
the period under review, Harworth was subject to the 2018 Code. The Board confirms that, throughout the year ended
31 December 2024, the Company complied with the principles and provisions set out in the 2018 Code. The 2018 Code
can also be found on the Financial Reporting Council’s website at www.frc.org.uk.
In this report, we outline the primary areas on which the Board focused during the year to ensure compliance with the Code.
Board Leadership and
Company Purpose
Key activities and discussions
The Board continued to focus on
growing Harworth to £1bn of EPRA
NDV by the end of 2027, maintaining
regular oversight of the Company’s
progress in implementing its strategy.
In June, the Board held a Strategy
Day reviewing how most effectively
to deliver the Group’s strategic
objectives, resulting in the evolution
of its strategy.
Outcomes
Evolution of the strategy by focusing
on growing the Group’s Investment
Portfolio through increasing focus
on the development of Industrial &
Logistics sites, growing recurring
rental income alongside generating
value gains to underpin sustainable
shareholder returns.
Future priorities
The Board will monitor actions by
the management team to ensure the
business has the requisite resources,
systems and processes to support
delivery of the evolved strategy;
continue to review the progress
achieved in its delivery; and continue
to review regularly our financial and
operational performance.
Stakeholders considered
All stakeholders, as set out in our s.172
Statement (pages 62 to 67).
Strategic Report, pages 4 to 96
Division of
Responsibilities
Key activities and discussions
Following feedback from the internal
Board effectiveness review, the Board
considered that, given the maturity
of the Group’s sustainability strategy
and reporting, the role of the ESG
Committee should be reviewed.
Outcomes
Given that (A) Harworth’s
sustainability strategy and reporting
had matured substantially since the
formation of the ESG Committee in
2021, and (B) Harworth’s approach
to sustainability is embedded in
the Group strategy and central to
Board decision-making, the Board
determined that responsibility for
oversight of sustainability related
risks, opportunities, strategies and
performance should move to the
Board, and oversight of ESG reporting
should become the responsibility of
the Audit Committee.
Future priorities
The evolution of the ESG governance
framework and reallocation
of responsibilities will be fully
implemented in April 2025, with
sufficient time to be allocated in
the Board timetable to continue
to oversee progress against our
sustainability commitments (including
NZC transition) in alignment with our
business strategy.
Stakeholders considered
Our people, communities and
investors.
Statement of Corporate
Governance, pages 108 to 121
Composition, Succession
and Evaluation
Key activities and discussions
Given the strategic focus on
Industrial & Logistics development,
the Nomination Committee
determined that Steven Underwood’s
retirement from the Board (effective
31 December 2024) would leave a gap
in skills, experience and knowledge.
During the second half of the year,
the Committee started a recruitment
process to identify and appoint another
independent Non-Executive Director
with in-depth experience in industrial
and logistics real estate development.
Outcomes
With the appointment of a new Non-
Executive Director who has extensive
experience in the Industrial & Logistics
sector, the Group will bolster the
skills, experience and knowledge on
the Board, to deliver the strategy of
increasing direct development and
growing a high-quality Investment
Portfolio.
Future priorities
When made, the appointment
will be announced in accordance
with UK Listing Rule 6.4.6R, and
the new Director will undertake a
comprehensive and tailored induction
programme.
Stakeholders considered
A diverse Board comprising individuals
with varied skills, experience and
perspectives is important for all
stakeholders, as set out in our s.172
Statement (pages 62 to 67).
Nomination Committee Report,
pages 122 to 130
Harworth Group plc
108
Audit, Risk and Internal Control
Key activities and discussions
The Audit Committee oversaw the
establishment of a new ERM function,
which is supporting the evolution of our
approach to principal and operational risk
management.
Supported by the new ERM function, the
Board held two risk workshops to consider
the status and profile of the Group’s
principal risks as uncertain economic
and geopolitical conditions persisted
throughout the year.
An internal audit programme, approved
by the Audit Committee, was delivered to
plan in 2024.
Outcomes
The Board closely monitors principal risks
to ensure they are managed effectively,
and opportunities are identified, in pursuit
of our strategic objectives. During the year,
the Board determined that the residual risk
status of the “markets” risk had reduced
to medium given economic conditions
had stabilised in Harworth’s core markets
with an improving outlook, and expanded
what is now the “digital resilience” risk
to encompass broader threats beyond
cyber-attacks, increasing its residual risk
status to medium due to heightened
external threats and Harworth’s FTSE
250 status. The Board continues to
closely monitor the “planning” risk given
proposed government reforms, as well as
the “markets” risk as economic conditions
remain uncertain.
The establishment of Internal Audit and
Enterprise Risk functions over the last
two years provides enhanced assurance
around our risk management and internal
control systems which, alongside our
readiness for the implementation of
Provision 29 of the 2024 Code in 2026,
supports the effective delivery of the
strategy as the scale and pace of our
operational activities grows.
Future priorities
The Board will continue to review the
status of the principal risks at each
meeting and undertake a more detailed
review biannually (or at any time if there
are significant movements in risk profile).
The Audit Committee will continue
to monitor the evolution of our risk
management and internal controls systems
in readiness for the implementation of
Provision 29 of the 2024 Code in 2026.
Stakeholders considered
Our principal risks take account of all
stakeholders as set out in our s.172
Statement (pages 62 to 67).
Strategic Report: Effectively
managing our risk, pages
68 to 85
Audit Committee Report, pages
132 to 139
Remuneration
Key activities and discussions
The Remuneration Committee led a review
of the Remuneration Policy, including
consultation with shareholders and several
proxy advisers.
Outcomes
Revisions have been made to the
Remuneration Policy informed by the
growth of the business since the last Policy
review, and the evolution of our strategy,
to ensure that it remains supportive of
the Group’s long-term ambitions and is
competitively positioned to incentivise the
executive talent and experience needed in
a highly specialised sector.
Future priorities
Shareholder approval of the revised
Remuneration Policy will be sought at our
2025 AGM.
Subject to approval, the Board will oversee
implementation of the Policy, including
its application to the wider workforce, to
recruit, motivate and retain our people to
deliver successfully against the strategy
and to align the interests of employees
and shareholders.
Stakeholders considered
Our people and investors.
Directors’ Remuneration
Report, pages 142 to 178
Key areas of Board focus in 2025
Continued oversight of the
development of appropriate
commercial and funding plans to
implement our strategy, ensuring the
financial and operational performance
of the business remains strong
Oversight of progress against
Harworth’s NZC Pathway and
Communities Framework, including
review of targets
Recruitment process to be
completed by the Nomination
Committee, and recommendation
made to the Board, for the
appointment of a new Non-
Executive Director
Our people: oversight of
implementation of the people
strategy to support delivery of
the business strategy, including:
evolution of the organisation
design, recruitment, engagement,
welfare, succession planning, talent
development and diversity
In-depth assessment of the Group’s
principal risks and oversight of the
implementation of the relevant
mitigation strategies
External Board
effectiveness review
Annual Report and Financial Statements
109
Governance Report
GOVERNANCE REPORT
Statement of Corporate Governance
Board Leadership and
Company Purpose
Purpose and strategy
Harworth’s Purpose: “to transform
land and property into sustainable
places where people want to live
and work”, underpins our strategy,
business model, and all Board activity
and decisions. The Board’s primary
focus during 2024 was on the
evolution of the strategy originally
outlined by Lynda Shillaw in 2021
to grow Harworth to £1bn of EPRA
NDV by the end of 2027. In June
2024, the Group announced what
we have come to refer to as a “pivot”
in the strategy, being to increase the
volume of Industrial & Logistics direct
development, with the intention
to grow the Investment Portfolio,
through that direct development
together with selective acquisitions,
to £0.9bn by the end of 2029, in turn
growing recurring rental income
alongside value gains to underpin
sustainable shareholder returns.
This strategy requires an upwards
shift in the pace and scale of what
we do and a focus on the Industrial
& Logistics sector, leveraging our
specialist expertise to optimise the
development of our substantial
pipeline whilst continuing to create
value from sales of high-quality
serviced land. This “pivot” is exciting
and ambitious, building on the key
attributes that have made Harworth
successful to date, in particular
its passionate, innovative and
collaborative professional workforce,
a substantial land bank, end-markets
with strong fundamentals, and a
commitment to creating sustainable
communities, all of which contribute
towards our aim to deliver long-term
market-leading returns for investors.
The performance of the business is
overseen by the Board throughout
the year, measuring its achievements
against the strategic objectives, and
a Board-approved in-year budget
and five-year strategic plan, with
the Board satisfying itself as to the
adequacy of management’s response
to variations in performance against
the plan. Financial and operational
reforecasts are presented to the
Board on a periodic basis and the
Chief Executive, Chief Financial
Officer (‘CFO’), Chief Operating
Officer (‘COO’), Chief Investment
Officer (‘CIO’) and General Counsel
give operational and financial
updates at each Board meeting,
which they all attend.
Statement of
Corporate Governance continued
Opening of the Thoresby Vale Country Park. Thoresby Vale, Nottingham | YAC | R | MD
110
Harworth Group plc
Marzia Zafar, Non-Executive Director, enjoys a lighter moment with
Andrew Weaver, Chair of Strata Homes, during a Board site visit.
Riverdale Park, Doncaster | YAC | R | MD
Governance Report
GOVERNANCE REPORT
Statement of Corporate Governance
Statement of
Corporate Governance continued
Opposite page: Harworth employees enjoy the biannual Employee AGM
Culture and workforce engagement
The Board understands the importance of culture, setting the tone of the organisation
from the top and embedding it throughout Harworth. Our culture is key to the successful
implementation of our strategy.
Harworth aims to foster a diverse, inclusive, ambitious
and high-performing culture to attract, develop and
inspire the best people to deliver our strategy. During
2023, and into the first half of 2024, the Company
undertook an in-depth cultural review with the aim of
preserving, and continuing the positive evolution of,
Harworth’s culture as the workforce grows to support
the delivery of our business strategy, while maintaining
an outstanding employee experience. This review sought
input from colleagues across all areas of the business
and resulted in an evolved Harworth vision, mission
and values along with the introduction of a behavioural
competency framework. The Board was kept appraised
throughout the culture review process, and will continue
to monitor the rollout and promotion of the new values
and behavioural competency framework with the
support of a “culture dashboard”. (See further on the
culture project in the “People” section of the Strategic
Report on page 45).
The Board seeks to engage with our people and assess
and promote our positive and collaborative culture in the
following ways:
– Meeting and engaging with staff in various formats,
including employee lunches, site visits, regional and
central function team dinners, office visits and the
biennial Employee AGM (see the following page).
– An annual review of employee engagement
presented by the Group Resources and
Transformation Director, based on the annual
employee survey results.
– Feedback from the Chief Executive at each Board
meeting on progress of the people strategy,
including culture.
– Where there are departures at a senior level, the
Board seeks to understand from the Executive the
motivations for, and impact of, those departures.
– Access to the staff newsletter, which provides
information on the issues, topics and activities that
are important to all our people on a day-to-day
basis and are critical to the positive evolution of our
culture through consistent, frequent communication.
This includes our monthly focus on wellbeing, a
Chief Executive update, operational highlights and
achievements, and a monthly “spotlight” topic.
– We have a well-established speak up and
whistleblowing process that facilitates colleagues’
ability to raise matters of concern more formally, and
in confidence, should they wish. The Audit Committee
reviews speak up reports and the process is outlined
in the Audit Committee Report on page 139.
Our new values reflect Harworth’s commitment to sustainability, growth, innovation and collaboration.
Build the Future:
We are committed
to creating a legacy
that promotes
sustainability.
Inspire Growth:
We set
ambitious goals
and embrace
change.
Innovate & Create:
We constantly evolve,
explore possibilities,
and innovate to deliver
lasting results.
One Harworth:
We work together
with respect, where
individuality is valued
and appreciated.
112
Harworth Group plc
CASE STUDY
Culture and workforce engagement in action:
Employee AGM
We held our Employee AGM in April 2024, which brought together all
employees and provided an opportunity for them to engage directly with the
Board. The Employee AGM comprised:
– A briefing from the Chief Executive and CFO
following the 2023 Results announcement
and investor roadshow. Lynda and Kitty
regularly undertake similar briefings to our
employees.
– Q&A with the Chief Executive and CFO.
– Non-Executive Director introductions.
– Employees then split into breakout groups
to participate in a “town hall” style forum,
each group with a couple of Non-Executive
Directors. The Executive were not present
for this element to minimise employees
feeling inhibited from being open in their
discussions.
The Employee AGM was very well-attended, and,
as in previous years, was well-received and valued
by employees. Much of the session was centred
on engagement with the Non-Executive Directors
and feedback from the business reflects that most
value came from the “town hall” sessions where
employees put questions directly to Non-Executive
Board members. Not only did this allow staff to
ask questions of, and share feedback and raise any
concerns with, the Non-Executive Directors, it was
also an opportunity for Non-Executive Directors to
gain an insight into the work of employees and the
challenges they faced.
The next employee AGM will be held in 2026.
Feedback from employees:
“
I find it useful to have contact
with the Board and hear what
they have to say – I think it helps with
making people feel more connected
to the wider business.”
“
I have never met the Board of
the Company that I worked
for before and it shows how much
Harworth invests in its employees and
values them.”
“
I really enjoyed the Q&A
sessions with the NEDs.
A great opportunity to pose our
questions and they provided great
feedback that was delivered in what
felt like an honest way. Lynda & Kitty’s
sessions also provided me personally
with more insight into our business
and the level of future planning.”
Annual Report and Financial Statements
113
Governance Report
Governance Report
GOVERNANCE REPORT
Statement of Corporate Governance
Statement of
Corporate Governance continued
Stakeholders
Our Strategic Report on pages 4 to
96 outlines how we engage with our
key stakeholders and how the Board
complies with its obligations under
Section 172(1) of the Companies
Act 2006.
Board independence
Conflicts of interest
Each Director must disclose actual
or potential conflicts of interests,
either by way of general notice or
at the beginning of each Board or
Committee meeting. The Articles of
Association provide that the Board
can authorise actual and potential
conflicts of interest of Directors.
Where conflicts of interest arise, the
relevant Director may not receive
Board papers and may be excluded
from discussions, depending upon
the nature and materiality of the
conflict, and would be excluded from
voting on the relevant subject matter.
Martyn Bowes is a Board
representative of the Pension
Protection Fund and the Board has
approved any actual or potential
conflicts of interest that arise
as a result. Steven Underwood,
who was a Director during the
year and retired from the Board
on 31 December 2024, is Chief
Executive of Peel Group and is an
Executive Director of certain Peel
Group companies which may deal
with Harworth at an operational level
from time to time and/or may pursue
certain acquisition opportunities in
competition with Harworth. Steven
had previously declared by way of
general notice, and the Board had
approved, a potential conflict of
interest in that regard.
External appointments
Upon appointment, each Director
is required to notify the Company
Secretary of their external Board
appointments, other significant
commitments and any actual or
potential conflict of interest. Where
a Director proposes to take on an
additional external responsibility, this
is reviewed first by the Nomination
Committee, which, having considered
the time commitment and potential
for conflicts of interest, makes a
recommendation to the Board. The
Board makes a final decision on all
new external appointments.
The external appointments of
each Board member are set out
in the Directors’ biographies on
pages 104 to 107. The external
appointments approved during the
year are disclosed in the Nomination
Committee Report on page 125.
Effectiveness of Directors
Inductions
The Company Secretary oversees
the delivery of a comprehensive and
tailored induction programme for all
new Directors, which includes:
– provision of a detailed induction
pack ahead of appointments
taking effect;
– briefings from the Chair, the Chief
Executive, CFO, COO, CIO and
General Counsel;
– a series of one-to-one meetings
with members of the Group
Leadership Committee;
– site visits; and
– meetings with external advisers
where relevant, such as the
external auditors, remuneration
consultants and the Company’s
valuers.
Knowledge of business
and markets
To give constructive challenge and
support to the Executive, all Non-
Executive Directors must maintain a
good knowledge and understanding
of Harworth’s business and the
markets in which it operates. To that
end, the Board timetable typically
includes:
– site visits, which help to improve
knowledge and understanding
of key projects and, at the same
time, are an opportunity for Non-
Executive Directors to get to know
our operational teams better;
– annual health and safety
updates from the head of our
Environment, Health & Safety
division (supplemented by monthly
updates included in each Board
pack); and
– regular updates from each of the
regional and functional teams,
focusing on progress against
strategic objectives, markets and
resourcing and including project-
specific reviews. These are often
timetabled to precede, and give
context to, site visits.
114
Harworth Group plc
Ongoing support and CPD
All Directors have access to
the advice and services of the
Governance (Company Secretarial)
team which also facilitates the
continuous professional development
(‘CPD’) of all Directors. To that end:
– external CPD briefings are made
available to Directors, with a short
synopsis prepared by the Assistant
Company Secretary;
– external advisers host CPD
workshops for the Board and
Committees;
– the Company Secretary provides
written and verbal updates to
the Board and its Committees, as
appropriate, on governance and
regulatory changes;
– Directors are made aware of, and
have the opportunity to attend,
external CPD updates; and
– the Company Secretary shares
with the Board a “horizon scanning
tracker”, which is prepared
quarterly by our in-house legal
team, principally for the Group
Leadership Committee, and
identifies forthcoming and
anticipated legal changes which
will or may impact Harworth’s
activities.
Division of Responsibilities
There is a clear division of
responsibilities between the
Board, its Committees, and senior
management at an operational level.
During the year, we reviewed our
delegated authorities framework
and made some revisions to our
Board Reserved Matters Policy and
Operational Approvals Policy. These
policies reserve certain matters for
the Board and ensure that operational
decisions are made at the most
appropriate level in the business.
Our governance framework aims to
support the Board in focusing on
strategic proposals, while also giving
it oversight of major operational
projects that affect the long-term
success of the business.
The delegated authorities framework
is subject to annual review, led by the
Company Secretary and approved by
the Board, to ensure that it keeps
pace with Harworth’s evolving
business.
The Board has delegated certain
responsibilities to the Remuneration,
Audit, Nomination, and Disclosure
Committees. The terms of reference
of those Committees are reviewed
annually and appear on the website at
www.harworthgroup.com/investors/
governance/.
As outlined in the Chair’s Statement,
the Group’s approach to sustainability
is central to Board decision-making
and as such, given the relative
maturity of our sustainability strategy
and reporting, the Board has decided
that the oversight of sustainability
related risks, opportunities, strategies
and performance should move
to being considerations of the
main Board in which all Directors
participate, rather than scrutinised by
a separate ESG Committee, and the
oversight of ESG reporting should
become the responsibility of the
Audit Committee. This evolution of
our ESG governance framework will
be fully implemented in April 2025.
The Chief Executive has responsibility
for proposing and then implementing
the Company’s strategy and leading
the day-to-day management of the
business, with the agreement of the
Board on reserved matters. The Chief
Executive appoints the Executive, the
Corporate Governance Committee,
Investment Committee and Group
Leadership Committee to support
her in implementing the strategy.
The Executive comprises the Chief
Executive, CFO, COO, CIO and
General Counsel.
Our ongoing governance structure
and key responsibilities of the Board,
Committees, and individual roles are
summarised on pages 116 to 119.
Annual Report and Financial Statements
115
Governance Report
GOVERNANCE REPORT
Statement of Corporate Governance
Statement of
Corporate Governance continued
Board Committees
The Board
– Responsible for the long-term success of the Group,
ensuring there is appropriate regard by the Company
for the interests of its stakeholders.
– Sets strategy and oversees its implementation,
including approval of annual budget and strategic plan.
– Responsible for the overall financial and operational
performance and resilience of the business.
– Oversight of performance and reporting against our
sustainability framework (including the NZC Pathway
and Communities Framework) including targets
and KPIs.
– Approval of sustainability policies, processes and
initiatives in line with the overall strategic plan.
– Oversight of the people strategy.
– Oversight of health and safety policies, systems and
processes for all sites and projects.
– Sets risk appetite for, and has oversight of, the
principal risks.
– Approves underwriting proposals for all new sites,
direct developments and development management
engagements.
– Appointment of Board members and the Executive.
– Responsible for the establishment and maintenance of
an appropriate corporate governance structure.
Audit Committee
– Reviews the integrity of the
Group’s Financial Statements
and formal announcements on
its financial performance.
– Oversight of ESG reporting (from
April 2025).
– Oversight of the Group’s
financial and narrative reporting
processes.
– Reviews the Group’s operational
risks, the effectiveness of the risk
management system and of our
internal controls and processes,
and the Internal Audit function
and programme.
– Reviews the independence and
effectiveness of the external
auditor and the Internal Audit
function.
See pages 132 to 139 for the
full report
Remuneration Committee
– Determines and recommends
to the Board the Company’s
Remuneration Policy, ensuring
alignment with strategy.
– Determines the remuneration
packages of the Executive
Directors and other members
of the Executive team.
– Monitors performance against
bonus targets and long-term
incentive underpins.
– Reviews workforce
remuneration and related
policies.
– Determines awards under our
share schemes.
See pages 142 to 178 for the
full report
Nomination Committee
– Reviews the size and
composition of the Board
to ensure a balance of skills,
experience and knowledge on
the Board and its Committees.
– Oversight of succession
planning for the Board and
Executive.
– Leads the process for Board
appointments making
recommendations to
the Board.
– Appraises and recommends to
the Board proposed external
appointments of Directors.
– Oversight of progress in
improving diversity across the
business.
See pages 122 to 130 for the
full report
Disclosure Committee
Ensures compliance with disclosure obligations under the UK Market Abuse Regulation and the FCA’s UK Listing
Rules and Disclosure Guidance and Transparency Rules.
116
Harworth Group plc
Chief Executive
The Chief Executive has established
the following Management
Committees to support her in
discharging the authority delegated
to her by the Board.
See next page for the Chief
Executive’s key responsibilities
Executive
– Supports in the day-to-day
running of the business
and the formulation and
implementation of the strategy.
– Consults on strategic and
operational matters delegated
to the Chief Executive.
– Reviews performance of the
business against agreed
operational and financial KPIs.
Group Leadership Committee
– Ensures effective
communication and
collaboration between all
operating divisions and
functions sharing knowledge
and experience, including
site and project information,
market intelligence, innovation
opportunities and contacts.
– Monitors the risk profile of the
business.
Environment, Health, and Safety
(‘EHS’) Committee
– Senior leaders across the
business meet quarterly, and
at short notice if required, with
a strategic focus on: EHS data
(trends and areas of concern);
significant incidents; internal
EHS projects/initiatives;
and external EHS matters
(legislative horizon scanning,
industry trends and/or
intelligence).
– Monitors the risk profile of the
business.
Investment Committee
– Delegated authority for material
development and investment
activities.
– Reviews all material projects
and departures from project
plans including matters
reserved for the Board
before they are presented for
approval.
– Consults on strategy,
budgeting, people matters,
transformation projects and
sustainability initiatives.
Corporate Governance
Committee
– Responsible for certain
decisions relating
predominantly to resourcing
and transformation, including
reward, recruitment,
organisation design and
transformation projects.
– Monitors certain matters
relating to resourcing
and transformation,
including the learning and
development programme and
succession plans.
Annual Report and Financial Statements
117
Governance Report
GOVERNANCE REPORT
Statement of Corporate Governance
Statement of
Corporate Governance continued
Responsibilities of the Board and Executive
Alastair Lyons
Chair
– Leads the Board and is responsible for its overall effectiveness
by facilitating a culture of openness and debate.
– Ensures that Harworth has a defined purpose and clear values,
strategy, and objectives.
– Ensures the Company has the appropriate leadership to
achieve its strategy and objectives.
– Ensures the Board comprises diverse individuals with the
necessary skills and experience to achieve the appropriate
oversight of the Company’s activities.
– Ensures that the Board receives regular reporting on
performance of the Company.
– Ensures that Directors receive accurate, timely and clear
information, and that there is adequate time available for
discussion of agenda items and an effective decision-making
process in place.
– Ensures there is ongoing and effective communication with
shareholders, and that the Board engages appropriately with
other key stakeholders.
– Ensures that the effectiveness of the Board is subject to annual
evaluation, including an external evaluation every three years.
Lynda Shillaw
Chief Executive
Kitty Patmore
Chief Financial Officer
– Leads on the formulation of purpose and strategy, which,
once agreed by the Board, falls to the Chief Executive to
implement and communicate effectively.
– Leads the establishment and maintenance of Harworth’s
culture and values.
– Responsible for the design of Harworth’s operational
structure and for the recruitment and retention of an
appropriately skilled and experienced management team.
– Oversight of operational risk management, including health
and safety and the system of internal controls.
– Responsible for the formulation and implementation of
Harworth’s people strategy and for effective internal
communications.
– Responsible for Harworth’s relationships with both actual
and potential shareholders and for effective engagement
with key stakeholders.
– Responsible for ensuring the Group’s strategy embeds
ESG principles and objectives, including leading on the
formulation of ESG targets.
– Leads on all financial matters, including tax and treasury.
– Responsible for preparing the annual budget and strategic
plan and the maintenance of regularly updated reforecasts
of the Group’s financial and operational performance.
– Responsible for all statutory financial reporting, including the
preparation of the interim and year-end financial statements
and Annual Report.
– Responsible for ensuring the adequacy of the Group’s
financial resources, formulating the Group’s funding strategy
and raising new equity and debt capital as appropriate.
– Leads the monitoring of performance against the Company’s
ESG targets.
– Responsible for ensuring clear, effective, and timely
measurement and reporting of financial and non-financial
key performance indicators to the Board.
– Responsible for internal financial controls, systems and
processes.
118
Harworth Group plc
Angela Bromfield
Senior Independent Director ('SID')
Chris Birch
General Counsel & Company Secretary
– Provides a sounding board for the Chair.
– Acts, where appropriate, as an interlocutor between the
Chair and other Directors.
– Available to shareholders as an alternative point of contact.
– Leads the process for appointing a new Chair.
– Leads the annual appraisal of the Chair’s performance.
– Secretary to the Board and the provision of secretarial
resource to Board Committees.
– Ensures that all Board reserved matters are referred to the
Board for review and approval.
– Advises on regulatory compliance and corporate
governance.
– Responsible for the preparation of Board and Committee
agendas and the collation and distribution of papers.
– Leads on arranging inductions for, and CPD of, Directors.
– Responsible for governance, both at Board and operational
levels, including non-financial internal controls, systems and
processes, and responsible for risk management.
– Leads the Legal, Governance, Audit and Assurance and
EHS teams.
Andrew Blackshaw
Chief Operating Officer
Jonathan Haigh
Chief Investment Officer
– Responsible for operational delivery by Harworth’s
regional teams.
– Ensures there are appropriate resources across the
regional teams to implement the strategy and deliver the
business plan.
– Leads on the delivery of our mixed tenure products across
the portfolio.
– Jointly responsible, with the CFO and CIO, for ensuring that
the regional teams work effectively alongside our finance
and central support teams.
– Jointly with the CIO, leads the half-year and year-end
valuation process.
– Responsible for the expertise, support and resources
provided by our Technical, Energy & Natural Capital and
Asset Management teams to the regional teams.
– Responsible for the management of our Investment Portfolio
in accordance with our strategy, including strategic
disposals and the incorporation of directly developed assets
into the portfolio.
– Leads on portfolio and strategic acquisitions and projects.
– Oversight of the direct development programme across the
portfolio.
– Jointly responsible, with the CFO and COO, for ensuring that
the central teams work effectively alongside our finance and
regional teams.
– Jointly with the COO, leads the half-year and year-end
valuation process.
Annual Report and Financial Statements
119
Governance Report
GOVERNANCE REPORT
Statement of Corporate Governance
Composition, Succession
and Evaluation
Composition and succession
The Nomination Committee regularly
reviews the composition of the
Board and its Committees. At the
2024 AGM, Steven Underwood was
proposed for re-election but in the
knowledge that he would be retiring
with effect from 31 December 2024,
given that by then he would have
served almost 14.5 years as a
Director (starting as a representative
Director of the Peel Group, a material
shareholder of the Company, and
remaining on the Board in a personal
capacity following the reduction of
Peel Group’s shareholding). Given
the evolution of Harworth’s strategy
to focus on Industrial & Logistics
development and investment, and
Ruth Cooke’s primarily residential real
estate background and expertise,
Ruth will also be retiring from the
Board at the 2025 AGM.
Notwithstanding the retirements of
Steven and Ruth, the proportion of
independent Non-Executive Directors
on the Board remains compliant with
the Code. That said, having regard
to the evolution of the strategy,
the Nomination Committee has
determined that Steven’s retirement
will leave a gap in skills, experience
and knowledge on the Board. As a
result, during the second half of 2024,
the Nomination Committee started
a recruitment process to identify
and appoint another independent
Non-Executive Director with in-depth
experience in industrial and logistics
real estate development. When made,
this appointment will be announced
in accordance with UK Listing Rule
6.4.6R.
Subject to this appointment, the
Nomination Committee concludes
that the composition of the Board is
appropriately balanced, and, on the
recommendation of the Committee,
the Board proposes the re-election of
all other Directors at the 2025 AGM.
Board performance review
The Board undertakes annual reviews of
its effectiveness. Even prior to its entry
into the FTSE 250 Index in September
2024, the Company considered it
good practice to instruct an externally
facilitated evaluation every three
years, as prescribed by the Code for
FTSE 350 companies. The last external
Board performance review was
undertaken over Q4 2021 and Q1 2022
and information about this review is
included in the 2021 Annual Report on
pages 98 and 99. The Company’s next
external Board effectiveness review
will take place during 2025, and the
recommendations from this review will
be reported in the 2025 Annual Report.
In H2 2024, the Chair conducted an
internal review of the Board and its
Committees. This took the form of
one-to-one meetings between the
Chair and each Director and member
of the Executive. The findings were
reported to the Board in November
2024, where it discussed a range
of possible actions to enhance its
effectiveness. Below is a summary of
some of the agreed actions from the
review and progress to date:
Theme
Actions agreed
Outcomes
Board
composition
Seek to replicate the skillset and
experience that Steven Underwood
brought to the Harworth Board
(experience in real estate development
in the North of England).
As outlined above, the Nomination Committee is
undertaking a recruitment process to identify and appoint
another independent Non-Executive Director with in-
depth experience in industrial and logistics real estate
development.
Strategic
focus
Given the evolution of the strategy
that was agreed in 2024, to increase
the time available at Board meetings
for strategic discussions on the
component elements of the evolved
strategy.
2025 Board timetable updated to include discussions on key
elements of the delivery of the evolved strategy at regular
Board meetings.
Committee
effectiveness
Review whether it remains appropriate
to have ESG considerations
undertaken by a separate committee.
Following discussions at the ESG Committee and Board, and
a review of transition proposals presented by management,
the Board determined that the oversight of sustainability
related risks, opportunities, strategies and performance
should move to being considerations of the main Board in
which all Directors participate rather than scrutinised by a
separate ESG Committee, and oversight of ESG reporting
should become the responsibility of the Audit Committee.
These changes will be fully implemented in April 2025.
Statement of
Corporate Governance continued
120
Harworth Group plc
An evaluation of the Chair’s
performance is led by the SID
alongside each internal Board
effectiveness review. Angela
Bromfield met with other Non-
Executive Directors and the Executive
in late 2024 to review the Chair’s
performance. Following that review,
she considered and discussed
with the Chair the comments and
feedback received and confirmed
that the performance of the Chair
was considered effective and
that he continued to demonstrate
appropriate commitment to his role.
The Chair, taking into account
the views of the other Directors,
maintains an ongoing review of the
performance of the Chief Executive.
The Chief Executive appraises
the performance of the members
of the Executive twice a year.
Similar appraisals are undertaken
by Executive members of the
performance of their direct reports on
the Group Leadership Committee.
Annual General Meeting
The Annual Report and Notice of
AGM are sent to shareholders at least
20 working days before the meeting.
The 2025 AGM will be held at 10.00
am on Monday 19 May 2025 at The
Brearley Room, AMP Technology
Centre, Advanced Manufacturing
Park, Brunel Way, Waverley,
Rotherham, S60 5WG. Along with the
Chief Executive, CFO and Company
Secretary, I will be at this location
in person, with our other Directors
joining online. The Board encourages
shareholders to attend, participate
and exercise their right to vote at
the AGM.
The resolutions to be proposed at the
AGM, together with the explanatory
notes, appear in the separate Notice
of AGM accompanying this Annual
Report. Separate resolutions are
proposed on each substantially
separate issue. The Notice of AGM is
also available on our website.
There are three ways to submit
voting instructions before the
meeting, which are available from
the publication date of the Notice
of AGM:
1. By completing and returning
a paper proxy form as per
the instructions on the form.
Shareholders who elect to receive
hard copy documents will receive
a proxy form with the Notice of
AGM. Otherwise it is available from
our registrars (see contact details
on page 263).
2. Electronically at www.shareview.
co.uk. Those that have already
signed up for a Shareview portfolio
can login and register their vote, or
shareholders can create an online
portfolio using the shareholder
reference number on the proxy
form or online voting card.
3. Via the CREST or Proxymity system
for those that are users of either
platform.
For each resolution, the proxy
appointment forms provide
shareholders with the option to direct
their proxy vote either for or against
the resolution or to withhold their
vote. All valid proxy appointments
are properly recorded and counted.
Information on the number of shares
represented by proxy, the proxy votes
for and against each resolution, and
the number of shares in respect of
which the vote was withheld for each
resolution, together with the voting
result, are given at the meeting and
made available on the Company’s
website. A vote withheld will not
be counted in the calculation of
the proportion of the votes for and
against a resolution.
There have been no material votes
against recommended resolutions at
recent AGMs. Wherever practicable,
the Board seeks to ensure that
shareholder views are canvassed in
advance on any unusual or potentially
controversial proposals. That said,
if there were any significant votes
against a proposal, the Board would
take action to understand the reasons
behind that vote and explain the
same to shareholders, in line with the
principles of the Code.
This Statement of Corporate
Governance was approved on behalf
of the Board by:
Alastair Lyons
Chair
17 March 2025
Annual Report and Financial Statements
121
Governance Report
GOVERNANCE REPORT
Statement of Corporate Governance
Dear shareholder,
This report sets out the activities of the Nomination
Committee during 2024 and its priorities for 2025, which
focus on reviewing Board and Committee composition and
succession planning to ensure a balanced and diverse Board,
as well as maintaining oversight of equity, diversity and
inclusion across the business.
The Committee’s terms of reference, which were reviewed and updated during
the year, are available on the Company’s website at www.harworthgroup.com/
investors/governance/. Throughout 2024, the Committee acted in accordance
with the principles of, and fulfilled its obligations under, the Code.
Membership and meetings
There were no changes to Committee membership during the year. The
Committee held two scheduled meetings in the year. Given Steven Underwood’s
retirement as a Director at the end of the year, and the Committee’s judgement
that this will leave a gap in skills, experience and knowledge on the Board, the
Committee started a recruitment process for a new Non-Executive Director
during the second half of the year. It also assessed succession and development
planning for the Board and Executive; reviewed management’s plans for
changes to organisation design; and reviewed the effectiveness of the initiatives
in place to improve diversity throughout the business.
Membership and attendance at meetings in 2024 are shown below:
Independent
Committee
tenure at 31
December
2024
Scheduled
meetings
attended/
eligible to
attend
Alastair Lyons
Chair
Yes
6 years
10 months
2/2
Angela
Bromfield
Member
Yes
5 years
2/2
Lynda Shillaw
Member
No
4 years
2 months
2/2
Ruth Cooke
Member
Yes
2 years
11 months
2/2
Nomination Committee Report
Alastair Lyons
(Chair)
Angela Bromfield
Ruth Cooke
Lynda Shillaw
Harworth Group plc
122
2010
2017
2018
2019
2020
2021
2022
2022
Martyn Bowes – Mar 2013
Alastair Lyons – Mar 2018
Angela Bromfield – Apr 2019
Kitty Patmore – Oct 2019
Lisa Scenna – Sep 2020
Lynda Shillaw – Nov 2020
Marzia Zafar –
Jun 2022
Patrick O’Donnell Bourke – Nov 2020
2024
Board tenures
This timeline shows the tenure of
each of the Directors who will be
seeking re-election at the 2025
AGM by date of appointment
The Committee’s key activities in 2024
The key activities of the Committee during 2024 are shown below:
Recruitment
Board composition and succession
External appointments
Organisation design and diversity
Recruitment process for a new Non-Executive Director
Review of Board and Committee composition
Review of succession plans for the Board and Executive
Annual review of time commitment of Non-Executive Directors
Review of proposed external appointments for Lisa Scenna and Patrick O’Donnell Bourke
Review of progress in improving diversity across the business
Review of organisation design
The Committee’s priorities for 2025
– Complete recruitment process for a new Non-Executive Director
– Ongoing review of Board and Committees composition and succession planning for the Board and Executive
– Ongoing review of the effectiveness of initiatives to promote equity, diversity and inclusion across the business
Board and Committee composition and succession planning
The Board comprises the Chair, who is considered independent, the Chief Executive, the CFO and, at the date of this
report, six Non-Executive Directors, one of whom is not considered independent. Angela Bromfield continues in the role
of SID.
The composition of, and succession plans for, the Board and its Committees are reviewed regularly by the Committee to
ensure that the membership of the Board provides appropriate diversity and balance of skills, knowledge, and experience
and the Board and each Committee comprise the right number of independent Directors. Such reviews take account of
output from the Board effectiveness reviews. During the period, the Committee undertook a review of the succession plans
for Executive and Non-Executive Directors.
Annual Report and Financial Statements
123
Governance Report
GOVERNANCE REPORT
Nomination Committee Report
Succession: Non-Executive
Directors
During the period, Steven
Underwood (Non-Executive Director)
served on the Board but retired with
effect from 31 December 2024, given
that by then he had served almost
14.5 years as a Director (starting as
a representative Director of the Peel
Group, a material shareholder of
the Company, and remaining on the
Board in a personal capacity following
the reduction of Peel Group’s
shareholding). Steven brought to the
Board extensive experience in real
estate development and investment,
including in the Industrial & Logistics
sector, in the North of England.
Ruth Cooke has advised the
Committee that she will not be seeking
re-election at the 2025 AGM and
will be retiring from the Board, given
the evolution of Harworth’s strategy
to focus on Industrial & Logistics
development and investment, and
Ruth’s primarily residential real estate
background and expertise.
Notwithstanding the retirements of
Steven and Ruth, the proportion of
independent Non-Executive Directors
on the Board remains compliant with
the Code. That said, having regard
to the evolution of the strategy to
Industrial & Logistics development
and investment which we enacted
during 2024, the Committee has
determined that Steven’s retirement
will leave a gap in skills, experience
and knowledge on the Board. As
a result, during the second half of
2024, the Committee engaged
Warren Partners to lead a recruitment
process to identify and appoint
another independent Non-Executive
Director with in-depth experience
in industrial and logistics real estate
development, gained preferably in
the North of England. The Company
does not retain Warren Partners in any
other capacity, and Warren Partners
has no other connection with the
Company or individual Directors.
As with recruitment throughout
the business, the Committee works
with executive search consultants
to ensure they support Harworth’s
approach to diversity in providing
a diverse selection of candidates
for Board appointments, for the
selection to then be based upon
merit and objective criteria. A
number of diverse high-quality
candidates have been identified
by Warren Partners, some of whom
the Committee have selected to be
invited for interview. At the date of
this report, the Committee continues
with the recruitment process. When
appropriate, the Committee will make
a recommendation to the Board, and
when made, the appointment will be
announced in accordance with UK
Listing Rule 6.4.6R.
Subject to this appointment, the
Nomination Committee concludes
that the composition of the Board
is appropriately balanced, and all
Directors (excluding Ruth Cooke)
are proposed for re-election at the
2025 AGM.
Board Committee membership
Membership of our Committees
complied with the Code throughout
the year. Given the upcoming
retirement of Ruth Cooke in May
2025, an initial review of Committee
memberships has been undertaken
to ensure that the composition of our
Committees draws effectively on the
skills, experience and knowledge
across our cohort of Non-Executive
Directors and remains compliant with
the Code. Following Ruth Cooke’s
retirement, Marzia Zafar will replace
Ruth on the Audit Committee.
Marzia has a wealth of experience
in sustainability, having spent over
20 years working on policies and
strategies to enable energy transition
across many sectors, and will be well-
placed on the Audit Committee as it
assumes responsibility for oversight
of our ESG reporting following
reallocation of the ESG Committees’
responsibilities effective April 2025
(see further in the ESG Committee
Report on pages 140 to 141). Once the
appointment of a new independent
Non-Executive Director has been
made, the Committee will again review
Committee membership, including
appointing an additional independent
Non-Executive Director to succeed
Ruth Cooke as a member of this
Committee.
The Non-Executive Directors have no
financial or contractual interests in the
Group, other than interests in ordinary
shares as disclosed in the Directors’
interests section of the Directors’
Remuneration Report on page 176.
External appointments
of Directors
The Committee reviews all proposals
for external appointments of
Executive and Non-Executive
Directors. Before making a
recommendation to the Board,
the Committee considers the
time commitment required by the
proposed appointment and its
likely impact on the prospective
appointee’s commitment to their
role at Harworth, together with the
prospect of conflicts of interest
arising. The Board makes the
final decision on all new external
appointments.
Nomination Committee Report continued
124
Harworth Group plc
During 2024, the Committee reviewed the following proposed appointments of:
– Lisa Scenna as a Non-Executive Director of Ingenia Communities (an Australian listed company); and
– Patrick O’Donnell Bourke to succeed as Board Chair of Pantheon Infrastructure plc, effective Q2 2025.
The above appointments were recommended to, and approved by, the Board.
Succession: Executive Directors and wider membership of the Executive
Succession plans are in place for each member of the Executive and those plans are reviewed regularly (typically annually)
by the Committee.
In addition to the tables on page 126, further analysis of the composition of the Executive (at the date of this report) is
shown below.
Age
Tenure
Male
Female
Male
Female
30–40 years
0–3 years
41–50 years
3–6 years
51–60 years
6–10 years
Board composition: diversity
The Board remains mindful of the benefits afforded by diversity, in its widest sense, both in the boardroom and across the
business. We are proud of the gender balance we have achieved on the Board, and the steps we have taken to improve
ethnic minority representation. We consider opportunities to improve Board diversity to enhance the effectiveness of
Board discussion, analysis and decisions, but appointments will continue to be made on merit.
Harworth confirms that, as at 31 December 2024, it met, and at the date of this report continues to meet, the Board
diversity targets prescribed by UK Listing Rule 6.6.6R(9), as follows:
TARGET
OUR PROGRESS
At least 40% of individuals on the board of directors are women.
60%* of our Board are women.
At least one of the following senior positions on the board of
directors is held by a woman:
– the chair;
– the chief executive;
– the senior independent director; or
– the chief financial officer.
Three out of four senior positions on the Board are
held by women, as follows:
– Chief Executive, Lynda Shillaw;
– Senior Independent Director, Angela
Bromfield; and
– Chief Financial Officer, Kitty Patmore.
At least one individual on the board of directors is from a
minority ethnic background.
One member of the Board is from a minority
ethnic background.
* Percentage includes Steven Underwood who remained a Director until and including 31 December 2024 and Ruth Cooke who is not seeking re-election at
the 2025 AGM. The same applies to the gender and ethnicity analysis on the next page.
Annual Report and Financial Statements
125
Governance Report
GOVERNANCE REPORT
Nomination Committee Report
Numerical data on the gender identity and ethnic background of our Board members and Executive management as at
31 December 2024 is set out in the tables below. For this purpose, “Executive management” refers to our “Executive” and
comprises the Chief Executive, CFO, COO, CIO and General Counsel.
Nomination Committee Report continued
The data for reporting against the
Board diversity targets and numerical
disclosures has been collected in
two ways:
– For the Executive, we have relied
upon the existing data stored on
our HR platform where employees
report their preferred gender
identity and ethnic group.
– The Non-Executive Board
members, whose details are not
held on the HR platform, were
asked to complete a questionnaire
and select their preferred gender
identity and ethnic group in line
with the categories in the tables
above.
Analysis of diversity across the
workforce is detailed later in this
report. Further analysis of the
composition of the Board (at the date
of this report) is shown below. The
Directors’ biographies appear on
pages 104 to 107.
Board composition: further analysis
Composition
Age
Tenure
Male
Female
Male
Female
Male
Female
Chair
30–40 years
0–3 years
Executive Directors
41–50 years
1–3 years
Independent NEDs
51–60 years
3–6 years
Non-independent NEDs1
61–70 years
6–9 years
71–75 years
Over 9 years
The figures in this table include Ruth Cooke, who is a Director at the date of this report but will be retiring from the Board at the 2025 AGM.
1 Martyn Bowes is the representative of the Pension Protection Fund and is not, therefore, independent.
Board composition: gender identity representation
Number
of Board
members
Percentage
of the
Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
Executive
management
Percentage
of Executive
management
Male
4
40%
1
3
60%
Female
6
60%
3
2
40%
Non-binary
–
–
–
–
–
Other gender identity
–
–
–
–
–
Not specified/Prefer not to say
–
–
–
–
–
Board composition: ethnicity representation
Number
of Board
members
Percentage
of the
Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
Executive
management
Percentage
of Executive
management
White British or other White (including
minority-white groups)
9
90%
4
5
100%
Mixed/Multiple Ethnic Groups
–
–
–
–
–
Asian/Asian British
–
–
–
–
–
Black/African/Caribbean/Black British
–
–
–
–
–
Other ethnic group, including Arab
1
10%
–
–
–
Not specified/Prefer not to say
–
–
–
–
–
126
Harworth Group plc
Diversity, inclusion and
equal opportunities
The Board recognises the benefit of a
diverse (in its widest sense) Board and
workforce comprising individuals with
different backgrounds, experience,
perspectives and ideas. In common
with much of the real estate and
construction sectors, achieving that
objective remains a challenge, but we
are committed to it.
The Committee takes the lead in
monitoring the effectiveness of the
initiatives we have introduced to
improve diversity, and the progress
made. A review is undertaken annually,
with the results reported to the Board.
A summary of the measures established
in 2024 and in previous years is set out
on the following page. The Company’s
Equity, Diversity and Inclusion (‘ED&I’)
Policy (adopted in 2022) formalises
our commitment to making Harworth
a diverse and inclusive organisation.
With this ED&I Policy, and supporting
initiatives, we aim to find and nurture
the best talent, as well as increase
employee engagement and retention,
all of which are essential to achieving
our strategy and delivering long-term
sustainable success.
We have published our gender pay
gap statistics since 2017 despite
not being obliged to do so, as the
Board feels it is important to have
a transparent benchmark against
which to measure our progress. We
publish below the same analysis again
in respect of 2024, alongside the
comparative results for 2023.
Gender pay gap reporting
In each case the reference point is 31 December.
Proportion of men and women in each quartile band
Males
Females
Lower quartile
2024
29%
71%
2023
34%
66%
Lower middle
2024
56%
44%
2023
57%
43%
Upper middle
2024
70%
30%
2023
69%
31%
Upper quartile
2024
82%
18%
2023
83%
17%
Gender pay gap analysis
2024
2023
Mean gender pay gap
27%
20%
Median gender pay gap
33%
38%
Mean bonus gender pay gap
10%
0%
Median bonus gender pay gap
69%
70%
Whilst we believe that our gender
pay gap is a function of historic trends
across the property and construction
sectors, this does not diminish
the importance of, or the Board’s
commitment to, reducing it as quickly
and effectively as we can.
Our commitment to gender
representation at the most senior
level is championed through our two
female Executive Directors. However,
an increase in the proportion of
female employees in the lower
quartile band and little to no change
in the other quartile bands has driven
the increase in our mean gender pay
gap measures. Our median gender
pay gap has reduced as the median
hourly rate for female employees has
increased slightly more than male
employees, resulting from promotions
and role assessments.
We are conscious that,
notwithstanding the female
representation on our Board and in
the two most senior Executive roles,
we must continue our efforts to
accelerate gender rebalancing across
the workforce with a focus on the
wider senior leadership team.
Annual Report and Financial Statements
127
Governance Report
GOVERNANCE REPORT
Nomination Committee Report
Nomination Committee Report continued
Promoting a diverse workforce
The Committee reviews and oversees the implementation of initiatives to promote diversity and inclusion across the business.
The following measures, some of which have been long-established, are designed to ensure that opportunities for
recruitment, development and promotion are available to everyone, regardless of background or personal circumstances.
MEASURES PREVIOUSLY ESTABLISHED
MEASURES ESTABLISHED IN 2024
– Diversity is an active and important consideration in the
Committee’s succession plans for the Board and Executive
which is evident from appointments to both Executive and
Non-Executive roles on the Board in recent years.
– Whilst appointments will always be based on merit,
Harworth is committed to giving everyone, regardless
of gender, ethnicity, sexuality or background, every
opportunity to apply for, and be appointed to, roles across
the business and, as such, the desire to encourage diversity
is a prominent consideration when we are recruiting
for all roles. To that end, our recruitment, interview and
onboarding processes have been designed to ensure we are
attracting and retaining employees in a way that appeals to
a diverse population and promotes an inclusive culture.
– Adoption of a new ED&I Policy in 2022, which had a wider
remit than the previous Diversity and Equal Opportunities
Policy (adopted in 2018), with the objective of increasing
emphasis on inclusivity and culture.
– Hybrid Working and Core Business in Core Hours policies,
which recognise the benefits of different working patterns
and practices to accommodate the different personal
commitments of our employees.
– Market leading maternity, adoption and paternity leave
and pay policies. We are proud of our progressive stance in
this area.
– A new Menopause Policy was introduced in 2022
recognising an employer’s role to support sensitively this
potentially distressing life stage. We also have a certified
menopause champion.
– A number of employees work part time, whether that be a
reduced number of days or reduced hours every day.
– We provide a wide range of options for time off, paid and
unpaid, which allows employees to personalise and manage
their work/life balance, and we have found these measures
to be in line with, or above, market median.
– In 2023 we introduced a new Reward Policy to ensure we
had a transparent and fair approach to pay and promotion.
– Increased holiday entitlement (whilst reducing
volunteer days which were largely unused) in line
with advanced EDI trends we are seeing externally
to facilitate a “moments that matter” approach
to leave.
– A range of internal communication methods
introduced, including a monthly newsletter with
mixed media communication formats, weekly
email bulletins, regular employee voice sessions
and people drop-in sessions. We recognise that
communication is an inclusivity enabler for both
existing and potential employees for the purposes
of ensuring we have an approach which supports
individuals within neurominority groups.
– We relaunched our Employee Forum with
representatives across all areas of the business,
and all meetings include a standing agenda item
on EDI and wellbeing.
– We established new corporate values which
include a “One Harworth” component. This is
defined as valuing individuality to work together
with respect.
– The Company became a member of Inclusive
Employers, an organisation which supports
businesses to become more inclusive and diverse.
Through this, we facilitate a range of optional
webinars for our employees.
– We continued to partner with local schools,
academies, colleges, universities and other
organisations in the communities that we serve,
taking part in careers events and providing other
support, to help extend our reach into different
talent pools.
128
Harworth Group plc
Board
Executive
Investment
Committee
Group Leadership
Committee
Wider
workforce1
GENDER
BALANCE
GENDER
BALANCE
GENDER
BALANCE
GENDER
BALANCE
GENDER
BALANCE
2024 2023
Female
6
6
Male
4
4
2024 2023
Female
2
2
Male
3
3
2024 2023
Female
2
2
Male
12
12
2024 2023
Female
5
5
Male
20
19
2024 2023
Female
50
43
Male
63
53
ETHNIC DIVERSITY
BALANCE
ETHNIC DIVERSITY
BALANCE
ETHNIC DIVERSITY
BALANCE
ETHNIC DIVERSITY
BALANCE
ETHNIC DIVERSITY
BALANCE
2024 2023
White
9
9
Ethnic
1
1
Minority
2024 2023
White
5
5
Ethnic
–
–
Minority
2024 2023
White
13
13
Ethnic
1
1
Minority
2024 2023
White
22
22
Ethnic
2
3
Minority
2024 2023
White
99
88
Ethnic
6
8
Minority
Unknown
8
–
1 Excludes the Group Leadership Committee.
Assessing the diversity of our workforce
For consistency, where comparisons below are given between 2023 and 2024, in each case the position reflected is at
31 December.
At 31 December 2024, the total headcount was 138 employees.
Although the gender and ethnic diversity balance of the Board and Executive is set out on page 126, it is displayed again
below in the context of the whole workforce.
Annual Report and Financial Statements
129
Governance Report
GOVERNANCE REPORT
Nomination Committee Report
Nomination Committee Report continued
Opposite page: Lynda and Kitty participate in a
Q&A session at the Harworth Summer Conference.
Gender diversity
We are pleased to have achieved
gender balance on the Board,
with our business being led
by female Executive Directors
demonstrating our commitment to
gender representation at the most
senior level. This was recognised
in the February 2025 FTSE Women
Leaders Review (a Government-
backed, business-led voluntary
initiative focused on increasing
the representation of women on
Boards and leadership teams) where
Harworth was at the top of the FTSE
250 chart for Women on Boards –
companies with the highest female
representation. Notwithstanding
this achievement, and whilst we
continue on a trajectory of gradual
improvement, we recognise that
more work is needed to accelerate
gender rebalancing across the wider
Group Leadership Committee and
workforce. We are hopeful that the
examples set by our Chief Executive
and CFO will send a positive signal
to female employees and external
candidates for roles at Harworth
such that gender diversity across the
business continues to improve.
We are also working to actively
address the legacy gender disparity
by creating opportunities for women
to move into more senior positions by
focusing on leadership training and
middle management, recognising that
developing talent at all levels is key to
driving long-term change.
Ethnic diversity
We are mindful that, whilst we have
made a start with regard to ethnic
diversity in the business, including
on the Board and Group Leadership
Committee, we have much further
to go and we are committed to
improving the figures year on year.
It is important to stress that, while
our desire to improve diversity will
be a consideration in decisions on
recruitment and promotion, selection
continues to be based on merit
and ability.
Equal opportunities for all
Since Harworth’s formation in 2012
we have been committed to creating
a working environment that is free
from discrimination, harassment and
victimisation, where everyone feels
valued and respected. This includes:
– promoting equality and fairness for
all in our employment;
– making reasonable adjustments
for disabled employees and giving
full and fair consideration to
disabled applicants for roles in our
business; and
– providing equal opportunities
for the continuing professional
development and promotion
within our business of any disabled
employees.
Annual General Meeting
All Directors are subject to annual
re-election by shareholders. The
Directors’ biographies appear on
pages 104 to 107.
The Committee has concluded that all
Directors seeking re-election continue
to be effective and to demonstrate
commitment to their role. They have
the requisite skills, knowledge and
experience to continue to discharge
their duties effectively.
The Board considers that each
Director provides valuable input to
the operation of the Board and that
their contribution is important to the
Company’s long-term sustainable
success, bringing a diverse range
of skills from different sectors
and experience. As such, on the
recommendation of the Committee,
the Board considers it appropriate
to propose the re-election of all
Directors (excluding Ruth Cooke
who, as outlined earlier in this report,
is standing down) at the AGM to be
held on 19 May 2025.
I will be available at the meeting to
respond to any questions or discuss
matters relating to the Committee’s
activities.
Alastair Lyons
Chair of the Nomination Committee
17 March 2025
130
Harworth Group plc
Governance Report
Governance Report
GOVERNANCE REPORT
Nomination Committee Report
Dear shareholder,
I am pleased to report to shareholders on the work of the
Audit Committee during the year ended 31 December 2024.
This report sets out the Committee’s responsibilities and
highlights its activities during 2024 and its priorities for 2025.
The Committee’s terms of reference,
which were reviewed and updated
during the year, are available on
the Company’s website: www.
harworthgroup.com/investors/
governance/. Throughout 2024,
the Committee acted in accordance
with the principles of, and fulfilled its
obligations under, the Code and had
regard to the FRC’s Audit Committees
and the External Audit: Minimum
Standard.
Membership and meetings
There were no changes to
Committee membership during
the year, which continued to
comprise three independent Non-
Executive Directors. I chaired the
Committee, and its other members
were Ruth Cooke and Lisa Scenna.
The experience of each member of
the Committee at the date of this
report is summarised on pages 105
and 106. The Board is satisfied that
I have recent and relevant financial
experience. I am also Chair of the
Audit & Risk Committee of Pantheon
Infrastructure plc, an investment trust
focused on international infrastructure
assets. I was previously Chair of the
Audit & Risk Committee of Calisen
plc, which was then a constituent of
the FTSE 250, as well as Chair of the
Audit Committee of Affinity Water
Limited. My most recent executive
position was that of Group Finance
Director for John Laing Group plc. I
am a chartered accountant, and so
too are Ruth Cooke and Lisa Scenna.
Throughout the year, the Board was
also satisfied that the Committee had
competence relevant to the sectors
in which the Company operates,
given that I have extensive experience
in infrastructure investment and
management, Lisa Scenna has a
strong background in real estate
development and asset management,
and Ruth Cooke is the Chief Executive
Officer of a business operating in the
real estate sector.
Ruth Cooke is not seeking re-election
at the 2025 AGM and, as outlined in
the Nomination Committee report,
Marzia Zafar will replace Ruth as a
member of this Committee following
Ruth’s retirement from the Board.
Marzia has a wealth of experience
in sustainability, having spent over
20 years working on policies and
strategies to enable energy transition
across many sectors, and will be
well-placed on this Committee
as it assumes responsibility for
oversight of ESG reporting following
reallocation of the ESG Committee’s
responsibilities effective April 2025
(see further in the ESG Committee
Report on pages 140 to 141).
The Chief Executive, CFO and
external auditors normally attend
Committee meetings. The Chair of the
Board and other members of senior
management, including the Head of
Audit and Assurance are also invited
to attend, as appropriate. The Head
of Audit and Assurance has direct
access, and reports regularly, to me as
Chair of the Committee.
In performing its duties, the
Committee has access to the services
of the General Counsel and Company
Secretary and, if required, external
professional advisers.
Audit Committee Report
Patrick O’Donnell Bourke
(Chair)
Ruth Cooke
Lisa Scenna
Harworth Group plc
132
Key
Financial reporting
External audit
Internal audit
Risk management and
internal controls
Governance
FEBRUARY
Review of 2023 year-end valuations
Initial review of going concern analysis
Review of movements in year-end provisions
Review of draft of 2023 results RNS
Review of draft of 2023 Annual Report and Financial
Statements
Update by Head of Audit and Assurance
Review of the effectiveness of risk management and
internal controls
Review of procedures for detection of fraud and
prevention of bribery
JULY
2023 audit de-brief and review of external auditor’s
appointment (without external auditor present)
Areas of focus for 2024 interim results
Annual review of appointments of valuers
Annual review of the Group’s tax strategy and policy
Update by Head of Audit and Assurance
Digital resilience update
Approval of revisions to Gifts & Entertainment Policy
NOVEMBER
2024 interim results de-brief and review of external
auditor’s appointment and fees (without external auditor
present)
Planning for 2024 external audit
Appointment of valuers for year-end valuations, including
Jones Lang LaSalle as valuer of the Investment Portfolio
properties, representing the first stage of our valuer
rotation exercise, together with an update on the second
stage planned for 2025
2025 insurance programme renewal
Update by Head of Audit and Assurance, including
approval of 2025 internal audit plan
Annual assessment of the effectiveness of the Internal
Audit function (without Head of Audit and Assurance
present)
Report on audit of subsidiary management companies
Review of auditor appointment of subsidiary
management companies
Digital resilience update
Annual review of Committee’s terms of reference
External briefing on developments in sustainability
reporting
MARCH
Updated going concern analysis
External audit of 2023 accounts
Finalisation of 2023 results and recommendation to
the Board
Finalisation of 2023 Annual Report and Financial
Statements and recommendation to the Board
SEPTEMBER
Feedback from external auditor (without management
present)
Review of 2024 half-year valuations
Review of going concern analysis
Review of movements in provisions at the half-year
External auditor’s report on 2024 interim results and
2024 full-year audit strategy
Review of 2024 interim results and recommendation to
the Board
Update by Head of Audit and Assurance
The key activities of the Committee during 2024 and its priorities for 2025 are shown below and on the next page:
Audit Committee Report continued
During 2024, there were five scheduled meetings of the Committee. Attendance at meetings in 2024 is shown below:
Independent
Committee tenure at
31 December 2024
Scheduled meetings attended/
eligible to attend
Patrick O’Donnell Bourke
Chair
Yes
4 years 2 months
5/5
Ruth Cooke
Member
Yes
5 years 10 months
5/5
Lisa Scenna
Member
Yes
4 years 2 months
4/5
Annual Report and Financial Statements
133
Governance Report
GOVERNANCE REPORT
Audit Committee Report
The Committee’s priorities for 2025
– Review reporting of 2024 full-year results and 2025 interim results, including going concern and viability analysis and
significant financial judgements by management.
– Oversee and appraise external audit undertaken by Ernst & Young LLP (‘EY’), including the transition to a new audit
partner for 2025.
– Monitor and assess the effectiveness of the risk management system.
– Oversee the Internal Audit function, approve internal audit plan, and monitor the effectiveness of internal controls
via updates from Internal Audit function.
– Oversee the second stage of our valuer rotation exercise including a review of the proposed appointment of
valuers for the balance of the portfolio.
– Oversee the 2026 insurance programme renewal.
– Monitor the maturity of the Group’s digital resilience programme.
– Review sustainability reporting following publication of 2024 disclosures.
Financial reporting
The Committee reviews the contents of the full-year results, Annual Report and interim results and makes a
recommendation to the Board for their approval. Ahead of the interim and full-year results announcements and publication
of the Annual Report, the following processes are followed by the Committee to satisfy itself as to the integrity of the
statements and disclosures contained therein, and to ensure that all financial reporting is fair and balanced and provides an
understandable assessment of the Company’s position and prospects:
REPORTS FROM
MANAGEMENT
VALUATIONS
EXTERNAL AUDIT
GOING CONCERN
Reports from
management
include a detailed
explanation
of valuation
assumptions
and movements,
commentary
on provisions,
and analysis of
movements in the
balance sheet and
cash position.
– The Committee Chair (and
other Committee members if
available) attends the half-
year and year-end valuation
review meetings in conjunction
with the Company’s valuers,
external auditors and
management team.
– The valuers attend Committee
meetings ahead of publication
of the interim and full-year
results to explain valuation
methodology and processes,
comment on market conditions,
and take questions from
Committee members.
– Valuation experts from EY
also attend those Committee
meetings to explain the work
they have undertaken in
reviewing the half-year or year-
end (as appropriate) valuations,
and to take questions from
Committee members.
– At the start of H2, the Committee reviews the
plan and timetable for the procedures the
external auditor will undertake in respect of
the interim results. These include acceleration
of some year-end audit work. In September
and/or November each year, the Committee
examines the full year-end external audit plan
and timetable before detailed audit work
commences.
– The Committee reviews the external auditor’s
report on the work it has undertaken for the
interim and full-year results. The lead audit
partner attends Committee meetings to take
questions from Committee members.
– The Committee meets the external auditor
annually independently of management,
ensuring it has full visibility of matters that
have been the subject of particular scrutiny
by the external auditor and/or discussions
between it and management.
– For the 2024 audit, there were no specific
areas the Committee asked the external
auditor to look at beyond those identified in
the audit plan.
– The Committee
receives early
sight of going
concern analyses.
– The Committee
reviews the long-
term viability and
going concern
assessments
prepared by
management and
the Directors’
responsibility
statements
(including the
assumptions
underpinning
them) and
recommends to
the Board their
adoption.
Audit Committee Report continued
134
Harworth Group plc
The Committee also reviews drafts
of the interim and Annual Reports
in advance of their publication
and comments thereon. Since it
was established in 2021, the ESG
Committee reviews and seeks
assurance on disclosures relating
to climate change, including for
SECR and TCFD reporting. Subject
to that review, the ESG Committee
recommends the adoption of those
disclosures to the Audit Committee,
and this endorsement is incorporated
into the Audit Committee’s
recommendation to the Board to
approve publication of the Annual
Report. Following publication of this
2024 Annual Report, responsibility
for ESG reporting assurance will
pass from the ESG Committee
to this Committee following the
Board’s decision to reallocate
the responsibilities of the ESG
Committee.
In addition, the Committee reviews
the controls in place to ensure the
completeness and accuracy of the
Company’s financial disclosures.
As part of this, as in previous years,
for the 2024 results the Committee
noted (i) the reviews undertaken
during the preparation of the Annual
Report and Financial Statements
by various internal and external
parties, including the external
auditor and valuers, to ensure
consistency and balance; and (ii)
the internal verification exercise
undertaken in respect of the
financial and operational metrics
referred to in the Strategic Report
and Directors’ Report. As part of the
Committee’s review of the Group’s
internal controls system (see page
137), it considered, concluded, and
recommended to the Board that the
disclosures in, and the process and
controls underlying the production
of, the 2024 Annual Report, are
appropriate to enable the Committee
to determine that the report is fair,
balanced and understandable and
provides the information necessary
for shareholders to assess the Group’s
position and performance, business
model and strategy. The Board’s
conclusions in this regard are set
out in the Statement of Directors’
Responsibilities on page 186.
In preparation for the application of
Provision 29 of the 2024 Code, which
will apply to the financial period
commencing on 1 January 2026,
the Head of Audit and Assurance is
undertaking an assurance mapping
exercise which will form the basis for
a comprehensive review of assurance
of our material controls, including
reporting controls, and of the
effectiveness of the same.
Significant reporting issues
considered by the Committee for
the 2024 financial statements
Valuation of the property portfolio
The property portfolio accounts
for the vast majority of the Group’s
total assets. This portfolio includes
investment property, development
property, assets held for sale,
overages, owner-occupied properties
and joint ventures. The portfolio
is valued by independent external
valuers, BNP Paribas, Jones Lang
LaSalle, and Savills, in accordance
with the Royal Institution of Chartered
Surveyors Valuation – Professional
Standards. Within these valuations,
the key judgements are as follows:
a. the future intention and plans for
the properties/site;
b. value per acre;
c. where relevant, the expected
timing and/or outcome of planning
submissions;
d. future rental amounts and financial
stability of tenants;
e. future rental yields;
f. applicability and availability of
comparable sales evidence;
g. anticipated risk of delivery of a
site’s masterplan;
h. costs to bring sites forward for sale
or development; and
i. where transactions are agreed
or close to being agreed, the
probability of conditions to
completion being satisfied.
The valuation of the Group’s property
portfolio lies at the core of its financial
reporting and the Committee has a
particular duty to ensure it is reported
in a fair, balanced and understandable
manner.
At both the half-year and the year-
end, the Committee reviewed the
reports prepared by the external
valuers and challenged them on
methodology, market conditions,
assumptions and judgements
underlying the disclosures in
the consolidated balance sheet.
The Committee also challenged
management on the key assumptions
underlying certain asset valuations.
In its review, the Committee noted
the current market conditions against
which the valuation exercise was
undertaken. The Committee also took
into account the work carried out
by the external auditor’s valuation
team, and overall is satisfied that the
relevant balances are appropriately
stated in the financial statements.
Annual Report and Financial Statements
135
Governance Report
GOVERNANCE REPORT
Audit Committee Report
Going concern and viability
These are addressed in the Long-
Term Viability Statement (pages 58 to
60) and the Statement of Directors’
Responsibilities (pages 186 to 187),
and also in the Notes to the Financial
Statements (page 206). For both
the half-year and the year-end,
management prepared forecasts on
several bases: a base case; a sensitised
forecast that reflected a number of
severe but plausible downsides; and
a specific climate change scenario
case. The outputs, which were
reviewed in detail and discussed and/
or challenged by the Committee,
project that the Group can continue
to operate with available liquidity
and banking facilities under plausible
downside scenarios. The Committee
is satisfied that the disclosures in the
financial statements on going concern
and long-term viability are appropriate.
Alternative Performance
Measures (‘APMs’)
Harworth continues to believe
that the use of APMs alongside
statutory measures is essential in
communicating the performance
and position of the Group to its
stakeholders. A full description of
the measures is set out in Note 2
to the financial statements with a
reconciliation between statutory
measures and APMs set out in the
appendix to the financial statements.
The Committee reviewed the
appropriateness, prominence and
consistency of the APMs disclosed.
Revenue
In addition to these areas the
Committee also discussed revenue
recognition with the external auditors
and is satisfied that revenue has been
recognised appropriately.
External audit
The Committee is responsible
for making recommendations to
the Board on the appointment,
reappointment and removal of the
external auditor. EY has served as the
Company’s external auditor since
the 2020 financial year, following
their appointment by shareholders
at the 2020 AGM. This appointment
resulted from a competitive tender
process overseen by the Committee
in 2019, which gave fair and objective
consideration to both “Big Four”
and challenger firms. Details of this
tender process were included in the
2019 Annual Report. The external
auditor’s appointment is subject to
annual review by the Committee, with
the most recent review conducted in
July 2024 alongside the Committee’s
assessment of the 2023 year-end audit
effectiveness. EY has served as the
external auditor for five consecutive
years, having first audited the financial
year ended 31 December 2020. In
accordance with applicable audit
legislation, companies are required
to conduct a mandatory rotation of
auditors after 10 years, which can
be extended to 20 years if there is a
competitive tender process at the 10-
year mark. The Committee proposes
to conduct its next competitive tender
process in the 2029 financial year.
The Committee believes this timing is
in the best interests of shareholders
as it enables a comprehensive
competitive tender process ahead of
the mandatory rotation deadline, and
will ensure the process adheres to
the FRC’s Audit Committees and the
External Audit: Minimum Standard and
corporate governance best practice.
Following the 2024 year-end audit,
EY’s audit partner will have managed
the audit for five years and will
therefore step down from the audit, as
required by the FRC’s Ethical Standard.
During H2 2024, management
undertook a process to select a new
key audit partner, which was overseen
by the Committee, culminating in the
appointment of Kate Jarman, who
management and the Committee
consider to have the requisite skills,
knowledge and experience to
undertake the role.
Audit Committee Report continued
Having reviewed:
– the independence and
objectivity of the external auditor,
including consideration of
potential conflicts of interest and
of any non-audit work undertaken
for the Company (for 2024, see
analysis on the next page);
– the effectiveness of the last
external audit;
– the quality control processes that
the external auditor has in place,
including any regulator’s public
comments on the same;
– the quality of the audit team,
including the experience of the
new audit partner, the team and
its capacity;
– the quality of the audit
through feedback from the
management team;
– the proposed scope of the
audit; and
– the quantum of fees payable for
the audit (see analysis on the
next page).
The Committee is recommending
the re-appointment of EY at the
forthcoming AGM for the external
audit of the Company’s financial
statements for the year ending
31 December 2025.
136
Harworth Group plc
The Board recognises the importance
of safeguarding auditor objectivity
and takes the following steps
to ensure that external auditor
independence is not compromised:
– The Committee reviews the audit
appointment annually.
– The Company has a policy that, save
for audit-related services (such as
regulatory and statutory reporting,
and work relating to any circulars
required by the Listing Rules) and
exceptional circumstances (but
only with the Committee’s prior
approval), the external auditor will
not provide non-audit services to
the Group.
– The Group retains Deloitte to
provide advice and assistance
on most tax matters, pension
accounting and remuneration
consulting services. KPMG is
retained to advise on tax matters
relating to some of the Group’s joint
venture agreements. RSM provides
co-sourced internal audit support.
– The Committee reviews on a regular
basis all fees paid for both audit
and non-audit activity, with a view
to assessing the reasonableness
of fees, value of delivery, and any
independence issues that may have
arisen or may potentially arise in the
future. An analysis of all audit and
non-audit fees incurred in 2024 is
shown below.
– The Committee reviews the external
auditor’s report to the Directors
and the Committee confirming its
independence in accordance with
auditing standards.
Whilst EY audits the accounts of the
main subsidiary entities in addition
to those of the Company and the
Group consolidation, BHP, a regional
chartered accountancy firm, audits
the accounts of certain Group
management companies and joint
venture companies. The Committee
receives a report each year from
BHP on its audit of the management
companies, and at the same time
reviews BHP’s appointment.
Analysis of audit and non-audit fees
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Audit fees
Fees payable to the external auditor and its associates for the audit of:
The Company and the consolidated financial statements
398
380
The Company’s subsidiaries pursuant to legislation
68
40
Non-audit fees
Other assurance services
–
1891
466
609
1 Audit related services supporting a site-specific project disposal (pre-approved by the Audit Committee).
Valuers
The Royal Institution of Chartered
Surveyors introduced mandatory
rotation rules for valuers for regulated
purpose valuations, which came into
effect on 1 May 2024, but allowed
for a transition period to May 2026
where a valuer is operating under an
existing arrangement, allowing the
client to organise an orderly transfer
of the appointment. In response to
those rules, management formulated
a plan to rotate the Group’s
incumbent appointments away from
its longstanding valuers, BNP Paribas
and Savills. That plan provided for
the appointment of a new valuer for
Investment Portfolio properties for the
2024 year-end valuations (Jones Lang
LaSalle), and for the appointment of
a new valuer in 2025 for the balance
of the Group’s portfolio for the 2025
year-end valuations (to be selected),
before the end of the transition
period. The Committee has been,
and continues to be, consulted on
implementation of the plan.
Risk management and
internal controls
The Board has overall responsibility
for risk and has delegated to the
Committee the responsibility for
overseeing the effectiveness of the
Group’s risk management and internal
control systems. An explanation of the
Group’s risk management framework,
including the work undertaken by
the Board to identify and review the
Group’s principal risks, the Directors’
appetite for each of those risks, and
the adequacy of the measures in
place to mitigate them, is set out in
the “Effectively managing our risk”
section on pages 68 to 85.
Annual Report and Financial Statements
137
Governance Report
GOVERNANCE REPORT
Audit Committee Report
The Committee assesses the
effectiveness of the Group’s risk
management and internal controls
framework. As part of this assessment,
the Committee receives reports of
risk management activities performed
during the year and updates from the
Group Risk Register, the operational
tool used to monitor the Group’s
principal risks. Each risk is subject
to a consistent risk assessment
methodology, the outputs of which
are reflected in a risk “dashboard”
which details:
– the scope and commentary on the
status of each risk;
– inherent risk, residual risk and
risk appetite scores to evaluate
the changing status of each risk
and monitor the alignment (or
misalignment) of risk appetite and
risk profile; and
– mitigation measures (internal
controls) that have either been
implemented, are in progress, or
are planned.
Harworth’s ERM function aims to
improve the quantity and quality of
Key Risk Indicators (‘KRIs’), and to
develop a KRI dashboard to allow for
continuous real-time monitoring of
KRIs where possible.
Ahead of publication of the year-
end results and Annual Report,
management presents a detailed
assessment of the effectiveness
of the Group’s principal financial,
operational and compliance controls,
which is supported by the outputs
from the internal audits carried out
during the year.
In 2024, management took significant
steps to transform Harworth’s risk
management framework, focusing
on two key objectives: maintaining
a continuous improvement culture
responsive to an evolving risk
landscape, and preparing for the
future, notably Provision 29 of the
updated Code set to take effect
for periods starting on or after
1 January 2026. Whilst aspects of the
existing risk management framework
represented a good foundation for
satisfying the new requirements
introduced by the updated Code,
in January 2024 management
established an ERM function which
has subsequently developed a
comprehensive roadmap to enhance
and standardise practices across the
organisation. A maturity assessment
was completed, setting clear
goals and proportionate targets to
strengthen the approach and ensure
full engagement from the wider
business.
The Committee is satisfied that the
risk management and internal controls
systems in place, and the assurance
regime for the same described below,
are effective to support delivery of
the Group’s strategy. Informed by
the Committee’s recommendation,
the Board’s assessment of the
effectiveness of those systems can be
found on page 69.
Internal audit
The Head of Audit and Assurance
is responsible for designing and
delivering a 36-month rolling internal
audit programme with support from
a co-sourced partner. This role has a
dotted reporting line to me as Chair
of the Committee and I engage with
the Head of Audit and Assurance
regularly.
In November 2023, the Committee
approved the 2024 internal audit
programme, which included audits of:
acquisitions pipeline management;
financial appraisal model; cost
management within development
projects; effectiveness of the site
inspection regime; environmental
compliance review over waste
management; commercial direct
development project management;
compliance with the operational
approvals process; key managing
agent contract management; several
project reviews; and certain advisory
assignments. The findings and
recommendations from these audits
were reported to the Committee
throughout the year. Overall, no
significant control issues were
identified which had not previously
been identified by management with
a plan already in place to address
these in progress, although some
process and control improvements
were recommended, the majority of
which have been adopted and have
been, or are being, implemented.
In addition to the audits listed
above, the Head of Audit and
Assurance undertook a gap analysis
of Harworth’s existing fraud risk
management procedures in Q3 2024,
in preparation for the “failure to
prevent fraud” offence introduced by
the Economic Crime and Corporate
Transparency Act 2023. An action
plan has been developed to ensure
the Group’s fraud prevention,
detection, and response measures are
updated where necessary ahead of
the 1 September 2025 effective date.
Audit Committee Report continued
138
Harworth Group plc
In November 2024, the Committee
reviewed the effectiveness of the
Internal Audit function, without the
Head of Audit and Assurance being
present, and informed by feedback
from the management team, wider
business, and external auditors. The
Committee concluded that, under
the stewardship of the Head of Audit
and Assurance, the scope and quality
of internal controls continued to
improve. At the same meeting, the
Committee approved a detailed
internal audit plan for 2025 and an
outline plan for 2026 and 2027. The
audit programme, however, remains
flexible to changing assurance needs
during the year and the outputs from
internal audit activity will continue
to be reported to the Committee in
real time.
Business continuity
The Group’s Business Continuity Plan
(‘BCP’) is reviewed and updated by
management annually. The last review
was in Q4 2024, where small changes
were made in respect of personnel
and systems, and which was reported
to the Committee in February 2025.
A test of the BCP will be undertaken
in H2 2025, with the results due to
be presented to the Committee. In
addition, the digital incident response
plan will be tested as part of the
Group’s digital resilience programme,
with the results due to be presented
to the Committee during 2025.
Insurance
The Committee had oversight of the
2025 insurance programme renewal,
challenging management both on the
overall programme and on individual
aspects of certain policies. The
scope of the insurance programme
remained largely unchanged, and the
Committee was pleased to see that
pricing had reduced overall.
Whistleblowing/Speak Up
The Committee has responsibility
for reviewing and monitoring the
Group’s whistleblowing policy and
procedures, and the appropriate
investigation of whistleblowing
reports. The Company operates
an external “Speak Up” platform,
which offers employees and external
stakeholders another means of
reporting concerns (on a confidential
basis if preferred) alongside
the Group’s internal reporting
mechanisms. There were no incidents
of whistleblowing, or reports made to
the Speak Up platform, during 2024.
Compliance
The Committee is responsible for
monitoring the effectiveness of, and
compliance with, the Group’s policies
and procedures for combating modern
slavery, bribery and corruption, and
preventing the facilitation of tax
evasion. The Company’s 2024 Modern
Slavery Statement can be found on our
website at www.harworthgroup.com/
investors/governance/, together with
policies on anti-corruption and bribery
and anti-facilitation of tax evasion.
Audit Committees and the
External Audit: Minimum
Standard (‘Minimum Standard’)
In May 2023, the FRC published the
Minimum Standard. Since becoming
a constituent of the FTSE 350 Index
in September 2024, the Company
seeks to apply the Minimum Standard.
During the year, the Committee
reviewed the Minimum Standard
and has included disclosures
where required within this report.
The introduction of the Minimum
Standard did not result in substantive
changes to the operation of the
Audit Committee, but the Committee
has updated its terms of reference
to incorporate provisions of the
Minimum Standard.
An explanation of the application of
Harworth’s accounting policies can
be found in Note 1 to the financial
statements (see pages 206 to 215).
During the year, there were no
shareholder requests for specific
audit matters, nor any regulatory
inspections of the quality of the
Company’s audit.
Competition and Markets
Authority (‘CMA’) Order
The Company confirms that it has
complied with the provisions of The
Statutory Audit Services for Large
Companies Market Investigation
(Mandatory Use of Competitive
Tender Processes and Audit
Committee Responsibilities) Order
2014 relating to tendering and non-
audit services.
I will be available online at the AGM
to respond to any questions relating
to the Committee’s activities.
Patrick O’Donnell Bourke
Chair of the Audit Committee
17 March 2025
Annual Report and Financial Statements
139
Governance Report
GOVERNANCE REPORT
Audit Committee Report
ESG Committee Report
Angela Bromfield
(Chair)
Alastair Lyons
Martyn Bowes
Marzia Zafar
Kitty Patmore
Lynda Shillaw
Dear shareholder,
I am pleased to report to shareholders on the work of the
ESG Committee during the year ended 31 December 2024.
Given our purpose to transform
land and property into sustainable
places where people want to live
and work, Harworth has a long-
standing structured approach to
ESG and an ongoing commitment to
sustainability, which is embedded in
the Group’s strategy, culture, values
and operations. The ESG Committee
was established in 2021 to provide
oversight of, and guidance on,
Harworth’s sustainability framework,
practices and reporting. It has
overseen the evolution of the Group’s
approach to sustainability, articulated
as The Harworth Way, as well as
the development of ESG-related
disclosures including publication of
our NZC Pathway and Communities
Framework (both available on the
Company’s website).
After much detailed work overseen
by the ESG Committee, the process of
evolving our sustainability framework,
practices and reporting has now
been completed, and the framework
is now wholly integrated into our
business strategy. The Board has,
therefore, decided that the ongoing
oversight of sustainability related
risks, opportunities, strategies and
performance should move to being
considerations of the main Board in
which all Directors participate rather
than of a separate ESG Committee.
The oversight of ESG reporting,
itself now being embedded into
international accounting standards,
will become the responsibility of
our Audit Committee. To support
the transition of this responsibility
to the Audit Committee, Marzia
Zafar will replace Ruth Cooke on
the Audit Committee following
Ruth’s retirement from the Board in
May 2025. Marzia has a wealth of
experience in sustainability, having
spent over 20 years working on
policies and strategies to enable
energy transition across many
sectors, and will be well-placed on
the Audit Committee as it assumes
responsibility for oversight of our
ESG reporting. This evolution of
our ESG governance framework
reflects recommendations from the
internal Board effectiveness review
conducted in Q4 2024, and will be
fully implemented in April 2025.
Membership and meetings
I chaired the Committee, and its other
members were Alastair Lyons, Lynda
Shillaw, Kitty Patmore, Martyn Bowes
and Marzia Zafar.
The Committee met quarterly
and meetings were also attended
by our Director of Sustainability.
Membership and attendance at those
meetings is shown on the next page:
Harworth Group plc
140
Independent
Committee tenure at
31 December 2024
Meetings
attended/
eligible to
attend
Angela Bromfield
Chair
Yes
3 years 9 months
4/4
Alastair Lyons
Member
Yes
3 years 9 months
4/4
Martyn Bowes
Member
No
3 years 9 months
2/4
Lynda Shillaw
Member
No
3 years 9 months
4/4
Kitty Patmore1
Member
No
3 years 9 months
3/4
Marzia Zafar
Member
Yes
2 years 7 months
4/4
1 Kitty Patmore commenced maternity leave in September 2024.
In Q1 2025, the Committee has
reviewed and recommended for
approval to the Audit Committee
the sustainability disclosures in this
Annual Report, as well as reviewing
the NZC Pathway Progress Report for
2024 prior to publication. As part of
their membership of the wider Board,
the Committee members will ensure
that the Board’s responsibilities
and Audit Committee terms of
reference are appropriately updated
to cover the reallocation of the ESG
Committee’s responsibilities.
As the commercial and regulatory
landscapes continue to evolve in
response to climate change, social
considerations and corporate
responsibility, the Board of Harworth
remains committed to evolving our
sustainability approach ensuring
we have a sustainable business that
delivers for all stakeholders.
I will be available online at the AGM to
respond to any questions or discuss
matters relating to the Committee’s
activities.
Angela Bromfield
Chair of the ESG Committee
17 March 2025
2024 key activities
During the year, the Committee:
– Conducted a comprehensive review of our TCFD reporting, with
particular focus on supply chain considerations and addressing specific
recommendations from EY’s external review.
– Reviewed the external verification of our 2023 SECR disclosure,
conducted by Turley, an external consultancy, which confirmed our
disclosures and greenhouse gas calculations met to a high standard
SECR legislative requirements and related guidance.
– Reviewed, and recommended for approval to the Remuneration
Committee, the ESG metrics and targets to be incorporated into the
2024 annual bonus scheme for all employees.
– Reviewed, and recommended for approval to the Audit Committee, the
Group’s sustainability disclosures in the 2023 Annual Report and 2024
interim results announcement.
– Oversaw the continued development of The Harworth Way, including
the implementation of its principles as part of day-to-day operations.
– Reviewed investor feedback and comments on ESG following the 2023
year-end and 2024 interim results announcements.
– Assessed progress against our NZC Pathway and oversaw the continued
development of the methodology for the capture, calculation and
reporting of carbon emissions data. The NZC Pathway Progress Report
for 2024, which includes disclosure of a wider range of Scope 3
emissions from our master developer process than had previously been
able to be captured, has been published alongside this Annual Report
and can be found on the Company’s website.
– Considered the Company’s impact on local communities, including a
review of our Communities Framework which was published in 2024
and can be found on the Company’s website.
– Oversaw preparation for a CDP submission, which further enhanced our
reporting of environmental data.
– Received regular briefings from the Director of Sustainability covering
the UK ESG landscape and outlook.
– Participated in the Board effectiveness review process, including
consideration of the recommendation that relevant ESG responsibilities
should become considerations of the main Board and Audit Committee.
Annual Report and Financial Statements
141
Governance Report
GOVERNANCE REPORT
ESG Committee Report
Directors’ Remuneration Report
Dear shareholder,
On behalf of the Board, I am pleased to present the Directors’
Remuneration Report for the year ended 31 December 2024.
This report includes:
– my Annual Statement as Chair of
the Remuneration Committee;
– the new Directors’ Remuneration
Policy (the ‘Policy’). This sets out
the policy intended to apply for
the three years from 2025 which
is subject to a binding shareholder
vote at the 2025 AGM; and
– the Annual Report on
Remuneration. This outlines how
we implemented our current policy
in 2024 and how we intend to
apply the new Policy in 2025. This
is subject to an advisory vote by
shareholders.
Performance outcomes for 2024
Harworth delivered record revenue
and land sales in 2024, in particular
landmark sales at Skelton Grange
and Ansty. Significant management
actions during the year included
planning successes, growing
momentum in our enabling works
programme, several strategic
acquisitions, and lettings ahead
of estimated rental values across
the Investment Portfolio, which is
now 45% Grade A (2023: 37%).
The programme of enabling works
supports in-flight and pipeline direct
development to achieve our ambition
of 800,000 sq. ft of Industrial &
Logistics development each year by
the end of 2027. EPRA NDV increased
by 8.4% to 222.3p per share (2023:
205.1p), which led to a Total Return of
9.1% (2023: 5.1%), representing sector
leading results ahead of the MSCI All
Property Index.
Notwithstanding the turbulent
and uncertain macro-economic
and geopolitical backdrop which
currently persists, about which we
remain rightly cautious, Harworth
is well-positioned in structurally
undersupplied sectors that are
fundamental to the UK’s growth, with
an extensive consented pipeline,
strong balance sheet and specialised
skillset. These attributes position us
well as we move through 2025 and
beyond, towards our targets of £1bn
of EPRA NDV by the end of 2027 and
a core investment portfolio of £0.9bn
by the end of 2029.
Lynda Shillaw’s and Kitty Patmore’s
bonus opportunity for 2024 were
150% and 125% of salary respectively
based on a combination of financial
measures (50% of the opportunity),
strategic measures (20% of the
opportunity), ESG measures (10%
of the opportunity) and personal
objectives (20% of the opportunity).
Taking into account performance
against these measures, the
Committee approved a bonus
outcome equal to 100% of maximum
(which equates to 150% and 125%
of salary for Lynda Shillaw and Kitty
Patmore respectively). Full details are
set out on pages 167 to 170.
The Committee believes that the level
of bonus outcome is appropriate
in the context of the shareholder
experience and having regard to the
strong performance resulting from
the positive management actions that
created value during the year.
Angela Bromfield
(Chair)
Alastair Lyons
Lisa Scenna
Harworth Group plc
142
The average bonus outcome for
eligible employees (excluding the
Executive Directors) was 94% of their
maximum entitlement.
The third tranche of the 2020
Restricted Share Plan (‘RSP’) award
granted to Kitty Patmore, the second
tranche of the 2021 RSP awards
granted to Lynda Shillaw and Kitty
Patmore, and the first tranche of the
2022 RSP awards granted to Lynda
Shillaw and Kitty Patmore will vest
in full on 18 March 2025. The vested
shares under the second tranche of
the 2021 RSP Awards will be subject
to a holding period until March
2026. The vested shares under the
first tranche of the 2022 RSP Awards
will be subject to a holding period
until March 2027. The Committee
reviewed performance against the
underpins, as well as underlying
financial performance, and found
no cause to reduce the vesting
outcomes. Full details are set out on
page 171.
Policy review
Our current policy was approved at
the 2022 AGM and is approaching
the end of its three-year term. The
Committee has, therefore, undertaken
a comprehensive review of the
Executive remuneration framework to
ensure that it remains supportive of the
Group’s long-term growth ambitions
and is competitively positioned to
incentivise and retain the Executive
talent and experience we need in a
highly specialised sector.
The review has been underpinned
by strong performance
Following her appointment as Chief
Executive in November 2020, Lynda
Shillaw proposed, and the Board
endorsed, an ambitious growth
strategy for the Group which was well
received by shareholders.
The Group’s EPRA NDV has increased
from £516m (160p per share) at
the end of 2020 to £719.6m (222p
per share) at the end of 2024,
representing growth of 39.5%,
notwithstanding the challenging and
uncertain market backdrop that has
persisted for much of that period.
The Group is targeting growth of 39%
over the next three years to reach its
strategic goal of £1bn EPRA NDV by
the end of 2027.
In addition to performing well on
an absolute basis, the Group has
performed strongly relative to
peers. Harworth’s Total Shareholder
Return over the four-year period
to 31 December 2024 was 86%
compared to 0% for the FTSE All
Share Real Estate Index. Harworth’s
cumulative Total Property Return
over the four-year period to
31 December 2024 was 69%,
significantly exceeding the MSCI UK
All Property Index returns over the
same period of 11%.
Harworth has undoubtedly increased
in size and complexity over the last
four years and is now a multi-faceted
business having a significantly
broader footprint within the real
estate sector. It is also now a FTSE 250
business, with a market capitalisation
at the end of 2024 of c.£552m (which
has grown by over 60% since Lynda
Shillaw’s appointment) and, as at
31 December 2024, had a headcount
of 138 full-time equivalent employees
(which has grown by c.86% since
Lynda Shillaw’s appointment).
Proposed changes to the RSP
Harworth has operated an RSP for
Executive Directors and management
since 2019. As part of the review, the
Committee considered a variety of
incentive structures ranging from
keeping the current structure to
moving towards a more traditional
long-term performance-based
structure. The Committee continues to
believe that a core RSP award remains
appropriate. It supports the strategy to
deliver long-term sustainable growth
and addresses the challenge of setting
long-term performance targets in a
cyclical market.
The Committee is also cognisant
of Harworth’s strong financial and
operational performance in recent
years, both in absolute terms and
relative to its listed peers, and its
stretching growth ambitions to
achieve £1bn EPRA NDV by the end
of 2027, with the strategy evolving
during 2024 to focus more on growth
of the income generating Industrial
& Logistics portfolio – see strategic
targets on pages 18 to 22. Reflecting
what the Company has set itself to
achieve over the next three years in
The Committee’s Priorities for 2025:
– Ensure the new Remuneration Policy is effectively implemented following shareholder approval at the 2025 AGM
– Operation of the 2025 annual bonus and grant of 2025 performance flexed Restricted Share Plan awards
– Approve grant of options for SAYE Plan and Share Incentive Plan awards
Annual Report and Financial Statements
143
Governance Report
GOVERNANCE REPORT
Directors’ Remuneration Report
order to deliver against the end 2027
EPRA NDV ambition, the Committee
believes that, alongside sustainable
growth through the cycle, the
Executive Directors and management
should also be incentivised to
continue to outperform the market.
To that end, the Committee proposes
to introduce an outperformance
element to the RSP, designed to
incentivise and reward the delivery
of superior returns relative to the
wider listed property sector. We
refer to this proposed evolution as a
“performance flexed RSP structure”.
While incorporating an
outperformance element within our
RSP is admittedly innovative, the
Committee is cognisant that the UK
Executive remuneration landscape is
evolving to embrace more tailored
structures, provided that there is a
clear and demonstrable link to: (i)
the corporate and talent strategy of
the business; and (ii) the interests of
long-term shareholders. Indeed, many
of the shareholders that we engaged
with welcomed this innovative
proposal for our RSP, and the
conversations proxy advisory bodies
have had with us focused on ensuring
that the remuneration structure
aligned with Harworth’s business
model and strategy while continuing
to foster good practice and alignment
with shareholder expectations.
We approached the review of the
incentive structure with this mindset.
The Committee firmly believes that
our proposed performance flexed
RSP structure is simple, transparent
and strikes an appropriate balance
between supporting the delivery
of sustainable, long-term decision-
making which “looks through” the
property cycle (via the core award),
and incentivising to deliver strong
market outperformance (via the
outperformance element).
The Committee was also mindful
of the evolving debate on hybrid
arrangements (which comprise
distinct performance-based long-
term incentive and RSP awards) and
considered that such an arrangement
was not in Harworth’s best interests at
this stage. The Committee considers
that there is a fundamental and
important difference between our
proposed structure and a hybrid
arrangement. Under a hybrid
arrangement, the performance
based long-term incentive award
would vest on a graded scale
between threshold (minimum)
and stretch (maximum) targets.
Under our proposed structure, the
outperformance element provides
for “cliff-edge” vesting – i.e. it will
only vest if Harworth achieves a
challenging stretch target over a
three-year period. There is no ability
for the Executive Directors to earn
any element of outperformance if the
pre-requisite level of strong market
outperformance is not delivered.
The Committee was also comfortable
that such “cliff-edge” vesting
does not detract from the core
award’s promotion of long-term
decisions, given that vesting of the
outperformance element will be
measured over a three-year period,
necessitating a focus on long-term,
rather than in-year, decision-making.
The outperformance element will
also form only a modest component
of the overall RSP award and, in a
“maximum” performance scenario,
a small proportion of overall
remuneration.
RSP outperformance element
The Committee carefully considered
the performance criteria for the
outperformance element taking into
account feedback from shareholders.
The Committee believes that Total
Property Return, which measures
the income and growth in value from
the Group’s property portfolio, is
directly aligned to the performance
that the Executive Directors are
being asked (and incentivised) to
deliver – to achieve the strategic
goal of becoming a £1bn business
(in terms of EPRA NDV) by the end of
2027, execute the evolved strategy,
and continue to outperform against
real estate peers. The Committee
also believes that strong Total
Property Return performance will
translate into shareholder returns.
However, the Committee is also
mindful that, during consultation,
several shareholders expressed a
strong preference for a portion of
the outperformance element to
be subject to a Total Shareholder
Return performance measure, to
provide stronger alignment with the
shareholder experience over the
longer-term. It is, therefore, proposed
that 50% of the outperformance
element is subject to Total Property
Return performance and 50% is
subject to Total Shareholder Return
performance, both measured over a
three-year period.
Total Property Return
performance measure
The most common approach to
structuring a relative Total Property
Return performance measure is
to compare performance against
an established MSCI real estate
index. The Committee has explored
different MSCI indices and bespoke
benchmarks and, after careful
Directors’ Remuneration Report continued
144
Harworth Group plc
consideration, believes that the MSCI
UK All Property Total Return Index
is currently the most appropriate
benchmark for Harworth. This index
covers assets across all real estate
sectors and UK geographies, with
strong representation of industrial
assets and residential assets, both
being sectors across which Harworth
is currently very active.
It is, therefore, proposed that 50%
of the outperformance element
of the 2025 performance flexed
RSP award will vest if Harworth’s
Total Property Return performance
over the three-year period ending
31 December 2027 outperforms the
upper quartile of the MSCI UK All
Property Total Return Index.
The Committee considered
Harworth’s Total Property Return
performance over recent years
relative to the upper quartile of the
MSCI UK All Property Total Return
Index, which reflected that Harworth
had outperformed the upper quartile
of the MSCI UK All Property Total
Return Index in some but not all of the
previous five years. The Committee
also had regard to Harworth’s future
Total Property Return expectations
informed by the most recent Strategic
Plan presented to the Board in January
2025. With these reference points
in mind, and taking into account
typical market practice (noting that,
where companies operate relative
Total Shareholder Return or Total
Return performance measures within
incentive plans, upper quartile is
often the stretch target for maximum
vesting), the Committee believes that
outperforming the upper quartile
of the index is a demanding and
ambitious metric that will reflect
stretching performance against
the market.
The MSCI UK Industrials Total Return
Index was also explored as a potential
benchmark, reflecting Harworth’s
evolved strategy to focus on the
growth of the income-generating
Industrial & Logistics portfolio. This
index largely comprises funds with
income-generating assets (and
therefore few land and property
regeneration or development assets)
and the Committee did not, therefore,
consider this index to be appropriate
at this time. It is likely to become more
relevant in the future as the Group’s
portfolio evolves to include more
income-generating assets, and this
will be kept under review over the
coming years.
Total Shareholder Return
performance measure
The Committee has explored different
comparator groups for the Total
Shareholder Return performance
measure and believes that a
comparator group comprising the
FTSE 250 Real Estate companies
(excluding agencies) is the most
appropriate for Harworth.
It is, therefore, proposed that 50%
of the outperformance element of
the 2025 performance flexed RSP
award will vest if Harworth’s Total
Shareholder Return performance
over the three-year period ending
31 December 2027 outperforms
the upper quartile of the FTSE 250
Real Estate companies (excluding
agencies). Outperforming the upper
quartile is considered an appropriate
target for the outperformance
element to vest, reflecting that upper
quartile is often the stretch target for
maximum vesting within conventional
performance share plan structures.
Performance underpins and
Committee discretion
As well as upside potential
under the revised structure, the
Committee continues to believe that
it is appropriate for performance
flexed RSP awards to be subject
to downside risk through the
underpin framework. As part of the
policy review, the Committee has
considered the underpins which
have applied since the introduction
of the RSP in 2019. These are based
on: no breach of financial covenants;
satisfactory underlying performance
compared to the real estate sector;
and no material failure in corporate
governance, or health and safety. The
Committee continues to believe that
this selection of underpins reflects
an appropriate overall balance,
safeguarding the financial stability of
the business while providing sufficient
focus on our corporate governance
and health and safety responsibilities.
Details of the underpins are set out on
page 171.
In addition to the underpins, the
Committee retains discretion to
reduce the vesting outcome of a
performance flexed RSP award if it
is not considered to be reflective
of the underlying performance of
the business or the shareholder
experience.
RSP quantum
Under the current policy, the normal
RSP opportunity is equal to 75%
of salary.
In the view of the Committee,
shared by the Board and many of the
shareholders with whom we have
consulted about the revised Policy,
Lynda Shillaw and Kitty Patmore
have performed exceptionally well
since their appointments as Chief
Annual Report and Financial Statements
145
Governance Report
GOVERNANCE REPORT
Directors’ Remuneration Report
Executive and CFO respectively.
Under their leadership, the Group
has made strong progress towards
becoming a £1bn business by the end
of 2027, and has delivered market-
leading performance along the way.
As explained above, Harworth has
increased considerably in size and
complexity over the last four years.
The Committee has benchmarked
the proposed Chief Executive and
Chief Financial Officer performance
flexed RSP opportunity and total
compensation opportunity against:
1. LSE Main Market listed companies
(excluding financial services) with
a market capitalisation ranging
from £300m to £900m. Harworth’s
market capitalisation (12 month
average: c.£500m, 3 month
average: c.£570m) is positioned
towards the median of this
comparator group.
2. LSE Main Market listed real
estate peers (NewRiver,
Henry Boot, Helical, CLS,
Empiric Student Property,
Workspace). Harworth’s market
capitalisation is positioned
towards the upper end of this
comparator group.
0
1.0
2.0
3.0
4.0
5.0
£m
CEO maximum total compensation
opportunity vs market cap
comparator group
Increasing the core award opportunity
to 100% of salary will position the
Chief Executive’s and CFO’s on-target
total compensation opportunity
around median compared to the
market capitalisation comparator
group and real estate comparator
group. The Committee strongly
believes that positioning the on-target
remuneration arrangements for our
Executive Directors at the median of
the market is justified not only by the
size of the business (which has recently
become a constituent of the FTSE 250
Index) relative to the benchmarking
comparator groups, but also by the
calibre of the Executive Directors that
we have in role.
As noted above, the maximum
opportunity, including the
outperformance element, will only
Directors’ Remuneration Report continued
After careful consideration, the
Committee proposes to set the
performance flexed RSP award
opportunity for the Executive
Directors under the new Policy
as follows:
– A core award opportunity
equal to 100% of salary.
– An outperformance element
of 0.33x core award.
– Meaning an overall maximum
opportunity of 133% of
salary.
vest in full if Harworth delivers
stretching outperformance against
the market over the longer-term
(i.e. if Harworth’s three-year Total
Property Return outperforms the
upper quartile of the MSCI UK All
Property Total Return Index and
three-year Total Shareholder Return
outperforms the upper quartile of
the FTSE 250 Real Estate companies
(excluding agencies)). The Committee
considers that a vesting of 133%
of salary for delivering stretching
outperformance against the market
(alongside strong underlying financial
business performance) is reasonable,
noting that:
– This level of maximum opportunity
will be positioned below the lower
quartile compared to the market
capitalisation benchmarking
comparator group, reflecting the
downside protection afforded by
the core award.
– Maximum total compensation
opportunity for the Chief Executive
and Chief Financial Officer will
be positioned around the lower
quartile compared to the market
capitalisation benchmarking
comparator group.
CFO target total compensation
opportunity vs market cap
comparator group
0
0.5
1.0
1.5
2.0
£m
0
1.0
2.0
3.0
4.0
£m
CEO target total compensation
opportunity vs market cap
comparator group
146
Harworth Group plc
0
0.5
1.0
1.5
2.0
2.5
3.0
£m
CFO maximum total compensation
opportunity vs market cap
comparator group
In summary, the Committee
considers the proposed
performance flexed RSP quantum to
be appropriate on the basis that:
– The award opportunity reflects
the growth and scaling of
Harworth, as well as its increased
complexity, over the last three
years since the last policy review.
Harworth is also well-positioned
to unlock further long-term
growth potential under the
evolved strategy.
– We take pride in our exceptional
Executive leadership team. It
is the key to our success and
therefore essential that we
continue to provide a reward
package which reflects the
calibre of our Executive Directors
and retains and incentivises them
to deliver the Group’s growth
ambitions.
– Pay differentials between
Executive Directors and
below Board levels are a
key consideration when
setting salaries and incentive
opportunities for leadership
roles. The growth and scaling of
Harworth in recent years has led
to us having a more experienced
and marketable Executive
leadership team who receive
remuneration commensurate
with their experience and
marketability. Repositioning
the award opportunity for the
Executive Directors will ensure
that a reasonable differential
can be maintained between
them and the remainder of the
Executive leadership team, while
providing scope for growth
in performance flexed RSP
participation for those below
Board.
– The outperformance element
will only vest if strong market
outperformance is delivered
over the longer-term.
– The award opportunity is
supported by market data.
Other minor changes proposed to
aid competitiveness and support
simplification
It is proposed that the historic
approach of setting the share price to
determine the number of shares at the
start of the policy period is removed
to align with market practice and
remove unnecessary complexity. In
addition, given that the same construct
is applied across the Group as a
whole, undue challenges were faced
in explaining the changes in individual
award levels each year.
Under the current policy, an RSP award
vests in equal tranches after three,
four and five years. Vested tranches
are then released (i.e. the point at
which shares can be sold) after five
years from grant. Under the new
Policy, in line with market practice, it is
proposed that a performance flexed
RSP award vests after three years. The
vested award is then released after
the end of a two-year holding period.
There is no change to the overall
timeframe between grant and release
of award: a five-year timeframe will
continue to apply.
No material changes to the annual
bonus structure are proposed. The
only minor adjustment is to set the
threshold level of vesting at 25%
(currently 10%) of the maximum for
financial performance measures
(when the threshold targets have
been met) to provide a more
meaningful vesting outcome for
achieving threshold performance and
which is more aligned with the typical
threshold vesting levels across the
FTSE 250.
Annual Report and Financial Statements
147
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Directors’ Remuneration Report
Directors’ Remuneration Report continued
Post-cessation shareholding
requirements
A post-cessation shareholding
requirement is in place such that,
for the first 12 months following an
Executive Director stepping down
from the Board, they must retain shares
with a value of 200% of salary (or their
actual shareholding if it is lower than
200% of salary), with that requirement
tapering down to 0% over the
following 12 months. The Committee
continues to believe that this approach
is appropriate reflecting the reward
structure that we have in place.
RSP awards are subject to a combined
vesting and holding period of
five years, and awards are not
accelerated on departure (unless
there are exceptional circumstances).
When an Executive Director ceases
employment, any vested awards will
continue to be released over a period
of up to two years following the end
of their holding period. Furthermore,
if the Executive Director is treated as a
good leaver, any unvested awards will
continue to be capable of vesting on
a pro-rated basis and will be released
over a period of up to five years. As
an illustration, if an Executive Director
leaves after five years in post, then
on cessation of their employment,
assuming they are treated as a good
leaver, they will hold outstanding core
RSP awards (on a net-of-tax basis)
equal to c.150% of salary on cessation
of employment and c.100% of salary
one year post-cessation.
We, therefore, believe that the
RSP alongside our current post-
cessation shareholding requirement
achieves the objective of ensuring
there is ongoing alignment of
Executive Directors’ interests with
the shareholder experience post-
cessation of their employment.
Shareholder consultation
Over recent months, we have
undertaken an extensive consultation
with the Company’s major shareholders
(representing c.85% of the Company’s
issued share capital), which has shaped
the proposed changes to the RSP.
Overall, shareholders were
supportive of the proposed changes
acknowledging that the performance
flexed RSP, while a unique structure,
aligns with and supports Harworth’s
business and strategy. As noted
above, reflecting on the most
prevalent piece of feedback received
from shareholders (that a portion
of the outperformance element of
the RSP should be subject to Total
Shareholder Return performance),
it is proposed that 50% of the
outperformance element is based on
Total Property Return performance
and 50% based on Total Shareholder
Return performance.
The Investment Association, ISS and
Glass Lewis also provided valuable
input as the Committee sought to
finalise the proposed changes to
the RSP, including acknowledging
that the performance flexed RSP
structure is different to a traditional
hybrid structure (for the reasons
detailed earlier in this report) and
providing clear guidance to set
out in the Directors’ Remuneration
Report the rationale for the proposed
approach, together with supporting
benchmarking data.
We have included in the governance
section of our website (www.
harworthgroup.com/investors/
governance/) the initial and closing
letters sent to shareholders and
proxy advisory bodies as part of the
consultation process. These provide
further detail on the wider business
context underpinning the proposals,
other long-term incentive structures
considered, and further information
on benchmarking.
On behalf of the Committee, I would
like to extend our sincere thanks to
all those who participated in the
consultation.
Implementation of the
Policy for 2025
Base salary
Lynda Shillaw and Kitty Patmore were
each awarded a 3% salary increase
with effect from 1 January 2025. This
compares to an average increase of
3% for the wider workforce.
Annual bonus
Lynda Shillaw’s and Kitty Patmore’s
bonus opportunity for 2025 is
equal to 150% and 125% of salary
respectively.
30% of the bonus opportunity
will be based on Total Accounting
Return, 30% on Total Property
Return relative to the MSCI UK All
Property Total Return Index, and
40% on strategic measures aligned
to the key strategic pillars under the
evolved strategy and ESG priorities.
The Committee believes that the
proposed performance measures
provide an appropriate balance to
incentivise Executive Directors to
continue to deliver strong operational
and financial performance, and
outperform the market, alongside
executing the evolved strategy.
The Committee is mindful that
Total Property Return relative to the
MSCI UK All Property Total Return
Index features as a performance
measure in both the annual bonus
and performance flexed RSP. The
Committee believes this is currently
appropriate for Harworth for the
following reasons:
148
Harworth Group plc
– Total Property Return (alongside
Total Accounting Return) are key
metrics based on which Harworth’s
performance is judged by external
stakeholders: the Executive
Directors should, therefore, be
incentivised and rewarded for
outperforming the returns of the
broader UK real estate sector over
the short and long term.
– There is symmetry in terms of
potential upside and downside. If
Harworth performs well against the
MSCI UK All Property Total Return
Index then the Executive Directors
will see the benefit in both the
annual bonus and performance
flexed RSP awards. Equally, if
Harworth does not outperform
the MSCI UK All Property Total
Return Index then the Executive
Directors will be penalised on both
the annual bonus and performance
flexed RSP awards.
– There are currently no other
financial metrics that are
considered more directly relevant
to an assessment of Harworth’s
performance for the annual bonus
than Total Property Return and
Total Accounting Return.
Performance targets are considered
to be commercially sensitive at this
point in the year and they will be
fully disclosed in the 2025 Annual
Remuneration Report.
33% of any amount earned by Lynda
Shillaw and 20% of any amount
earned by Kitty Patmore will be
deferred into shares for two years.
The higher level of deferral for Lynda
Shillaw reflects that she is awarded a
higher bonus opportunity.
Performance flexed RSP
Lynda Shillaw and Kitty Patmore will
each be granted performance flexed
RSP awards comprising a core award at
100% of salary and an outperformance
element equal to 0.33x the core
award, meaning an overall maximum
opportunity of 133% of salary.
50% of the outperformance
element will vest if Harworth’s Total
Property Return over the three-year
period ending 31 December 2027
outperforms the upper quartile of
the MSCI UK All Property Total Return
Index. The remaining 50% of the
outperformance element will vest if
Harworth’s Total Shareholder Return
over the three-year period ending
31 December 2027 outperforms
the upper quartile of the FTSE 250
Real Estate companies (excluding
agencies).
The awards will vest after three years.
Vested awards will then be released
after the end of a two-year holding
period. Details of performance
underpins are set out on page 171.
Chair and Non-Executive
Directors
During the year, the Board (without
the Chair being present) reviewed
the Non-Executive Chair’s fee
and (without the Non-Executive
Directors being present) reviewed
the Non-Executive Directors’ fees
in the context of the development
of Harworth’s value, size, and
complexity since the fee levels were
last externally benchmarked in 2021.
It was agreed that, with effect from
1 January 2025, the Non-Executive
Chair’s fee will increase from £187,715
to £211,750 (12% increase) and the
Non-Executive Directors’ base fee will
increase from £53,076 to £58,500
(10% increase). It was also agreed
that the additional fees for acting as
SID, or chairing the Remuneration
Committee or Audit Committee
would increase from £9,371 to
£10,300. The fee for chairing the
ESG Committee would increase
from £6,615 to £10,300, to apply
until the end of April 2025 when the
responsibilities of the ESG Committee
will be reallocated to the Board and
Audit Committee as explained in the
ESG Committee report (pages 140 to
141). Details of the Chair and Non-
Executive Director fees are set out on
page 167.
The Committee and Board consider
these fee levels to be appropriate for
a business of our size and complexity,
noting that the fees are positioned
around the median compared to Main
Market listed companies (excluding
financial services) with a market
capitalisation ranging from £300m to
£900m, and reflect the experience
and calibre of the Non-Executive
Chair and Non-Executive Directors.
Conclusion
We greatly appreciate the feedback
and the level of support we have
received from our shareholders
regarding our approach to
remuneration and the changes
outlined above. We are firmly of the
view that they are in the best interests
of the business and its shareholders.
We remain committed to a
responsible approach to Executive
pay, as I trust this Directors’
Remuneration Report demonstrates.
We believe that the policy operated
as intended in respect of the 2024
financial year and consider that
the remuneration received by the
Executive Directors was, and that
proposed for 2025 is, appropriate,
taking in the round the Group’s and
the Executive Directors’ performance.
Angela Bromfield
Chair of the Remuneration Committee
17 March 2025
Annual Report and Financial Statements
149
Governance Report
GOVERNANCE REPORT
Directors’ Remuneration Report
Directors’ Remuneration Policy
Changes to the Directors’ Remuneration Policy and summary of decision-making process
During 2024, the Committee carried out a comprehensive review of the current remuneration policy. The outcome of the
review and changes to the policy are outlined on pages 143 to 148.
In determining the Policy, the Committee followed a robust process which included extensive discussion on the content of
the Policy at four Committee meetings. The Committee considered input from the Executive Directors and its independent
advisers and consulted with the Company’s major shareholders (representing c.85% of the Company’s issued share capital).
In undertaking the review, the Committee kept in mind the Group’s core reward principles (set out below) as well as the
factors in Provision 40 of the 2018 UK Corporate Governance Code, which applied to the 2024 financial year and Provision
38 of the 2024 UK Corporate Governance Code, which will apply to the Policy period (see page 163).
CORE REWARD PRINCIPLES
The incentive structure should reward the delivery of the Group’s strategic ambition, long-term sustainable
decision‑making and value creation in a cyclical market.
The total reward package should be competitively positioned against the market, to ensure Executives are appropriately
incentivised and fairly rewarded.
The total reward package should be sufficiently weighted towards long-term value creation.
The incentive structure should reward strong market outperformance.
As far as possible, each of the components of the reward package should be capable of tailored application to, and
being understood by, the wider workforce to support, where appropriate, the alignment of reward between the
Executive Directors and the wider workforce.
Directors’ Remuneration Report continued
In June 2024 Harworth completed the sale of a 16-acre serviced land parcel to Taylor Wimpey for £19.55m
at Benthall Grange, our major mixed-use development on the site of the former Ironbridge Power Station.
The site will deliver over 1,000 new homes, alongside a range of commercial, leisure and community uses.
Ironbridge, Telford | MID | R | MD
150
Harworth Group plc
This section of the report sets out the Policy for Directors which will be put to a binding shareholder vote at the 2025 AGM.
Subject to shareholder approval, the Policy will come into effect from the close of the 2025 AGM.
Policy table
FUNCTION
OPERATION
OPPORTUNITY
PERFORMANCE MEASURES
Base salary
To recognise the
individual’s skills
and experience
and to provide a
competitive base
reward.
Base salaries are ordinarily
reviewed annually, with
reference to: salary levels for
similar roles at comparable
companies; individual
contribution to performance;
and to the experience of
the Executive Director. Any
adjustments will typically
be determined in the first
quarter of the year and
take effect retrospectively
from 1 January in that year.
Any base salary increases are
applied in line with the outcome
of the review as part of which the
Committee also considers average
increases across the Group.
Salary increases will generally be
in line with the range of increases
awarded to salaried employees
(in percentage terms). Increases
above this level may be awarded
in certain circumstances including,
but not limited to: where there
has been an expansion in role
and responsibility; to reflect an
Executive Director’s development
in role (e.g. to align a new hire’s
salary with the market over
time); where there is a significant
change in the Group’s size and/
or complexity; where the current
salary level has fallen behind the
market over time.
None
Pension
To provide an
opportunity
for Executive
Directors to
build up income
on retirement.
All Executive Directors are
either members of the Group
pension scheme or receive a
cash pension allowance.
Salary is the only element
of remuneration that is
pensionable.
Aligned with the contribution rate
available to the majority of the
wider workforce (currently 10% of
salary).
None
Benefits
To provide
benefits which
are competitive
in the market
in which the
Executive
Director is
employed.
Executive Directors receive
benefits which consist
primarily of the provision
of a car allowance, private
medical cover and life
insurance although can
include any such benefits
that the Committee
deems appropriate, and
the Company may make a
payment in respect of any
associated tax liability where
the Committee considers this
to be appropriate.
The monetary value of benefits
vary by role and individual
circumstances: eligibility and cost
is reviewed periodically.
The Committee retains the
discretion to approve a higher cost
in appropriate circumstances (e.g.
relocation) or in circumstances
where factors outside the
Company’s control have changed
materially (e.g. increases in
insurance premiums).
None
Annual Report and Financial Statements
151
Governance Report
GOVERNANCE REPORT
Directors’ Remuneration Report
FUNCTION
OPERATION
OPPORTUNITY
PERFORMANCE MEASURES
Annual bonus
To incentivise
and reward
strong
performance
against financial
and personal
annual targets,
thus delivering
value to
shareholders and
being consistent
with the delivery
of the strategic
plan.
The scheme is based on a
combination of financial
performance, strategic and/
or personal objectives.
At the end of the year, the
Committee determines the
extent to which targets have
been achieved.
If the maximum bonus
opportunity exceeds 100%
of salary, up to one third
of any amount earned (not
only the proportion earned
above 100% of salary) will
be deferred into shares in
the Company for two years.
For example, if the bonus
opportunity is equal to 125%
of salary, 20% of any amount
earned will be deferred
for two years. If the bonus
opportunity is equal to 150%
of salary, 33% of any amount
earned will be deferred for
two years.
Dividend equivalents may be
paid on vested shares based
on dividends paid during
the deferral period. Such
amounts will normally be
paid in shares.
Maximum opportunity of up to
150% of base salary in respect of a
financial year.
For 2025, the maximum annual
bonus opportunity will be 150% of
salary and 125% of salary for the
Chief Executive and Chief Financial
Officer respectively.
For financial metrics, up to 25%
of maximum may be earned
for threshold performance
with 100% of maximum earned
for meeting or exceeding the
maximum performance level. For
performance between threshold
and maximum, the vesting
profile will be determined by the
Committee taking into account the
stretch in the targets.
Vesting of the bonus in respect of
strategic performance or personal
objectives will be between 0% and
100% based on the Committee’s
assessment of the extent to which
the relevant metric or objective has
been met.
Performance measures,
targets and weightings
are set at the start of the
year, to reflect the Group’s
annual strategic plan and,
for personal objectives,
individual contribution to
that plan.
At least 50% of the bonus
opportunity is based on
financial measures. The
remainder is based on
strategic and/or personal
objectives, with no more
than 20% of the bonus
opportunity based on
personal objectives.
Overall payout under
the annual bonus may
be subject to additional
underpins, determined by
the Committee at the start of
the year.
The Committee has
discretion to amend the
payout should any formulaic
output not reflect the
Committee’s assessment of
overall business performance
or if the Committee
considers the formulaic
outturn is not appropriate
in the context of other
factors considered by the
Committee to be relevant
(e.g. the experience of
shareholders or employees).
Any such adjustments
would be fully explained in
the relevant Remuneration
Report.
Directors’ Remuneration Report continued
152
Harworth Group plc
FUNCTION
OPERATION
OPPORTUNITY
PERFORMANCE MEASURES
Performance
flexed
Restricted Share
Plan (‘RSP’)
To support
the delivery
of long-term
decision‑making
which “looks
through” the
property cycle
and incentivises
strong market
outperformance.
Annual awards will be made
in the form of conditional
share awards or nil-cost
options.
The awards will comprise
a core award and an
outperformance element.
Vesting of the
outperformance element
will be subject to one or
more financial performance
targets.
Vesting of the awards will
be subject to specific
performance underpins.
Awards will normally vest
after three years. Vested
awards will be subject to a
two-year holding period.
Dividend equivalents may
be paid on vested shares
based on dividends paid
during the vesting period
and/or holding period. Such
amounts will normally be
paid in shares.
Core award: up to 100% of salary in
respect of a financial year.
Outperformance element: up to
0.33x core award.
Meaning an overall maximum
opportunity of up to 133% of salary
in respect of a financial year.
The outperformance element
will be subject to one or
more financial targets, set
by the Committee, normally
over a three-year period.
For 2025, 50% of the
outperformance element will
be based on Total Property
Return performance relative
to the MSCI UK All Property
Total Return Index, and 50%
based on Total Shareholder
Return performance relative
to the FTSE 250 Real Estate
companies (excluding
agencies). Details are set out
on page 177.
The vesting outcome of
an award may be reduced
by the Committee if a
performance underpin is not
achieved.
In addition, the Committee
has discretion to amend the
vesting outcome should it
not reflect the Committee’s
assessment of overall
business performance or if
the Committee considers the
outcome is not appropriate
in the context of other
factors considered by the
Committee to be relevant
(e.g. the experience of
shareholders or employees).
Any such adjustments
would be fully explained in
the relevant Remuneration
Report.
Annual Report and Financial Statements
153
Governance Report
GOVERNANCE REPORT
Directors’ Remuneration Report
FUNCTION
OPERATION
OPPORTUNITY
PERFORMANCE MEASURES
Share Incentive
Plan (‘SIP’)
and Save-As-
You-Earn plan
(‘SAYE)’
To motivate and
to facilitate share
ownership on
an all-employee
basis.
These plans are reviewed
annually and, if offered,
are offered to all eligible
employees in accordance
with their terms and
applicable legislation.
An Executive Director may
contribute up to £500 per month
(or such other limit as may be
permitted under the relevant
legislation) (SAYE) and £1,800
per annum (or such other limit
as may be permitted under the
relevant legislation) (SIP) into these
tax‑efficient all-employee plans.
Under the SAYE, the per share
option exercise price is set at a
discount of up to 20% (or such
other amount as may be permitted
under the relevant legislation) to
the share price when participation
is offered.
Under the SIP, the Company may
match the shares up to a 2 for 1
basis (or on such other basis as may
be permitted under the relevant
legislation).
Under the SIP, the Company may
also make an award to an Executive
Director of up to £3,600 of free
shares in any year (or such other
limit as may be permitted under
the relevant legislation).
None
Notes to the policy table
Performance measure selection
and approach to target setting
Annual bonus
The measures used under the annual
bonus plan are selected annually
to reflect the Group’s financial and
strategic priorities for the year
identified in the budget and strategic
plan. Additional underpins may be
set, for example to ensure appropriate
consideration of all relevant aspects
of health and safety.
Financial and strategic performance
targets are set annually and calibrated
to reward Executive Directors for
strong operational performance
taking into account the Group’s
budget and strategic plan.
Performance flexed RSP
The financial target(s) for the
outperformance element is/are
selected annually. For the 2025
award, 50% of the outperformance
element will be based on Total
Property Return performance relative
to the MSCI UK All Property Total
Return Index, and 50% based on Total
Shareholder Return performance
relative to the FTSE 250 Real Estate
companies (excluding agencies).
The terms of the underpins will
be determined on an annual basis
taking into account the Committee’s
assessment of the metrics which will
best reflect overall business health
over the vesting period. Underpins
will ordinarily be qualitative, and the
Committee will use its judgement
to assess “in the round” whether the
level of vesting is appropriate having
regard to the underpins and business
performance.
Recovery provisions
The annual bonus and performance
flexed RSP are subject to malus and
clawback provisions as follows:
– any bonus paid in cash may be
recovered for up to two years
following payment;
– a deferred bonus award may be
reduced or cancelled during the
two-year deferral period; and
Directors’ Remuneration Report continued
154
Harworth Group plc
– a performance flexed RSP award
may be cancelled (if shares have
not been delivered to satisfy it) or
recovered from a participant (if
shares have been delivered) up to
the second anniversary of vesting.
Malus or clawback may be applied
in the event of misconduct, material
financial misstatement, error in
calculation of outcomes, material
failure of risk management and
internal controls, a significant health
and safety event or environmental
incident, conduct leading to financial
loss or reputational damage,
unreasonable failure to protect
the interests of employees and
customers, material corporate failure,
material breach of banking covenants
or an unauthorised breach of the
Group’s internal gearing policy, or
in any other circumstance that the
Committee considers appropriate.
A clawback period of two years
following payment of an annual bonus
and vesting of a performance flexed
RSP award is considered appropriate
on the basis that:
– it is reasonable to assume that an
event relating to the performance
/ vesting period requiring
clawback would be discovered
within a two-year period;
– it is considered a reasonable
period to support the
enforceability of clawback; and
– it is aligned with market practice
across the FTSE 250.
SAYE and SIP
SAYE options and awards under the
SIP are not subject to performance
measures in line with the treatment of
such awards for all employees and in
accordance with the applicable tax
legislation.
Variations
The Committee may vary or substitute
any performance measure or underpin
if an event occurs which causes it to
determine that it would be appropriate
to do so, provided that any such
variation is fair and reasonable and
(in the opinion of the Committee)
the change would not make the
performance measure or underpin
less demanding. If the Committee
were to make such a variation, an
explanation would be given in the
next Remuneration Report.
Operation of share plans
The Committee will operate its share
plans in accordance with their rules.
Share awards may be made in the
form of conditional share awards,
options (including nil cost options)
or forfeitable share awards. Awards
granted over shares may be settled
in cash. In the event of a variation
of the Company’s share capital or a
demerger, special dividend or other
event which, in the Committee’s
opinion may affect the price of shares,
the Committee may alter the terms
of awards under its share plans and
the number of shares subject to those
awards in accordance with the terms
of the relevant plan.
Remuneration policy for
other employees
All our people contribute to the
achievement of the Group’s long-
term success. As such, when making
decisions in respect of the Executive
Directors, the Committee considers
the reward arrangements for the
wider workforce.
Harworth’s approach to annual salary
reviews is consistent across the
Group, with consideration given to
the level of experience, responsibility,
individual performance and salary
levels in comparable companies.
The majority of employees are
eligible to participate in an annual
bonus scheme with similar measures
to those used for the Executive
Directors. Opportunities and specific
performance measures vary by
organisational level with business
area-specific metrics incorporated
where appropriate.
We want the interests of our
people to be strongly aligned with
our shareholders and the overall
performance of the business. We
actively support and encourage
employee share ownership across the
Group, so that our employees may
share in the success of the business.
Employees in Level 4 roles and above
participate in the RSP, with award
sizes varying by organisational level.
Over 60% of the Group’s employees
currently participate in the RSP.
Harworth operates a SAYE plan under
which awards are granted annually.
Around 70% of the Group’s employees
currently participate in the SAYE plan.
Harworth offers free shares under the
all-employee SIP, awarding all eligible
employees £3,600 of free shares in
2024, being the maximum amount
permitted under UK tax legislation,
as well as Partnership and Matching
Shares for eligible employees.
Subject to affordability, the Company
intends to continue to award Free
Shares to eligible employees on an
annual basis at the maximum amount
permitted, and to continue to offer
Partnership and Matching Shares.
Annual Report and Financial Statements
155
Governance Report
GOVERNANCE REPORT
Directors’ Remuneration Report
Shareholding guidelines
The Committee continues to
recognise the importance of aligning
Executive Directors’ interests with
shareholders’ through building up
a significant shareholding in the
Company. Shareholding guidelines
are in place that require Executive
Directors to acquire a holding
equivalent to 200% of base salary.
Until the relevant shareholding
levels are acquired, 50% of any
performance flexed RSP awards
vesting and 50% of any deferred
bonus awards vesting (post-payment
of tax) are required to be held. Shares
subject to performance flexed RSP
awards which have vested but which
remain subject to a holding period,
and shares subject to deferred bonus
awards, count towards the guidelines
on a net of assumed tax basis. Details
of the Executive Directors’ current
personal shareholdings are provided
in the Annual Remuneration Report.
A post-cessation shareholding
requirement is in place such that,
for the first 12 months following an
Executive Director stepping down
from the Board, they must retain such
number of their “relevant shares” as
have a value (at the time of stepping
down) equal to the shareholding
guideline that applies during service
(200% of base salary), with that
requirement tapering down to 0%
over the following 12 months. If the
Executive Director holds less than
the required number of “relevant
shares” at any time, they must retain
the “relevant shares” they hold. Shares
which the Executive Director has
purchased are not “relevant shares”
for these purposes. Shares subject
to RSP and performance flexed RSP
awards which have vested but not
been released, or have been released
but not exercised, and shares subject
to deferred bonus awards count
towards the post-cessation guideline
on a net of tax basis. Unless the
Committee determines otherwise,
when considering the extent to
which this requirement is satisfied,
an Executive Director or former
Executive Director shall be deemed
to have disposed of shares which
are not “relevant shares” before any
”relevant shares” that person holds.
Non-Executive Director remuneration
Non-Executive Directors are appointed on a rolling annual basis. All Non-Executive Directors offer themselves for re-
election at each AGM. The appointment and re-appointment and the remuneration of Non-Executive Directors are matters
reserved for the full Board.
Date of letter of
appointment
Appointment date
to the Board
Current appointment
expiry date1
A. Lyons
23 November 2017
7 March 2018
7 March 2026
A. Bromfield
19 February 2019
1 April 2019
1 April 2026
R. Cooke2
27 February 2019
19 March 2019
19 May 2025
L. Scenna
29 June 2020
1 September 2020
1 September 2025
P. O’Donnell Bourke
2 November 2020
3 November 2020
3 November 2025
M. Zafar
31 May 2022
1 June 2022
1 June 2025
M. Bowes3
1 March 2015
24 March 2015
24 March 2026
1 All Non-Executive Directors are subject to annual rolling appointments by reference to the date of their original appointment to the Board.
2 Ruth Cooke will not be seeking re-election at the 2025 AGM, scheduled for 19 May 2025, and will retire from the Board with effect from that date.
3 Martyn Bowes was previously a Non-Executive Director of Harworth Estates Property Group Limited from 19 March 2013.
Directors’ Remuneration Report continued
156
Harworth Group plc
The Non-Executive Directors are not eligible to participate in the Company’s performance‑related bonus plan, long-term
incentive plans or pension arrangements.
Full terms and conditions for each of the Non-Executive Directors are available at the Company’s registered office during
normal business hours and will be available at the AGM for 15 minutes prior to the meeting and during the meeting.
FUNCTION
OPERATION
OPPORTUNITY
PERFORMANCE
MEASURES
Fees and benefits
To attract and
retain Non-
Executive
Directors of the
highest calibre
with broad
commercial and
other experience
relevant to the
Company.
Fee levels are ordinarily reviewed
annually, with any adjustments typically
effective 1 January in the year following
review.
The fees of the Non-Executive Chair
and other Non-Executive Directors are
determined by the Board.
Additional fees are payable for
additional Board duties, including
but not limited to, acting as Senior
Independent Director and as Chair
of any of the Board’s Committees.
Additional fees may be paid in the
event that Non-Executive Directors
are required to commit substantial
additional time above that normally
expected of their role.
Fee levels are benchmarked against
similar roles at comparable companies.
Time commitment and responsibility
are taken into account when reviewing
fee levels.
The Non-Executive Directors may be
eligible to receive benefits linked to the
performance of their duties, including
but not limited to travel and other
expenses, and the Company may make
a payment in respect of any associated
tax liability where the Committee
considers this to be appropriate.
There is no overall maximum, but
fees are set taking into account
the responsibilities of the role and
expected time commitment.
It is generally expected that
increases to Non-Executive
Director fee levels will be in
line with the range of increases
awarded to salaried employees
(in percentage terms). However,
in the event that there is a material
misalignment with the market
or a change in the complexity,
responsibility or time commitment
required to fulfil a Non-Executive
Director role, the Board has
discretion to make an appropriate
adjustment to the fee level.
Where benefits are provided
to Non-Executive Directors,
they will be provided at a level
considered to be appropriate
taking into account the individual
circumstances.
Overall fees paid to the Non-
Executive Chair and Non-Executive
Directors will remain within the
limits set by the Company’s Articles
of Association.
None
Pay for performance scenarios
The charts below provide an
illustration of the potential future
reward opportunities for the
Executive Directors, and the potential
split between the different elements
of remuneration under three different
performance scenarios: ‘Minimum’,
‘On-target’ and ‘Maximum’, along
with an illustration assuming a 50%
increase in the share price for the
purposes of the performance flexed
RSP awards.
Potential reward opportunities are
based on the Policy, applied to base
salaries effective 1 January 2025. The
annual bonus and performance flexed
RSP awards are based on the level of
maximum opportunities applied in
2025. Performance flexed RSP award
values are based on the face value at
award rather than vesting (other than
as regards that element of the charts
assuming a 50% increase in the share
price).
Annual Report and Financial Statements
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GOVERNANCE REPORT
Directors’ Remuneration Report
The ‘Minimum’ scenario reflects
base salary, pension and benefits
(i.e. fixed remuneration) which
are the elements of the Executive
Directors’ remuneration packages
not linked to performance. Base
salaries and pensions (10% of salary)
as at 1 January 2025 as set out on
page 176, benefits are based on the
value of such benefits in 2024 which
are taken from the single total figure
remuneration table on page 166.
The ‘On-target’ scenario reflects fixed
remuneration as above, plus bonus
payout of 50% of maximum annual
bonus opportunity (for 2025, 150% of
salary for the CEO and 125% of salary
for the CFO) and the core award of
the performance flexed RSP vesting in
full (for 2025, 100% of salary).
The ‘Maximum’ scenario reflects
fixed remuneration as above, plus
full payout of all incentives (for 2025,
annual bonus of 150% of salary for the
CEO and 125% of salary for the CFO
and performance flexed RSP of 133%
of salary).
The final scenario is based on the
same assumptions as the ‘Maximum’
scenario, but also assumes, for the
purposes of the performance flexed
RSP award element of the chart, that
the share price increases by 50%.
100%
100%
42%
31%
26%
22%
36%
33%
36%
28%
45%
39%
29%
25%
26%
35%
38%
34%
32%
43%
£615,311
£1,561,624
£2,415,634
£2,505,232
£409,679
£981,728
£1,317,916
£1,552,016
£0
£500,000
£2,000,000
Minimum
performance
Performance
in line with
expectations
Maximum
performance
Maximum
performance
with 50%
share price increase
Minimum
performance
Performance
in line with
expectations
Maximum
performance
Maximum
performance
with 50%
share price increase
£3,000,000
£1,500,000
Base salary, benefits and pensions
Kitty Patmore
Lynda Shillaw
Annual Bonus
Performance flexed RSP
£2,500,000
Directors’ Remuneration Report continued
158
Harworth Group plc
Approach to recruitment remuneration
External appointment
In the cases of hiring or appointing a new Executive Director from outside the Company, the Committee may make use of
all the existing components of remuneration, as follows:
COMPONENT
APPROACH
MAXIMUM ANNUAL GRANT VALUE
Base salary
The base salaries of new appointees will be determined by
reference to relevant market data, experience and skills of
the individual, internal relativities and current base salary.
Where new appointees have initial base salaries set below
market, any shortfall may be managed with phased increases
subject to the individual’s development in the role.
Pension
New appointees will receive pension contributions or an
equivalent cash supplement in line with the existing Policy.
Benefits
New appointees will be eligible to receive benefits which
may include (but are not limited to) the provision of a
Company car or cash alternative, private medical cover, life
insurance and any necessary relocation expenses.
Annual bonus
The structure described in the policy table will usually apply
to new appointees with the relevant maximum usually being
pro-rated to reflect the proportion of employment over the
year. Targets for any personal element will be tailored to
each Executive Director.
Up to 150% of salary in respect of a
financial year.
Performance
flexed RSP
New appointees will be eligible to participate in the
performance flexed RSP, as described in the policy table.
Core award: up to 100% of salary
in respect of a financial year.
Outperformance element: up to
0.33x core award.
Meaning an overall maximum
opportunity of up to 133% of salary
in respect of a financial year.
In determining appropriate
remuneration, the Committee will
take into consideration all relevant
factors (including quantum and
nature of remuneration for the
appointee’s previous employment,
and the jurisdiction from which the
candidate was recruited) to ensure
that arrangements are in the best
interests of both Harworth and
its shareholders. The Committee
may make an award in respect of
a new appointment to “buy out”
remuneration arrangements forfeited
on leaving a previous employer,
which may be awarded in addition to
the remuneration structure outlined
in the table above. The Committee
will generally seek to structure “buy
out” awards on a comparable basis
to the remuneration arrangements
forfeited and will consider relevant
factors including time to vesting,
any performance measures attached
to these awards and the likelihood
of those measures being met. Any
such “buy out” awards will typically
be made under the annual bonus or
RSP rules, although in exceptional
circumstances the Committee may
exercise the discretion available
under Listing Rule 9.3.2 R to make
awards using a different structure.
Any “buy out” awards would normally
have a fair value no higher than the
awards forfeited (as determined by
the Committee).
However, this discretion will not
be used to offer non-performance
related incentive payments (for
example a “guaranteed sign-on
bonus”) and the maximum level of
variable remuneration which may
be granted (excluding any “buy out”
award) is up to 283% of salary.
Annual Report and Financial Statements
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Directors’ Remuneration Report
Other elements of remuneration
may be included in appropriate
circumstances, such as:
– an interim appointment being
made to fill an Executive
Director role on a short-term
basis (including if exceptional
circumstances require that the
Non-Executive Chair or other Non-
Executive Director takes on an
executive function); or
– if an Executive Director is recruited
at a time in the year when it would
be inappropriate to provide
an annual bonus or long-term
incentive award for that year.
Subject to the limit on variable
remuneration set out below, the
quantum in respect of the months
employed during the year may be
transferred to the subsequent year
so that reward is provided on a fair
and appropriate basis.
Internal promotion
In cases of appointing a new
Executive Director by way of internal
promotion, the Committee and Board
will act consistently with the Policy for
external appointees detailed above.
Where an individual has contractual
commitments made prior to their
promotion to Executive Director
level, the Company will continue
to honour these arrangements.
The remuneration policy for other
employees is set out on page 155.
Incentive opportunities for below
Board employees are typically no
higher than Executive Directors, but
measures may vary.
Non-Executive Directors
In recruiting a new Non-Executive
Director, the Committee will utilise
the Policy as set out in the table on
page 157.
Service contracts and treatment
for leavers and change of control
Executive Director service contracts,
including arrangements for early
termination, are carefully considered
by the Committee. The Chief
Executive has a rolling service
contract requiring nine months’ notice
of termination on either side. The
Chief Financial Officer has a rolling
service contract requiring six months’
notice of termination on either side.
Such contracts contain no specific
provision for compensation for loss
of office, other than an obligation to
pay for any notice period waived by
the Company, where pay is defined
as salary plus benefits only. Executive
Director service contracts are
available to view at the Company’s
registered office. The Committee
may offer a notice period of up to
12 months (on either side) for any
incumbent or newly appointed
Executive Director.
When considering exit payments,
the Committee reviews all potential
incentive outcomes to ensure
they are fair to both shareholders
and participants. The table below
summarises how the awards under
the annual bonus and performance
flexed RSP are typically treated in
specific circumstances, with the final
treatment remaining subject to the
Committee’s discretion:
REASON FOR LEAVING
CALCULATION OF VESTING / PAYMENT
Annual Bonus
Leaving other than as a
“Good Leaver”1
No annual bonus payable for the year of departure.
An unvested deferred bonus award will ordinarily lapse.
“Good Leaver”1
Bonus for year of departure: Cash bonuses will typically be paid to the extent that financial,
strategic and/or personal objectives set at the beginning of the plan year have been met.
Any resulting bonus will be pro-rated for time served during the year, unless the Committee
determines otherwise, and paid at the usual time. The Committee has discretion to pay the
bonus earlier in appropriate circumstances.
The Committee has discretion to pay the whole of any bonus earned for the year of
departure and preceding year in cash in appropriate circumstances.
Unvested deferred bonus award: Typically vest in full on the normal vesting date. The
Committee has discretion to vest the award earlier in appropriate circumstances.
Change of Control
Bonus for year of relevant event: Cash bonuses will typically be paid to the extent that
financial, strategic and/or personal objectives set at the beginning of the plan year have
been met. Any resulting bonus will typically be pro-rated for time to the relevant event,
unless the Committee determines otherwise.
Unvested deferred bonus award: Vest in full on occurrence of the relevant event.
Directors’ Remuneration Report continued
160
Harworth Group plc
Performance flexed
RSP
Leaving before
vesting other than as
a “Good Leaver”1
An unvested performance flexed RSP award will ordinarily lapse.
“Good Leaver”1
before vesting
If a participant ceases employment as a “good leaver” while holding an unvested
performance flexed RSP award, the award will continue and vest following the end of the
ordinary vesting period, subject to the application of the underpin and performance target(s)
for the outperformance element in the ordinary way and, unless the Committee determines
otherwise, a reduction to reflect the proportion of the underpin assessment period that has
elapsed at the date of cessation. The unvested award will ordinarily be released following
the end of the holding period. The Committee has discretion to vest and release the award at
cessation or to release any award as soon as it vests in appropriate circumstances.
Cessation after vesting
If a participant ceases employment while holding a performance flexed RSP award which
is subject to a holding period, it will ordinarily continue and be released following the end
of the holding period. The Committee has discretion to release the award at cessation.
However, if a participant ceases employment due to dismissal for misconduct during the
holding period, that award will lapse.
Change of Control
In the event of a change of control of the Company or other relevant corporate event,
unvested performance flexed RSP awards will usually vest. In the case of any unvested
award, the number of shares in respect of which the award vests shall be determined by the
Committee taking into account:
– the extent to which the performance target(s) for the outperformance element is satisfied
at the date of the relevant event, or the extent to which the Committee determines it
would have been satisfied at the end of the ordinary assessment period;
– whether it is appropriate to reduce vesting to reflect the extent to which the underpin
is not satisfied at the date of the relevant event, or the extent to which the Committee
determines it would have been satisfied at the end of the ordinary assessment period; and
– unless the Committee determines otherwise, the proportion of the underpin assessment
period that has elapsed at the date of the relevant event.
A vested award which remains subject to a holding period will be released in full.
1 ‘Good leaver’ is defined as a participant ceasing to be employed by the Group by reason of death, disability, ill health, redundancy, retirement or any other
reason that the Committee determines in its absolute discretion.
Options under the SAYE plan and
awards under the SIP may vest and,
where relevant, be exercised in the
event of a cessation of employment
or change of control in accordance
with the rules of the relevant plan.
The plans do not permit the exercise
of discretion and, accordingly, the
treatment for Executive Directors
will be the same as for all other
participants.
The terms applying to any “buy out”
award on cessation of employment
would be determined when the
award was granted.
The Committee reserves the right
to make any other payments in
connection with a Director’s cessation
of office or employment where the
payments are made in good faith
in discharge of an existing legal
obligation (or by way of damages for
breach of such an obligation) or by
way of settlement of any claim arising
in connection with the cessation of
a Director’s office or employment.
Any such payments may include but
are not limited to paying any fees for
outplacement assistance and/or the
Director’s legal and/or professional
advice fees in connection with his/her
cessation of office or employment.
REASON FOR LEAVING
CALCULATION OF VESTING / PAYMENT
Annual Report and Financial Statements
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Directors’ Remuneration Report
External appointments
The Board will consider any request
by an Executive Director to take
potential Non-Executive Director
appointments on a case by case basis,
taking account of the overriding
requirements of the Group and the
extent to which the Non-Executive
Director opportunity supports the
agreed personal development
objectives of the Executive Director.
Legacy arrangements
The Committee reserves the right
to make remuneration payments
and payments for loss of office, and
to exercise any discretion available
in relation to any such payment,
notwithstanding that they are not in
line with the Policy set out above:
– where the terms of the payment
were agreed before the Policy
came into effect; and
– where the terms of the payment
were agreed at a time when the
relevant individual was not a
Director of the Company and, in
the opinion of the Committee, the
payment was not in consideration
of the individual becoming a
Director of the Company.
For these purposes, ‘payments’
include the satisfaction of variable
remuneration and, in relation to an
award over shares, the terms of the
payment are ‘agreed’ no later than the
time the award is granted.
Consideration of conditions
elsewhere in the Company
The Committee oversees the Group-
wide review of salary and benefits
as part of its work. We aim to create
an inclusive and fair environment
where people can develop their
skills and experience, and contribute
fully to Harworth’s success. The
Company holds an Employee AGM
biennially which forms part of a wider
programme of formal and informal
employee engagement by the Board,
providing a platform for employees
to discuss a range of topics with the
Board, including Executive and wider
workforce remuneration.
When making decisions on
Executive Director remuneration,
the Committee considers pay and
conditions across the Group as well
as any feedback from employees via
the Employee Engagement Survey
and Employee AGM. Following
the publication of this Policy, the
Executive Directors and Chair of the
Remuneration Committee intend to
host a briefing and Q&A session on
the revised Policy for all employees.
Consideration of
shareholder views
The Committee maintains a regular
dialogue with the Company’s major
shareholders. In late 2024 and early
2025, we conducted an extensive
shareholder consultation regarding
this Policy. Details of the consultation
are set out on page 148.
The Committee will continue to
monitor trends and developments
in corporate governance, market
practice and shareholder views to
ensure the structure of the Executive
remuneration remains appropriate.
Directors’ Remuneration Report continued
Mark Nicholson, Senior Development Manager, welcomes guests to the Harworth Regeneration Pavillion at UKREiiF
162
Harworth Group plc
Annual Remuneration Report
This part of the Directors’ Remuneration Report describes how we implemented our current policy in 2024 and how we
intend to apply our new Policy in 2025.
The Annual Remuneration Report will be subject to an advisory vote by shareholders at the 2025 AGM.
Role of the Remuneration Committee
The role of the Committee is to determine and recommend to the Board the Remuneration Policy for the Executive
Directors and set the remuneration for the Executive Directors and wider Executive team. The Policy is designed to support
the Group’s strategy and help attract, retain, and incentivise an Executive team with the requisite skills, knowledge and
experience to deliver strong, sustainable value for shareholders. The table below describes how, when determining the
new Policy, the Committee addressed the factors in Provision 40 of the 2018 UK Corporate Governance Code, which
applied to the 2024 financial year, and Provision 38 of the 2024 UK Corporate Governance Code, which will apply to the
Policy period.
Alignment to
strategy and
culture
The Committee seeks to ensure a healthy culture exists across the entire Group and believes that
the Executive Directors and wider Executive team set the standards for behaviour and conduct
across the Group.
Bonus awards are focused on Group performance to foster collective accountability and deliver
a consistent reward structure across all levels of management. The Group financial and strategic
performance measures ensure that the extent to which bonuses are earned reflects the delivery of
our strategy for the benefit of shareholders.
Our performance flexed RSP strikes a balance between supporting the delivery of long-term
decision-making which ‘looks through’ the property cycle, and incentivising Executives to deliver
strong market outperformance over the strategy period which aligns with the next Policy period.
Clarity and
simplicity
A core reward principle of our Policy is to operate a simple and transparent framework which
can be readily cascaded. The remuneration framework is made up of three key elements: fixed
pay (including base salary, pension and benefits); annual bonus; and our long-term incentive,
the performance flexed RSP. The structure is simple to understand for both participants and
shareholders and promotes both near-term achievement and long-term stewardship.
Risk
Annual bonus opportunities are set so as to reflect the long-term nature of our business and at
levels which reward high performance, but do not encourage inappropriate business risk.
The Committee has discretion to reduce vesting outcomes under the annual bonus and
performance flexed RSP where it considers that they would not otherwise be representative of
the underlying business performance or the experience of shareholders or employees over the
vesting period.
Annual bonus and performance flexed RSP awards are also subject to malus and clawback
provisions.
Annual Report and Financial Statements
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Directors’ Remuneration Report
Proportionality
and fairness
A significant proportion of an Executive Director’s reward is linked to performance through the
incentive framework, with a clear line of sight between performance against the selected measures
and the delivery of long-term shareholder value.
Performance measures and the underlying targets for incentives are reviewed by the Committee
each year to ensure that they are directly aligned with the Group’s strategic priorities, and targets
are calibrated to reward Executive Directors for strong performance.
Awards under the performance flexed RSP vest after three years and vested awards are subject
to a two-year holding period, therefore aligning Executive Directors’ interests with those of
shareholders for the longer-term.
Executive Directors are also required to build material shareholdings in the Group (200% of base
salary). A post-cessation shareholding requirement applies which ensures that their interests are
aligned with those of the Group for two years post-cessation of employment.
Through the SIP and SAYE Plan we encourage and enable material long-term share ownership for
all employees, further supporting both alignment with shareholders and the long-term nature of
our business and its returns.
Predictability
The range of possible rewards to individual Executive Directors is set out in the scenario charts on
page 158.
Committee membership and attendance
Membership and attendance at meetings in 2024 are shown below:
Independent
Committee tenure at
31 December 2024
Scheduled meetings attended/
eligible to attend
Angela Bromfield
Chair
Yes
5 years 9 months
6/6
Alastair Lyons
Member
Yes
6 years 10 months
6/6
Lisa Scenna
Member
Yes
4 years 4 months
6/6
During the year, the Committee held six scheduled meetings. The key activities of the Committee during 2024 are
shown below:
January
Review 2024 bonus measures and targets
February
Approve 2024 bonus measures and targets
Assessment of 2023 bonus outcomes for Executive team
(in the context of bonus outcomes for wider workforce)
Assessment of the vesting of the third tranche of the 2019 RSP awards,
second tranche of the 2020 RSP awards and first tranche of the 2021 RSP awards
Approval of 2024 RSP awards
Approval of 2024 SIP awards
July
Remuneration Policy review
September
Remuneration Policy review
Approval of 2024 RSP awards to new joiners
Approval of 2024 SAYE awards
November
Remuneration Policy review
Directors’ Remuneration Report continued
164
Harworth Group plc
December
Remuneration Policy review
Review draft 2025 bonus measures and targets
Review Committee terms of reference
Review effectiveness of Committee advisers
The Committee’s terms of reference were reviewed during the period and re-approved with minor changes made to align
with the 2024 Code (which applies from 1 January 2025), and are available on the Company’s website:
www.harworthgroup.com/investors/governance/. Throughout 2024, the Committee acted in accordance with the
principles of, and fulfilled its obligations under, the 2018 Code (which applied during the year).
Advisers to the Committee
The Company Secretary is secretary to the Committee. The following individuals may be invited to attend Committee
meetings to provide advice and to support the Committee to make informed decisions:
– Chief Executive;
– CFO;
– Group Resources and Transformation Director; and
– representatives of Deloitte LLP (see further below).
No individuals are involved in decisions relating to their own remuneration. The minutes of Committee meetings are
circulated to all Directors, where appropriate.
During the year under review, the Committee received advice on Executive remuneration matters from Deloitte LLP
(‘Deloitte’). Deloitte was appointed by the Committee on 18 October 2018 as its independent adviser following a
competitive selection process. Deloitte is a founder member of the Remuneration Consultants Group and, as such,
voluntarily operates under its Code of Conduct in relation to Executive remuneration matters in the UK. The Committee has
satisfied itself that Deloitte provided objective and independent advice during 2024.
Deloitte’s fees in relation to remuneration advice provided to the Committee during 2024 were £155,500 plus VAT,
charged on a time and expenses basis. Deloitte also provided advice to the Group during 2024 in relation to corporate tax,
pensions and share plans. The Committee did not consider that these engagements impaired Deloitte’s independence.
Shareholding voting and engagement
The table below shows the results of votes at the Harworth Group plc Annual General Meetings on: (1) 20 May 2024 on the
resolution relating to the approval of the Annual Remuneration Report; and (2) 24 May 2022 on the resolution relating to
the approval of the Remuneration Policy.
Votes
For
For as a
percentage of
votes cast
Against
Against as a
percentage of
votes cast
Withheld
Approval of Annual Remuneration Report (2024)
261,369,447
99.95
140,078
0.05
44,893
Approval of Remuneration Policy (2022)
261,511,584
91.58
24,043,640
8.42
53,398
Annual Report and Financial Statements
165
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GOVERNANCE REPORT
Directors’ Remuneration Report
Single total figure of remuneration for Executive Directors (audited)
The table below sets out the remuneration received by each Executive Director of the Company for the year ended
31 December 2024 with a comparison to the previous year.
L. Shillaw
K. Patmore
2024
2023
2024
2023
Fixed pay
Salary
£525,000
£442,680
£341,775
£325,500
Taxable benefits1
£20,486
£22,503
£22,4462
£29,3862
Pension benefit3
£52,500
£44,268
£34,178
£32,550
Subtotal
£597,986
£509,451
£398,399
£387,436
Variable pay
Single-year variable
£787,500
£499,011
£427,219
£305,767
Multi-year variable4
£194,647
£71,055
£189,128
£87,999
Other5
£10,567
£7,200
£7,200
£11,080
Subtotal
£992,714
£577,266
£623,547
£404,846
Total
£1,590,700
£1,086,717
£1,021,946
£792,282
1 Taxable benefits consist of car allowance, private medical cover, and the use of a chauffeur service for business travel and commuting. Other benefits
include life insurance.
2 The taxable benefits for Kitty Patmore for 2023 and 2024 include reimbursement for in-year private medical cover. Kitty also received £5,117 in 2023 as
a reimbursement for private medical cover for the period from her appointment to 31 December 2022, which the Company had previously omitted to
reimburse due to an administrative oversight, and is not included in the 2023 taxable benefits figure cited above.
3 Kitty Patmore participated in the Company’s defined contribution scheme until May 2023, in relation to which the Company contributed 10% of salary. From
June 2023, Kitty Patmore received a pension allowance equivalent to 10% of salary. Lynda Shillaw received a pension allowance equivalent to 10% of salary.
4 Multi-year variable values for 2024 relate to the vesting of the third tranche of the RSP awards granted in 2020 (which Kitty Patmore participated in), the
second tranche of the RSP awards granted in 2021 (which Lynda Shillaw and Kitty Patmore participated in) and the first tranche of the RSP awards granted
in 2022 (which Lynda Shillaw and Kitty Patmore participated in). Multi-year variable values for 2023 relate to the vesting of the second tranche of the RSP
awards granted in 2020 (which Kitty Patmore participated in) and the first tranche of the RSP awards granted in 2021 (which Lynda Shillaw and Kitty Patmore
participated in).
5 ‘Other’ includes free shares and matching shares awarded to Lynda Shillaw and Kitty Patmore during 2023 and 2024 under the all-employee SIP, and options
granted during 2023 to Kitty Patmore and during 2024 to Lynda Shillaw under the all-employee SAYE Plan. The value of free shares and matching shares is
determined based on the face value of the shares at the award date. The value of SAYE options is determined based on the intrinsic value of the award at the
grant date.
6 In the 2023 Directors’ Remuneration Report the value of the second tranche of the 2020 RSP awards and the first tranche of the 2021 RSP awards which
vested on 19 March 2024 was estimated by reference to the average mid-market closing share price for the three-month period ended 31 December 2023
(£1.07). The value has been updated in the table to reflect the mid-market closing share price on the vesting date (£1.36). The share price at the grant date
of the 2020 RSP awards (£1.04, based on the mid-market closing share price on the trading day immediately preceding the grant date on 25 June 2020) is
£0.32 less than the share price at the vesting date. Therefore, 23.5% of the face value at vesting is attributable to growth in share price between grant and
vesting. The share price at the grant date of the 2021 RSP awards (£1.276, based on the average mid-market closing share price for the five trading days
immediately preceding the grant date on 6 April 2021) is £0.084 less than the share price at the vesting date. Therefore, 6.2% of the face value at vesting is
attributable to growth in share price between grant and vesting.
Directors’ Remuneration Report continued
166
Harworth Group plc
Single total figure of remuneration for Non-Executive Directors (audited)
The table below sets out remuneration received by each Non-Executive Director of the Company for the year ended
31 December 2024 with a comparison to the previous year, representing payments received in respect of the period during
which each individual was a Director of the Company.
Base fee
Committee Chair fees
SID fee
Total
2024
2023
2024
2023
2024
2023
2024
2023
A. Lyons
£188,715
£179,729
-
-
-
-
£188,715
£179,729
M. Bowes
£53,076
£50,549
-
-
-
-
£53,076
£50,549
A. Bromfield
£53,076
£50,549
£15,986
£15,225
£9,371
£8,925
£78,433
£74,699
R. Cooke
£53,076
£50,549
-
-
-
-
£53,076
£50,549
P. O’Donnell Bourke
£53,076
£50,549
£9,371
£8,925
-
-
£62,447
£59,474
L. Scenna
£53,076
£50,549
-
-
-
-
£53,076
£50,549
S. Underwood
£53,076
£50,549
-
-
-
-
£53,076
£50,549
M. Zafar
£53,076
£50,549
-
-
-
-
£53,076
£50,549
Group targets
Incentive outcomes for year ended 31 December 2024 (audited)
Annual bonus
Lynda Shillaw’s and Kitty Patmore’s bonus opportunities for 2024 were equal to 150% and 125% of salary respectively,
subject to a combination of financial performance measures, strategic performance measures, ESG performance measures
and personal objectives. Detailed information of performance against individual targets and subsequent vesting of 2024
annual bonuses are set out in the tables below.
Group financial performance outcome (50% of total bonus opportunity)
The Group has had an exceptional year in terms of financial and strategic performance which is testament to the Executive
Directors and wider leadership team. Harworth has delivered sector-leading financial performance, has made strong
progress towards delivering its 2027 strategic targets (see pages 6 to 9), and announced its evolved strategy towards
building and retaining more Industrial & Logistics assets to unlock further growth potential which has been well-received
by shareholders and the wider market.
Financial measure
Weighting
(% of
financial
element)
Threshold1
Target2
Maximum
Actual
performance
Vesting
outcome
Total Return
Growth in EPRA NDV plus dividends paid
during 2024
50%
3.9%
5.8%
7.8%
9.0%
50%
Strategic Land pipeline
Capital deployed on acquisitions during 2024
30%
£15.9m
£46.1m
£55.4m
£108.4m
30%
Capital management
Reflects focus on utilising capital on activities
which deliver most value and complete sales,
whilst maintaining cost control and ensuring
compliance with the covenants in the Revolving
Credit Facility
20%
£5.7m
£6.0m
£12.8m
£90.6m
20%
Total vesting on financial performance element
50% weighting of total bonus opportunity
100%
Broadly straight-line vesting occurs between defined levels of performance
1 10% of maximum opportunity vests at threshold.
2 50% of maximum opportunity vests at target.
Annual Report and Financial Statements
167
Governance Report
GOVERNANCE REPORT
Directors’ Remuneration Report
Strategic measures (20% of total bonus opportunity)
The strategic measures were based on the Group’s commercial, residential and natural capital milestones for the year (as
defined at the start of the year) and the vesting of this element determined by the Committee’s assessment of the extent
to which the milestones have been met, as well as progress towards delivering the Group’s key 2027 strategic targets
(see pages 6 to 9). Taking into account the Group’s strategic performance in the year, together with the Group’s strong
sector-leading financial performance, the Committee considered that full vesting in respect of the strategic element was
appropriate.
Strategic measure
Objectives
Actual performance
Vesting
outcome
Commercial:
Enablement
and delivery
Remain on track to deliver an average of
800,000 sq. ft of Industrial & Logistics
development each year by the end of 2027.
Agreed milestones for the year include:
– Delivering planning promotion and
commercial development enabling works
in line with budgeted cost and timetable
– Progressing construction of units in line
with budgeted cost and timetable
Planning promotion and commercial
development enabling works all delivered in line
with or ahead of budgeted cost and timetable.
On track to deliver 2027 target.
Investment Portfolio at the end of 2024 was 45%
Grade A (2023: 37%) and we remain on track to
deliver 100% Grade A by the end of 2027.
Evolved strategy towards building and retaining
more Industrial & Logistics assets to unlock
further long term growth potential.
100%
Residential:
Enablement
and delivery
Progressing the sales and broadening
the range of Residential products, to
optimise returns and generate capital for
redeployment.
Remain on track to sell an average of 2,000
plots per year by the end of 2027.
Agreed milestones for the year include:
– Completing agreements for the delivery
of land sales (or equivalent) for mixed
tenure products in line with budget
– Accelerating plans for mixed tenure
products across sites
– Completion of site-specific phases across
the ‘NZC’ homes portfolio
Generated revenues in excess of budget
through a combination of land sales for
mixed tenure products and open market sales
strategically converted from mixed tenure to
support acceleration of sales and to optimise
returns.
Planning applications submitted for 441 mixed
tenure plots.
Affordable housing projects progressed in line
with budget.
First Later Living scheme designed for delivery
at Coalville (89 homes). Marketing for sale
scheduled to commence in Q1 2025.
Redefined approach to delivering NZC homes
in light of insolvency of modular build partner,
mitigating Harworth’s downside exposure in the
process.
Energy and
Natural
Capital (‘ENC’)
strategy
Developing and implementing ENC strategy.
Agreed milestones for the year include:
– Organisation design and roadmap
for implementation of ENC strategy
approved and in progress
– Driving towards transactions for the
delivery of an ENC product
Completion of ENC strategic review.
Successful integration of ENC diligence within
the appraisal of acquisition opportunities and
the development management of pipeline and
active sites.
Rooftop solar fitted to units on selected sites.
Roll-out of retrofit meters to support Scope 3
emissions reporting for tenants.
Negotiated conservation covenant and
managing agent agreements to support future
Biodiversity Net Gain delivery.
Directors’ Remuneration Report continued
168
Harworth Group plc
ESG performance outcome (10% of total bonus opportunity)
The ESG measures were based on meeting commitments made in our NZC Pathway and Communities Framework and the
vesting of this element determined by the Committee’s assessment of the extent to which key milestones for the year were
achieved. The Group made strong progress against its NZC Pathway and Communities Framework commitments during the
year, adapting to changes in industry guidance and the challenges in the wider market on assessing and reporting carbon
emissions. The Committee therefore considered that full vesting in respect of the ESG element was appropriate.
ESG measure
Objectives
Actual performance
Vesting
outcome
NZC Pathway
Meeting the business commitments made in
the NZC Pathway. Agreed milestones for the
year include:
– Establishing carbon data assessment for
commercial building and development
appraisals, and set out implementation
plan for future use
– Implementing carbon appraisal processes
for future development
– Development of embodied carbon and
energy use intensity targets for Residential
buildings
Established data reporting procedures and
carbon dashboard to support analysis of
emissions from construction projects and
investment cases.
Carbon monitoring requirements introduced for
selected affordable housing schemes.
Fully updated the Group’s carbon reporting
requirements, in light of changes to the RICS
Whole Life Carbon Assessment standards, and
implemented changes throughout the business.
Developed proposal to address the Greater
Manchester Combined Authority (‘GMCA’)
Planning Policy and UKNZC Standard
Pilot and submitted this to the GMCA as a
recommendation for how it may implement
the requirements around carbon emissions
and energy performance assessments for new
planning applications.
Developed a comprehensive methodology for
emissions reporting during house construction.
Worked with affordable housing delivery partners
to support establishment of emissions reporting
system. This work, along with the GMCA Planning
Policy review, will support the Group to develop
authentic embodied carbon and energy use
intensity targets for Residential buildings.
100%
Communities
Framework
Progress the development and
implementation of Communities Frameworks
for pilot projects.
Significant progress made on pilot project
for which a Communities Framework has
been developed and a precedent format
for documents established for use on future
schemes.
Pilots are also progressing for additional sites
with Communities Frameworks being developed.
Annual Report and Financial Statements
169
Governance Report
GOVERNANCE REPORT
Directors’ Remuneration Report
Personal performance outcomes (20% of total bonus opportunity)
Lynda Shillaw
Objective
Actual performance
Vesting
outcome
Lead a strategic review of the business and the
approaches available to unlock further value for
shareholders
A comprehensive strategic review was completed in H1
2024. The evolved strategy was announced in June 2024
and presented to shareholders at the Capital Markets Day
in October 2024. There has been a positive reaction to the
evolved strategy from shareholders and the wider market.
Harworth entered the FTSE 250 in September 2024 and its
discount to NAV has narrowed over 2024.
100%
Kitty Patmore
Objective
Actual performance
Vesting
outcome
Support Lynda Shillaw with the strategic review
A comprehensive strategic review was completed in H1
2024. The evolved strategy was announced in June 2024
and presented to shareholders at the Capital Markets Day
in October 2024. There has been a positive reaction to the
evolved strategy from shareholders and the wider market.
Harworth entered the FTSE 250 in September 2024 and its
discount to NAV has narrowed over 2024.
50%
Develop analytics to support capital optimisation and
strategic decision-making regarding portfolio
management
Significant work undertaken to develop analytics which
supported strategic options presented to the Board, and also
the development of the 2025 Budget and Strategic Plan.
50%
100%
Overall bonus outcomes
Financial
Strategic
ESG
Personal
Overall bonus outcome
Executive
Director
Weighting
Vesting
Weighting
Vesting
Weighting
Vesting
Weighting
Vesting
% of
bonus
% of
salary
L. Shillaw
50%
50%
20%
20%
10%
10%
20%
20%
100%
150%
K. Patmore
50%
50%
20%
20%
10%
10%
20%
20%
100%
125%
In accordance with the Policy, 33% of Lynda Shillaw’s earned bonus and 20% of Kitty Patmore’s earned bonus will be
deferred into shares for two years.
Restricted Share Plan awards vesting (audited)
An RSP award was granted to Kitty Patmore on 25 June 2020 at 50% of salary (2020 RSP award). No award was granted to
Lynda Shillaw in 2020 given the date of grant preceded her joining the business.
RSP awards were granted to Lynda Shillaw and Kitty Patmore on 6 April 2021 at 50% of salary (2021 RSP award) and
8 June 2022 at 75% of salary (2022 RSP award).
Directors’ Remuneration Report continued
170
Harworth Group plc
Vesting is phased over a five-year period, with one third vesting after three years, one third after four years and one third
after five years, although all vested shares must be held to the end of year five.
The RSP awards are subject to the following underpins:
Performance
underpin
Not met if there is:
Financial health
A breach of financial covenants in the Group’s principal banking facilities.
Underlying
performance
A material deterioration in the Group’s underlying performance which departs significantly from
any deterioration across the real estate sector including, but not limited to, by reference to share
price, dividend and/or EPRA NDV.
Corporate
governance
A material failure in governance or an act resulting in significant reputational damage and/
or material financial loss to the Group. This includes giving consideration to any successful
prosecutions in relation to health and safety.
The Committee reviewed performance against these underpins, as well as underlying financial performance, and found
no cause to reduce the vesting outcomes. The Committee considers the vesting outcomes to be appropriate, recognising
that the Group has performed strongly, both financially and strategically, against a backdrop of continued macro-economic
uncertainty.
Therefore, the third tranche of the 2020 RSP award granted to Kitty Patmore, the second tranche of the 2021 RSP awards
granted to Lynda Shillaw and Kitty Patmore, and the first tranche of the 2022 RSP awards granted to Lynda Shillaw and
Kitty Patmore, will vest in full on 18 March 2025. The vested shares under the third tranche of the 2020 RSP awards are
not subject to a holding period given that a five year vesting period applied to this tranche. The vested shares under the
second tranche of the 2021 RSP awards will be subject to a holding period until March 2026. The vested shares under the
first tranche of the 2022 RSP awards will be subject to a holding period until March 2027.
2020 RSP awards
Executive Director
Number of shares granted
under tranche 3
Number of shares vesting
under tranche 3
Face value at vesting1,2
K. Patmore
32,052
32,052
£56,089
1 Face value based on the average mid-market closing share price for the three-month period ended 31 December 2024 (£1.75). The RSP awards did not
accrue dividend equivalents during the vesting period.
2 The share price at the grant date of the RSP awards (£1.04, based on the mid-market closing share price on the trading day immediately preceding the grant
date on 25 June 2020) is £0.71 less than the above mentioned share price used to calculate the face value of the shares at vesting. Therefore, 40.6% of the
face value at vesting is attributable to growth in share price between grant and vesting.
2021 RSP awards
Executive Director
Number of shares granted
under tranche 2
Number of shares vesting
under tranche 2
Face value at vesting1,2
L. Shillaw
52,246
52,246
£91,431
K. Patmore
32,654
32,654
£57,145
1 Face value based on the average mid-market closing share price for the three-month period ended 31 December 2024 (£1.75). The RSP awards did not
accrue dividend equivalents during the vesting period.
2 The share price at the grant date of the RSP awards (£1.276, based on the average mid-market closing share price for the five trading days immediately
preceding the grant date on 6 April 2021) is £0.47 less than the above mentioned share price used to calculate the face value of the shares at vesting.
Therefore, 27.1% of the face value at vesting is attributable to growth in share price between grant and vesting.
Annual Report and Financial Statements
171
Governance Report
GOVERNANCE REPORT
Directors’ Remuneration Report
2022 RSP awards
Executive Director
Number of shares granted
under tranche 1
Number of shares vesting
under tranche 1
Face value at vesting1,2
L. Shillaw
58,981
58,981
£103,217
K. Patmore
43,368
43,368
£75,894
1 Face value based on the average mid-market closing share price for the three-month period ended 31 December 2024 (£1.75). The RSP awards did not
accrue dividend equivalents during the vesting period.
2 The share price used to determine the number of RSP awards granted (£1.787, based on the average mid-market closing share price for the five trading days
immediately preceding the announcement of the annual results for 2021) is £0.04 more than the above mentioned share price used to calculate the face
value of the shares at vesting. Therefore, none of the face value at vesting is attributable to growth in share price.
RSP awards granted in 2024 (audited)
RSP awards were granted to Lynda Shillaw and Kitty Patmore on 22 April 2024 as follows:
Executive Director
Type of award
Date of grant
Number of shares
subject to award
Face value at grant1
L. Shillaw
RSP award Nil-Cost Option
22 April 2024
220,341
£298,562
K. Patmore
RSP award Nil-Cost Option
22 April 2024
143,442
£194,364
1 Face value based on the average mid-market closing share price for the five trading days immediately following the annual results for 2023 (£1.355).
Vesting will be phased over a five-year period, with one third vesting after three years, one third after four years, and one
third after five years, although all vested shares must be held to the end of year five.
The RSP awards are subject to three specific performance underpins related to financial health, underlying performance
and corporate governance as defined on page 171. Furthermore, the Committee has discretion to reduce vesting outcomes
where it considers that they would not otherwise be representative of the underlying business performance over the
vesting period. The Committee will disclose at the time of vesting how performance underpins and underlying business
performance over the vesting period have been taken into account.
Deferred share bonus awards granted in 2024 (audited)
In accordance with the Policy, Lynda Shillaw and Kitty Patmore were respectively required to defer 33% and 20% of their
earned 2023 bonuses into shares for two years. Accordingly, Lynda Shillaw and Kitty Patmore were granted deferred share
bonus awards on 27 March 2024 which vest on 28 February 20261.
Executive Director
Type of award
Date of grant
Number of shares
subject to award
Face value2
L. Shillaw
DBP Nil-Cost Option
27 March 2024
121,530
£164,673
K. Patmore
DBP Nil-Cost Option
27 March 2024
45,132
£61,154
1 The Committee approved Lynda Shillaw’s and Kitty Patmore’s bonus awards in respect of 2023 on 29 February 2024, hence the deferred share bonus award
vests on 28 February 2026.
2 Face value based on the average mid-market closing share price for the five trading days immediately following the annual results for 2023 (£1.355).
Malus and Clawback
The Group’s malus and clawback provisions are set out on page 154. The Group did not use the malus and clawback
provisions during the year ended 31 December 2024.
Directors’ Remuneration Report continued
172
Harworth Group plc
Percentage change in remuneration of Directors and employees
The table below shows the annual percentage change in each of the Directors’ remuneration compared to the average
employee remuneration.
% change between
2023 and 2024
% change between
2022 and 2023
% change between
2021 and 2022
% change between
2020 and 2021
% change between
2019 and 2020
Salary
& fees
Benefits
Bonus
Salary
& fees
Benefits
Bonus
Salary
& fees
Benefits
Bonus
Salary
& fees
Benefits
Bonus
Salary
& fees
Benefits
Bonus
Executive
Directors
L. Shillaw1
18.6%
9.3%
57.8%
5%
14.6%
51.5%
5.4%
3.8%
–9%
n/a
n/a
n/a
n/a
n/a
n/a
K. Patmore2
5.0%
–8.6%
39.7%
5%
51.0%
57.8%
24.0%
17.1%
–14.4%
25%
0%
122.3%
n/a
n/a
n/a
Non–Executive
Directors
A. Lyons
5.0%
–
–
5.0%
–
–
5.4%
–
–
1.5%
–
–
0%
–
–
M. Bowes
5.0%
–
–
5.0%
–
–
5.4%
–
–
1.5%
–
–
0%
–
–
A. Bromfield3
5.0%
–
–
5.0%
–
–
16.8%
–
–
28%
–
–
n/a
–
–
R. Cooke4
5.0%
–
–
5.0%
–
–
5.4%
–
–
1.5%
–
–
n/a
–
–
P. O’Donnell
Bourke5
5.0%
–
–
5.0%
–
–
6.3%
–
–
n/a
–
–
n/a
–
–
L. Scenna6
5.0%
–
–
5.0%
–
–
5.4%
–
–
n/a
–
–
n/a
–
–
S. Underwood
5.0%
–
–
5.0%
–
–
5.4%
–
–
1.5%
–
–
0%
–
–
M. Zafar7
5.0%
–
–
n/a
–
–
n/a
–
–
n/a
–
–
n/a
–
–
Average
employee
(Company)8
5.0%
3.3%
80.5%
6.3%
3.6%
5.8%
19.4%
10.0%
9.5%
13.3%
6.5%
157.4%
7%
34%
14%
Average
employee
(Group)
6.3%
4.6%
27.6%
3.1%
–12%
5%
5.4%
28.8%9
–7.8%
9.4%
3.8%
45.7%
3.3%
5%
(20%)
1 Appointed as Chief Executive with effect from 1 November 2020 and therefore the annual percentage change in remuneration between 2019 and 2020 and
between 2020 and 2021 is not applicable.
2 Appointed as CFO with effect from 1 October 2019 and therefore the annual percentage change in remuneration between 2019 and 2020 is not applicable.
3 Appointed as Non-Executive Director with effect from 1 April 2019 and therefore the annual percentage change in remuneration between 2019 and 2020 is
not applicable. Appointed as SID and Chair of the Remuneration Committee with effect from 1 November 2020. A fee for chairing the ESG Committee was
introduced with effect from 1 January 2022.
4 Appointed as Non-Executive Director with effect from 19 March 2019 and therefore the annual percentage change in remuneration between 2019 and 2020
is not applicable.
5 Appointed as Non-Executive Director with effect from 3 November 2020 and therefore the annual percentage change in remuneration between 2019 and
2020 and between 2020 and 2021 is not applicable.
6 Appointed as Non-Executive Director with effect from 1 September 2020 and therefore the annual percentage change in remuneration between 2019 and
2020 and between 2020 and 2021 is not applicable.
7 Appointed as Non-Executive Director with effect from 1 June 2022 and therefore the annual percentage change in remuneration between 2019 and 2020,
between 2020 and 2021, between 2021 and 2022 and between 2023 and 2023 is not applicable.
8 Calculated by reference to employees (excluding Directors) of the Company to satisfy the disclosure obligations under The Companies (Directors’
Remuneration Policy and Directors’ Remuneration Report) Regulations 2019. However, given that the Company only employs a small proportion of the
Group’s employees, the row below cites the equivalent figures calculated by reference to employees (excluding Directors) of the Company and its
subsidiaries.
9 A one-off non-contractual payment of £2,000 was made to all employees (excluding the Executive team) during 2022 to provide some support during
the “cost of living crisis”. This payment is included within the 2022 benefits figure. There have been no recent changes to the broader benefits available to
our employees. Car allowances are determined by internal gradings and applied consistently. Private medical insurance is available to all employees, their
spouses/partners and dependants on the same terms.
Annual Report and Financial Statements
173
Governance Report
GOVERNANCE REPORT
Directors’ Remuneration Report
Chief Executive pay ratio
The Group has fewer than 250 UK employees and is therefore not required to disclose a Chief Executive pay ratio.
However, in line with best practice, the Committee considers it appropriate to disclose the pay ratio voluntarily.
The table below sets out the Chief Executive’s total remuneration as a ratio against the full-time equivalent remuneration of
employees for the years ended 31 December 2021 to 31 December 2024.
Year ended
25th percentile pay ratio
Median pay ratio
75th percentile pay ratio
31 December 2024
24:1
17:1
11:1
31 December 2023
16:1
12:1
8:1
31 December 2022
15:1
10:1
7:1
31 December 2021
18:1
12:1
8:1
For each year, the Company has calculated the ratio in line with the reporting regulations using Option A. Option
A methodology was selected on the basis that it is a robust approach and is preferred by shareholders and proxy
voting agencies. The calculations for the representative employees were performed as at the final day of the relevant
financial year.
A substantial proportion of the Chief Executive’s total remuneration is performance-related and delivered in shares. The
ratios will therefore depend significantly on the Chief Executive’s annual bonus and RSP outcomes and may fluctuate year-
on-year.
The Board believes that the median pay ratio is consistent with the pay, reward and progression policies for the wider
workforce.
The table below sets out the pay and benefits figures used to calculate the ratios and the salary component.
Year ended
Chief
Executive1
25th
percentile pay
ratio
Median pay
ratio
75th
percentile pay
ratio
31 December 2024
Total pay and benefits
£1,590,700
£65,725
£89,500
£133,951
Salary
£525,000
£45,840
£64,129
£94,000
31 December 2023
Total pay and benefits
£1,086,717
£66,265
£87,188
£128,102
Salary
£442,680
£42,520
£61,600
£87,999
31 December 2022
Total pay and benefits
£815,256
£56,033
£78,384
£115,409
Salary
£421,600
£35,309
£60,000
£77,996
31 December 2021
Total pay and benefits2
£823,893
£46,200
£67,839
£107,348
Salary
£400,000
£42,000
£48,000
£72,500
1 The Chief Executive’s total pay and benefits is the total single figure as disclosed on page 166. The Chief Executive’s 2023 total pay and benefits has been
restated to reflect the value of the first tranche of the 2021 RSP awards at the vesting date. There was no change to the 2023 Chief Executive pay ratio as a
result of the restatement.
2 The employee percentile total pay and benefits has been calculated on the same basis as required for the Chief Executive’s remuneration for single figure
purposes. With the exception that the vesting of awards under the RSP are omitted from the employee calculations.
Relative importance of spend on pay
Total employee pay expenditure
Distribution to shareholders
2024
2023
% change
2024
2023
% change
£22.5m
£17.7m
27.3%
£4.8m
£4.7m
10%
Total employee pay in the year reflected the inflationary increase of c.3% awarded to all employees as well as the 7%
increase in headcount during the year, with the average number of employees rising to 130 from 121.
Total dividends declared for 2024 were 1.614p per share (2023: 1.466p per share), resulting in total dividends of £4.8m
(2023: £4.7m). The percentage change is shown on a per share basis.
Directors’ Remuneration Report continued
174
Harworth Group plc
Review of past performance
The following chart shows the Total Shareholder Return (‘TSR’) of the Company compared to the FTSE SmallCap Index and
FTSE 250 Index over the period from the Company’s relisting on 24 March 2015 to 31 December 2024. The FTSE SmallCap
Index and FTSE 250 Index were chosen as comparators as the Company was a constituent of the FTSE SmallCap Index until
September 2024 when it was admitted to the FTSE 250 Index. The table below shows the Chief Executive’s ‘single-figure’
remuneration over the same period.
Historical TSR performance
Growth in the value of a hypothetical £100 holding (including re-investment of dividends) over the period from re-listing on
24 March 2015 to 31 December 2024:
Historical Chief Executive remuneration
Chief Executive
Single figure
remuneration (£’000)
Short-term incentive
award as a % of
maximum opportunity
Long-term incentive
award as a % of
maximum opportunity
2024
L. Shillaw
£1,591
100%
100%1
2023
L. Shillaw
£1,087
75.2%
100%2
2022
L. Shillaw
£815
62.5%
n/a
2021
L. Shillaw
£824
90.5%
n/a
2020
L. Shillaw
£76
n/a
n/a
O. Michaelson
£559
51.34%
5.05%
2019
O. Michaelson
£669
44.2%
51.5%
2018
O. Michaelson
£901
85.6%
51.8%
2017
O. Michaelson
£1,392
80.6%
n/a3
2016
O. Michaelson
£599
90.0%
n/a
2015
O. Michaelson
£480
85.6%
n/a
1 Vesting of the second tranche of the 2021 RSP award and first tranche of the 2022 RSP award.
2 Vesting of the first tranche of the 2021 RSP award.
3 Excludes vesting of Harworth Estates Long-Term Incentive Plan award as this was a one-off scheme put in place by Harworth Estates Property Group Limited
in 2013.
£75
£100
£125
£150
£175
£200
£225
£275
£250
Total Shareholder Return (rebased to £100)
Harworth
FTSE Small Cap
FTSE 250
Source: LSEG DataStream
Mar-15
Jun-15
Sep-15
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
Sep-18
Dec-18
Mar-19
Jun-19
Sep-19
Dec-19
Mar-20
Jun-20
Sep-20
Dec-20
Mar-21
Jun-21
Sep-21
Dec-21
Mar-22
Jun-22
Sep-22
Dec-22
Mar-23
Jun-23
Sep-23
Dec-23
Mar-24
Jun-24
Sep-24
Dec-24
Annual Report and Financial Statements
175
Governance Report
GOVERNANCE REPORT
Directors’ Remuneration Report
Loss of office payments and payment to former Directors (audited)
There were no loss of office payments made to past Directors during the year ended 31 December 2024.
As disclosed in the 2020 Directors’ Remuneration Report, on Owen Michaelson’s retirement on 31 December 2020, two-
thirds of his 2020 RSP awards remained capable of vesting subject to the satisfaction of the performance underpins and the
Committee’s assessment of underlying business performance during the respective vesting periods.
Two-thirds of the third tranche of the 2020 RSP award will vest (34,722 shares) on 18 March 2025.
Directors’ interests (audited)
The following table sets out the beneficial interests of the Directors and their connected persons in the share capital of
the Company as at 31 December 2024. None of the Directors have a beneficial interest in the shares of any other Group
Company. Details of Directors’ share options are also set out in the table below. Current shareholding as a percentage of
salary is based on the mid-market closing price for the shares on 31 December 2024 of £1.70.
Shares held
Options held
Beneficially
owned
Unvested and
not subject to
performance1
Unvested and
subject to
performance2
Vested and
subject to
holding
period
(unexercised)3
Unvested and
not subject to
performance4
Shareholding
requirement
% salary
Current
shareholding
% salary
Requirement
met?
L. Shillaw
261,011
15,077
687,569
52,246
192,223
200%
129%
No
K. Patmore
96,126
15,077
507,519
96,756
67,562
200%
93%
No
A. Lyons
400,000
-
-
-
-
n/a
n/a
n/a
M. Bowes
-
-
-
-
-
n/a
n/a
n/a
A. Bromfield
36,264
-
-
-
-
n/a
n/a
n/a
R. Cooke
-
-
-
-
-
n/a
n/a
n/a
S. Underwood
38,385
-
-
-
-
n/a
n/a
n/a
L. Scenna
-
-
-
-
-
n/a
n/a
n/a
P. O’Donnell
Bourke
40,000
-
-
-
-
n/a
n/a
n/a
M. Zafar
-
-
-
-
-
n/a
n/a
n/a
1 Free share awards and matching share awards under the Share Incentive Plan.
2 Nil-cost options granted under the RSP that remained unvested as at 31 December 2024.
3 Nil-cost options granted under the RSP that have vested but remained subject to a holding period as at 31 December 2024.
4 Options granted under the SAYE Plan and nil-cost options granted under the DBP that remain unvested as at 31 December 2024.
As at 17 March 2025, shares held by Lynda Shillaw and Kitty Patmore were 276,907 and 112,022 respectively, as a result of
partnership shares and matching shares awarded under the SIP. There have been no further changes to the holdings listed
above between 31 December 2024 and 17 March 2025.
Implementation of the Directors’ Remuneration Policy for 2025
Base salary
Lynda Shillaw and Kitty Patmore were each awarded a 3% salary increase with effect from 1 January 2025. This compares to
an average increase of 3% for the wider workforce.
Executive Director
Annual base salary at
1 January 2024
Annual base salary at
1 January 2025
L. Shillaw
£525,000
£540,750
K. Patmore
£341,775
£352,030
Directors’ Remuneration Report continued
176
Harworth Group plc
Pension
Lynda Shillaw and Kitty Patmore will each continue to receive a pension allowance equivalent to 10% of salary.
Annual bonus
The maximum annual bonus opportunity for Lynda Shillaw and Kitty Patmore will be 150% and 125% of salary respectively.
The performance measures are outlined below. Performance targets are considered to be commercially sensitive at this
point in the year and they will be fully disclosed in the 2025 Annual Remuneration Report.
Measure
Weighting
(% of bonus
opportunity)
Total Accounting Return
30%
Total Property Return relative to the MSCI UK All Property Total Return Index
30%
Strategic measures aligned to the key strategic pillars under the evolved strategy and ESG priorities
Key strategic pillars: Increasing direct development of Industrial & Logistics space; Accelerating sales and
broadening the range of Residential products; Scaling up land acquisitions and promotion; Repositioning
core Investment Portfolio to modern Grade A
40%
Total
100%
The Committee will have discretion, both positive and negative, to amend the bonus outcome if it is not reflective of
underlying financial and operational performance, or of the experience of shareholders or employees.
33% of any bonus earned by Lynda Shillaw and 20% of any bonus earned by Kitty Patmore will be deferred into shares for
two years. The higher level of deferral for Lynda Shillaw reflects that she is awarded a higher bonus opportunity.
Performance flexed RSP
Lynda Shillaw and Kitty Patmore will each be granted performance flexed RSP awards comprising a core award at 100% of
salary and an outperformance element equal to 0.33x the core award. This adds up to an overall maximum opportunity of
133% of salary.
50% of the outperformance element will vest if Harworth’s Total Property Return over the three-year period ending
31 December 2027 outperforms the upper quartile of the MSCI UK All Property Total Return Index. The remaining 50%
of the outperformance element will vest if Harworth’s Total Shareholder Return over the three-year period ending
31 December 2027 outperforms the upper quartile of the FTSE 250 Real Estate companies (excluding agencies).
The awards will also be subject to three specific performance underpins related to financial health, underlying performance
and corporate governance as defined on page 171, to be assessed over the three-year period ending 31 December 2027.
Furthermore, the Committee has discretion to amend the vesting outcome where it considers that it is not reflective of
underlying financial and operational performance, or the experience of shareholders or employees, over the underpin
assessment period. The Committee will consider whether there have been any ‘windfall gains’ over the vesting period when
assessing the vesting outcome.
The awards will vest after three years. Vested awards will then be released after the end of a two-year holding period.
Annual Report and Financial Statements
177
Governance Report
GOVERNANCE REPORT
Directors’ Remuneration Report
Chair and Non-Executive Director fees
Fees effective from 1 January 2025 are set out below. As noted on page 149, the Committee and Board consider these
fee levels to be appropriate for a business of our size and complexity, and reflecting the experience and calibre of the
Non-Executive Chair and Non-Executive Directors.
Annual fee at
1 January 2024
Annual fee at 1
January 2025
Chair
£188,715
£211,750
Non-Executive Director base fee
£53,076
£58,500
Additional fee for acting as SID
£9,371
£10,300
Additional fee for chairing the Remuneration Committee or Audit Committee
£9,371
£10,300
Additional fee for chairing the ESG Committee1
£6,615
£10,300
1 The fee for chairing the ESG Committee will apply until April 2025 when the responsibilities for the ESG Committee are reallocated to the Board and Audit
Committee, as outlined in the ESG Committee report on page 140.
Angela Bromfield
Chair of the Remuneration Committee
17 March 2025
Opposite page: Kirstin Powell, Communities and Placemaking Manager,
hosts local residents at the Thoresby Vale Country Park opening
Directors’ Remuneration Report continued
178
Harworth Group plc
Governance Report
GOVERNANCE REPORT
Directors’ Remuneration Report
Introduction
The Directors present their report and the audited consolidated financial statements for the year ended
31 December 2024.
Some of the matters required to be included in this Directors’ Report can be found in the Strategic Report or elsewhere in
the Governance Report as indicated below:
REFERENCE
Annual General Meeting
Chair’s Introduction, page 103
Statement of Corporate Governance, page 121
Auditors
Audit Committee Report, pages 136 to 137
Composition and operation of administrative,
management and supervisory bodies and committees
Statement of Corporate Governance, pages 116 to 117
Directors’ interests in shares
Directors’ Remuneration Report, page 176
Directors’ remuneration
Directors’ Remuneration Report, pages 142 to 178
Disclosure of information to auditors
Statement of Directors’ Responsibilities, page 187
Diversity
Nomination Committee Report, pages 125 to 130
Employee numbers
Nomination Committee Report, page 129
Employee engagement
Statement of Corporate Governance, page 112
Employees with disabilities
Nomination Committee Report, page 130
Employee share schemes
Directors’ Remuneration Report, page 155
Future developments of the business
Strategic Report, page 28
Going concern
Statement of Directors’ Responsibilities, pages 186 to
187
Greenhouse gas emissions
Strategic Report, pages 86 and 87
Post balance sheet events
Financial Statements, Note 31, page 255
Risk management and internal controls
Strategic Report, pages 68 to 85
Audit Committee Report, pages 137 to 138
Stakeholders, including regard to the need to foster
relationships with suppliers, customers and others
Section 172 Statement, pages 62 to 67
Significant related party transactions
Financial statements, Note 30, pages 254 to 255
Long-Term Viability Statement
Strategic Report, pages 58 to 60
UK Corporate Governance Code
Statement of Corporate Governance, page 108
The liabilities of the Directors in connection with this Report are subject to the limitations and restrictions provided by
English Company law.
Directors’ Report
Harworth Group plc
180
Company status
Harworth Group plc is a company
incorporated in England with
company number 02649340. Its
head office is in Rotherham. It is listed
on the London Stock Exchange. In
September 2024, Harworth was
admitted to the FTSE 250 Index.
All subsidiaries and associated
undertakings are listed in Note 15 to
the Financial Statements.
Financial results and dividends
The Group’s profit before taxation
for the financial year ended
31 December 2024 was £69.4m
(2023: £49.8m). The net assets
attributable to shareholders of
the Group increased to £691.7m
(2023: £637.7m) over the financial
year. During the year, the Group’s
EPRA NDV per share increased by
8.4% to 222.3p (2023: 205.1p).
The Board is recommending a final
dividend of 1.125p per share, which,
together with the interim dividend
of 0.489p per share paid in October
2024, makes a combined dividend
of 1.614p (2023: 1.466p) per share.
Payment of the final dividend,
if approved at the 2025 AGM,
will be made on 23 May 2025 to
shareholders on the register at the
close of business on 25 April 2025.
The ex-dividend date will be
24 April 2025. The dividend paid
in the year to 31 December 2024
was 1.511p (2023: 1.373p) per share,
comprising the 2023 final dividend
of 1.022p per share and the interim
dividend of 0.489p per share
for 2024.
Share capital and
allotment of shares
Details of the Company’s issued
share capital are shown in Note
26 to the Financial Statements on
page 252. There is only one class of
share in issue: ordinary shares of 10
pence each.
There are no restrictions on the
transfer of shares in the Company,
save for the power of the Board to
refuse to transfer shares in certain
circumstances prescribed by the
Articles of Association, and those
specified by law or regulation (for
example, insider trading laws) and
pursuant to the Listing Rules of the
FCA whereby certain employees of
the Group require the approval of the
Company to deal in the shares.
All shares carry equal rights to
dividends, voting and return of capital
on the winding up of the Company, as
set out in the Company’s Articles of
Association, and are fully paid.
On a show of hands at a general
meeting of the Company, every
holder of shares present in person
and entitled to vote shall have one
vote, and on a poll every member
present in person or by proxy and
entitled to vote shall have one vote
for every ordinary share held. The
notice of the 2025 AGM specifies
deadlines for exercising voting rights
and appointing a proxy or proxies
to vote in relation to resolutions to
be passed at the meeting. There
are no restrictions on any voting
rights or deadlines, other than those
prescribed by law or the Articles of
Association.
The Company is not aware of any
arrangement between holders of
shares which may result in restrictions
on the transfer of securities or
voting rights, nor any arrangement
whereby a shareholder has waived
or agreed to waive dividends (other
than the Employee Benefit Trust – see
page 184).
The Directors were granted authority
at the 2024 AGM to allot shares up
to a nominal amount of one-third of
the Company’s issued nominal share
capital, as well as additional authority
to allot a further one-third on a rights
issue. This authority expires at the
conclusion of the 2025 AGM and a
resolution will be proposed for its
renewal.
Annual Report and Financial Statements
181
Governance Report
GOVERNANCE REPORT
Directors’ Report
The Company’s issued share capital as at 31 December 2023 was 324,084,072 ordinary shares of 10 pence each. During
2024 the issued share capital was increased as follows:
Date (2024)
Description
Number of shares
issued
Price (discount if
applicable)
03 January
Exercise of SAYE options
14,614
£0.739 (40.64%)
24 January
Exercise of SAYE options
7,307
£0.739 (43.80%)
15 February
Grant of SIP Matching Shares
9,764
Nil consideration
15 March
Grant of SIP Matching Shares
852
Nil consideration
19 March
Release of RSP awards
346,678
Nil consideration
15 April
Grant of SIP Matching Shares
5,492
Nil consideration
10 May
Grant of SIP Free Shares
304,500
Nil consideration
15 May
Grant of SIP Matching Shares
14,472
Nil consideration
03 June
Exercise of SAYE options
30,788
£1.023 (27.70%)
12 June
Exercise of SAYE options
17,594
£1.023 (26.93%)
17 June
Grant of SIP Matching Shares
10,502
Nil consideration
19 June
Exercise of SAYE options
3,519
£1.023 (28.21%)
26 June
Exercise of SAYE options
17,595
£1.023 (29.93%)
10 July
Exercise of SAYE options
10,557
£1.023 (38.37%)
24 July
Exercise of SAYE options
18,473
£1.023 (38.93%)
15 August
Grant of SIP Matching Shares
515
Nil consideration
21 August
Exercise of SAYE options
17,595
£1.023 (36.06%)
16 September
Grant of SIP Matching Shares
12,656
Nil consideration
02 October
Exercise of SAYE options
1,759
£1.023 (46.16%)
15 October
Grant of SIP Matching Shares
12,412
Nil consideration
As such, as at 31 December 2024, the Company’s issued share capital was 324,955,414 ordinary shares of 10p each.
Since 31 December 2024, the Company’s issued share capital has increased to 324,991,682 ordinary shares of 10p each, as
follows:
Date (2025)
Description
Number of shares
issued
Price (discount if
applicable)
15 January
Grant of SIP Matching Shares
9,224
Nil consideration
17 February
Grant of SIP Matching Shares
13,150
Nil consideration
05 March
Exercise of SAYE options
308
£1.46 (9.3%)
17 March
Grant of SIP Matching Shares
13,586
Nil consideration
Under Section 561 of the Companies
Act 2006 (‘Companies Act’), if the
Directors wish to allot unissued
shares for cash (subject to certain
exceptions, including allotments
pursuant to an approved employee
share scheme), they must first offer
them to existing shareholders in
proportion to their holdings (a pre-
emptive offer). By a special resolution
at the 2024 AGM, the shareholders
gave authority to the Directors to
disapply the previously mentioned
pre-emption and to allot shares for
cash other than by way of rights issue
to existing shareholders, provided
that the aggregate nominal value of
such shares does not exceed 5% of
the Company’s total issued equity
capital. The Directors have not made
use of this authority since the 2024
AGM. The Directors propose to renew
this authority at the 2025 AGM.
Purchase of the Company’s
own shares
The Company has authority under
a shareholders’ resolution passed
at the 2024 AGM to purchase up
to 32,446,328 of the Company’s
ordinary shares, representing
Directors’ Report continued
182
Harworth Group plc
approximately 10% of the Company’s
total issued share capital in the
market during the period expiring at
the 2024 AGM. No shares have been
purchased by the Company under this
authority. A special resolution will be
proposed at the 2025 AGM to renew
this authority. Any shares purchased
under this authority will be cancelled
(unless the Directors determine that
they are to be held as treasury shares)
and the number of shares in issue will
be reduced accordingly.
Directors
The Directors who held office
during the financial year ended
31 December 2024 and up to the date
of this Report are:
Non-Executive Chair
Alastair Lyons
Executive Directors
Lynda Shillaw (Chief Executive)
Katerina Patmore (CFO)
Independent Non-Executive
Directors
Angela Bromfield (SID)
Ruth Cooke
Lisa Scenna
Patrick O’Donnell Bourke
Marzia Zafar
Non-Executive Directors (not
independent)
Martyn Bowes
Steven Underwood was a Director
during the year but retired
from the Board with effect from
31 December 2024. Biographical
details of the Directors are contained
on pages 104 to 107.
The Directors’ Remuneration Report,
which includes details of Directors’
service agreements and their interests
in the shares of the Company,
is set out on pages 142 and 178
respectively. Copies of the service
agreements of the Executive Directors
and letters of appointment for the
Non-Executive Directors are available
for inspection at the Company’s
registered office during normal
business hours and will be available
for inspection at the Company’s
2025 AGM.
In accordance with the Code, all
Directors, except Ruth Cooke, will
offer themselves for re-election at the
2025 AGM.
Save as set out on page 114 of the
Statement of Corporate Governance,
no Director has, or has had, a material
interest, directly or indirectly, at any
time during the year under review
in any contract significant to the
Company’s business.
The Directors may exercise all the
powers of the Company, subject
to compliance with relevant laws,
the Company’s Memorandum and
Articles of Association and any
directions given by special resolution
of shareholders.
Financial risk management
The Group’s overall risk management
programme includes a focus on
credit and liquidity risks to minimise
any potential adverse effects on the
Group’s financial health. Further
detail, including use of financial
instruments as appropriate as part
of managing the interest rate risk on
external borrowings, is set out in Note
23 to the Financial Statements.
Directors’ indemnities, insurance
and independent advice
The Company maintains Directors’
and Officers’ liability insurance. To
the extent permitted by UK law, the
Company indemnifies its Directors
and senior executives against
claims brought against them as a
consequence of the execution of their
duties as Directors of the Company.
The Board has established a
procedure by which any Director, for
the purpose of furthering their duties,
may take independent professional
advice at the Company’s expense. No
Director had reason to use this facility
in 2024.
Charitable and political
donations
The Group made charitable donations
during 2024 in the aggregate sum of
£51,784 (2023: £33,047).
No political donations were made
during the year (2023: £nil). It remains
the Company’s policy not to make any
cash donations to political parties.
This policy is strictly adhered to and
there is no intention to change it.
However, the definitions of “political
donation” and “political expenditure”
used in the Companies Act remain
very broad, which may have the
effect of covering some normal
business activities that would not
be considered political donations
or political expenditure in the usual
sense. These could include support
for bodies engaged in law reform
or governmental policy review
or involvement in seminars and
functions that may be attended by
politicians. To avoid any possibility
of inadvertently contravening
the Companies Act, the Directors
obtained authority from shareholders
at the 2024 AGM for certain political
donations and expenditure, subject to
financial limits, and will seek to renew
this authority at the 2025 AGM.
Annual Report and Financial Statements
183
Governance Report
GOVERNANCE REPORT
Directors’ Report continued
Employee Benefit Trust1
The Harworth Group plc Employee
Benefit Trust (‘EBT’) holds shares
in the Company for the purposes
of satisfying awards that may vest
under the Company’s employee
share plans, including deferred
bonus awards granted to Executive
Directors. Shares issued pursuant
to Share Incentive Plan awards
are held by Equiniti Share Plan
Trustees Limited pending maturity.
At 31 December 2024, the EBT held
230,713 (2023: 63,657) ordinary
shares of 10 pence each in the
Company and Equiniti Share Plan
Trustees Limited held 1,445,184
(2023: 1,017,580) ordinary shares
of 10 pence each in the Company,
being in aggregate 1,675,897
(2023: 1,081,237) shares, which
represent 0.52% of the Company’s
issued share capital as of
31 December 2024. The EBT has
waived its right to receive dividends
on shares that it holds beneficially
in respect of awards that have not
vested.
1 The number of shares held by Equiniti Share
Plan Trustees Limited is higher than the number
of the Company’s own shares held as stated
in Note 26 of the Financial Statements due to
Partnership shares held under the SIP.
Amendment of Articles
of Association
The Articles of Association may be
amended by special resolution of the
shareholders.
General meetings
An AGM must be called on at least
21 days’ clear notice, although the
Company typically gives not less than
20 working days’ notice of its AGM
following the FRC’s Guidance on
Board Effectiveness.
All other general meetings are also
required to be held on at least 21
days’ clear notice unless the Company
offers shareholders an electronic
voting facility. A special resolution
reducing the period of notice for
general meetings (other than AGMs)
to not less than 14 days was passed
at the 2024 AGM. The Directors are
proposing to seek renewal of that
authority at the 2025 AGM.
Substantial shareholdings and agreements with shareholders
As at the date of this Report, the Company had been notified, pursuant to paragraph 5 of the FCA’s Disclosure and
Transparency Rules, of the following notifiable voting rights:
Name of holder
Number of
ordinary
shares
Percentage
of total voting
rights
London and Amsterdam Trust Company
85,100,257
26.19%
Goodweather Holdings Limited1
84,610,000
26.04%
Pension Protection Fund
57,716,672
17.76%
1 Goodweather Holdings Limited is a member of the Peel Group.
The Company’s relationship with the Pension Protection Fund (‘PPF’) is governed by a relationship agreement pursuant to
which, amongst other things, the PPF is entitled to appoint a representative Director to the Board.
Change of control provisions
Under the terms of the RCF entered into between National Westminster Bank plc, Santander UK plc, HSBC UK Bank plc and
Harworth Estates Property Group Limited (‘HEPGL’) in March 2022, if any person or Group of persons acting in concert
gains direct or indirect control of HEPGL the facility is capable of being cancelled, in which event all outstanding loans and
bonds, guarantees or letters of credit together with accrued interest shall become immediately due and payable.
Transactions with related parties
Transactions entered into with related parties during 2024 are disclosed in Note 30 to the Financial Statements.
The Directors’ Report was approved by the Board of Directors and signed on its behalf by:
Chris Birch
General Counsel and Company Secretary
17 March 2025
Directors’ Report continued
Opposite Page: Joshua Johnson, Communities and Placemaking
Coordinator, plants trees at Chevington with local school children
184
Harworth Group plc
Governance Report
GOVERNANCE REPORT
Directors’ Report continued
Statement of Directors’
Responsibilities
The Directors are responsible for preparing the Annual Report and the Financial Statements in
accordance with applicable United Kingdom law and regulations.
Company law requires the Directors
to prepare Financial Statements for
each financial year. Under that law,
the Directors have elected to prepare
the Group and Company Financial
Statements in accordance with UK-
adopted international accounting
standards (‘IFRSs’). Under company
law, the Directors must not approve
the Financial Statements unless they
are satisfied that they give a true and
fair view of the state of affairs of the
Group and the Company and of the
profit or loss of the Group and the
Company for that period.
In preparing these Financial
Statements the Directors are
required to:
– select suitable accounting
policies in accordance with IAS 8
Accounting Policies, Changes in
Accounting Estimates and Errors
and then apply them consistently;
– make judgements and accounting
estimates that are reasonable and
prudent;
– present information, including
accounting policies, in a manner
that provides relevant, reliable,
comparable and understandable
information;
– provide additional disclosures
when compliance with the specific
requirements in IFRS is insufficient
to enable users to understand the
impact of particular transactions,
other events and conditions
on the Group and Company
financial position and financial
performance;
– in respect of the Group Financial
Statements, state whether UK-
adopted international accounting
standards have been followed,
subject to any material departures
disclosed and explained in the
Financial Statements;
– in respect of the Company
Financial Statements, state
whether UK-adopted international
accounting standards have
been followed, subject to any
material departures disclosed
and explained in the Financial
Statements; and
– prepare the Financial Statements
on the going concern basis unless
it is inappropriate to presume that
the Company and/or the Group
will continue in business.
The Directors are responsible for
keeping adequate accounting
records that are sufficient to show
and explain the Company’s and
Group’s transactions and disclose
with reasonable accuracy at any time
the financial position of the Company
and the Group and enable them to
ensure that the Company and the
Group Financial Statements comply
with the Companies Act 2006. They
are also responsible for safeguarding
the assets of the Group and Company
and hence for taking reasonable steps
for the prevention and detection of
fraud and other irregularities.
Under applicable law and regulations,
the Directors are also responsible
for preparing a Strategic Report,
Directors’ Report, Directors’
Remuneration Report and Corporate
Governance Statement that comply
with that law and those regulations.
The Directors are responsible for
the maintenance and integrity of the
corporate and financial information
included on the Company’s website.
Responsibility statements
The Directors (see the list of
names and roles on pages 104 to
107) confirm, to the best of their
knowledge:
– that the consolidated Financial
Statements, prepared in
accordance with UK-adopted
international accounting standards
give a true and fair view of the
assets, liabilities, financial position
and profit of the Company and
undertakings included in the
consolidation taken as a whole;
– that the Annual Report, including
the Strategic Report, includes a
fair review of the development
and performance of the business
and the position of the Company
and undertakings included in the
consolidation taken as a whole,
together with a description of the
principal risks and uncertainties
that they face; and
– that they consider the Annual
Report, taken as a whole, is fair,
balanced and understandable and
provides the information necessary
for shareholders to assess the
Company’s position, performance,
business model and strategy.
Going concern basis
These Financial Statements are
prepared on the basis that the Group
is a going concern. In forming its
opinion as to going concern, the
Company prepares cash flow and
banking covenant forecasts based
upon its assumptions with particular
consideration to the key risks and
uncertainties and the current macro-
186
Harworth Group plc
economic environment as well
as taking into account available
borrowing facilities. The going
concern period assessed is until June
2026 which has been selected as it
can be projected with a good degree
of expected accuracy.
A key focus of the assessment of
going concern is the management
of liquidity and compliance with
borrowing facilities for the period to
June 2026. A £240m RCF facility is
available to the Group and is aligned
to the Group’s strategy and provides
significant liquidity and flexibility
to enable it to pursue its strategic
objectives. The facility is subject
to financial covenants, including
minimum interest cover, maximum
infrastructure debt as a percentage
of property value and gearing, all of
which are tested through the going
concern assessment undertaken.
Available liquidity, including cash
and cash equivalents and bank
facility headroom, was £192.4m as at
31 December 2024.
The Group benefits from
diversification across its Capital
Growth and Income Generation
businesses including its industrial and
renewable energy property portfolio.
Taking into account the independent
valuation by BNP Paribas and Savills,
the Group net LTV remains low at
5.4%, within the Board’s target range
and with headroom to allow for falls
in property values. Rent collection
remained strong, with 98% collected
to date for 2024.
In addition to a base cashflow
forecast, a sensitised forecast was
produced that reflected a number
of severe but plausible downsides.
These downsides included:
1. a severe reduction in sales to the
housebuilding sector as well as
lower investment property sales;
2. notwithstanding strong rent
collection in 2024, a prudent
material increase in bad debts
across the portfolio over the
majority of the going concern
assessment period;
3. a material decline in the value
of land and investment property
values; and
4. increases in interest rates,
impacting the cost of the
Group’s borrowings.
A scenario was also run which
demonstrated that very severe loss
of revenue, valuation reductions
and interest cost increases would
be required to breach cashflow and
banking covenants. The Directors
consider this very severe scenario
to be remote. A scenario with
consideration of potential climate
change and related transition impacts
was also examined as part of the
Group’s focus on climate-related risks
and opportunities.
Under each downside scenario, for
the going concern period to June
2026, the Group expects to continue
to have sufficient liquidity to continue
to operate with headroom on lending
facilities and associated covenants and
has additional mitigation measures
within management’s control, for
example reducing development
and acquisition expenditure and
reducing operating costs, that could
be deployed to create further liquidity
and covenant headroom.
Based on these considerations,
together with available market
information and the Directors’
knowledge and experience of the
Group’s property portfolio and
markets, the Directors considered it
appropriate to adopt a going concern
basis of accounting in the preparation
of the Group’s and Company’s
Financial Statements.
Disclosure of information
to the auditor
Each of the Directors who were in
office at the date of approval of this
Report also confirms that:
– so far as they are aware, there is no
relevant audit information of which
the auditor is unaware; and
– each Director has taken all the
steps that they ought to have taken
as a Director to make themselves
aware of any relevant information
and to establish that the Group’s
and Company’s auditor is aware of
that information.
This confirmation is given and
should be interpreted in accordance
with the provisions of Section 418
Companies Act.
This Statement of Directors’
Responsibilities was approved by the
Board and signed by order of
the Board.
Chris Birch
General Counsel and
Company Secretary
17 March 2025
Annual Report and Financial Statements
187
Governance Report
GOVERNANCE REPORT
Statement of Directors’ Responsibilities
Financial
Statements
Contents
Independent auditor’s report to the members of
Harworth Group plc
189
Consolidated income statement
198
Consolidated statement of comprehensive income
199
Consolidated balance sheet
200
Company balance sheet
201
Consolidated statement of changes in equity
202
Company statement of changes in equity
203
Consolidated statement of cash flows
204
Company statement of cash flows
205
Notes to the financial statements
206
Harworth Group plc
188
Independent auditor’s report
to the members of Harworth Group Plc
Opinion
In our opinion:
– Harworth Group plc’s group financial statements and parent company financial statements (the “financial statements”)
give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 December 2024 and of the
group’s profit for the year then ended;
– the group financial statements have been properly prepared in accordance with UK adopted international accounting
standards;
– the parent company financial statements have been properly prepared in accordance with UK adopted international
accounting standards as applied in accordance with section 408 of the Companies Act 2006; and
– the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Harworth Group plc (the ‘parent company’) and its subsidiaries (the ‘group’) for
the year ended 31 December 2024 which comprise:
Group
Parent company
Consolidated income statement for the year then ended
Balance sheet as at 31 December 2024
Consolidated statement of comprehensive income for the
year then ended
Statement of changes in equity for the year then ended
Consolidated balance sheet as at 31 December 2024
Statement of cash flows for the year then ended
Consolidated statement of changes in equity for the year
then ended
Related notes 1 to 31 to the financial statements, including:
material accounting policy information
Consolidated statement of cash flows for the year then
ended
Related notes 1 to 31 to the financial statements, including:
material accounting policy information
The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international
accounting standards and as regards the parent company financial statements, as applied in accordance with section 408 of
the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We are independent of the group and parent in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have
fulfilled our other ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent company and
we remain independent of the group and the parent company in conducting the audit.
Opposite page: Swans atop Waverley Reservoir
Waverley, Rotherham | YAC | R | MD
Annual Report and Financial Statements
Annual Report and Financial Statements
189
Financial Report
FINANCIAL REPORT
Independent auditor’s report to the members of Harworth Group Plc
Independent auditor’s report
to the members of Harworth Group Plc
Conclusions relating to going concern
In auditing the financial statements, we have concluded that
the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the group
and parent company’s ability to continue to adopt the going
concern basis of accounting included
– Confirming our understanding of management’s going
concern assessment process, through our walkthrough
of the Group’s financial close process and also engaging
with management early to ensure all factors we identified
were considered in their assessment;
– Obtaining management’s going concern assessment,
including the cash forecasts and covenant calculations
for the going concern period which covers the period to
30 June 2026. The Group has modelled a base scenario
and a severe downside scenario in its cash forecasts and
covenant calculations in order to incorporate unexpected
changes to the forecasted liquidity of the Group;
– The downside scenario considered a severe but
plausible reduction in property sales, decline in land and
investment property values, and an increase in overheads
and interest rates. In this scenario the Group continues to
have sufficient cash reserves and headroom on lending
facilities and associated covenants;
– Testing the assumptions included in each modelled
scenario for the cash forecasts and covenant calculations,
considering the impact of the challenging macro-
economic environment on forecasted property sales,
property values, overheads, and interest cost. We
also considered the appropriateness of the models
used to calculate the cash flow forecasts and covenant
calculations to determine if they were appropriate to be
able to make an assessment on going concern;
– Considering the mitigating factors that could be applied
to the cash flow forecasts and covenant calculations that
are within control of the Group, for example, reducing
uncommitted development expenditure. This included
review of the Company’s non-operating cash outflows;
– Verifying the credit facilities available to the Group
comprising the five-year, £240m revolving credit facility
which is due to expire in March 2027;
– Performing reverse stress testing in order to identify what
factors would lead to the Group utilising all liquidity
or breaching the financial covenants during the going
concern period;
– Performing our own independent sensitivity analysis
to assess the impact of changes in key assumptions,
including forecasted property sales; and
– Reviewing the Group’s going concern disclosures
included in the Annual Report in order to assess that the
disclosures were appropriate and in conformity with the
reporting standards.
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the group and parent company’s
ability to continue as a going concern for the period to
30 June 2026.
In relation to the group and parent company’s reporting
on how they have applied the UK Corporate Governance
Code, we have nothing material to add or draw attention
to in relation to the directors’ statement in the financial
statements about whether the directors considered
it appropriate to adopt the going concern basis of
accounting.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report. However, because not all future
events or conditions can be predicted, this statement is not
a guarantee as to the group’s ability to continue as a going
concern.
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Harworth Group plc
Overview of our audit approach
Audit scope
– We performed an audit of the complete financial information of one full scope reporting
component, being the group as a whole.
Key audit matters
– Valuation of investment property
– Carrying value of development property
– Revenue recognition
Materiality
– Overall group materiality of £10.5m which represents 1% of total assets.
An overview of the scope of the parent company
and group audits
In the current year our audit scoping has been updated to
reflect the new requirements of ISA (UK) 600 (Revised).
We have followed a risk-based approach when developing
our audit approach to obtain sufficient appropriate
audit evidence on which to base our audit opinion. We
performed risk assessment procedures to identify and
assess risks of material misstatement of the Group financial
statements and identified significant accounts and
disclosures. When identifying components on which audit
work needed to be performed to respond to the identified
risks of material misstatement of the Group financial
statements, we considered our understanding of the
Group and its business environment, the potential impact
of climate change, the applicable financial framework, the
group’s system of internal control at the entity level, the
existence of centralised processes, applications and any
relevant internal audit results.
We determined that centralised audit procedures can
be performed across all Group significant accounts
and therefore identified one full scope component for
the Group. Our scoping to address the risk of material
misstatement for each key audit matter is set out in the Key
audit matters section of our report
Climate change
Stakeholders are increasingly interested in how climate
change will impact Harworth Group plc. The Group has
determined the most significant future impacts from
climate change which are explained on pages 88 to 96
in the required Task Force On Climate Related Financial
Disclosures and on page 72 in the principal risks and
uncertainties. They have also explained their climate
commitments on page 95. All of these disclosures form
part of the “Other information,” rather than the audited
financial statements. Our procedures on these unaudited
disclosures therefore consisted solely of considering
whether they are materially inconsistent with the financial
statements or our knowledge obtained in the course of the
audit or otherwise appear to be materially misstated, in line
with our responsibilities on “Other information”.
In planning and performing our audit we assessed the
potential impacts of climate change on the Group’s
business and any consequential material impact on its
financial statements.
The group has explained in the accounting policies (note 1)
its articulation of how climate change has been reflected
in the financial statements. There are no significant
judgements or estimates relating to climate change in the
notes to the financial statements.
Our audit effort in considering the impact of climate change
on the financial statements was focused on evaluating
management’s assessment of the impact of climate risk,
physical and transition, their climate commitments, the
effects of material climate risks disclosed on page 84
and whether these have been appropriately reflected
in the valuation of the property portfolio following the
requirements of IAS 40 ‘Investment Property’ in relation
to investment property and IAS 2 ‘Inventories’ in relation
to the development property. As part of this evaluation,
we performed our own risk assessment, supported by our
climate change and property valuation internal specialists,
to determine the risks of material misstatement in the
financial statements from climate change which needed to
be considered in our audit.
We also challenged the Directors’ considerations of climate
change risks in their assessment of going concern and
viability and associated disclosures. Where considerations
of climate change were relevant to our assessment of going
concern, these are described above.
Based on our work, whilst we have not identified the
impact of climate change on the financial statements to
be a standalone key audit matter, we have considered the
impact on the following key audit matters: valuation of
investment property and carrying value of development
property. Details of the impact, our procedures and
findings are included in our explanation of key audit
matters below.
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Annual Report and Financial Statements
191
Financial Report
FINANCIAL REPORT
Independent auditor’s report to the members of Harworth Group Plc
Independent auditor’s report
to the members of Harworth Group Plc
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not
due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy,
the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in
the context of our audit of the financial statements as a whole, and in our opinion thereon, and we do not provide a separate
opinion on these matters.
Risk
Our response to the risk
Valuation of investment property
(2024: £584.0m, 2023: £433.9m)
Refer to the Audit Committee Report
(pages 132 to 139); Accounting
policies (page 210); and Note 14 of
the Consolidated Financial Statements
(page 227)
At 31 December 2024 investment
property held a value of £584m (2023:
£434m), with a valuation gain of £61m
(2023: £71m gain) reported in the year.
Property valuations are calculated by
the independent external valuers with a
number of key assumptions specific to
each individual property. Depending on
type of site this could include: estimated
land values per acre, likelihood of
planning permission being granted,
construction costs, actual and estimated
rental values and yields. There is a risk
that the carrying value is misstated given
the complexity of the calculation, and
the inherent uncertainty and judgement
within these assumptions.
In addition, there is a risk that
management inappropriately override
the valuation determined by the external
valuer.
Our testing approach to investment properties included:
– Performing a walkthrough to understand the key process and identification
of key controls including management’s challenge of the external valuers
throughout the valuation process.
– Assessing the appropriateness of the valuations, with the assistance of our
EY Real Estate specialists, through:
• Assessing the competence and objectivity of both the external valuers
and third party surveyors;
• Attending a sample of sites, alongside the external valuers to gain a
detailed understanding of the portfolio and the valuation process and to
observe the specialist’s inspection;
• Reading the external valuer reports for a sample of sites and holding
discussions directly with the external valuer regarding its valuation
approach; including its consideration of climate risk;
• Validating, for a sample of sites, the appropriateness of the key
assumptions applied by the external valuer in forming its valuation by
comparing to third party evidence of market activity (e.g. land values
including recent comparable sales, construction costs, rental values and
yields) as well as assessing the reasonableness of judgements made such
as the likelihood of planning permission being granted and any other
property specific adjustments made. As part of these procedures we
consider any contrary evidence that could imply the valuation approach
and assumptions made are not appropriate. Using this information we
calculate an independent valuation range for each sampled site and
assess whether management’s valuation falls within this range;
• Testing the underlying data provided to the external valuer by
management, by checking a sample to source documents (e.g. acreage,
third party costs to complete assessments and rental contracts); and
• Testing the appropriateness of any material adjustments from the
valuation determined by the external valuer to the book value recorded.
Key observations communicated to the Audit Committee
Based on the work performed, we consider that the external valuers’ methodologies used in developing the estimate are
consistent with valuation practice given the characteristics of the assets being measured.
Our work did not identify evidence to contradict the external valuers’ significant assumptions used in developing the
estimate as of the balance sheet date.
Our procedures performed over the adjustments made to the valuations have confirmed that these are in line with our
expectations and appropriately recorded.
We consider that the valuation of investment properties held as of the balance sheet date is appropriate.
192
Harworth Group plc
Risk
Our response to the risk
Carrying value of development
property (2024: £191.9m, 2023:
£250.0m)
Refer to the Audit Committee Report
(page 132 to 139); Accounting policies
(page 209); and Note 16 of the
Consolidated Financial Statements
(page 238)
Development property has a book
value of £191m (2023: £250m) at
31 December 2024. The Group’s portfolio
consists of a range of assets at varying
stages of development, across various
sectors and geographies. A risk exists
that the carrying value of development
property is overstated given the
complexity of the calculation and the
inherent judgements in determining
the net realisable value, such as gross
developable value per acre/plot, costs to
complete and profit hurdle.
In addition, there is a risk that
management inappropriately override
the valuation determined by the
external valuer. A substantial element of
management bonuses are impacted by
EPRA NDV (European Public Real Estate
Association Net Development Value)
and there is therefore an incentive for
management to maximise NDV resulting
in the carrying value being inappropriate.
Our testing approach to development properties included:
– Performing a walkthrough to understand the key process and identification
of key controls including management’s challenge of the external valuers
throughout the valuation process.
– Assessing the appropriateness of the valuations, with the assistance of our
EY Real Estate specialists, through:
• Assessing the competence and objectivity of both the external valuer
and third party surveyors;
• Attending a sample of sites, alongside the external valuer to gain a
detailed understanding of the portfolio and the valuation process and to
observe the specialist’s inspection;
• Reading the external valuer reports for a sample of sites and holding
discussions directly with the external valuer regarding its valuation
approach; including its consideration of climate risk;
• Validating, for a sample of sites, the appropriateness of the key
assumptions applied by the external valuer in forming its valuation by
comparing to third party evidence of market activity (e.g. development
values including recent comparable sales, costs to complete) as well
as assessing the reasonableness of judgements made such as the profit
hurdle and any other property specific adjustments made. As part of
these procedures we consider any contrary evidence that could imply
the valuation approach and assumptions made are not appropriate.
Using this information we calculate an independent valuation range
for each sampled site and assess whether management’s valuation falls
within this range;
• Testing the underlying data provided to the external valuer by
management, by checking a sample to source documents (e.g. acreage
and third party costs to complete assessments); and
• Testing the appropriateness of any material adjustments from the
valuation determined by the external valuer.
In addition, we then compared the valuation post adjustments to the carrying
value to assess the appropriateness of the NRV provision recorded.
Key observations communicated to the Audit Committee
Based on the work performed, we consider that the external valuers’ methodologies used in developing the estimate of
net realisable value are consistent with valuation practice given the characteristics of the assets being measured. Our work
did not identify evidence to contradict the external valuers’ significant assumptions used in developing the estimate as of
the balance sheet date.
We consider that the carrying value of development properties held as of the balance sheet date is appropriate.
Annual Report and Financial Statements
Annual Report and Financial Statements
193
Financial Report
FINANCIAL REPORT
Independent auditor’s report to the members of Harworth Group Plc
Independent auditor’s report
to the members of Harworth Group Plc
Risk
Our response to the risk
Inappropriate recognition of revenue
(2024: £181.5m, 2023: £72.4m)
Refer to the Audit Committee Report
(page 132 to 139); Accounting
policies (page 207); and Note 3 of the
Consolidated Financial Statements
(page 217)
Revenue for the year ended
31 December 2024 is £182m (2023:
£72m), made up of £140m (2023: £47m)
from the sale of development property,
£22m (2023: £23m) from income
generation activities, £19m from build-to-
suit development (2023: £1m) and £1m
(2023: £1m) from other revenue activities.
There is a risk that management could
override controls impacting on the
amount of revenue recognised via posting
journal entries that fall outside of the
standard flow of transactions (all revenue
streams) or by purposefully recording
property sales in the incorrect period.
In addition, complexity within the sales
contracts could lead to property sales
being measured inappropriately due to
error or through management override.
Our approach included:
– Performing walkthroughs to understand the key processes and identify key
controls; and
– We have analysed 100% of the revenue journal entry population across all
revenue streams by adopting a data analytics approach to corroborate our
expectation of the relationship between revenue, trade receivables and/
or cash receipts. Our focus was on transactions posted to revenue that fall
outside of this routine process as well as consolidation entries made.
Development Property Sales:
– Testing all material property disposals to confirm revenue recognised in the
year is in line with the contract terms and completion date; and
– Testing all material January 2025 disposals to confirm revenue should be
recorded post year end.
Key observations communicated to the Audit Committee
We are satisfied revenue has been recognised appropriately and that there was no evidence of management bias.
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified
misstatements on the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to
influence the economic decisions of the users of the financial statements. Materiality provides a basis for determining the
nature and extent of our audit procedures.
We determined materiality for the Group to be £10.6 million (2023: £8.3 million), which is 1% (2023: 1%) of total assets. We
believe that total assets provides us with the most appropriate basis for determining overall materiality given that key users
of the Group’s financial statements are primarily focused on the valuation of the Group’s assets.
We determined materiality for the Parent Company to be £2.4 million (2023: £2.1 million), which is 1% (2023: 1%) of total
assets.
During the course of our audit, we reassessed initial materiality and amended it for the year end results.
194
Harworth Group plc
Specific materiality
We assessed that for account balances related to the income
generation segment of the business, a misstatement of less
than overall materiality for the financial statements could
influence the economic decisions of users. We determined
specific materiality for these areas to be £1.6m which
equates to 15% of overall materiality based on the quantum
of these account balances. During the course of our audit,
we reassessed initial materiality and amended it for the year
end results.
Performance materiality
The application of materiality at the individual account
or balance level. It is set at an amount to reduce to an
appropriately low level the probability that the aggregate
of uncorrected and undetected misstatements exceeds
materiality.
On the basis of our risk assessments, together with our
assessment of the Group’s overall control environment,
our judgement was that performance materiality was 75%
(2023: 75%) of our planning materiality, namely £7.9m
(2023: £6.3m). We set performance materiality at this
percentage due to this being our fifth year of engagement
and, from our prior year experience, an expectation of a low
level of audit differences.
Reporting threshold
An amount below which identified misstatements are
considered as being clearly trivial.
We agreed with the Audit Committee that we would report
to them all uncorrected audit differences in excess of £0.5m
(2023: £0.4m), which is set at 5% of planning materiality,
as well as differences below that threshold that, in our view,
warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both
the quantitative measures of materiality discussed above
and in light of other relevant qualitative considerations in
forming our opinion.
Other information
The other information comprises the information
included in the annual report , including Strategic report,
Governance report and supplementary information set out
on pages 1 to 187 and 256 to 263, other than the financial
statements and our auditor’s report thereon. The directors
are responsible for the other information contained within
the annual report.
Our opinion on the financial statements does not cover
the other information and, except to the extent otherwise
explicitly stated in this report, we do not express any form of
assurance conclusion thereon.
Our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements or our
knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements,
we are required to determine whether this gives rise
to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of the other
information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the
Companies Act 2006
In our opinion, the part of the Directors’ Remuneration
Report to be audited has been properly prepared in
accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course
of the audit:
– the information given in the strategic report and the
directors’ report for the financial year for which the
financial statements are prepared is consistent with the
financial statements; and
– the strategic report and the directors’ report have
been prepared in accordance with applicable legal
requirements.
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Financial Report
FINANCIAL REPORT
Independent auditor’s report to the members of Harworth Group Plc
Independent auditor’s report
to the members of Harworth Group Plc
Matters on which we are required to report
by exception
In the light of the knowledge and understanding of the
group and the parent company and its environment
obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the
directors’ report.
We have nothing to report in respect of the following
matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
– adequate accounting records have not been kept by the
parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
– the parent company financial statements and the part of
the Directors’ Remuneration Report to be audited are not
in agreement with the accounting records and returns; or
– certain disclosures of directors’ remuneration specified
by law are not made; or
– we have not received all the information and
explanations we require for our audit
Corporate Governance Statement
We have reviewed the directors’ statement in relation to
going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the group
and company’s compliance with the provisions of the UK
Corporate Governance Code specified for our review by the
UK Listing Rules.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent
with the financial statements or our knowledge obtained
during the audit:
– Directors’ statement with regards to the appropriateness
of adopting the going concern basis of accounting and
any material uncertainties identified set out on pages
186 and 187;
– Directors’ explanation as to its assessment of the
company’s prospects, the period this assessment covers
and why the period is appropriate set out on pages
58 to 60;
– Directors’ statement on whether they have a reasonable
expectation that the group will be able to continue in
operation and meets its liabilities set out on pages 186
and 187;
– Directors’ statement on fair, balanced and
understandable set out on page 186;
– Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out
on pages 72 to 85;
– The section of the annual report that describes the
review of effectiveness of risk management and internal
control systems set out on page 137 and 138; and
– The section describing the work of the audit committee
set out on pages 132 to 139.
Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement set out on pages 186 and 187, the directors are
responsible for the preparation of the financial statements
and for being satisfied that they give a true and fair view,
and for such internal control as the directors determine is
necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group and parent company’s
ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using
the going concern basis of accounting unless the directors
either intend to liquidate the group or the parent company
or to cease operations, or have no realistic alternative but
to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial
statements.
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Harworth Group plc
Explanation as to what extent the audit was
considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above,
to detect irregularities, including fraud. The risk of not
detecting a material misstatement due to fraud is higher
than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example,
forgery or intentional misrepresentations, or through
collusion. The extent to which our procedures are capable
of detecting irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention
and detection of fraud rests with both those charged with
governance of the company and management.
– We obtained an understanding of the legal and
regulatory frameworks that are applicable to the group
and determined that the most significant are those
that relate to the reporting framework (UK adopted
International Accounting Standards, the Companies Act
2006 and the UK Corporate Governance Code). We
understood how Harworth Group Plc is complying with
those frameworks by making inquiries of management,
those responsible for legal and compliance procedures
and the Company Secretary.
– We assessed the susceptibility of the group’s financial
statements to material misstatement, including how
fraud might occur by meeting with management and
those charged with governance to understand where it
considered there was a susceptibility to fraud. We also
considered performance targets and the propensity
to influence efforts made by management to manage
earnings. Where the risk was considered to be higher, we
performed audit procedures to address each identified
fraud risk. These procedures included testing higher risk
journal entries and were designed to provide reasonable
assurance that the financial statements were free from
fraud and error.
– Based on this understanding we designed our audit
procedures to identify non-compliance with such laws
and regulations. Our procedures involved journal entry
testing, with a focus on manual consolidation journals
and journals indicating unusual transactions based on
our understanding of the business; enquiries of Legal
Counsel, Group management and focused testing, as
referred to in the key audit matters section above. In
addition, we completed procedures to conclude on
the compliance of the disclosures in the Annual Report
and Accounts with the requirements of the relevant
accounting standards, UK legislation and the UK
Corporate Governance Code 2018.
A further description of our responsibilities for the audit of
the financial statements is located on the
Financial Reporting Council’s website at https://www.frc.
org.uk/auditorsresponsibilities. This description forms part
of our auditor’s report.
Other matters we are required to address
– Following the recommendation from the audit
committee, we were appointed by the company on
13 July 2020 to audit the financial statements for the
year ending 31 December 2020 and subsequent
financial periods.
The period of total uninterrupted engagement including
previous renewals and reappointments is five years,
covering the years ended 31 December 2020 to
31 December 2024.
– The audit opinion is consistent with the additional report
to the audit committee.
Use of our report
This report is made solely to the company’s members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the company’s members those
matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company’s
members as a body, for our audit work, for this report, or for
the opinions we have formed.
Victoria Venning (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
Manchester
17 March 2025
Annual Report and Financial Statements
Annual Report and Financial Statements
197
Financial Report
FINANCIAL REPORT
Independent auditor’s report to the members of Harworth Group Plc
Consolidated income statement
for the year ended 31 December 2024
Note
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Revenue
3
181,585
72,427
Cost of sales
3
(150,508)
(60,077)
Gross profit
3
31,077
12,350
Administrative expenses
3
(33,185)
(27,435)
Other gains
3
78,113
69,426
Other operating expense
3
(1,371)
(112)
Operating profit
3
74,634
54,229
Finance costs
6
(9,900)
(6,421)
Finance income
6
3,166
445
Share of profit of joint ventures
15
1,487
1,554
Profit before tax
69,387
49,807
Tax charge
8
(12,150)
(11,851)
Profit for the year
57,237
37,956
All activities in the year are derived from continuing operations.
Earnings per share from continuing operations attributable to the owners of the Group during the year
Note
Pence
Pence
Basic earnings per share
11
17.7
11.8
Diluted earnings per share
11
17.3
11.5
The Notes on pages 206 to 255 are an integral part of the consolidated financial statements.
198
Harworth Group plc
Consolidated statement of
comprehensive income
for the year ended 31 December 2024
Note
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Profit for the financial year
57,237
37,956
Other comprehensive (expense)/income – items that will not be reclassified to profit or loss:
Net actuarial loss in Blenkinsopp Pension scheme
24
(239)
(10)
Revaluation of Group occupied property
(515)
(167)
Deferred tax on other comprehensive income items
8
–
3
Total other comprehensive expense
(754)
(174)
Total comprehensive income for the year
56,483
37,782
Annual Report and Financial Statements
Annual Report and Financial Statements
199
Financial Report
FINANCIAL REPORT
Consolidated statement of comprehensive income
Consolidated balance sheet
as at 31 December 2024
Note
As at
31 December
2024
£’000
As at
31 December
2023
£’000
ASSETS
Non-current assets
Property, plant and equipment
12
1,529
1,670
Right of use assets
13
1,443
512
Trade and other receivables
17
25,638
11,296
Investment properties
14
585,489
433,942
Investments in joint ventures
15
33,553
30,722
647,652
478,142
Current assets
Inventories
16
205,985
263,073
Trade and other receivables
17
72,580
37,289
Assets held for sale
18
8,910
18,752
Cash
19
117,382
27,182
404,857
346,296
Total assets
1,052,509
824,438
LIABILITIES
Current liabilities
Borrowings
20
–
(29,744)
Trade and other payables
21
(135,998)
(88,087)
Lease liability
13
(271)
(158)
Current tax liabilities
8
(8,130)
(2,643)
(144,399)
(120,632)
Net current assets
260,458
225,664
Non-current liabilities
Borrowings
20
(164,125)
(33,830)
Trade and other payables
21
(15,226)
(1,757)
Lease liability
13
(1,196)
(397)
Deferred income tax liabilities
8
(35,853)
(30,089)
Retirement benefit obligations
24
(45)
(11)
(216,445)
(66,084)
Total liabilities
(360,844)
(186,716)
Net assets
691,665
637,722
SHAREHOLDERS’ EQUITY
Called up share capital
26
32,495
32,408
Share premium account
27
25,157
25,034
Fair value reserve
216,704
225,177
Capital redemption reserve
257
257
Merger reserve
45,667
45,667
Investment in own shares
(138)
(99)
Retained earnings
314,286
271,322
Current year profit
57,237
37,956
Total shareholders’ equity
691,665
637,722
The financial statements on pages 198 to 255 were approved by the Board of Directors on 17 March 2025 and were signed
on its behalf by:
Lynda Shillaw
Chief Executive
Company Registered Number 02649340
200
Harworth Group plc
Company balance sheet
as at 31 December 2024
Note
As at
31 December
2024
£’000
As at
31 December
2023
£’000
ASSETS
Non-current assets
Investment in subsidiaries
15
212,239
210,844
Trade and other receivables
17
21,199
23,337
Retirement reimbursement asset
24
45
11
Deferred income tax assets
8
568
143
234,051
234,335
Current assets
Trade and other receivables
17
3,544
302
Current tax asset
8
383
–
Cash
19
504
90
4,431
392
Total assets
238,482
234,727
LIABILITIES
Current liabilities
Trade and other payables
21
(59,840)
(41,478)
Current tax liabilities
8
–
(849)
(59,840)
(42,327)
Net current liabilities
(55,409)
(41,935)
Non-current liabilities
Retirement benefit obligations
24
(45)
(11)
(45)
(11)
Total liabilities
(59,885)
(42,338)
Net assets
178,597
192,389
SHAREHOLDERS’ EQUITY
Called up share capital
26
32,495
32,408
Share premium account
27
25,157
25,034
Capital redemption reserve
257
257
Merger reserve
45,667
45,667
Investment in own shares
(138)
(99)
Retained earnings
85,929
98,444
Current year loss
9
(10,770)
(9,322)
Total shareholders’ equity
178,597
192,389
The financial statements on pages 198 to 255 were approved by the Board of Directors on 17 March 2025 and were signed
on its behalf by:
Lynda Shillaw
Chief Executive
Company Registered Number 02649340
Annual Report and Financial Statements
Annual Report and Financial Statements
201
Financial Report
FINANCIAL REPORT
Company balance sheet
Consolidated statement
of changes in equity
for the year ended 31 December 2024
Note
Called up
share
capital
£’000
Share
premium
account
£’000
Merger
reserve
£’000
Fair
value
reserve
£’000
Capital
redemption
reserve
£’000
Investment
in own
shares
£’000
Retained
earnings
£’000
Total
equity
£’000
Balance at 1 January 2023
32,305
24,688 45,667 174,520
257
(50) 325,277 602,664
Profit for the financial year
–
–
–
–
–
–
37,956
37,956
Fair value losses on
investment property
–
–
–
76,744
–
–
(76,744)
–
Transfer of unrealised gains
on disposal of investment
property
–
–
– (25,920)
–
–
25,920
–
Other comprehensive
(expense)/income:
Actuarial loss in Blenkinsopp
pension scheme
24
–
–
–
–
–
–
(10)
(10)
Revaluation of group
occupied property
–
–
–
(167)
–
–
–
(167)
Deferred tax on other
comprehensive expense
items
8
–
–
–
–
–
–
3
3
Total comprehensive
income for year ended
31 December 2023
–
–
– 50,657
–
–
(12,875)
37,782
Transactions with owners:
Purchase of own shares
–
–
–
–
–
(49)
–
(49)
Share-based payments
–
–
–
–
–
–
1,314
1,314
Dividends paid
10
–
–
–
–
–
–
(4,438)
(4,438)
Share issue
26, 27
103
346
–
–
–
–
–
449
Balance at
31 December 2023
32,408
25,034 45,667 225,177
257
(99) 309,278
637,722
Profit for the financial year
–
–
–
–
–
–
57,237
57,237
Fair value gains on investment
property
–
–
–
63,334
–
–
(63,334)
–
Transfer of unrealised gains
on disposal of investment
property
–
–
– (71,292)
–
–
71,292
–
Other comprehensive
(expense)/income:
Actuarial loss in Blenkinsopp
pension scheme
24
–
–
–
–
–
–
(239)
(239)
Revaluation of group
occupied property
–
–
–
(515)
–
–
–
(515)
Deferred tax on other
comprehensive expense
items
8
–
–
–
–
–
–
–
–
–
–
–
(8,473)
–
–
64,956
56,483
Transactions with owners:
Purchase of own shares
–
–
–
–
–
(39)
–
(39)
Share-based payments
–
–
–
–
–
–
2,188
2,188
Dividends paid
10
–
–
–
–
–
–
(4,899)
(4,899)
Share issue
26, 27
87
123
–
–
–
–
–
210
Balance at
31 December 2024
32,495
25,157 45,667 216,704
257
(138) 371,523
691,665
202
Harworth Group plc
Company statement
of changes in equity
for the year ended 31 December 2024
Note
Called up
share
capital
£000
Share
premium
£000
Merger
reserve
£000
Capital
redemption
reserve
£000
Investment
in own
shares
£000
Retained
earnings
£000
Total
equity
£000
Balance at 1 January 2023
32,305
24,688
45,667
257
(50)
101,619
204,486
Loss for the financial year
–
–
–
–
–
(9,322)
(9,322)
Actuarial gain in Blenkinsopp
pension scheme
24
–
–
–
–
–
(10)
(10)
Deferred tax on other
comprehensive expense
items
–
–
–
–
–
3
3
Total comprehensive
expense for the year ended
31 December 2023
–
–
–
–
–
(9,329)
(9,329)
Transactions with owners:
Purchase of own shares
–
–
–
–
(49)
–
(49)
Share-based payments
–
–
–
–
–
1,270
1,270
Dividends paid
10
–
–
–
–
–
(4,438)
(4,438)
Share issue
26,27
103
346
–
–
–
–
449
Balance at
31 December 2023
32,408
25,034
45,667
257
(99)
89,122
192,389
Loss for the financial year
–
–
–
–
–
(10,770)
(10,770)
Actuarial loss in Blenkinsopp
pension scheme
24
–
–
–
–
–
(239)
(239)
Deferred tax on other
comprehensive expense
items
–
–
–
–
–
61
61
Total comprehensive
expense for the year ended
31 December 2024
–
–
–
–
–
(10,948)
(10,948)
Transactions with owners:
Purchase of own shares
–
–
–
–
(39)
–
(39)
Share-based payments
–
–
–
–
–
1,884
1,884
Dividend paid
10
–
–
–
–
–
(4,899)
(4,899)
Share issue
26,27
87
123
–
–
–
–
210
Balance at
31 December 2024
32,495
25,157
45,667
257
(138)
75,159
178,597
Annual Report and Financial Statements
Annual Report and Financial Statements
203
Financial Report
FINANCIAL REPORT
Company statement of changes in equity
Consolidated statement of cash flows
for the year ended 31 December 2024
Note
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Cash flows from operating activities
Profit before tax for the financial year
69,387
49,807
Net finance costs
6
6,734
5,976
Other gains
3
(78,113)
(69,426)
Share of profit of joint ventures (including impairment)
15
(1,487)
(1,554)
Share-based transactions (1)
25
2,287
1,404
Depreciation of property, plant and equipment and right of use assets
12,13
406
282
Pension contributions in excess of charge
24
(205)
(113)
Operating cash outflows before movements in working capital
(991)
(13,624)
Decrease in inventories
57,088
5,186
(Increase)/decrease in receivables
(52,774)
18,868
Increase in payables
39,297
6,937
Cash generated from operations
42,620
17,367
Interest paid
(7,568)
(4,302)
Corporation tax paid
(516)
(10,212)
Cash generated from operating activities
34,536
2,853
Cash flows from investing activities
Interest received
810
445
Investment in joint ventures
(3,048)
(250)
Distribution from joint ventures
1,703
911
Net proceeds from disposal of investment properties, AHFS and overages
80,028
69,568
Property acquisitions
(69,478)
(19,046)
Expenditure on investment properties and AHFS
(47,009)
(35,808)
Expenditure on property, plant and equipment
(600)
(396)
Cash generated (used in)/from investing activities
(37,593)
15,424
Cash flows from financing activities
Net proceeds from issue of ordinary shares
137
400
Proceeds from other loans
5,510
5,939
Repayment of other loans
(37,134)
(3,299)
Proceeds from bank loans
205,000
45,000
Repayment of bank loans
(75,000)
(46,000)
Loan arrangement fees paid
(151)
(162)
Payment in respect of leases
(206)
(118)
Dividends paid
10
(4,899)
(4,438)
Cash generated from/(used in) financing activities
93,257
(2,678)
Increase in cash
90,200
15,599
Cash at 1 January
27,182
11,583
Increase in cash
90,200
15,599
Cash at 31 December
117,382
27,182
(1) Share-based transactions reflect the non-cash expenses relating to share-based payments included within the income statement.
204
Harworth Group plc
Company statement of cash flows
for the year ended 31 December 2024
Year ended
31 December
2024
£’000
Restated –
Note 1
Year ended
31 December
2023
£’000
Cash flows from operating activities
Loss before tax for the financial year
(11,557)
(8,010)
Net interest receivable
1,839
668
Share-based transactions (1)
546
278
Pension contributions in excess of charge, net of movement in reimbursement asset
(239)
(10)
Operating cash outflows before movements in working capital
(9,411)
(7,074)
Decrease/(increase) in receivables
(90)
(5)
(Decrease)/increase in payables
(460)
1,069
Cash (used in)/generated from operations
(9,961)
(6,010)
Interest paid
(3,270)
(2,256)
Corporation tax paid
(718)
–
Cash (used in)/generated from operating activities
(13,949)
(8,266)
Cash flows from investing activities
Repayment received from subsidiary undertakings
1,498
6,989
Advances made to subsidiary undertakings
(2,363)
(1,679)
Interest received
1,432
1,588
Cash generated from investing activities
567
6,898
Cash flows from financing activities
Repayment of loans made to subsidiary undertakings
(5,207)
(4,461)
Loans from subsidiary undertakings
23,765
8,524
Net proceeds from issue of ordinary shares
137
400
Dividends paid
(4,899)
(4,438)
Cash generated from/(used in) financing activities
13,796
25
Increase/(decrease) in cash
414
(1,343)
Cash at 1 January
90
1,433
Increase/(decrease) in cash
414
(1,343)
Cash at 31 December
504
90
(1) Share-based transactions reflect the non-cash expenses relating to share-based payments included within the income statement
Annual Report and Financial Statements
Annual Report and Financial Statements
205
Financial Report
FINANCIAL REPORT
Company statement of cash flows
Notes to the financial statements
for the year ended 31 December 2024
1. Accounting policies
The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below.
These policies have been consistently applied to all of the years presented, unless otherwise stated.
General information
Harworth Group plc, company number 02649340, (the ‘Company’) is a company limited by shares, incorporated and
domiciled in the United Kingdom. The address of its registered office is Advantage House, Poplar Way, Catcliffe, Rotherham,
South Yorkshire, S60 5TR.
The Company is a public company listed on the London Stock Exchange.
The consolidated financial statements for the year ended 31 December 2024 consolidate the results of the Company and its
subsidiaries (together referred to as the ‘Group’).
Basis of preparation
The Consolidated and Company financial statements of Harworth Group plc have been prepared on the going concern
basis and in accordance with UK adopted International Accounting Standards (‘IFRS’) and, as regards the company financial
statements, as applied in accordance with the provisions of the Companies Act 2006. The consolidated financial statements
have been prepared under the historical cost convention, as modified by the revaluation of investment properties and
financial assets and liabilities at fair value through profit or loss. The consolidated financial statements are presented in
pound sterling and all values are rounded to the nearest thousand (£’000), except when otherwise indicated.
The Group’s business activities, together with the factors likely to affect its future development, performance and position
are set out in the Strategic Report and the financial statements and notes. The Directors believe that the Group is well
placed to manage its business risks successfully. The principal risks that may impact the Group’s performance and their
mitigation are outlined in the “Effectively Managing Our Risk” statement starting on page 68. After making enquiries, the
Directors have a reasonable expectation that the Group has adequate resources to fund its operations for the foreseeable
future. For this reason, they continue to adopt the going concern basis in preparing the annual financial statements.
Going-concern basis
These financial statements are prepared on the basis that the Group is a going concern. In forming its opinion as to going
concern, the Company prepares cash flow forecasts based upon assumptions, with particular consideration to key risks and
uncertainties and the macro-economic environment as well as taking into account available borrowing facilities, including
compliance with financial covenants therein. The going concern period assessed is until June 2026 which is selected as it
can be projected with a reasonable degree of accuracy and covers a complete period of reporting under the Group’s RCF.
A key focus of the assessment of going concern is the management of liquidity and compliance with borrowing facilities for
the period to June 2026. A £240m RCF facility is available to the group and is aligned to the Group’s strategy and provides
significant liquidity and flexibility to enable it to pursue its strategic objectives. The facility is subject to financial covenants,
including minimum interest cover, maximum infrastructure debt as a percentage of property value and gearing, all of which
are tested through the going concern assessment undertaken. Available liquidity, including cash and cash equivalents and
bank facility headroom, was £192.4m as at 31 December 2024.
The Group benefits from diversification across its Capital Growth and Income Generation businesses including its industrial
and renewable energy property portfolios. Taking into account the independent valuation carried out by BNP Paribas, JLL
and Savills as at 31 December 2024, the Group LTV remains low at 5.4%, within the Board’s target range and with sufficient
headroom to allow for any falls in property values. Rent collection remained strong, with 98% collected to date for 2024.
In addition to the Company’s base cashflow forecast, sensitised forecasts were produced that included a severe but
plausible downside scenarios. This downside included: 1) a severe reduction in sales to the housebuilding sector as well
as lower investment property sales; 2) notwithstanding strong rent collection, a prudent material increase in bad debts
across the portfolio over the majority of the going concern assessment period; 3) a material decline in the value of land and
investment property values and; 4) increases in interest rates, impacting the cost of the Group’s borrowings.
206
Harworth Group plc
1. Accounting policies continued
A scenario was also run which demonstrated that very severe loss of revenue, valuation reductions and interest cost
increases would be required to breach cashflow and banking covenants. The Directors consider this very severe scenario to
be remote. A scenario with consideration of potential climate change and related transition impacts was also examined as
part of the Group’s focus on climate-related risks and opportunities.
Under each of the plausible downside scenarios, for the going concern period to June 2026, the Group expects to continue
to have sufficient cash reserves to continue to operate with headroom on lending facilities and associated covenants and
has additional mitigation measures within management’s control, for example reducing development and acquisition
expenditure and reducing operating costs, that could be deployed to create further cash and covenant headroom.
Based on these considerations, together with available market information and the Directors’ knowledge and experience
of the Group’s property portfolio and markets, the Directors considered it appropriate to adopt a going concern basis of
accounting in the preparation of the Group’s and Company’s financial statements.
Changes in accounting policy and disclosures
(A) NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS
A number of new standards and amendments to standards and interpretations are effective for annual periods beginning on
or after 1 January 2024. None of these have had a significant effect on the financial statements of the Group.
(B) NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS NOT YET ADOPTED
A number of new standards and amendments to standards and interpretations are effective for annual periods beginning on
or after 1 January 2025 and have not been applied in preparing these financial statements. None of these are expected to
have a significant effect on the financial statements of the Group.
Prior year restatement – Parent company cash flow reclassification
The parent company cash flow statement has been restated for the year ended 31 December 2023. The company previously
presented net cash flows in relation to the intercompany loans receivable within financing activities. This has been
reclassified to within investing activities.
The impact of correcting this error is that cash flows from investing activities have increased by £5,310,000 and cash flows
from financing activities have decreased by £5,310,000.
In addition, cashflows in relation to these intercompany loans have been represented to show repayments and increases
separately (gross) rather than as one net figure.
There is no impact on the Company Balance sheet, Company Statement of Changes in Equity or on the result for the year,
and no impact on the Consolidated Balance sheet, Consolidated Statement of Changes in Equity, Consolidated Statement
of Comprehensive Income or Consolidated Cash flow statement.
Revenue recognition
Revenue comprises rental and other land-related income arising on investment properties, income from construction
contracts, planning promotion agreements, promotion fees and overages and the sale of development properties.
Revenue is recognised to the extent that it is probable that the economic benefit will flow to the Group and the revenue can
be reliably measured. All such revenue is reported net of discounts, and value added and other sales taxes.
Rental income
Under IFRS 16 ‘Leases’, rental and other land related income is recognised on a straight-line basis over the term of the lease.
Lease incentives, including rent-free periods and payments to tenants, are allocated to the consolidated income statement
on a straight-line basis over the lease term as a deduction from rental and other land-related income.
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Notes to the financial statements
1. Accounting policies continued
Revenue from contracts with customers
Under IFRS 15 ‘Revenue from Contracts with Customers’, revenue is measured based on the consideration specified in a
contract with a customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange
for transferring promised goods or services to a customer, and excludes amounts collected on behalf of third parties. The
Group recognises revenue when it transfers control over a product or service to a customer.
On entering two or more contracts at the same time, or near the same time, with the same customer (or related parties of
the customer), the contracts shall be combined and evaluated on a combined basis. If one or more of the criteria under
IFRS15.17 are met, the contracts are accounted for as a single contract. Consideration is apportioned on relative standalone
selling price.
Income from construction contracts is recognised in line with the accounting policy for construction contracts. Revenue is
recognised when the Group is acting as a principal under a contract with primary responsibility for the contract.
Revenue from planning promotion agreements, promotion fees and overages is recognised at the point in time when the
associated performance obligations contained within the agreements are satisfied.
Royalty income relates to revenue paid by customers who extract natural resources from some of the Group’s property
and is recognised at the transaction prices set out in the customer contracts in line with the volumes or values of resources
extracted as determined by individual contracts.
Service charge income is recognised as revenue in the period to which it relates.
Sales of development properties, including land parcels sold to housebuilders for residential development, usually have
performance obligations such as transferring legal title that are satisfied at a point in time. Revenue is recognised when
control of the property passes to the buyer on completion of contracts. Any variable consideration including overages
is estimated at the point of sale, taking into consideration the time to recover overage amounts as well as other factors
which may give rise to variability. Revenue is only recognised to the extent that it is highly probable that there will not be
a significant reversal in the future. Where sale contracts contain specific performance obligations, the contract price is
apportioned to the obligations and the revenue is recognised as the obligations are satisfied in accordance with IFRS 15.
Any deferred consideration is discounted to present value with the discount being unwound to the consolidated income
statement as finance income.
Construction contracts
Contracts for the construction of substantial assets are accounted for as construction contracts. Revenue on construction
contracts is recognised over time, as the performance obligations are satisfied. Revenue is recognised over time if the
Group’s performance creates or enhances an asset that the customer controls as the asset is created. Otherwise, the revenue
is recognised at a point in time. The revenue is reported in Other Property Activities within Note 3. Where the outcome of a
construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion.
The assessment of the stage of completion is dependent on the nature of the contracts but will generally be based on
the estimated proportion of the total contract costs which have been incurred to date. If a contract is expected to be loss
making, a provision is recognised when the contract is, or has become, onerous in accordance with IAS 37.
Interest income and expense
Interest income and expense are recognised within ‘finance income’ and ‘finance costs’ in the income statement using the
effective interest rate method.
The effective interest rate method is a method of calculating the amortised cost of a financial asset or financial liability and of
allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash payments or receipts throughout the expected life of the financial instrument, or a shorter
period where appropriate, to the net carrying amount of the financial asset or financial liability.
Notes to the financial statements continued
for the year ended 31 December 2024
208
Harworth Group plc
1. Accounting policies continued
Inventories
Inventories comprise development properties, land held for development, options to purchase land and planning
promotion agreements.
Development properties are included in the consolidated balance sheet at the lower of cost and net realisable value.
Net realisable value is the expected net sales proceeds of the developed property in the ordinary course of business less
estimated costs to complete and anticipated selling costs. Properties re-categorised to development properties from
investment properties are transferred at deemed cost, being the fair value at the date of re-categorisation. Properties
are re-categorised as development properties once planning is secured and where development with a view to sale has
commenced.
Where individual parcels of land held for development are disposed of out of a larger overall development site, costs are
apportioned based on acreage, or other specific allocation where appropriate, after taking into account the cost or net
realisable value of any remaining residual land which may not form part of the overall development site or which may not be
available for development. Where the Group retains obligations attached to the development site as a whole, accruals are
made relating to these disposals on the same allocation basis.
Land held for development is land that has planning permission and is being developed for onward sale.
Options to purchase land are agreements that the Group has entered into with landowners whereby the Group has
the option to purchase their land within a limited timeframe. The landowners are not generally permitted to sell to any
other party during this period, unless agreed by the Group. All costs, including the cost of entering into the option, are
capitalised. At each reporting date, recoverability of the costs is considered by management and where required provisions
are made such that the agreements are held at the lower of cost and net realisable value.
Planning promotion agreements are agreements that the Group has entered into with landowners whereby the Group
provides planning and promotion services in exchange for a fixed fee and/or a set percentage of the proceeds or profit
of the eventual sale of the land that is the subject of the agreement. The Group promotes the land through the planning
process at its own expense. If the land is sold, the Group receives a fee for its services.
The Group incurs various costs in promoting land held under promotion planning agreements, in some instances the
agreements allow for the Group to be reimbursed certain expenditure following the conclusion of a successful sale. These
costs are held in inventory at the lower of cost and net realisable value.
Investments in subsidiaries
Investments held by the Company in subsidiary undertakings are carried at cost less impairments to write them down to their
recoverable amount.
Investments in joint ventures
Joint ventures are those entities over whose activities the Group has joint control established by contractual agreement.
Interests in joint ventures through which the Group carries on its business are classified as jointly controlled entities and
accounted for using the equity method. This involves recording the investment initially at cost to the Group and then, in
subsequent years, adjusting the carrying amount of the investment to reflect the Group’s share of the joint venture’s results
less any impairment in carrying value and any other changes to the joint venture’s net assets such as dividends.
Impairments in subsidiaries
Investments in subsidiaries are reviewed for impairment if there is any indication that the carrying amount may not be
recoverable.
When a review for impairment is conducted, the recoverable amount is assessed by reference to the higher of ‘value in
use’ (being the present value of expected future cash flows of the relevant cash-generating unit) or ‘fair value less costs to
sell’. Where there is no binding sale agreement or active market, fair value less costs to sell is based on the best information
available to reflect the amount the Company could receive for the cash-generating unit in an arm’s length transaction.
Annual Report and Financial Statements
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209
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FINANCIAL REPORT
Notes to the financial statements
1. Accounting policies continued
Impairment testing is carried out under the principles described in IAS 36 ‘Impairment of assets’ which includes a number of
restrictions on the future cash flows that can be recognised in respect of restructurings and improvements related to capital
expenditure.
Investment properties
Investment properties are those properties which are not occupied by the Group and which are held for long-term rental
yields, capital appreciation or both. Investment properties also include property that is being developed or constructed
for future use as investment property by the Group. Investment properties comprise freehold land and buildings and are
measured at fair value. At the end of a financial year the fair values are determined by obtaining an independent valuation
prepared in accordance with the current edition of the Appraisal and Valuation Standards published by the Royal Institution
of Chartered Surveyors. External, independent valuation firms having appropriate, recognised professional qualifications
and recent experience in the location and category of property being valued are used. A transfer to the fair value reserve is
made for all fair value gains in the year from retained earnings. Where there have been previous fair value gains transferred
to the fair value reserve and fair value losses have been incurred in the year then a transfer is made to retained earnings to
offset as much of the fair value losses as possible.
At each subsequent reporting date, and in between where a indicator of requirement is present, investment properties are
re-measured to their fair value. Movements in fair value are included in the income statement.
Investment properties are re-categorised as development properties and moved to inventory once planning is secured and
where development with a view to sale has commenced.
A transfer from the fair value reserve to retained earnings is made if any net realisable value provision is required on any
development property where gains had previously been recorded as an investment property.
At each subsequent reporting date, investment properties are re-measured to their fair value. Movements in fair value are
included in the income statement.
Where specific investment properties have been identified as being for sale within the next 12 months, a sale is considered
highly probable and the property is immediately available for sale, their fair value is shown under assets held for sale
(‘AHFS’) within current assets, measured in accordance with the provisions of IAS 40 ‘Investment Property’.
Profit or loss on disposal of investment properties
Disposals are accounted for when control of the investment property is passed to a customer, typically at the point of legal
completion and when title passes. Profits or losses on disposal arise from deducting the asset’s net carrying value, selling
costs and where appropriate a proportion of future costs attributable to the development of the overall land area from the
net proceeds (being net purchase consideration less any clawback liability arising on disposal) is recognised in the income
statement. Net carrying value includes valuation in the case of investment properties.
In the case of investment properties, any fair value reserve for the property disposed of is treated as realised on disposal of
the property and transferred to retained earnings.
Investment properties in the course of construction
Directly attributable costs incurred in the course of constructing a property, not including interest, are capitalised as part of
the cost of the property. Any resultant change in value is therefore recognised through the next revaluation.
Government grants
Government grants are recognised when there is reasonable assurance that the conditions associated with the grants
have been complied with and the grants will be received. Grants related to the development of Investment Property
and Development Property are deducted from the cost of the related asset. Grants for the reimbursement of operating
expenditure are deducted from the related category of costs in the income statement. Once a government grant is
recognised, any related deferred income is treated in accordance with IAS 20 ‘Accounting for Government Grants and
Disclosure of Government Assistance’.
Notes to the financial statements continued
for the year ended 31 December 2024
210
Harworth Group plc
1. Accounting policies continued
Financial assets
A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Assets in this
category are classified as current assets if expected to be settled within 12 months, otherwise they are classified as non-
current.
Financial assets include cash received from the sale of certain development properties but held in separate bank accounts
over which third party infrastructure loan providers have a charge.
Financial assets carried at fair value through profit or loss are initially recognised at fair value and transaction costs are
expensed in the income statement. Financial assets are assessed for their recoverability under the Expected Credit Loss
model on a periodic basis with a provision being made if required under this model. Financial assets are de-recognised
when the rights to receive cash flows from the investments have expired or have been transferred and the Group has
transferred substantially all risks and rewards of ownership.
Gains or losses arising from changes in the fair value of financial assets are presented in the income statement within ‘other
gains’ in the year in which they arise.
Interest income is recognised on financial assets by applying the effective interest rate, except for short-term receivables
when the recognition of interest would be immaterial.
Financial liabilities
Liabilities within the scope of IFRS 9 are classified as financial liabilities at fair value through profit or loss or as other
liabilities, as appropriate. A financial liability is de-recognised when the obligation under the liability is discharged,
cancelled or expires.
All loans and borrowings are classified as other liabilities. Initial recognition is at fair value less directly attributable
transaction costs. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised
cost using the effective interest method.
Financial liabilities included in trade and other payables are recognised initially at fair value and subsequently at amortised
cost. The fair value of a non interest bearing liability is its discounted repayment amount. If the due date of the liability is less
than one year, discounting is omitted.
Pension obligations
The Group contributes to defined contribution schemes for its current employees. The cost is charged to the consolidated
income statement as incurred.
Blenkinsopp pension
The Group’s only defined benefit pension liability is in respect of the Blenkinsopp Section of the Industry-Wide Mineworkers
Pension Scheme.
During the years to 31 December 2024 and 31 December 2023 all contributions have been paid to this scheme by the
Company.
In the Company balance sheet, a net liability equal to the IAS 19 (revised) liability is recognised, and an equal amount within
non-current assets, due to its ability to call upon an indemnity from Harworth Estates Mines Property Limited for this liability
if required. Harworth Estates Mines Property Limited is a wholly owned subsidiary of the Group.
Annual Report and Financial Statements
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211
Financial Report
FINANCIAL REPORT
Notes to the financial statements
1. Accounting policies continued
Share-based payments
Equity-settled share-based payments to employees of the Company and its subsidiary undertakings are measured at the
fair value of the equity instruments at the date of grant and are expensed on a straight-line basis over the vesting period in
the consolidated income statement. The fair value of the equity instruments is determined at the date of grant taking into
account any market-based vesting conditions attached to the award. Non-market based vesting conditions are taken into
account in estimating the number of awards likely to vest. The estimate of the number of awards likely to vest is reviewed
regularly and the expense charge adjusted accordingly.
Operating segments
Management has determined the operating segments based upon the operating reports reviewed by the Investment
Committee that are used to assess both performance and strategic decisions. Management has identified that the
Investment Committee is the Chief Operating Decision Maker in accordance with the requirements of IFRS 8 ‘Operating
Segments’.
The Group is organised into two operating segments: Income Generation and Capital Growth. Group costs are not a
reportable segment. However, information about them is considered by the Investment Committee in conjunction with the
reportable segments.
The Income Generation segment focuses on generating rental returns from the investment portfolio, rental returns and
royalties from energy generation, environmental technologies and the agricultural portfolio, and generating income from
recycled aggregates and secondary coal products. The Capital Growth segment focuses on delivering value by developing
the underlying investment and development property portfolios, and includes planning and development activity, value
engineering, proactive asset management and strategic land acquisition.
All operations are carried out in the United Kingdom.
Consolidation
SUBSIDIARIES
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They
are deconsolidated from the date that control ceases.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred to the former owners of the
acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or
liability resulting from a contingent consideration arrangement. Identifiable assets acquired, and liabilities and contingent
liabilities, assumed in a business combination are measured initially at their fair values at the acquisition date. The Group
recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the
non-controlling interest’s proportionate share of the recognised amounts of the acquiree’s identifiable net assets.
Costs related to acquisitions, other than those associated with the issue of debt or equity securities, are expensed as
incurred.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held
equity interest in the acquiree is re-measured to fair value at the acquisition date; any gains or losses arising from such
re-measurement are recognised in profit or loss.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated.
Notes to the financial statements continued
for the year ended 31 December 2024
212
Harworth Group plc
1. Accounting policies continued
In line with the requirements of IFRS 3, and the change to the definition of a “business acquisition” the Group is
required to review the impact of the concentration test, when accounting for the acquisition of new subsidiaries. Under
the concentration test, the Group considers whether substantially all of the fair value of the gross assets acquired are
concentrated within a single asset (or a group of similar assets). In these situations where the concentration test requirements
are met the Group accounts for the acquisition of a subsidiary using the following methodology:
1. Identify the individual identifiable assets acquired and liabilities assumed that it recognises at the date of the acquisition.
2. Determines the individual transaction price for each identifiable asset and liability by allocating the cost of the group
based on the relative fair value of those assets and liabilities at the date of acquisition, and then.
3. Apply the initial measurement requirements in applicable IFRSs to each identifiable asset acquired and liability assumed.
The Group will account for any difference between the amount at which the asset or liability measured and its individual
transaction price applying the relevant requirements.
Share capital and reserves
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options
are shown in equity as a deduction, net of tax, from the proceeds.
Where shares are issued in direct consideration for acquiring shares in another company, and following which the Group
holds at least 90% of the nominal share capital of that company, any premium on the shares issued as consideration is
included in a merger reserve rather than share premium.
The merger reserve reflects the premium on the shares issued to the Pension Protection Fund as part of the consideration for
the purchase of 75.1% of the issued share capital of Harworth Estates Property Group Limited in 2016.
The fair value reserve reflects the accumulation of fair value adjustments as detailed in the investment property and property,
plant and equipment accounting policies.
Property, plant and equipment
Land and buildings relate to Group-occupied properties. These properties are stated at their fair value, based on market
values, less any subsequent accumulated depreciation or accumulated impairment loss. Depreciation is provided where it
is considered significant having regard to the estimated remaining useful lives and residual values of individual properties.
Surpluses on revaluations are recorded in other comprehensive income and credited to the fair value reserve. However,
to the extent that it reverses a revaluation deficit of the same asset previously recognised in profit or loss, the increase is
recognised in profit or loss. Deficits on revaluations are charged against the fair value reserve to the extent that there are
available surpluses relating to the same asset and are otherwise charged to profit or loss.
Office equipment is stated at cost less accumulated depreciation and any recognised impairment loss. Depreciation is
charged on these assets so as to write off the cost or valuation of assets over their estimated useful lives of three to four
years, using the straight-line method.
Derivatives and hedging
Derivative financial instruments such as interest rate swaps are entered into in order to manage interest rate risks. Such
derivative instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are
subsequently re-measured at fair value. Derivatives are carried as assets when the fair value is positive and as liabilities when
the fair value is negative.
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213
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FINANCIAL REPORT
Notes to the financial statements
1. Accounting policies continued
At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which
the Group wishes to apply hedge accounting, and the risk management objective and strategy for undertaking the hedge.
The documentation includes identification of the hedging instrument, the hedge item or transaction, the nature of the risk
being hedged and how the entity will assess the hedging instrument’s effectiveness in offsetting the exposure to changes in
the hedged item’s fair value or cash flows attributable to the hedge risk. Such hedges are expected to be highly effective in
achieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine that they actually
have been highly effective throughout the financial reporting periods for which they are designated.
The effective portion of the gain or loss on the hedging instrument is recognised through other comprehensive income,
while any ineffective portion is recognised immediately in profit or loss, such as when the hedged financial income or
financial expense is recognised or when a forecast sale of the hedged item occurs.
If the forecast transaction or firm commitment is no longer expected to occur, amounts previously recognised in equity
are transferred to profit or loss. If the hedging instrument expires or is sold, terminated or exercised without replacement
or rollover, or if its designation as a hedge is revoked, amounts previously recognised in equity remain in equity until the
forecast transaction or firm commitment occurs.
When a derivative is held as an economic hedge for a period beyond 12 months after the end of the reporting period, the
derivative is classified as non-current (or separated into current and non-current portions) consistent with the classification
of the underlying item. A derivative instrument that is a designated and effective hedging instrument is classified consistent
with the classification of the underlying hedged item. The derivative instrument is separated into a current portion and
non-current portion only if: 1) a reliable allocation can be made; and 2) it is applied to all designated and effective hedging
instruments.
Tax
CURRENT TAX
The charge or credit for current tax is based on the results for the year adjusted for items that are either not subject to
taxation or for expenditure which cannot be deducted in computing the tax charge or credit. The tax charge or credit is
calculated using taxation rates that have been enacted or substantively enacted at the balance sheet date.
DEFERRED TAX
Deferred tax is recognised using the balance sheet liability method on temporary differences between the carrying amounts
of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit.
Deferred tax is recognised in respect of all taxable temporary differences and all deductible temporary differences, the carry
forward of unused tax credits and any unused tax losses, with certain limited exceptions:
– Deferred tax liability is not recognised when it arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss and does not give rise to equal taxable and deductible temporary differences; and
– Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised,
except when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition
of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary
differences; and
– In respect of taxable or deductible temporary differences associated with investments in subsidiaries and joint ventures,
deferred tax liability is not recognised when the timing of the reversal of the temporary differences can be controlled
and it is probable that the temporary differences will not reverse in the foreseeable future while deferred tax asset is not
recognised when the timing of the reversal of the temporary differences can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable future.
Notes to the financial statements continued
for the year ended 31 December 2024
214
Harworth Group plc
1. Accounting policies continued
Deferred tax is calculated at the tax rates that are expected to apply in the years in which temporary differences reverse,
based on tax rates and laws enacted or substantively enacted at the balance sheet date. Deferred tax is charged or credited
to the income statement, except where it applies to items credited or charged to other comprehensive income or equity in
which case the deferred tax is also dealt with in other comprehensive income or equity.
The carrying value of the Group’s investment properties is assumed to be realised by sale at the end of use. The capital
gains tax rate applied is that which would apply on a direct sale of the property recorded in the Balance Sheet regardless of
whether the Group would structure the sale via the disposal of the subsidiary holding the asset, to which a different tax rate
may apply. The deferred tax is then calculated based on the respective temporary differences and tax consequences arising
from recovery through sale.
Critical accounting estimates and judgements
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing these financial statements, the significant judgements made by management in applying the Group’s
accounting policies and the key sources of estimation uncertainty are as follows:
ESTIMATION OF FAIR VALUE OF INVESTMENT PROPERTIES
The fair value of investment property reflects, amongst other things, rental income from current leases, assumptions
about rental income from future leases and the possible outcome of planning applications, in the light of current market
conditions. The valuation has been arrived at primarily after consideration of market evidence for similar property, although
in the case of those properties where fair value is based on their ultimate redevelopment potential, development appraisals
have been undertaken to estimate the residual value of the landholding after due regard to the cost of, and revenue from,
the development of the property.
In determining fair value measurement, the impact of potential climate-related matters, including legislation, which may
affect the fair value measurement of investment property has been considered.
The values reported are based on significant assumptions and a change in fair values could have a material impact on the
Group’s results. This is due to the sensitivity of fair value to the assumptions made as regards to variances in development
costs compared to management’s own estimates.
Investment properties are disclosed in note 14.
ESTIMATION OF VALUATION OF DEVELOPMENT PROPERTIES
For the purposes of calculating net realisable value for both EPRA reporting and ensuring that development properties
are stated at the lower of cost and net realisable value, the Group obtains an independent valuation of these properties,
prepared in accordance with the current edition of the Appraisal and Valuation Standards published by the Royal Institution
of Chartered Surveyors.
If the net realisable value of the property is lower than cost, a provision is made to reduce the value of the property.
Annual Report and Financial Statements
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215
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FINANCIAL REPORT
Notes to the financial statements
2. Alternative Performance Measures (“APMs”)
Introduction
The Group has applied the December 2019 European Securities and Markets Authority (“ESMA”) guidance on APMs and
the November 2017 Financial Reporting Council (“FRC”) corporate thematic review of APMs in these results. An APM is a
financial measure of historical or future financial performance, position or cash flow of the Group which is not a measure
defined or specified in IFRS.
Overview of our use of APMs
The Directors believe that APMs assist in providing additional useful information on the underlying trends, performance
and position of the Group. APMs assist stakeholder users of the accounts, particularly equity and debt investors, through
the comparability of information. APMs are used by the Directors and management, both internally and externally, for
performance analysis, strategic planning, reporting and incentive-setting purposes.
APMs are not defined by IFRS and therefore may not be directly comparable with other companies’ APMs, including peers in
the real estate industry. APMs should be considered in addition to, and are not intended to be a substitute for, or superior to,
IFRS measurements.
The derivations of our APMs and their purpose
The primary differences between IFRS statutory amounts and the APMs used by Harworth are as follows:
1. Capturing all sources of value creation – Under IFRS, the revaluation movement in development properties which are
held in inventory, is not included in the balance sheet. Also, overages are not recognised in the balance sheet until they
are highly probable. These movements, which are verified by BNP Paribas and Savills (independent external property
valuers), are included within our APMs;
2. Recategorising income statement amounts – Under IFRS, the grouping of amounts, particularly within gross profit and
other gains, does not clearly allow Harworth to demonstrate the value creation through its business model. In particular,
the statutory grouping does not distinguish value gains (being realised profits from the sales of properties and unrealised
profits from property value movements) from the ongoing profitability of the business which is less susceptible to
movements in the property cycle. Finally, the Group includes profits from joint ventures within our APMs as our joint
ventures conduct similar operations to Harworth, albeit in different ownership structures; and
3. Comparability with industry peers – Harworth discloses some APMs which are European Public Real Estate Association
(“EPRA”) measures as these are a set of standard disclosures for the property industry and thus aid comparability for our
stakeholder users.
Our key APMs
The key APMs that the Group focuses on are as follows:
– Total Return – The movement in EPRA NDV plus dividends per share paid in the year expressed as a percentage of
opening EPRA NDV per share
– EPRA NDV per share – EPRA NDV divided by the number of shares in issue less shares held by the Employee Benefit Trust
and Equiniti Share Plan Trustees Limited to satisfy Long Term Incentive Plan and Share Incentive Plan awards
– Value gains – These are the realised profits from the sales of properties and unrealised profits from property value
movements including joint ventures and the mark to market movement on development properties, AHFS and overages
– Net LTV – Group debt net of cash held expressed as a percentage of portfolio value
Set out in the appendix to these financial statements is a reconciliation of the statutory measures to the APMs for the current
reporting period and its comparative.
Notes to the financial statements continued
for the year ended 31 December 2024
216
Harworth Group plc
3. Segmental Information
Segmental Income Statement
31 December 2024
Capital Growth
Sale of
Development
Properties
£’000
Other
Property
Activities
£’000
Income
Generation
£’000
Central
£’000
Total
£’000
Revenue (1)
140,253
19,841
21,491
–
181,585
Cost of sales
(126,320)
(19,534)
(4,654)
–
(150,508)
Gross profit (2)
13,933
307
16,837
–
31,077
Administrative expenses (4)
–
(6,367)
(1,107)
(25,711)
(33,185)
Other gains (3)
–
59,722
18,391
–
78,113
Other operating expense
–
–
–
(1,371)
(1,371)
Operating profit/(loss)
13,933
53,662
34,121
(27,082)
74,634
Finance costs
–
(119)
–
(9,781)
(9,900)
Finance income
–
2,974
125
67
3,166
Share of (loss)/profit of joint ventures
–
(717)
2,204
–
1,487
Profit/(loss) before tax
13,933
55,800
36,450
(36,796)
69,387
(1) Revenue
Revenue is analysed as follows:
Sale of development properties
140,253
–
–
–
140,253
Revenue from PPAs
–
593
–
–
593
Build-to-suit development revenue
–
18,690
–
–
18,690
Rent, service charge and royalties revenue
–
412
21,358
–
21,770
Other revenue
–
146
133
–
279
140,253
19,841
21,491
–
181,585
(2) Gross profit
Gross profit is analysed as follows:
Gross profit excluding sales of development
properties
–
307
16,837
–
17,144
Gross profit on sale of development
properties*
8,248
–
–
–
8,248
Net realisable value provision on development
properties
(5,664)
–
–
–
(5,664)
Release of previous net realisable value
provision on development properties
6,950
–
–
–
6,950
Release of previous net realisable value
provision on disposal of development
properties
4,399
–
–
–
4,399
13,933
307
16,837
–
31,077
Annual Report and Financial Statements
Annual Report and Financial Statements
217
Financial Report
FINANCIAL REPORT
Notes to the financial statements
Notes to the financial statements continued
for the year ended 31 December 2024
3. Segmental Information continued
Segmental Income Statement
31 December 2024
(3) Other gains/(losses)
Other gains/(losses) are analysed as follows:
Increase in fair value of investment properties
–
43,004
17,813
–
60,817
Decrease in the fair value of AHFS
–
(201)
(165)
–
(366)
Profit on sale of investment properties
–
12,476
826
–
13,302
Profit/(loss) on sale of AHFS
–
97
(83)
–
14
Profit on sale of overages
–
4,346
–
–
4,346
–
59,722
18,391
–
78,113
(4) Administrative expenses
Administrative expenses are analysed as follows:
Wages and salaries
–
(5,255)
(902)
(16,398)
(22,555)
Legal and professional
–
(531)
(408)
(3,683)
(4,622)
Other administrative expenses
–
(581)
203
(5,630)
(6,008)
–
(6,367)
(1,107)
(25,711)
(33,185)
* Gross profit on sale of development properties includes a reduction of £4.3m (2023: £2.0m) relating to the discounting of deferred consideration receivable.
Segmental Balance Sheet
31 December 2024
Capital
Growth
£’000
Income
Generation
£’000
Central
£’000
Total
£’000
Non-current assets
Property, plant and equipment
–
–
1,529
1,529
Right of use assets
–
–
1,443
1,443
Other receivables
25,638
–
–
25,638
Investment properties
281,635
303,854
–
585,489
Investments in joint ventures
18,935
14,618
–
33,553
326,208
318,472
2,972
647,652
Current assets
Inventories
205,985
–
–
205,985
Trade and other receivables
61,404
10,948
228
72,580
AHFS
2,450
6,460
–
8,910
Cash
–
–
117,382
117,382
269,839
17,408
117,610
404,857
Total assets
596,047
335,880
120,582
1,052,509
Financial liabilities and derivative financial instruments are not allocated to the reporting segments as they are managed and
measured at a Group level.
218
Harworth Group plc
3. Segmental Information continued
Segmental Income Statement
31 December 2023
Capital Growth
Sale of
Development
Properties
£’000
Other
Property
Activities
£’000
Income
Generation
£’000
Central
£’000
Total
£’000
Revenue (1)
46,731
2,286
23,410
–
72,427
Cost of sales
(51,709)
(2,340)
(6,028)
–
(60,077)
Gross profit (2)
(4,978)
(54)
17,382
–
12,350
Administrative expenses (4)
–
(5,062)
(3,147)
(19,226)
(27,435)
Other gains (3)
–
65,066
4,360
–
69,426
Other operating expenses
–
–
–
(112)
(112)
Operating profit/(loss)
(4,978)
59,950
18,595
(19,338)
54,229
Finance costs
–
–
–
(6,421)
(6,421)
Finance income
–
438
7
–
445
Share of profit of joint ventures
–
892
662
–
1,554
Profit/(loss) before tax
(4,978)
61,280
19,264
(25,759)
49,807
(1) Revenue
Revenue is analysed as follows:
Sale of development properties
46,731
–
–
–
46,731
Revenue from PPAs
–
776
–
–
776
Build-to-suit development revenue
–
956
–
–
956
Rent, service charge and royalties revenue
–
340
22,657
–
22,997
Other revenue
–
214
753
–
967
46,731
2,286
23,410
–
72,427
(2) Gross profit
Gross profit is analysed as follows:
Gross (loss)/profit excluding sales of
development properties
–
(54)
17,382
–
17,328
Gross loss on sale of development properties
(618)
–
–
–
(618)
Net realisable value provision on development
properties
(7,442)
–
–
–
(7,442)
Reversal of previous net realisable value
provision on development properties
1,213
–
–
–
1,213
Release of previous net realisable value
provision on disposal of development
properties
1,869
–
–
–
1,869
(4,978)
(54)
17,382
–
12,350
Annual Report and Financial Statements
Annual Report and Financial Statements
219
Financial Report
FINANCIAL REPORT
Notes to the financial statements
Notes to the financial statements continued
for the year ended 31 December 2024
3. Segmental Information continued
Segmental Income Statement
31 December 2023
(3) Other gains/(losses)
Other gains/(losses) are analysed as follows:
Increase in fair value of investment properties
–
65,584
5,788
–
71,372
Decrease in the fair value of AHFS
–
(114)
(158)
–
(272)
Loss on sale of investment properties
–
(588)
(365)
–
(953)
Loss on sale of AHFS
–
(134)
(1,006)
–
(1,140)
Profit on sale of overages
–
318
101
–
419
–
65,066
4,360
–
69,426
(4) Administrative expenses
Administrative expenses are analysed as follows:
Wages and salaries
–
(4,174)
(1,083)
(12,413)
(17,670)
Legal and professional
–
(310)
(840)
(2,062)
(3,212)
Other administrative expenses
–
(578)
(1,224)
(4,751)
(6,553)
–
(5,062)
(3,147)
(19,226)
(27,435)
Segmental Balance Sheet
31 December 2023
Capital
Growth
£’000
Income
Generation
£’000
Central
£’000
Total
£’000
Non-current assets
Property, plant and equipment
–
–
1,670
1,670
Right of use assets
–
–
512
512
Other receivables
11,296
–
–
11,296
Investment properties
199,216
234,726
–
433,942
Investments in joint ventures
17,604
13,118
–
30,722
228,116
247,844
2,182
478,142
Current assets
Inventories
263,073
–
–
263,073
Trade and other receivables
23,967
11,300
2,022
37,289
AHFS
3,764
14,988
–
18,752
Cash
–
–
27,182
27,182
290,804
26,288
29,204
346,296
Total assets
518,920
274,132
31,386
824,438
Financial liabilities and derivative financial instruments are not allocated to the reporting segments as they are managed and
measured at a Group level.
220
Harworth Group plc
4. Operating profit
Note
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Operating profit before tax is stated after charging:
Net realisable value provision (release)/charge on development properties
16
(5,685)
4,360
Staff costs
5
22,555
17,670
Depreciation of property, plant and equipment and right of use assets
12, 13
406
282
5. Employee information
The monthly average number of persons (excluding Non-Executive Directors) employed by the Group during the year was:
Group
Company
Year ended
31 December
2024
Number
Year ended
31 December
2023
Number
Year ended
31 December
2024
Number
Year ended
31 December
2023
Number
Management and administration
131
121
3
3
Remuneration details of these persons were as follows:
Group
Company
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Wages and salaries
17,162
13,768
3,087
3,087
Share-based payment expense
2,287
1,404
301
301
Social security costs
2,026
1,603
407
407
Post employment benefits
1,080
895
33
33
22,555
17,670
3,828
3,828
Key management remuneration relates to the members of the Investment Committee:
Group
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Short term employee benefits
5,883
5,364
Post employment benefits
312
218
Share-based payment expense
1,004
775
7,199
6,357
Detailed information relating to Directors’ remuneration is disclosed in the Directors’ remuneration report on pages 142 to
178 and forms part of these financial statements.
Annual Report and Financial Statements
Annual Report and Financial Statements
221
Financial Report
FINANCIAL REPORT
Notes to the financial statements
Notes to the financial statements continued
for the year ended 31 December 2024
6. Finance costs and finance income
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
– Bank interest
810
42
– Unwind of discounting on deferred consideration
2,356
403
Total finance income
3,166
445
Finance costs
– Bank interest
(6,201)
(2,778)
– Facility fees
(1,235)
(1,524)
– Amortisation of up-front fees
(727)
(671)
– Other interest
(1,737)
(1,448)
Total finance costs
(9,900)
(6,421)
Net finance costs
(6,734)
(5,976)
During the year no interest has been capitalised in investment or development properties (2023: £nil).
7. Auditors’ remuneration
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Fees payable to the Company’s auditors and its associates for the audit of the Company
and the consolidated financial statements
398
380
Fees payable to the Company’s auditors and its associates for other services:
– The audit of the Company’s subsidiaries pursuant to legislation
68
40
– Other assurance services
–
189
466
609
8. Tax
Analysis of tax (charge)/credit in the year
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Current tax
Current year
(7,931)
(6,749)
Adjustment in respect of prior periods
1,925
907
Total current tax charge
(6,006)
(5,842)
Deferred tax
Current year
(5,807)
(4,779)
Adjustment in respect of prior periods
(337)
(987)
Difference between current tax rate and rate of deferred tax
–
(243)
Total deferred tax (charge)/credit
(6,144)
(6,009)
Tax charge
(12,150)
(11,851)
Other comprehensive income items
Deferred tax – current year
–
3
Total
–
3
222
Harworth Group plc
8. Tax continued
The tax charge for the year is lower (2023: higher) than the standard rate of corporation tax in the UK of 25% (2023: 23.5%).
The differences are explained below:
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Profit before tax
69,387
49,807
Profit before tax multiplied by rate of corporation tax in the UK of 25% (2023: 23.5%)
(17,347)
(11,705)
Effects of:
Adjustments in respect of prior periods - deferred taxation
337
(987)
Adjustments in respect of prior periods - current taxation
1,925
907
Defined benefits pension scheme
(342)
–
Non-taxable income
107
–
Expenses not deducted for tax purposes
(327)
(542)
Revaluation gains
2,734
252
Share of profit of joint ventures
372
365
Difference between current tax rate and rate of deferred tax
–
(243)
Share options
94
102
Utilisation of unrecognised deferred tax assets
176
–
Other adjustments
121
–
Total tax charge
(12,150)
(11,851)
The difference between current tax rate and rate of deferred tax of £nil (2023: £0.2m) relates to the unwinding of balances
previously recognised at 25% and the reduction of the deferred tax liabilities recognised at 25% as a result of in year
movements.
At 31 December 2024, the Group had a current tax liability of £8.1m (2023: £2.6m).
The Company has recognised a current tax asset in 2024 of £0.4m (2023: liability £0.8m).
Deferred tax
The following is the analysis of deferred tax liabilities presented in the consolidated balance sheet:
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Deferred tax assets
1,520
503
Deferred tax liabilities
(37,373)
(30,592)
(35,853)
(30,089)
Annual Report and Financial Statements
Annual Report and Financial Statements
223
Financial Report
FINANCIAL REPORT
Notes to the financial statements
Notes to the financial statements continued
for the year ended 31 December 2024
8. Tax continued
The movements on the deferred income tax account were as follows:
Investment
Properties
£’000
Tax
Losses
£’000
Other
Temporary
Differences
£’000
Total
£’000
At 1 January 2023
(25,980)
–
1,839
(24,141)
Recognised in the consolidated income statement
(4,612)
–
(1,397)
(6,009)
Recognised in the consolidated statement of
comprehensive income
–
–
3
3
Recognised in the consolidated statement of equity
–
–
58
58
At 31 December 2023 and 1 January 2024
(30,592)
–
503
(30,089)
Recognised in the consolidated income statement
(6,781)
–
637
(6,144)
Recognised in the consolidated statement of equity
–
–
380
380
At 31 December 2024
(37,373)
–
1,520
(35,853)
In the Spring Budget 2021, the Government announced an increase in the corporation tax rate from 19% to 25% from
1 April 2023. The rate was enacted at the balance sheet date and as such the deferred tax balances have been calculated
in full on temporary differences under the liability method using the rate expected to apply at the time of the reversal of the
balance. As such, the deferred tax assets and liabilities as at 31 December 2024 have been reflected at 25%.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred taxes relate to the same fiscal authority.
Deferred tax assets of £5.4m at 31 December 2024 (2023: £7.7m) have not been recognised owing to the uncertainty as to
their recoverability.
The Company has recognised a deferred tax asset in 2024 of £0.6m (2023: £0.1m).
9. Result of the parent entity
As permitted by section 408 of the Companies Act 2006, the Company’s income statement and statement of comprehensive
income have not been included separately in these financial statements. The loss for the financial year was £10.8m (2023:
£9.3m) and the total comprehensive expense for the financial year was £11m (2023: £9.3m). The distributable reserves of
the Company are £75.2m (2023: £89.1m).
224
Harworth Group plc
10. Dividends
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Interim dividend of 0.489p per share for the year ended 31 December 2024
1,589
–
Full year dividend of 1.022p per share for the year ended 31 December 2023
3,310
–
Interim dividend of 0.444p per share for the year ended 31 December 2023
–
1,437
Full year dividend of 0.929p per share for the year ended 31 December 2022
–
3,001
4,899
4,438
The Board has declared a final dividend to be paid of 1.125p (2023: 1.022p) per share to be paid in May 2025, bringing
the total dividend for the year to 1.614p (2023: 1.466p). The recommended 2024 final dividend and 2024 total dividend
represent a 10% increase.
There is no change to the current dividend policy to continue to grow dividends by 10% each year.
11. Earnings per share
Earnings per share has been calculated by dividing the profit attributable to ordinary shareholders by the weighted average
number of shares in issue and ranking for dividend during the year.
Year ended
31 December
2024
Year ended
31 December
2023
Profit from continuing operations attributable to ordinary shareholders (£’000)
57,237
37,956
Weighted average number of shares used for basic earnings per share calculation
323,497,275
322,767,356
Basic earnings per share (pence)
17.7
11.8
Weighted average number of shares used for diluted earnings per share calculation
331,274,223
328,653,655
Diluted earnings per share (pence)
17.3
11.5
The difference between the weighted average number of shares used for the basic and diluted earnings per share
calculation is due to the effect of employee share schemes that are dilutive.
Annual Report and Financial Statements
Annual Report and Financial Statements
225
Financial Report
FINANCIAL REPORT
Notes to the financial statements
Notes to the financial statements continued
for the year ended 31 December 2024
12. Property, plant and equipment
Group
Cost or fair value
Land and
Buildings
£’000
Office
Equipment
£’000
Total
£’000
As at 1 January 2023
502
635
1,137
Additions at cost
–
396
396
Transfers from investment property
967
–
967
Decrease in fair value
(169)
–
(169)
As at 31 December 2023 and 1 January 2024
1,300
1,031
2,331
Additions at cost
403
197
600
Decrease in fair value
(515)
–
(515)
As at 31 December 2024
1,188
1,228
2,416
Depreciation
As at 1 January 2023
–
(537)
(537)
Depreciation charge
–
(124)
(124)
As at 31 December 2023 and 1 January 2024
–
(661)
(661)
Depreciation charge
–
(226)
(226)
As at 31 December 2024
–
(887)
(887)
Net book value
Net book value at 31 December 2024
1,188
341
1,529
Net book value at 31 December 2023
1,300
370
1,670
At 31 December 2024, the Group had entered into contractual commitments for the acquisition of £0.2m of property, plant
and equipment (2023: £nil).
13. Right of use assets
Group
Right of use assets
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Buildings
1,391
466
Vehicles
52
46
1,443
512
Lease liabilities
Current
271
158
Non-current
1,196
397
1,467
555
Group
Depreciation charge of right of use assets
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Buildings
149
143
Vehicles
31
15
180
158
The Group leases a number of offices and vehicles. Rental contracts are typically made for fixed periods of three to five years
but may have extension options.
226
Harworth Group plc
13. Right of use assets continued
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the
lease and non-lease components based on their relative stand-alone prices.
However, for leases of real estate for which the Group is a lessee, it has elected not to separate lease and non-lease
components and instead accounts for these as a single lease component.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease
agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor.
Lease assets may not be used as security for borrowing purposes.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net
present value of the following lease payments:
– fixed payments (including in-substance fixed payments), less any lease incentives receivable
– variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the
commencement date
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
14. Investment properties
Investment properties at 31 December 2024 and 31 December 2023 have been measured at fair value. The Group
holds five categories of investment property, being Agricultural Land, Natural Resources, the Investment Portfolio, Major
Developments and Strategic Land in the UK, which sit within the operating segments of Income Generation and Capital
Growth.
Income Generation
Capital Growth
Agricultural
Land
£’000
Natural
Resources
£’000
Investment
Portfolio
£’000
Major
Developments
£’000
Strategic
Land
£’000
Total
£’000
At 1 January 2023
5,694
19,726
210,407
44,244
120,292
400,363
Direct acquisitions
655
–
–
–
15,829
16,484
Subsequent expenditure
45
1,350
677
22,104
11,558
35,734
Disposals
–
–
(11,136)
(788)
(7,041)
(18,965)
Increase/(decrease) in fair value
116
89
5,583
3,196
62,388
71,372
Transfers between divisions
–
–
18,551
(10,416)
(8,135)
–
Transfers to development properties
–
–
–
–
(51,865)
(51,865)
Transfers to property, plant and
equipment
–
–
(967)
–
–
(967)
Transfer to AHFS
–
(1,264)
(14,800)
–
(2,150)
(18,214)
At 31 December 2023
6,510
19,901
208,315
58,340
140,876
433,942
Direct acquisitions
–
–
44,833
30,494
15,462
90,789
Subsequent expenditure
36
624
1,494
41,733
3,111
46,998
Disposals
–
–
(648)
–
(40,022)
(40,670)
(Decrease)/increase in fair value
(278)
688
17,402
3,656
39,349
60,817
Transfers between divisions
–
(1,285)
11,149
(8,119)
(1,745)
–
Transfer to AHFS
–
(2,167)
(2,720)
–
(1,500)
(6,387)
At 31 December 2024
6,268
17,761
279,825
126,104
155,531
585,489
Properties included within AHFS
(note 18)
–
3,740
2,720
–
2,450
8,910
At 31 December 2024
6,268
21,501
282,545
126,104
157,981
594,399
Subsequent expenditure is recorded net of government grants of £nil (2023: £1.6m).
Annual Report and Financial Statements
Annual Report and Financial Statements
227
Financial Report
FINANCIAL REPORT
Notes to the financial statements
Notes to the financial statements continued
for the year ended 31 December 2024
14. Investment properties continued
Included within investment properties (agricultural land) is a provision of £0.2m (2023: £0.2m) relating to the restoration
liability on sites formerly rented to mining tenants. This provision is treated as a reduction of the individual property
valuations.
During the year no development property was re-categorised as investment property to reflect a change in use (2023: £nil).
During the year none of the investment property was re-categorised to development properties (2023: £51.9m). During
the year no investment property was re-categorised as land and buildings (2023: £1.0m). Properties that have obtained
planning permission and where development with a view to sale has commenced are held as development properties
in inventories. Until sites receive planning permission and their future use has been determined, Harworth’s view is that
the land is held for a currently undetermined future use and should thus be held as investment property. Where there is a
subsequent change in use, typically in properties and land that have received planning permission and where development
with a view to sale has commenced, these are re-categorised as development properties in inventories.
Investment property is transferred between divisions to reflect a change in the activity arising from the asset.
The fair value disclosures for investment properties are presented on a combined basis along with those properties in AHFS
as summarised in the following table:
Income Generation
Capital Growth
Agricultural
Land
£’000
Natural
Resources
£’000
Investment
Portfolio
£’000
Major
Developments
£’000
Strategic
Land
£’000
Total
£’000
Investment properties
6,268
17,761
279,825
140,431
141,204
585,489
Properties included within AHFS
(note 18)
–
3,740
2,720
–
2,450
8,910
Total properties (excluding
development properties)
6,268
21,501
282,545
140,431
143,654
594,399
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Market value as estimated by the external valuer
605,933
461,288
Capital incentives and rent-free periods included within other receivables
(6,357)
(5,149)
Contingent interest in adjoining land included within external valuations
(5,729)
(4,118)
Other adjustments
552
673
Fair value for financial purposes
594,399
452,694
Valuation process
The properties were valued in accordance with the Royal Institution of Chartered Surveyors (RICS) Valuation – Professional
Standards (the ‘Red Book’) by BNP Paribas Real Estate, Jones Lang LaSalle and Savills. All are independent firms acting in the
capacity of external valuers with relevant experience of valuations of this nature. The valuations are on the basis of Market
Value as defined by the Red Book, which RICS considers meets the criteria for assessing Fair Value under International
Financial Reporting Standards. The valuations are based on what is determined to be the highest and best use. When
considering the highest and best use a valuer will consider, on a property by property basis, its actual and potential uses
which are physically, legally and financially viable. Where the highest and best use differs from the existing use, the valuer
will consider the cost and the likelihood of achieving and implementing this change in arriving at its valuation. Most of the
Group’s properties have been valued on the basis of their development potential which differs from their existing use.
228
Harworth Group plc
14. Investment properties continued
At each financial year end, management:
– verifies all major inputs to the independent valuation report;
– assesses property valuation movements when compared to the prior year valuation report; and
– holds discussions with the independent valuer.
The different valuation levels are defined as:
Level 1: valuation based on quoted market prices traded in active markets.
Level 2: valuation based on inputs other than quoted prices included within Level 1 that maximise the use of observable data
either directly or from market prices or indirectly derived from market prices.
Level 3: where one or more inputs to valuation are not based on observable market data.
The Directors determine the applicable hierarchy that each investment property falls into by assessing the level of significant
unobservable inputs used in the valuation technique. As a result of the specific nature of each investment property, valuation
inputs are not based on directly observable market data and therefore all investment properties were determined to fall into
Level 3.
The Group’s policy is to recognise transfers into and out of fair value hierarchy levels as at the date of the event or
change in circumstance that caused the transfer. There were no transfers between hierarchy levels in the year ended
31 December 2024 (2023: none).
Valuation techniques underlying management’s estimation of fair value are as follows:
Agricultural land
Most of the agricultural land is valued using the market comparison basis, with an adjustment made for the length of the
remaining term on any tenancy and the estimated cost to bring the land to its highest and best use. Where the asset is
subject to a secure letting, it is valued on a yield basis, based upon sales of similar types of investment.
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Market value £’000
6,397
6,653
Weighted Average Land value per acre £’000
3
3
The land value per acre is considered to be a significant unobservable input and details are provided below. All things being
equal, a higher value per acre would lead to an increase in the valuation of an asset and vice versa. The table below sets out
a sensitivity analysis for the key source of estimation uncertainty with the resulting increase/(decrease) in the fair value at
31 December 2024:
2024
2023
Increase in
Sensitivity
Value
£’000
Decrease in
Sensitivity
Value
£’000
Increase in
Sensitivity
Value
£’000
Decrease in
Sensitivity
Value
£’000
Change in land value per acre by 5%
320
(320)
333
(333)
Annual Report and Financial Statements
Annual Report and Financial Statements
229
Financial Report
FINANCIAL REPORT
Notes to the financial statements
Notes to the financial statements continued
for the year ended 31 December 2024
14. Investment properties continued
Natural resources
Natural resource sites in the portfolio are valued based on a discounted cash flow for the operating life of the asset with
regard to the residual land value.
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Market value £’000
21,503
19,499
Weighted Average Land value per acre £’000
16
19
The land value per acre is considered to be a significant unobservable input and details are provided below. All things being
equal, a higher value per acre would lead to an increase in the valuation of an asset and vice versa. The table below sets out
a sensitivity analysis for the key source of estimation uncertainty with the resulting increase/(decrease) in the fair value at
31 December 2024:
2024
2023
Increase in
Sensitivity
Value
£’000
Decrease in
Sensitivity
Value
£’000
Increase in
Sensitivity
Value
£’000
Decrease in
Sensitivity
Value
£’000
Change in land value per acre by 5%
1,075
(1,075)
1,082
(1,082)
Investment Portfolio
The industrial & logistics investment properties are valued on the basis of market comparison with direct reference to
observable market evidence including current rent and estimated rental value (ERV), yields and capital values and adjusted
where required for the estimated cost to bring the property to its highest and best use. The evidence is adjusted to reflect
the quality of the property assets, the quality of the covenant profile of the tenants and the reliability/volatility of cash flows.
The Group’s portfolio has a spread of yields. New income acquisitions are generally acquired at high yields where value can
be added. Subject to market backdrop, properties that are newly built by Harworth typically have lower yields. As assets are
enhanced and improved, these would also be expected to be valued at lower yields.
ERV, reversionary rental yields, net income and net initial yield are considered to be significant unobservable inputs. Details
of the aggregate ERV and weighted average reversionary rental yields used for the Investment Portfolio properties are
provided in the following table:
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Market value (£’000)
288,853
226,650
Aggregate ERV (£’000)
17,570
16,187
Equivalent rental yield %
6.7
7.2
All other factors being equal, a higher equivalent yield would lead to a decrease in the valuation of an asset and an increase
in the current or estimated future rental stream, or market demand for the asset, would have the effect of increasing the
capital value, and vice versa. However, there are inter-relationships between the significant unobservable inputs which are
partially determined by market conditions, which would impact on these changes.
230
Harworth Group plc
14. Investment properties continued
The table below sets out a sensitivity analysis for the key sources of estimation uncertainty with the resulting increase/
(decrease) in the fair value of Investment Portfolio assets at 31 December 2024:
2024
2023
Increase in
Sensitivity
Value
£’000
Decrease in
Sensitivity
Value
£’000
Increase in
Sensitivity
Value
£’000
Decrease in
Sensitivity
Value
£’000
Change in net income by 5%
14,443
(14,427)
11,427
(11,427)
Change in portfolio net initial yield by 50 basis points
(29,883)
30,230
(24,109)
28,653
The property rental income earned by the Group from its occupied investment property, all of which is leased out under
operating leases amounted to £16.9m (2023: £17.5m). Direct operating expenses arising on investment property
generating rental income in the year amounted to £4.5m (2023: £5.4m).
The Group has considered performing sensitivity analysis on the ERV and reversionary rental yields on each site. However,
it was found that this variable was so inherent within the overall valuation calculation that it was not possible to be able
to specifically identify the financial impact of altering this variable in isolation. The Directors have determined that the
sensitivities shown for the change in both net income and net yield offer more relevant insight to the risks faced by
the Group.
The RCF and other loans are secured by way of fixed equitable charges over investment and development properties.
Major developments
Major development sites are generally valued using residual development appraisals, a form of discounted cash flow which
estimates the current site value from future cash flows measured by current land and/or completed built development
values, observable or estimated development costs, and observable or estimated development returns.
Where possible development sites are valued by direct comparison to observable market evidence with appropriate
adjustment for the quality and location of the property asset, although this is generally only a reliable method of
measurement for smaller development sites.
The discounted cash flows utilise gross development value, which takes account of the future expectations of sales over
time, less costs, as at today’s value, to complete remediation and provide the necessary site infrastructure to bring the site
forward. Sales prices, build costs and profit margins are considered to be significant unobservable inputs for sites valued
using residual development appraisals and details of these are provided below:
As at 31 December 2024
As at 31 December 2023
Market
value
(£’000)
Sales price
per sq. ft
Build cost
per sq. ft
Profit
Margin
%
Market
value
(£’000)
Sales price
per sq. ft
Build cost
per sq. ft
Profit
Margin
%
Major developments
125,308 £133–£187
£71–£84
15%
57,554
£131–£147
£69–£75
15%
All other factors being equal, a higher land value reflecting future expectations on sales would lead to an increase in the
valuation of an asset, an increase in costs would lead to a decrease in the valuation of an asset. However, there are inter-
relationships between the significant unobservable inputs which are partially determined by market conditions, which
would impact on these changes.
Annual Report and Financial Statements
Annual Report and Financial Statements
231
Financial Report
FINANCIAL REPORT
Notes to the financial statements
Notes to the financial statements continued
for the year ended 31 December 2024
14. Investment properties continued
The table below sets out a sensitivity analysis for the key sources of estimation uncertainty with the resulting increase/
(decrease) in the fair value of Major Development investment properties at 31 December 2024:
2024
2023
Increase in
Sensitivity
Value
£’000
Decrease in
Sensitivity
Value
£’000
Increase in
Sensitivity
Value
£’000
Decrease in
Sensitivity
Value
£’000
Change in sales price of 5%
13,589
(13,588)
8,649
(8,745)
Change in build cost of 5%
(8,694)
8,715
(6,224)
6,036
The Group has considered performing sensitivity analysis on the Profit Margin required on each site. However, it was found
that this variable was so inherent within the overall valuation calculation that it was not possible to be able to specifically
identify the financial impact of altering this variable in isolation. The Directors have determined that the sensitivities shown
for the change in both sales price and build cost offer more relevant insight to the risks faced by the Group.
Strategic land
Strategic land is valued on the basis of discounted cash flows, with future cash flows measured by current land values
adjusted to reflect the quality of the development opportunity, the potential development costs estimated by reference to
observable development costs on comparable sites, and the likelihood of securing planning consent. Valuations are then
benchmarked against observable land values reflecting the current existing use of the land, which is generally agricultural
and, where available, observable strategic land values. The land value per acre and planning consent risk factor are
considered to be significant unobservable inputs and details are provided below:
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Market value £’000
163,872
148,792
Weighted Average Land value per acre £’000
84
75
All things being equal, a higher value per acre would lead to an increase in the valuation of an asset and vice versa. The table
below sets out a sensitivity analysis for the key source of estimation uncertainty with the resulting increase/(decrease) in the
fair value at 31 December 2024:
2024
2023
Increase in
Sensitivity
Value
£’000
Decrease in
Sensitivity
Value
£’000
Increase in
Sensitivity
Value
£’000
Decrease in
Sensitivity
Value
£’000
Change in land value per acre by 5%
8,194
(8,194)
7,440
(7,440)
Change in Discount rate by 5%
(19,234)
19,234
(10,904)
10,904
The Group has considered performing sensitivity analysis on both the Quality of Development Opportunity & Potential
Development Costs. However, it was found that these variables were so inherent within the overall valuation calculation
that it was not possible to be able to specifically identify the financial impact of altering the single variable in isolation. The
Directors have determined that the sensitivities shown for the change in land value and the change in planning consent risk
factors offer more relevant insight to the risks faced by the Group.
232
Harworth Group plc
14. Investment properties continued
Acquisition of Investment Property
On the 2nd October 2024 the Group acquired the entire share capital and voting rights of SPV (Star UK PAS V Propco
Limited) for a total consideration of £44.5m. As part of the transaction the Group acquired five logistics units located just off
junction 33 of the M1 at Sheffield/Rotherham. The properties are known as the Catalyst site at Sheffield Business Park.
The acquisition was made via Harworth No.1 Limited (“HN1L”) – which is a 100% owned subsidiary of Harworth Estates
Limited (“HEL”).
At the date of purchase 3 of the properties were already leased out to 3rd party tenants – thereby adding to the company’s
existing Income Generation portfolio.
At the point of Acquisition, the consideration was made up of the following elements:
At date of
Acquisition
£’000
Fair value of consideration paid:
Cash paid to acquire net assets
21,100
Repayment of debt
21,800
Interco loan repayment
200
Stamp duty costs
100
Acquisition costs
1,200
Total
44,500
In line with the requirements of IFRS 3, and the change to the definition of a “business acquisition” the company has
considered the impact of the concentration test when accounting for the acquisition of “Catalyst”.
Under the concentration test, the Group has considered whether substantially all of the fair value of the gross assets
acquired is concentrated within a single asset (or a group of similar assets).
Having performed the calculation, it is evident that the acquisition of the business was to acquire the property held within
the limited company. The property acquired represented 99% of the net assets of the acquired entity and therefore the
assets acquired do not represent a business. Instead, the assets of the acquired company, under the concentration test
should instead be accounted for, on consolidation, as an acquisition of activities and assets.
The company accounts for the acquisition under IFRS 3. For any identifiable asset or liability initially measured at an amount
other than cost, the company initially measures that asset or liability at the amount specified in the applicable IFRS Standard.
The company then deducts from the transaction price of the group the amounts allocated to the assets and liabilities initially
measured at an amount other than cost, and then allocates the residual transaction price to the remaining identifiable assets
and liabilities based on their relative fair values at the date of the acquisition.
Annual Report and Financial Statements
Annual Report and Financial Statements
233
Financial Report
FINANCIAL REPORT
Notes to the financial statements
Notes to the financial statements continued
for the year ended 31 December 2024
14. Investment properties continued
Following the approach set out in IFRS 3, detailed above, the company has recorded the following assets and liabilities at
the point of acquisition:
At date of
Acquisition
£’000
Fair Value applied to net assets acquired
Investment property
44,800
Accrued rental income
300
Cash
100
Trade creditors
(100)
Accruals
(300)
Deferred income
(300)
Total
44,500
Following the acquisition of the site the company has continued to operate the site within its existing Income Generation
portfolio with the following impact to the Group’s overall profitability. Also shown below is the total impact to the Group’s
profitability had the company acquired the activities and assets on 1st January 2024.
1 January–
1 October
2024
£’000
Since
acquisition
(2 October
2024)
£’000
From
1 January
2024
(Total)
£’000
Revenue
1,319
493
1,812
Cost of sales and administrative expenses
(1,050)
(38)
(1,088)
Interest expense
(1,331)
(380)
(1,711)
Revaluation gains
4,680
325
5,005
Total Profit/(loss)
3,618
400
4,018
15. Investments
Investment in subsidiaries (Company balance sheet)
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Cost and net book amount:
At 1 January
210,844
209,864
Grant of equity instruments to employees of subsidiaries
1,395
980
At 31 December
212,239
210,844
Investments in subsidiaries are stated at cost less provision for impairment. As permitted by section 616 of the Companies
Act 2006, where the relief afforded under section 612 of the Companies Act 2006 applies, cost is the aggregate of the
nominal value of the relevant number of the Company’s shares and the fair value of any other consideration given to acquire
the share capital of the subsidiary undertakings.
234
Harworth Group plc
15. Investments
The Company held investments in the following subsidiaries as at 31 December 2024:
Company name
Activity
Description of
shares held
Proportion of
nominal value
of issued
share capital
held by the
Company %
Held
directly or
indirectly
by the
Company
Harworth Estates Property Group Limited
Trading
Ordinary
100
Direct
Cadley Park Management Company Limited
Trading
Ordinary
100
Indirect
Cutacre Country Park Management Company Limited
Trading
Ordinary
100
Indirect
EOS Inc Limited
Trading
Ordinary
100
Indirect
Harworth Estates (Agricultural Land) Limited
Trading
Ordinary
100
Indirect
Harworth Estates (Waverley Prince) Limited
Trading
Ordinary
100
Indirect
Harworth Estates Curtilage Limited
Trading
Ordinary
100
Indirect
Harworth Estates Investments Limited
Trading
Ordinary
100
Indirect
Harworth Estates Limited
Trading
Ordinary
100
Indirect
Harworth Estates Mines Property Limited
Trading
Ordinary
100
Indirect
Harworth Estates Overage Limited
Trading
Ordinary
100
Indirect
Harworth Estates Residential Development Limited
Trading
Ordinary
100
Indirect
Harworth Estates Warwickshire Limited
Trading
Ordinary
100
Indirect
Harworth Surface Water Management (Bardon) Limited
Trading
Ordinary
100
Indirect
Harworth Surface Water Management (North West) Limited
Trading
Ordinary
100
Indirect
Harworth TRR Limited
Trading
Ordinary
100
Indirect
Logistics North MC Limited
Trading
Ordinary
10.86
Indirect
Thoresby Vale Management Company Limited
Trading
Ordinary
100
Indirect
Harworth Estates Northumberland Woodland Limited
Trading
Ordinary
100
Indirect
Coze Homes Limited
Trading
Ordinary
100
Indirect
Olive Lane Management Company Limited
Trading
Ordinary
100
Indirect
Harworth Catalyst 1 Limited
Trading
Ordinary
100
Indirect
Flass Lane Management Company Limited
Trading
Limited by guarantee
100
Indirect
Mapplewell Management Company Limited
Trading
Limited by guarantee
100
Indirect
POW Management Company Limited
Trading
Limited by guarantee
100
Indirect
Riverdale Park Management Company Limited
Trading
Limited by guarantee
100
Indirect
Rossington Community Management Company Limited
Trading
Limited by guarantee
100
Indirect
Simpson Park Management Company Limited
Trading
Limited by guarantee
100
Indirect
South East Coalville Management Company Limited
Trading
Limited by guarantee
100
Indirect
Waverley Community Management Company Limited
Trading
Limited by guarantee
100
Indirect
Moss Nook (St Helens) Management Company Limited
Trading
Limited by guarantee
100
Indirect
Ansty Development Vehicle LLP
Trading
Partnership
100
Indirect
Grimsby West LLP
Trading
Partnership
100
Indirect
Chidswell LLP
Trading
Partnership
100
Indirect
Harworth PV Limited
Non–trading
Ordinary
100
Indirect
Harworth Regeneration Limited
Non–trading
Ordinary
100
Indirect
Harworth Services Limited
Non–trading
Ordinary
100
Indirect
Harworth Estates No 2 Limited
Non–trading
Ordinary
100
Indirect
Harworth No 1 Limited
Non–trading
Ordinary
100
Indirect
Harworth PPA Holdco Limited
Non–trading
Ordinary
100
Indirect
Harworth PPA No 1 Limited
Non–trading
Ordinary
100
Indirect
Benthall Grange (Ironbridge) Management Company
Limited
Dormant
Limited by guarantee
100
Indirect
Skelton Grange Management Company
Dormant
Limited by guarantee
100
Indirect
All of the above companies are incorporated in England and Wales and have a registered address of Advantage House,
Poplar Way, Rotherham, South Yorkshire, S60 5TR. Control of Logistics North MC Limited is via ownership of voting rights
equal to 75% or more and the right to appoint and remove directors.
Annual Report and Financial Statements
Annual Report and Financial Statements
235
Financial Report
FINANCIAL REPORT
Notes to the financial statements
Notes to the financial statements continued
for the year ended 31 December 2024
15. Investments continued
The following entities were incorporated during the year:
– Skelton Grange Management Company Limited on 12 September 2024
– Harworth PPA Holdco Limited on 25 October 2024
– Harworth PPA No 1 Limited on 25 October 2024
– Chidswell LLP on 29 November 2024
The following entity was acquired in 2024:
Harworth Catalyst 1 Limited on 2 October 2024
Investment in joint ventures
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
At 1 January
30,722
29,828
Investments in joint ventures
3,048
250
Distributions from joint ventures
(1,704)
(910)
Share of profits/(losses) of joint ventures
1,487
1,554
At 31 December
33,553
30,722
The Group holds investments in the following joint ventures as at 31 December 2024:
Company name
Activity
Description of
shares held
Proportion of
nominal value
of issued
share capital
held by the
Group %
Multiply Logistics North Holdings Limited
Trading
Ordinary
20
Multiply Logistics North LP
Trading
Partnership
20
Crimea Land Mansfield LLP
Trading
Partnership
50
Northern Gateway Development Vehicle LLP
Trading
Partnership
50
The Aire Valley Land LLP
Trading
Partnership
50
All of the above companies are incorporated in England and Wales and, have a registered address of Advantage House,
Poplar Way, Rotherham, South Yorkshire, S60 5TR. Multiply Logistics North Holdings Limited and Multiply Logistics North LP
are joint ventures as a consequence of equal voting rights.
236
Harworth Group plc
15. Investments continued
Aggregate information of the Group’s share of assets, liabilities and results of joint ventures, that are individually material is:
The Aire Valley Land LLP
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Investment property
24,600
26,000
Current assets
280
2,339
Total assets
24,880
28,339
Current liabilities
(11)
(38)
Equity
24,869
28,301
Group’s share in equity (50%)
12,435
14,151
Group’s carrying amount of the investment
12,435
14,151
Included within current assets are cash and cash equivalents of £0.3m (2023: £2.3m).
Multiply Logistics North LP
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Investment property
71,316
63,245
Current assets
3,124
3,356
Total assets
74,440
66,601
Current liabilities
(1,348)
(1,011)
Equity
73,092
65,590
Group’s share in equity (20%)
14,618
13,118
Group’s carrying amount of the investment
14,618
13,118
Included within current assets are cash and cash equivalents of £1.2m (2023: £0.7m). Included within current liabilities are
accruals and deferred income of £0.6m (2023: £0.9m) and other taxes payable of £0.5m (2023: £0.4m).
The Aire Valley Land LLP
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Revenue
–
–
Cost of sales
(4)
(11)
Gross (loss)/profit
(4)
(11)
Administrative expenses
(13)
(9)
Other gains/(losses)
(1,415)
1,845
Profit/(loss) for the year
(1,432)
1,825
Group’s share of profit/(loss) for the year (50%)
(716)
913
Annual Report and Financial Statements
Annual Report and Financial Statements
237
Financial Report
FINANCIAL REPORT
Notes to the financial statements
Notes to the financial statements continued
for the year ended 31 December 2024
15. Investments continued
Multiply Logistics North LP
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Revenue
3,625
3,600
Cost of sales
(570)
(590)
Gross profit
3,055
3,010
Administrative expenses
(110)
(100)
Other gains/(losses)
8,075
400
Profit/(loss) for the year
11,020
3,310
Group’s share of profit/(loss) for the year (20%)
2,204
662
Aggregate information of the Group’s share of assets, liabilities and results of joint ventures, that are not individually
material is:
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Investment property
4,193
–
Current assets
9,899
7,701
Total assets
14,092
7,701
Current liabilities
(322)
(795)
Equity
13,770
6,906
Group share in equity (50%)
6,885
3,453
Group’s carrying amount of the investment
6,885
3,453
Loss for the year
(3)
(41)
Group’s share of losses for the year (50%)
(1)
(21)
The risks associated with these investments are as follows:
– Decline in the availability, and/or an increase in the cost, of credit for residential and commercial buyers; and
– Decline in market conditions and values.
16. Inventories
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Development properties
190,888
250,024
Planning promotion agreements
4,655
3,805
Options
10,442
9,244
At 31 December
205,985
263,073
The total cost of inventory recognised as an expense within cost of sales in the year is £127.5m (2023: £52.7m) and
comprised of: £132.0m (2023: £47.3m) relating to the sale of development properties; a credit of £5.7m (2023: £4.3m
charge) net realisable value provision against development properties, and a charge of £1.2m (2023: £1.1m) in relation to
planning promotion agreements.
238
Harworth Group plc
16. Inventories continued
The movement in development properties was as follows:
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
At 1 January
250,024
204,952
Acquisitions
1,419
–
Subsequent expenditure
38,919
32,417
Disposals
(105,159)
(34,850)
Net realisable value provision release/(charge)
5,685
(4,360)
Transfers from investment properties
–
51,865
At 31 December
190,888
250,024
Subsequent expenditure is recorded net of government grant receipts of £3.7m (2023: £1.2m).
The movement in net realisable value provision was as follows:
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
At 1 January
14,136
9,776
Charge for the year
5,664
7,442
Released on disposals
(6,950)
(1,213)
Reversal of previous net realisable value provision
(4,399)
(1,869)
At 31 December
8,451
14,136
The reversal of previous net realisable value provision occurs where development properties have an increase in net
realisable value which offsets a previous net realisable value charge.
17. Trade and other receivables
Group
Company
Current
As at
31 December
2024
£’000
As at
31 December
2023
£’000
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Trade receivables
48,625
16,933
–
–
Less: provision for impairment of trade receivables
–
(9)
–
–
Net trade receivables
48,625
16,924
–
–
Other receivables
19,691
17,019
380
111
Prepayments
568
1,965
26
55
Accrued income
3,696
1,381
–
–
Amounts owed by subsidiary undertakings (note 30)
–
–
3,138
136
72,580
37,289
3,544
302
Non-current
Trade receivables
25,038
10,336
–
–
Other receivables
600
960
–
–
Amounts owed by subsidiary undertakings (note 30)
–
–
21,199
23,337
25,638
11,296
21,199
23,337
Annual Report and Financial Statements
Annual Report and Financial Statements
239
Financial Report
FINANCIAL REPORT
Notes to the financial statements
Notes to the financial statements continued
for the year ended 31 December 2024
17. Trade and other receivables continued
The carrying amount of trade and other receivables approximates to their fair value due to the short time frame over which
the assets are realised. All of the Group and Company receivables are denominated in sterling.
Included within trade receivables is £43.8m (2023: £8.9m) of deferred consideration on the sale of development properties
due in less than one year and £0.7m (2023: £6.8m) of deferred consideration on the sale of AHFS due in less than one year.
The non-current trade receivable includes £24.5m (2023: £12.3m) of deferred consideration on the sale of development
properties due in more than one year and £0.5m (2023: £nil) of deferred consideration on the sale of AHFS due in more
than one year.
Other receivables include debtors from agent managed properties of £3.0m (2023: £3.7m), right of return assets of £2.7m
(2023: £2.3m) and rent -free and capital incentives of £6.4m (2023: £5.2m).
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivables as disclosed in
note 22. The Group and Company do not hold any collateral as security.
The amounts owed to the Company by subsidiary undertakings are repayable on demand. Interest is payable at SONIA + 2%
(2023: SONIA + 2%).
Group
Movements on the Group provisions for impairment of trade receivables are as follows:
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
At 1 January
(9)
(28)
Released/(provided for) in the year
9
19
At 31 December
–
(9)
Trade receivables can be analysed as follows:
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Amounts receivable not past due
48,034
16,828
Amounts receivable past due but not impaired
591
96
Amounts receivable impaired (gross)
–
9
Less impairment
–
(9)
At 31 December
48,625
16,924
Ageing of past due but not impaired trade receivables:
As at
31 December
2024
£’000
As at
31 December
2023
£’000
31–60 days
558
1
61–90 days
5
–
91–120 days
28
95
At 31 December
591
96
240
Harworth Group plc
17. Trade and other receivables continued
Ageing of impaired trade receivables:
As at
31 December
2024
£’000
As at
31 December
2023
£’000
91–120 days
–
9
120+ days
–
–
At 31 December
–
9
18. Assets Held For Sale
AHFS relate to investment properties identified as being for sale within 12 months, where a sale is considered highly
probable and the property is immediately available for sale.
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
At 1 January
18,752
59,790
Transferred from investment properties
6,387
18,214
Subsequent expenditure
163
74
Decrease in fair value
(366)
(272)
Disposals
(16,026)
(59,054)
At 31 December
8,910
18,752
19. Cash
Group
Company
As at
31 December
2024
£’000
As at
31 December
2023
£’000
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Cash
117,382
27,182
504
90
20. Borrowings
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Current:
Secured – infrastructure and direct development loans
–
(29,744)
–
(29,744)
Non-current:
Secured – bank loan
(164,125)
(33,830)
(164,125)
(33,830)
Total borrowings
(164,125)
(63,574)
Loans are stated after deduction of unamortised borrowing costs of £0.9m (2023: £1.5m).
Annual Report and Financial Statements
Annual Report and Financial Statements
241
Financial Report
FINANCIAL REPORT
Notes to the financial statements
Notes to the financial statements continued
for the year ended 31 December 2024
20. Borrowings continued
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Infrastructure and direct development loans
South Yorkshire Pension Fund/ Scrudf Limited Partnership
Rotherham AMP
–
(584)
Scrudf Limited Partnership
Gateway 36
–
(6,850)
Merseyside Pension Fund
Bardon Hill
–
(22,310)
Total infrastructure and direct development loans
–
(29,744)
Bank loan
(164,125)
(33,830)
Total borrowings
(164,125)
(63,574)
The Group’s Revolving Credit Facility (RCF) was increased to £240 million (31 December 2023: £200 million) in December
through activation of an accordion option. The facility is provided by Natwest, Santander and HSBC. The RCF is repayable in
February 2027 (five year term) on a non-amortising basis.
The RCF is subject to financial and other covenants. Bank borrowings are secured by way of a floating debenture over assets
not otherwise used as security under specific infrastructure or direct development loans. Proceeds from and repayments of
bank loans are reflected gross in the Consolidated Statement of Cash Flows and reflect timing of utilisation of the RCF.
The infrastructure and direct development loans are provided by public and private bodies in order to promote the
development of major sites or assist with vertical direct development. The loans are drawn down as work on the respective
sites is progressed and repaid on agreed dates or when disposals are made from the sites.
21. Trade and other payables
Group
Company
Current
As at
31 December
2024
£’000
As at
31 December
2023
£’000
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Trade payables
1,300
759
1
7
Amounts owed to subsidiary undertakings (note 30)
–
–
57,102
38,544
Taxation and social security
19,172
6,178
238
105
Other creditors
13,089
5,142
169
224
Accruals
97,035
71,814
2,330
2,598
Deferred income
5,402
4,194
–
–
135,998
88,087
59,840
41,478
The amounts owed by the Company to subsidiary undertakings are repayable on demand. Interest is payable at SONIA + 2%
(2023: SONIA + 2%).
Group
Company
As at
31 December
2024
£’000
As at
31 December
2023
£’000
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Amounts in accruals relating to parcels of land that have been
sold but where infrastructure costs are yet to be incurred
60,366
54,163
–
–
Amounts in accruals and other creditors relating to deferred
payments for investment property acquisitions
7,650
–
–
–
Deferred income includes £2.8m (2023: £3.1m) in relation to rental income.
242
Harworth Group plc
21. Trade and other payables continued
Non-current liabilities
Group
Company
As at
31 December
2024
£’000
As at
31 December
2023
£’000
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Other creditors
14,584
947
–
–
Deferred income
642
810
–
–
15,226
1,757
–
–
Amounts in non-current other creditors relating to deferred payments for property acquisitions £13.6m (2023: £nil).
22. Financial Instruments and derivatives
The Group’s principal financial instruments include trade and other receivables, cash, interest bearing borrowings and trade
and other payables.
Other financial assets and liabilities
As at 31 December 2024
As at 31 December 2023
Group
Book value
£’000
Fair value
£’000
Book value
£’000
Fair value
£’000
Financial assets held at amortised cost
Cash
117,382
117,382
27,182
27,182
Trade and other receivables
93,954
93,954
45,239
45,239
Financial liabilities held at amortised cost
Bank and other borrowings
164,125
164,125
63,574
63,574
Trade and other payables
126,007
126,007
78,662
78,662
As at 31 December 2024
As at 31 December 2023
Company
Book value
£’000
Fair value
£’000
Book value
£’000
Fair value
£’000
Financial assets held at amortised cost
Cash
504
504
90
90
Trade and other receivables
18,659
18,659
23,584
23,584
Financial liabilities held at amortised cost
Trade and other payables
59,602
59,602
41,373
41,373
The Group classifies the assets and liabilities in the analysis above as ‘loans and receivables’ and ‘other financial liabilities’,
respectively.
The fair value of bank and other borrowings equals their carrying amount, as the impact of discounting is not significant. The
fair values are within Level 2 of the fair value hierarchy.
Annual Report and Financial Statements
Annual Report and Financial Statements
243
Financial Report
FINANCIAL REPORT
Notes to the financial statements
Notes to the financial statements continued
for the year ended 31 December 2024
22. Financial Instruments and derivatives continued
Changes in liabilities arising from financing activities
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Borrowings at start of year
63,574
59,978
Repayments
(112,134)
(49,299)
Drawdowns
210,510
50,939
Interest expense
7,931
4,225
Interest paid
(6,332)
(2,778)
Borrowing costs
(151)
(162)
Amortisation of capitalised borrowing costs
727
671
Borrowings at end of year
164,125
63,574
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Leases at start of year
555
254
Additions
1,068
392
Lease financing costs
8
–
Payments in respect of leases
(164)
(91)
Leases at end of year
1,467
555
23. Financial risk management
The Group’s overall risk management programme focuses on credit and liquidity risks to minimise potential adverse effects
on the Group’s financial performance.
Risk management is carried out centrally under policies approved by the Board of Directors. The Board discusses and agrees
courses of action to cover material risk management areas, including credit risk and investment of excess liquidity.
Credit risk
The Group is subject to credit risk arising from outstanding receivables and committed cash and cash equivalents and
deposits with banks and financial institutions. The Group’s policy is to manage credit exposure to trading counterparties
within defined trading limits.
The Group is exposed to counterparty credit risk on cash and cash equivalent balances. The Group and Company hold all
their cash deposits with their principal bankers.
244
Harworth Group plc
23. Financial risk management continued
Interest rate risk
The Group currently holds no fixed interest borrowings, all bank borrowings held at year end are secured by way of a
floating debenture over assets not otherwise used as security under specific infrastructure or direct development loans. The
Group’s interest rate risk arises from these external borrowings.
The table below sets out a sensitivity analysis for an instance in which the UK interest rates were 1.0% higher or lower
showing the resulting increase/(decrease) in the Group’s pre-tax profit at 31 December 2024:
2024
2023
Increase in
Sensitivity
Value
£’000
Decrease in
Sensitivity
Value
£’000
Increase in
Sensitivity
Value
£’000
Decrease in
Sensitivity
Value
£’000
Change in interest of 1%
1,650
(1,650)
426
(426)
These sensitivities have been prepared in respect of the direct impact of such an interest rate change on the net financing
expense of financial instruments only, and do not attempt to estimate the indirect effect such a change may have on the
wider economic environment.
Liquidity risk
The Group is subject to the risk that it will not have sufficient liquid resources to fund its on-going business. The Group
manages its liquidity requirements with the use of operating cash flows, cash balances and drawdowns under its RCF.
The Group had net debt at 31 December 2024 of £46.7m (2023: £36.4m). The Group used cash from operating activities
and investing activities for the year of £3.1m (2023: cash generated of £18.3m).
The table below analyses the Group’s financial liabilities which will be settled on a net basis into relevant maturity groupings
based on the remaining period at the Balance sheet date to the contractual maturity date. The amounts disclosed in the table
are the gross contractual undiscounted cash flows.
Net carrying
amount of
financial
liabilities
£’000
Total
contractual
cashflow
£’000
Less than
1 year
£’000
Between
1 and 2 years
£’000
Between
2 and 5 years
£’000
Over
5 years
£’000
At 31 December 2024
Trade and other payables
126,007
126,007
111,423
13,694
890
–
Lease liability
1,467
1,921
322
364
579
656
Bank and other borrowings
including interest payable
164,125
190,098
12,511
12,511
165,075
–
At 31 December 2023
Trade and other payables
78,662
78,662
77,715
57
890
–
Lease liability
455
455
158
150
247
–
Bank and other borrowings
including interest payable
63,574
78,571
35,454
4,128
38,989
–
Annual Report and Financial Statements
Annual Report and Financial Statements
245
Financial Report
FINANCIAL REPORT
Notes to the financial statements
Notes to the financial statements continued
for the year ended 31 December 2024
23. Financial risk management continued
Capital risk management
The Group is subject to the risk that its capital structure will not be sufficient to support the growth of the business. The
Group’s objectives when managing capital are:
– to safeguard the Group’s ability to continue as a going concern and have the resources to provide returns for
Shareholders and benefits for other stakeholders;
– to maximise returns to Shareholders by allocating capital across the business based upon the expected level of return and
risk; and
– to maintain an optimal capital structure to reduce the cost of capital.
The Group manages and monitors its cash balances to ensure it has sufficient capital to manage and maintain its business
activities. Cash balances are disclosed in note 19.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to Shareholders,
return capital to Shareholders, issue new shares or sell assets to reduce debt.
The Group monitors capital on the basis of net debt to equity. Net debt is total debt less cash and at 31 December 2024 this
was £46.7m (2023: £36.4m).
The Group’s Revolving Credit Facility (RCF) was increased to £240 million (31 December 2023: £200 million) in December
through activation of an accordion option, as discussed in Note 20. The facility is provided by Natwest, Santander and
HSBC. The RCF is repayable in March 2027 (five year term) on a non-amortising basis.
The facility is subject to financial covenants including minimum interest cover, maximum infrastructure debts as a percentage
of property value and gearing. The bank borrowings are secured by fixed equitable charges over development and
investment properties.
24. Retirement benefit obligations
Defined contribution pension schemes
The Group pays defined contribution payments to pension insurance plans. Contributions to defined contribution schemes
in the year amounted to £1.1m (2023: £0.9m). The Group has no further payment obligations once the contributions have
been paid. The contributions are recognised as an expense when they are due.
Defined benefit obligations
The Group and the Company have defined benefit obligations in respect of the Blenkinsopp Section of the Industry-Wide
Mineworkers’ Pension Scheme (the Blenkinsopp scheme). This scheme is closed to new members.
The Balance sheet liability in respect of retirement benefit obligations was:
Group
Company
As at
31 December
2024
£’000
As at
31 December
2023
£’000
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Relating to continuing activities
Blenkinsopp
45
11
45
11
Contributions to the Blenkinsopp scheme of £1.6m were made by the Group during 2024 (2023: £0.2m). It is expected that
lower contributions will be paid in 2025. At 31 December 2024, no contributions remained unpaid (2023: £nil).
246
Harworth Group plc
24. Retirement benefit obligations continued
The pension scheme is valued annually by a qualified independent actuary for the purposes of IAS 19 (revised) and the
preparation of financial statements. The assumptions which usually have the most significant effect on the results of the
valuation are the discount rate, which is based on corporate bond yields, and the rates of increase in pensions. There are no
active members of this scheme. The main assumptions underlying the valuation of the Blenkinsopp scheme were:
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Discount rate
5.40% p.a.
4.60% p.a.
Rate of pension increases
2.70% p.a.
2.50% p.a.
Rate of price inflation (RPI)
3.20% p.a.
3.00% p.a.
Rate of price inflation (CPI)
2.70% p.a.
2.50% p.a.
Rate of cash commutation
25% of pension at
a rate of £9:£1
25% of pension at a
rate of £9:£1
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Life expectancy at age 65 for current pensioners (years)
Male
18.3
18.2
Female
21.7
21.6
Life expectancy at age 65 for future pensioners currently aged 45 (years)
Male
19.2
19.1
Female
22.9
22.8
The assumed pension increases depend on the period of service accrual (before April 1997: no increases, after 1997: in line
with statutory minimum increases based on consumer price inflation).
Defined benefit obligations
The amounts recognised in the Balance sheet are:
2024
£’000
2023
£’000
2022
£’000
2021
£’000
2020
£’000
Fair value of plan assets
1,933
2,124
1,989
2,747
2,537
Present value of funding obligations
(1,978)
(2,135)
(2,103)
(3,305)
(3,505)
Net liability recognised in the Balance sheet
(45)
(11)
(114)
(558)
(968)
The Blenkinsopp scheme does not own any shares in the Company.
Annual Report and Financial Statements
Annual Report and Financial Statements
247
Financial Report
FINANCIAL REPORT
Notes to the financial statements
Notes to the financial statements continued
for the year ended 31 December 2024
24. Retirement benefit obligations continued
The amounts recognised in the Consolidated Income Statement are:
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Expenses
(102)
(109)
(Loss)/gain on settlements
(1,294)
–
Interest cost
28
(3)
(1,368)
(112)
Other operating expense includes a settlement loss incurred following the Group entering a trustee agreed Buy-In
Agreement with respect to the Blenkinsopp Pension scheme during the year. The agreement secures all remaining
liabilities in the scheme by way of an insurance contract. The costs of £1.4m represent a settlement loss preceding buyout
arrangement and as such are expensed through the Income Statement.
A further credit of £0.2m (2023: £0.0m) has been reflected in the Statement of Comprehensive Income in the year. This
represents the net effect of experience, and actuarial gains and losses on the scheme in the year.
Change in assets
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Fair value of plan assets at the start of the year
2,124
1,989
Interest income
124
98
Actual return/(loss) on scheme assets excluding interest income
(401)
20
Employer contributions
1,573
225
Expenses
(101)
(109)
(Loss)/gain on settlements
(1,294)
–
Benefits paid
(90)
(99)
Fair value of plan assets at the end of the year
1,933
2,124
Plan assets, which are all quoted investments, are comprised as follows:
Analysis of plan assets (which are all quoted investments)
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Gilts
–
332
Liability driven investments
–
1,155
Delegated solutions
–
–
Sterling liquidity fund
–
442
Annuity policy
1,968
–
Other
(35)
195
Total
(1,933)
2,124
248
Harworth Group plc
24. Retirement benefit obligations continued
Change in defined benefit obligations
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Present value of defined benefit obligations at the start of the year
(2,135)
(2,103)
Interest cost
(96)
(101)
Remeasurements:
– Gain arising from changes in demographic assumptions
(1)
80
– Loss arising from changes in experience
16
(57)
– Gain arising from changes in financial assumptions
147
(53)
Benefits paid
90
99
Present value of defined benefit obligation at the end of the year
(1,979)
(2,135)
Analysis of the movement of the Balance Sheet liability
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
At the start of the year
(11)
(114)
Total amounts recognised in the income statement
(1,368)
(112)
Employer contributions
1,573
225
Net actuarial (loss)/gain recognised in the year
(239)
(10)
At the end of the year
(45)
(11)
The duration of the defined benefit obligation is c.12 years (2023: c.15 years).
Cumulative actuarial gains and losses recognised in equity
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
At the start of the year
(402)
(392)
Net actuarial (loss)/gain in the year
(239)
(10)
At the end of the year
(641)
(402)
Experience gains and losses
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Actual return/(loss) on scheme assets excluding interest income
(401)
20
Remeasurements:
– Loss arising from changes in experience
16
(57)
– (Loss)/gains arising from changes in financial assumptions
147
(53)
– Gains arising from changes in demographic assumptions
(1)
80
Net actuarial (loss)/gain
(239)
(10)
Contributions are determined by a qualified actuary on the basis of a triennial valuation, using the projected credit unit
method. The most recent valuation for the purpose of determining contributions was at 31 December 2021, which was
agreed in March 2023. This showed an estimated past service deficit of £0.7m.
Annual Report and Financial Statements
Annual Report and Financial Statements
249
Financial Report
FINANCIAL REPORT
Notes to the financial statements
Notes to the financial statements continued
for the year ended 31 December 2024
24. Retirement benefit obligations continued
The sensitivity of the defined benefit obligations to changes in the weighted principal assumptions is:
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Change in discount rate by 0.5% (2023: 0.5%)
(104)
(129)
Change in price inflation (and associated assumptions) by 0.5% (2023: 0.5%)
110
97
Increase in life expectancy by 1 year (2023: increase by 1 year)
69
79
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In
practice some of the assumptions may be correlated. No changes have been made to the method and types of assumptions
from those in the previous year.
The Scheme exposes the Group to actuarial risks such as: investment risk, interest rate risk and longevity risk.
– Investment risk: the present value of the defined benefit obligation is calculated using a discount rate determined by
reference to high quality corporate bond yields; if the return on Scheme assets is below this rate, it will create a deficit.
The majority of the Scheme investments are held within index-linked government bonds, cash/liquidity funds and
delegated solutions.
– Interest rate risk: a decrease in the corporate bond interest rate will increase the liability but this would likely be partially
offset by an increase in the return on the Scheme’s debt investments.
– Longevity risk: the present value of the defined benefit obligation is calculated by reference to the best estimate of the
mortality of Scheme participants both during and after retirement. An increase in the life expectancy of the participants
will increase the Scheme’s liability.
25. Share-based payments
During the year, there were five classes of equity-settled share incentive plans outstanding:
– Deferred Share Bonus Plan (DSBP). Under this scheme share options with a nil-cost exercise price are granted to eligible
employees. Vesting of the share options is subject to the achievement of a performance condition relating to Total Return
and continued employment.
– Deferred Bonus Plan (DBP). Under this scheme share options with a nil-cost exercise price are granted to eligible
employees. Vesting of the share options is subject to continued employment.
– Restricted Share Plan (RSP). Under this scheme share options with a nil-cost exercise price are granted to eligible
employees. Vesting of the share options is subject to continued employment and the satisfaction of underpin conditions
relating to Financial Health, Underlying performance and Corporate Governance as detailed on page 153 of the
Directors’ Remuneration Report.
– Save As You Earn (SAYE). Under this scheme eligible employees enter into a savings contract for a period of three years.
Share options are granted on commencement of the savings contract and are exercisable using the amount saved under
the contract at the time it terminates. Share options are granted at a discount of up to 20% of the market value of the
shares at the time of invitation. The exercise of the share options is subject to continued employment only.
– Share Incentive Plan (SIP). Under this scheme eligible employees are granted free shares which vest after three years
subject to continued employment only.
Share options granted under the DSBP, DBP and RSP are exercisable no later than the tenth anniversary of the grant date.
Share options granted under the SAYE are exercisable for a six month period after the end of the three year savings period.
250
Harworth Group plc
25. Share-based payments continued
The movements in the number of share options outstanding and their weighted average exercise prices are as follows:
Number of shares
Weighted average
exercise price
DSBP
2024
2023
2024
2023
Outstanding at beginning of the year
943
943
£0.00
£0.00
Granted during the year
–
–
n/a
n/a
Forfeited during the year
–
–
n/a
n/a
Exercised during the year
–
–
n/a
n/a
Outstanding at end of the year
943
943
£0.00
£0.00
Exercisable at end of the year
943
943
£0.00
£0.00
Weighted average remaining contractual life
3.3 years
4.3 years
Number of shares
Weighted average
exercise price
DBP
2024
2023
2024
2023
Outstanding at beginning of the year
57,988
–
n/a
n/a
Granted during the year
166,662
57,988
£0.00
£0.00
Forfeited during the year
–
–
n/a
n/a
Exercised during the year
–
–
n/a
n/a
Outstanding at end of the year
224,650
57,988
£0.00
£0.00
Exercisable at end of the year
–
–
n/a
n/a
Weighted average remaining contractual life
9.0 years
9.2 years
Number of shares
Weighted average
exercise price
RSP
2024
2023
2024
2023
Outstanding at beginning of the year
3,762,530
2,412,749
£0.00
£0.00
Granted during the year
1,880,711
1,396,752
£0.00
£0.00
Forfeited during the year
(132,630)
(46,971)
£0.00
£0.00
Exercised during the year
(346,284)
–
n/a
n/a
Outstanding at end of the year
5,164,327
3,762,530
£0.00
£0.00
Exercisable at end of the year
4,394
–
n/a
n/a
Weighted average remaining contractual life
8.1 years
8.1 years
Number of shares
Weighted average
exercise price
SAYE
2024
2023
2024
2023
Outstanding at beginning of the year
1,194,070
894,382
£0.91
£0.91
Granted during the year
279,678
1,034,244
£1.00
£1.00
Forfeited during the year
(35,888)
(192,868)
£1.26
£1.26
Exercised during the year
(139,801)
(541,688)
£0.74
£0.74
Outstanding at end of the year
1,298,059
1,194,070
£1.04
£1.04
Exercisable at end of year
–
21,921
£0.74
£0.74
Weighted average remaining contractual life
1.5 years
2.1 years
Annual Report and Financial Statements
Annual Report and Financial Statements
251
Financial Report
FINANCIAL REPORT
Notes to the financial statements
Notes to the financial statements continued
for the year ended 31 December 2024
25. Share-based payments continued
Number of shares
Weighted average
exercise price
SIP
2024
2023
2024
2023
Outstanding at beginning of the year
890,743
432,769
£0.00
£0.00
Granted during the year
476,307
538,078
£0.00
£0.00
Forfeited during the year
(75,931)
(62,967)
£0.00
£0.00
Released during the year
(46,864)
(17,137)
£0.00
£0.00
Outstanding at end of the year
1,244,255
890,743
£0.00
£0.00
The fair values of the share options granted under the RSP and SAYE during the year were determined using Black-Scholes
valuation methodology. The weighted average fair value of the share options granted under the DBP during the year was
equal to the share price at date of grant £1.36.
The significant inputs to the valuation models were as follows:
RSP
SAYE
Share price at date of grant
£1.35
£1.73
Exercise price
–
1.46
Dividend yield
1.09%
0.88%
Expected volatility
37%
36%
Risk free interest rate
n/a
4.30%
Expected term
4.90 years
3.32 years
Weighted average fair value
£1.14
£0.58
The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may not
necessarily be the actual outcome.
Awards under the 2020 SAYE Scheme were exercised in the year with a weighted average share price on exercise of £1.27.
Awards under the 2021 SAYE Scheme were exercised in the year with a weighted average share price on exercise of £1.52.
The total charge for the year relating to employee share based payment plans was £1.8m (2023: £1.4m), £1.8m of which
related to equity-settled share based payment transactions and the remainder to cash-settled share based payment
transactions.
26. Share capital
Issued, authorised and fully paid
Group and Company
As at
31 December
2024
£’000
As at
31 December
2023
£’000
At 1 January
32,408
32,305
Shares issued
87
103
At 31 December
32,495
32,408
252
Harworth Group plc
26. Share capital continued
Issued, authorised and fully paid – number of shares
Group and Company
Year ended
31 December
2024
Year ended
31 December
2023
At 1 January
324,084,072
323,051,124
Shares issued
871,342
1,032,948
At 31 December
324,955,414
324,084,072
Own shares held
(1,314,562)
(929,699)
At 31 December
323,640,852
323,154,373
There is only one class of share in issue: ordinary shares of 10 pence each. All shares carry equal rights to dividends, voting
and return of capital on a winding up of the Company, as set out in the Company’s Articles of Association.
The own shares held represent the number of shares held by the Employee Benefit Trust and Equiniti Share Plan Trustees
Limited to satisfy Deferred Share Bonus Plan, Restricted Share Plan and Share Incentive plan awards for Executive Directors,
Senior Executives and employees. For this purpose both Employee Benefit Trust and Equiniti Share Plan Trustees Limited are
treated as an extension of the Company.
27. Share premium account
Group and Company
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
At 1 January
25,034
24,688
Premium on shares issued
123
346
At 31 December
25,157
25,034
28. Commitments
At 31 December 2024 the Group had contractual commitments due under construction contracts of £44.1m (2023:
£21.2m). Capital commitments for the acquisition of property, plant and equipment are disclosed in note 12. Future
expenditure required to bring investment and development properties to their highest and best use are not considered
to be capital commitments, however such build costs for our investment properties are disclosed as a significant
unobservable input in the valuation of Major Development properties as set out in note 14.
29. Operating leases
Future minimum lease receipts
At 31 December 2024 the Group had contracted with tenants for the following future minimum lease payments:
Group
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Less than one year
15,055
15,527
Between one and two years
14,460
13,506
Between two and three years
14,073
12,206
Between three and four years
11,790
11,850
Between four and five years
10,605
9,615
More than five years
107,955
108,973
173,938
171,677
As set out in note 14 property rental income earned during the year was £16.9m (2023: £17.5m).
Annual Report and Financial Statements
Annual Report and Financial Statements
253
Financial Report
FINANCIAL REPORT
Notes to the financial statements
Notes to the financial statements continued
for the year ended 31 December 2024
30. Related party transactions
Group
The Group carried out the following transactions with related parties during 2024. The following entities are related parties
as a consequence of shareholdings, joint venture arrangements and partners of such and/or common Directorships. All
related party transactions are clearly justified and beneficial to the Group and are undertaken on an arm’s-length basis on
fully commercial terms in the normal course of business.
Year ended/
as at
31 December
2024
£000
Year ended/
as at
31 December
2023
£000
MULTIPLY LOGISTICS NORTH HOLDINGS LIMITED &
MULTIPLY LOGISTICS NORTH LP
Sales
Recharges of costs
176
281
Asset management fee
107
100
Water charges
132
146
Purchases
Recharge of costs
3
1
Receivables
Other receivables
–
5
Trade receivables
39
281
Payables
Other payables
(66)
–
GENUIT GROUP (FORMERLY POLYPIPE)
Sales
Rent
–
10
Development property disposal
–
1,680
Receivables
Trade receivables
–
–
THE AIRE VALLEY LAND LLP
Receivables
–
26
CRIMEA LAND MANSFIELD LLP
Receivables
–
9
Investment made during the year
25
–
NORTHERN GATEWAY DEVELOPMENT VEHICLE LLP
Partner loan made during the year
5
–
Investment made during the year
3,023
250
INVESTMENT PROPERTY FORUM
Purchases
3
5
BRITISH PROPERTY FEDERATION
Purchases
20
–
254
Harworth Group plc
30. Related party transactions continued
Company
The Company carried out the following transactions with subsidiary undertakings.
Details of the Company’s intercompany balances and interest at 31 December 2024 are set out below:
Year ended/as at
31 December 2024
Year ended/as at
31 December 2023
Net interest
receivable/
(payable)
in the year
£’000
Net amounts
due from/(to)
£’000
Net interest
receivable/
(payable)
in the year
£’000
Net amounts
due from/(to)
£’000
EOS Inc. Limited
1,033
15,142
1,039
15,232
Harworth Estates Limited
(683)
(12,692)
(495)
(9,020)
Harworth Estates (Agricultural Land) Limited
(145)
(2,794)
(122)
(1,953)
Harworth Estates Investments Limited
(1,275)
(20,425)
(919)
(15,716)
Harworth Estates No. 1 Limited
–
879
–
–
Harworth Guarantee Co. Limited
–
–
–
–
Harworth Estates Overages Limited
–
3
–
3
Harworth Estates Mines Property Limited
399
6,057
391
5,661
Harworth Estates Curtilage Limited
–
2,244
151
2,444
Harworth Estates Waverley Prince Limited
(92)
(1,893)
(22)
(351)
Harworth Estates Property Group Limited
(994)
(17,520)
(646)
(10,680)
Harworth Surface Water Management (North West) Limited
(42)
(654)
(35)
(562)
Coalfield Estates Limited
–
–
–
–
Harworth Estates Warwickshire Limited
–
3
–
3
Harworth TRR Limited
(31)
(536)
(17)
(256)
Logistics North MC Limited
–
3
–
3
POW Management Company Limited
–
–
–
(2)
Rossington Community Management Company Limited
–
–
–
–
Flass Lane Management Company Limited
–
–
–
(1)
Mapplewell Management Company Limited
–
–
–
–
Cadley Park Management Company Limited
–
–
–
(2)
Simpson Park Management Company Limited
–
–
–
(1)
Ansty Development Vehicle LLP
(9)
(588)
7
121
Harworth Surface Water Management (Bardon) Limited
–
3
–
3
Harworth Estates Residential Development Limited
–
3
–
3
(1,839)
(32,765)
(668)
(15,071)
Dividends received
During the year the Company received dividends of £nil (2023: £nil) from subsidiary undertakings.
31. Post balance sheet events
There are no post balance sheet events to disclose that have not been disclosed publicly by a regulatory news
announcement.
Annual Report and Financial Statements
Annual Report and Financial Statements
255
Financial Report
FINANCIAL REPORT
Notes to the financial statements
Appendix
EPRA Net Asset Measures
EPRA introduced a new set of Net Asset Value metrics in 2020: EPRA Net Reinstatement Value (“NRV”), EPRA Net
Tangible Assets (“NTA”) and EPRA NDV. While the Group uses only EPRA NDV as a key APM, the EPRA Best Practices
Recommendations guidelines require companies to report all three EPRA NAV metrics and reconcile them to IFRS. These
disclosures are provided below.
31 December 2024
EPRA NDV
£’000
EPRA NTA
£’000
EPRA NRV
£’000
Net assets
691,665
691,665
691,665
Cumulative unrealised gains on development properties
31,026
31,026
31,026
Cumulative unrealised gains on overages
6,100
6,100
6,100
Deferred tax liabilities (IFRS)
–
35,853
35,853
Notional deferred tax on unrealised gains
(9,253)
–
–
Deferred tax liabilities @ 50%
–
(22,553)
–
Purchaser costs
–
–
58,616
719,538
739,209
817,598
Number of shares used for per share calculations
323,640,852
323,640,852
323,640,852
Per share (pence)
222.3
229.3
254.4
31 December 2023
EPRA NDV
£’000
EPRA NTA
£’000
EPRA NRV
£’000
Net assets
637,722
637,722
637,722
Cumulative unrealised gains on development properties
24,083
24,083
24,083
Cumulative unrealised gains on overages
9,400
9,400
9,400
Deferred tax liabilities (IFRS)
–
30,089
30,089
Notional deferred tax on unrealised gains
(8,342)
–
–
Deferred tax liabilities @ 50%
–
(19,216)
–
Purchaser costs
–
–
52,528
662,863
682,078
753,822
Number of shares used for per share calculations
323,154,373
323,154,373
323,154,373
Per share (pence)
205.1
211.1
233.3
256
Harworth Group plc
1) Reconciliation to statutory measures
a. Revaluation gains/(losses)
Note
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Increase in fair value of investment properties
3
60,817
71,372
Decrease in fair value of AHFS
3
(366)
(272)
Share of profit of joint ventures
3
1,487
1,554
Net realisable value provision on development properties
3
(5,664)
(7,442)
Reversal of previous net realisable value provision on development properties
3
6,950
1,213
Amounts derived from statutory reporting
63,224
66,425
Unrealised gains/(losses) on development properties
21,874
(3,708)
Unrealised gains on overages
854
2,209
Revaluation gains
85,952
64,926
b. Profit/(loss) on sale
Profit/(loss) on sale of investment properties
3
13,302
(953)
Profit/(loss) on sale of AHFS
3
14
(1,140)
Profit/(loss) on sale of development properties
3
8,249
(618)
Release of net realisable value provision on disposal of development properties
3
4,399
1,869
Profit on sale of overages
3
4,346
419
Amounts derived from statutory reporting
30,310
(423)
Less previously unrealised gains on development properties released on sale
(14,932)
(6,061)
Less previously unrealised gains overages released on sale
(4,154)
(309)
Profit/(loss) on sale contributing to growth in EPRA NDV
11,224
(6,793)
c. Value gains/(losses)
Revaluation gains
85,952
64,926
Profit/(loss) on sale
11,224
(6,793)
Value gains
97,176
58,133
d. Total property sales
Revenue
181,585
72,427
Less revenue from other property activities
3
(19,841)
(2,286)
Less revenue from income generation activities
3
(21,491)
(23,410)
Add proceeds from sales of investment properties, AHFS and overages
75,541
79,166
Total property sales
215,794
125,897
e. Operating profit contributing to growth in EPRA NDV
Operating profit
74,634
54,229
Share of profit of joint ventures
15
1,487
1,554
Unrealised gains/(losses) on development properties
21,874
(3,708)
Unrealised gains on overages
854
2,209
Less previously unrealised gains on development properties released on sale
(14,932)
(6,061)
Less previously unrealised gains on overages released on sale
(4,154)
(309)
Operating profit contributing to growth in EPRA NDV
79,763
47,914
Annual Report and Financial Statements
Annual Report and Financial Statements
257
Additional Information
ADDITIONAL INFORMATION
Appendix
1) Reconciliation to statutory measures continued
f. Portfolio value
Note
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Land and buildings (included within property, plant and equipment)
1,188
1,300
Investment properties
14
585,489
433,942
Investments in joint ventures
15
33,553
30,722
AHFS
18
8,910
18,752
Development properties (included within inventories)
16
190,888
250,024
Amounts recoverable on contracts (included within receivables)
1,604
–
Amounts derived from statutory reporting
821,632
734,740
Cumulative unrealised gains on development properties as at year end
31,026
24,083
Cumulative unrealised gains on overages as at year end
6,100
9,400
Portfolio value
858,758
768,223
g. Net debt
Gross borrowings
20
(164,125)
(63,574)
Cash
117,382
27,182
Net debt
(46,743)
(36,392)
h. Net loan to portfolio value (%)
Net debt
(46,743)
(36,392)
Portfolio value
858,758
768,223
Net loan to portfolio value (%)
5.4%
4.7%
i. Net loan to core income generation portfolio value (%)
Net debt
(46,743)
(36,392)
Core income generation portfolio value (investment portfolio and natural resources)
14
297,587
228,216
Net loan to core income generation portfolio value (%)
15.7%
15.9%
j. Gross loan to portfolio value (%)
Gross borrowings
20
(164,125)
(63,574)
Portfolio value
858,758
768,223
Gross loan to portfolio value (%)
19.1%
8.3%
k. Gross loan to core income generation portfolio value (%)
Gross borrowings
20
(164,125)
(63,574)
Core income generation portfolio value (investment portfolio and natural resources)
14
297,587
228,216
Gross loan to core income generation portfolio value (%)
55.2%
27.9%
Appendix continued
258
Harworth Group plc
1) Reconciliation to statutory measures continued
l. Number of shares used for per share calculations (number)
Number of shares in issue
26
324,955,414
324,084,072
Less Employee Benefit Trust and Equiniti Share Plan Trustees Limited held
shares (own shares)
26
(1,314,562)
(929,699)
Number of shares used for per share calculations
26 323,640,852
323,154,373
m. Net Asset Value (NAV) per share
NAV £’000
691,665
637,722
Number of shares used for per share calculations
26 323,640,852
323,154,373
NAV per share (p)
213.7
197.3
n. Underlying revenue
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Total property sales
215,794
125,897
Income generation portfolio revenue
21,491
23,410
Development revenues
18,690
956
Other revenue
1,151
1,330
Underlying revenue
257,126
151,593
Less proceeds from sale of investment properties, AHFS and overages
(75,541)
(79,166)
Statutory revenue
181,585
72,427
2) Reconciliation to EPRA measures
a. EPRA NDV
Note
As at
31 December
2024
£’000
As at
31 December
2023
£’000
Net assets
691,665
637,722
Cumulative unrealised gains on development properties
31,026
24,083
Cumulative unrealised gains on overages
6,100
9,400
Notional deferred tax on unrealised gains
(9,253)
(8,342)
EPRA NDV
719,538
662,863
Harworth calculates EPRA NDV per share and total asset return on an undiluted basis.
b. EPRA NDV per share (p)
EPRA NDV £’000
719,538
662,863
Number of shares used for per share calculations
26 323,640,852
323,154,373
EPRA NDV per share (p)
222.3
205.1
Annual Report and Financial Statements
Annual Report and Financial Statements
259
Additional Information
ADDITIONAL INFORMATION
Appendix
2) Reconciliation to EPRA measures continued
c. EPRA NDV growth and total return
Opening EPRA NDV/share (p)
205.1
196.5
Closing EPRA NDV/share (p)
222.3
205.1
Movement in the year (p)
17.2
8.6
EPRA NDV growth
8.4%
4.4%
Dividends paid per share (p)
1.5
1.4
Total return per share (p)
18.7
10.0
Total return as a percentage of opening EPRA NDV per share
9.1%
5.1%
To help retain and incentivise a management team with the requisite skills, knowledge and experience to deliver strong,
long-term, sustainable growth for shareholders Harworth runs a number of share schemes for employees. The dilutive
impact of these on the number of shares at 31 December is set out below:
Number of shares used for per share calculation
323,640,852
323,154,373
Outstanding share options and shares held in trust under employee share schemes
7,135,161
5,223,777
Number of diluted shares used for per share calculations
330,776,013
328,378,150
Diluted EPRA NDV per share, Diluted NDV Growth and Total Return as a percentage of opening diluted EPRA NDV per share
are set out below:
d. Diluted EPRA NDV per share (p)
EPRA NDV £’000
719,538
662,863
Number of diluted shares used for per share calculations
330,776,013
328,378,150
Diluted EPRA NDV per share (p)
217.5
201.9
Diluted EPRA NDV growth and total return
Opening diluted EPRA NDV/share (p)
201.9
194.5
Closing diluted EPRA NDV/share (p)
217.5
201.9
Movement in the year (p)
15.6
7.4
Diluted EPRA NDV growth
7.7%
3.8%
Dividends paid per share (p)
1.5
1.4
Total diluted return per share (p)
17.1
8.8
Total return as a percentage of opening diluted EPRA NDV per share
8.5%
4.5%
e. Net loan to EPRA NDV
Net debt
(46,743)
(36,392)
EPRA NDV
719,538
662,863
Net loan to EPRA NDV
6.5%
5.5%
Appendix continued
260
Harworth Group plc
AGM
Annual General Meeting
AHFS
Assets held for sale
AMP
Advanced Manufacturing Park
APMs
Alternative Performance Measures
BCP
Business Continuity Plan
BNG
Biodiversity Net Gain
BREEAM
Building Research Establishment Environmental Assessment Method
BTR
Build to Rent
CDM
Construction Design and Management
CEO
Chief Executive
CFO
Chief Financial Officer
CIO
Chief Investment Officer
Code
2018 UK Corporate Governance Code
COO
Chief Operating Officer
CPD
Continuous Professional Development
CRREM
Carbon Risk Real Estate Monitor
DBP
Deferred Bonus Plan
DSBP
Deferred Share Bonus Plan
DNO
Distribution Network Operator
EBT
Employee Benefit Trust
ED&I
Equity, Diversity and Inclusion
EHS
Environment, Health & Safety
EPC
Energy Performance Certificate
EPRA
European Public Real Estate Association
ERV
Estimated Rental Value
ESG
Environmental, Social and Governance
ESMA
European Securities and Markets Authority
the Executive
Comprises the CEO, CFO, COO, CIO and General Counsel/Company Secretary
EY
Ernst & Young LLP
FCA
Financial Conduct Authority
FRC
Financial Reporting Council
GHG
Greenhouse gas
GLC
Group Leadership Committee
GRAM
Group Risk and Assurance Map
Glossary of frequently used
terms and abbreviations
Annual Report and Financial Statements
Annual Report and Financial Statements
261
Additional Information
ADDITIONAL INFORMATION
Appendix | Glossary of frequently used terms and abbreviations
GVA
Gross Value Added
HEL
Harworth Estates Limited
HN1L
Harworth No.1 Limited
IPCC
Intergovernmental Panel on Climate Change
KPI
Key Performance Indicator
KWh
Kilowatt hours
LEP
Local Enterprise Partnership
LTV
Loan to portfolio value
MEES
Minimum Energy Efficiency Standard
NAV
Net Asset Value
NDV
Net Disposal Value
NRV
Net Reinstatement Value
NTA
Net Tangible Assets
NZC
Net Zero Carbon
PEVG
Profit Excluding Value Gains
the Policy
The Directors’ Remuneration Policy applicable for the three years from 2022 which was approved
by shareholders at the 2022 AGM
PPA
Planning Promotion Agreement
PV
Photo-Voltaic
RCF
Revolving Credit Facility
RCP
Representative Concentration Pathway
RICS
Royal Institution of Chartered Surveyors
RIDDOR
Reporting of Injuries, Diseases and Dangerous Occurrences Regulations
RSP
Restricted Share Plan
SAYE
Save As You Earn
SID
Senior Independent Director
SIP
Share Incentive Plan
SUDs
Sustainable urban drainage systems
TCFD
Task Force on Climate-Related Financial Disclosures
TSR
Total Shareholder Return
UN SDGs
United Nations Sustainable Development Goals
Glossary of frequently used
terms and abbreviations continued
262
Harworth Group plc
The production of this report supports the work of the
Woodland Trust, the UK’s leading woodland conservation
charity. Each tree planted will grow into a vital carbon store,
helping to reduce environmental impact as well as creating
natural havens for wildlife and people.
Company information and investor timetable
Non-Executive Chair
Alastair Lyons
Chief Executive
Lynda Shillaw
Chief Financial Officer
Kitty Patmore1
Non-Executive Directors
Angela Bromfield
Ruth Cooke
Lisa Scenna
Patrick O’Donnell Bourke
Marzia Zafar
Martyn Bowes
Company Secretary and
Registered Office
Christopher Birch
Advantage House, Poplar Way
Rotherham, S60 5TR
1 Dougie Maudsley undertook the role of Interim
Chief Financial Officer for part of the year,
whilst Kitty Patmore was on maternity leave.
External Auditors
Ernst & Young LLP
12 Wellington Place
Leeds, LS1 4AP
Solicitors
DLA Piper UK LLP
Elshaw House, 51 Carver Street
Sheffield, S1 4FT
Brokers
Peel Hunt LLP
100 Liverpool Street
London, EC2M 2AT
Panmure Liberum Group Limited
Ropemaker Place
25 Ropemaker Street
London, EC2Y 9LY
Registrars
Equiniti Limited
Aspect House, Spencer Road
Lancing, West Sussex, BN99 6DA
Principal lenders
National Westminster Bank plc
3rd Floor, 2 Whitehall Quay
Leeds, LS1 4HR
Santander UK plc
58/60 Briggate, Leeds, LS1 6AS
HSBC UK Bank plc
1 Centenary Square
Birmingham, B1 1HQ
Company Registered Number
02649340
Share price information
The Company’s Ordinary Shares are
traded on the London Stock Exchange.
SEDOL number BYZJ7G4
ISIN number GB00BYZJ7G42
Reuters ticker HWG.L
Bloomberg ticker HWG:LN
LEI Code
213800R8JSSGK2KPFG21
Financial Calendar
Annual General Meeting
The Brearley Room, AMP Technology Centre, Advanced Manufacturing Park,
Monday 19 May 2025 at 10.00am
Brunel Way, Catcliffe, Rotherham, S60 5WG.
Please refer to our 2025 Notice of Meeting for the most up to date information. Shareholders are also advised to check our
website at https://harworthgroup.com/investors/annual-general-meeting/, which will be updated if there are any changes
to the arrangements.
Interim Results Announcement 2025
Interim Results to be published at www.harworthgroup.com/investors
September 2025
Registrars
All administrative enquiries relating to shareholdings should, in the first instance, be directed to Equiniti, Aspect House,
Spencer Road, Lancing, West Sussex, BN99 6DA (telephone: +44 (0)371 384 2301) and should clearly state the registered
shareholder’s name and address.
Dividend mandate
Any shareholder wishing dividends to be paid directly into a bank or building society should contact the Registrars for a
dividend mandate form. Dividends paid in this way will be paid through the Bankers’ Automated Clearing System (BACS).
Website
To keep up to date with Harworth, you can source further information about the Group on www.harworthgroup.com
Annual Report and Financial Statements
Annual Report and Financial Statements
263
Additional Information
ADDITIONAL INFORMATION
Glossary | Company information and investor timetable
Harworth Group plc
Head Office
Advantage House
Poplar Way
Rotherham
S60 5TR
harworthgroup
Visit our website for the latest company news
www.harworthgroup.com