RE: Results27 Sep 2021 17:58
Harworth directors ignite hot property
Jim Armitage
Sunday September 26 2021, 12.01am, The Sunday Times
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It is not entirely foolproof, but following directors when they buy shares in their company is rarely a bad move. That is what draws the eye to Harworth, the property group that specialises in buying old industrial sites, cleaning them up and pushing them through the planning process to be used for homes, warehouses or workplaces. Its preferred hunting ground is the Midlands, northwest and northeast England.
Regularly overlooked by investors, its name came on the radar recently when three directors dipped into their pockets to buy stock worth nearly £100,000.
One was new chief executive Lynda Shillaw, who this month completed a review of the company and decided to double its size in five to seven years.
Given that she then made a £30,000 share purchase, she clearly has faith.
Veteran investors may recall that Harworth emerged from the ashes of UK Coal, the doomed, privatised coalmines once owned by the late tycoon Richard Budge.
Harworth was the part of the business that owned the land. It has been performing well since the worst of the pandemic, with a chunky 15 per cent return in the first half of the year, partly due to its focus on warehouses, which boomed through the online shopping surge in the work-from-home era.
But that six-month period was nothing unusual. Harworth has a decent track record of steering land through the planning process and either selling it on or developing it itself.
Shillaw has declared her doubling of the portfolio will be driven by building more warehouses from a rate in recent years of 200,000 sq ft a year to 800,000, while growing its land bank — currently 15,000 acres.
Hedge fund billionaire Nick Roditi, who learned his trade at the knee of George Soros, upped his stake at the depth of the lockdown last year when the shares were at rock bottom and is sitting on a tidy paper profit. His London & Amsterdam Trust is now the biggest shareholder with a quarter of the business — a little more than the Pension Protection Fund, a legacy of the UK Coal collapse.
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A vehicle of Trafford Centre developer John Whittaker holds 15 per cent.
Investing beside such dominant shareholders may put off some people, as will the fact that Harworth’s shares have already had a good run up this year. You might end up having to stay in for a while to see gains.
But with the shares still trading at a discount to the forecast value of its developments, it’s worth following bosses’ footsteps and buying for the long term.
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