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(Alliance News) - Property and land regeneration firm Harworth Group PLC on Tuesday reported a "solid" year of progress in 2019 though also announced the departure of its chief executive.
Owen Michaelson will be leaving Rotherham-headquartered Harworth at the end of 2020 after a decade in charge.
Non-Executive Chair Alastair Lyons said: "In large part Harworth owes its existence to Owen. He seized the regeneration potential of the former UK Coal collieries and, in doing so, created a business that is now a leader in its field, transforming former industrial sites and urban edge extensions into new homes and employment areas across the breadth of the North of England and the Midlands.
"Throughout the last 10 years, under Owen's leadership, Harworth has remained true to its purpose, investing to transform land and property into sustainable places where people want to live and work, and in doing so has created material value for our shareholders and a strong platform from which to grow further. He will take with him our every good wish for life after Harworth."
A process has begun to find a successor, the company said.
Shares were 6.5% lower on Tuesday morning in London at 104.77 pence each.
Turning to results, Harworth's net asset value per share rose 7.2% to 155.6 pence, meaning a slowdown from the 13% growth achieved in 2018. The 2019 figure was hindered by a delay in the timing of sale gains.
Revenue for the year rose 9.3% to GBP85.4 million, with pretax profit dipping 7.6% to GBP30.3 million due to a much lower rise in the fair value of investment properties.
Harworth is paying a final dividend of 0.698p per share, meaning a total of 1.0p, up from the 0.9p paid a year earlier.
The total return for the year was 7.8%, compared to a 13% total return in 2018.
"Our move to a regional operating model has begun to yield firm results in 2019, with good progress made across all of our core regions in extending our future land pipeline through a mixture of freehold acquisitions, options and planning promotion agreements," said Michaelson.
Looking ahead to 2020, Harworth is "well advanced" with sales for the year, with 39% of budgeted sales either in agreed heads of terms, in legal preparation, or exchanged.
"Notwithstanding this progress, the returns from large-scale sites like ours are not linear and this has been seen in the lower total return in 2019, primarily as a result of the planning headwinds at a local authority level that we reported through our interim results," Michaelson added.
"Also, as previously indicated, whilst we continue to target long-term market-leading returns, our current trading plans suggest that our historic site portfolio will deliver lower returns in the near term whilst our new sites move through the development cycle, exacerbated by the continued local political headwinds which will take some time to unwind."
By George Collard; georgecollard@alliancenews.com
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