A very good morning, everyone. Kitty and I are delighted to be speaking to you today from our offices here in the heart of our Waverley site, home to the world-class Advanced Manufacturing Park. Thank you for joining us for Harworth's half-year results for the six months end of the 30th of June, 2026. Before we get into our results presentation, you will no doubt be aware that Harworth is currently in an offer period. Alongside today's results, we have published our response to the un-recommended offer for Harworth Group by Peel Pepper UK Limited, a company indirectly wholly owned by Peel Holdings Group Limited. Materials relating to our response can be found on the Harworth website, with the focus of today's presentation being on our performance during the first half. So here is our agenda for today. First, I will provide a brief overview of what we have achieved so far this year and the continued progress we have made in bringing our sites forward. Kitty will then take you through our financial and operational performance, and I will then provide a strategic update. This will include more details on our acceleration of key initiatives to create a simpler, lower cost and higher returning platform, in turn delivering sustainable further growth for shareholders. I want to begin with some of our key highlights from the first half. It was another period of strong operational momentum and disciplined delivery against what has continued to be a challenging market backdrop. First, we continue to build momentum across our industrial and logistics and powered land pipeline. This culminated in completing two pre-lets shortly after period end, with a third in legals. And we also entered into exclusivity with a leading data centre provider on a second powered land sale. I'll cover these both in more detail shortly. Secondly, as of today, we have our largest ever substantially construction-ready land bank. This provides a material pipeline for value realisation through pre-lets, land sales and selective development, with the potential for gross development value estimated at 600 million over the next three to five years. Finally, we are continuing to build on the strong track record we have established over many years by today announcing an acceleration of key initiatives to create a simpler, lower cost and higher returning platform, and I will touch on this in more detail later in the presentation. The group's industrial logistics and powered land platform totals 34.8 million square feet, with accepted power offers of 0.8 gigawatts, and 73% of the pipeline is either consented or in the planning system. This portfolio would be extremely difficult to replicate today given its scale, together with the advanced planning and power supply status and the strategic locations of many of our sites. sustained investment in infrastructure and enabling works during the period and last year has created our largest ever substantially construction ready land bank of 3.8 million square feet which as mentioned has the potential to deliver 600 million of gdv over three to five years we're already underway with monetizing this pipeline so far this year we've completed or entered league interlegals on three pre-lets totalling over 300 000 square feet These are on long-term leases ranging from 15 to 20 years and are expected to generate 3.7 million of annualised rent at an average of 17% premium compared to ERV. We're also in negotiations across a further 1.5 million square feet demonstrating strong occupier demand across our product range. Powered land and data centres are a significant component of the opportunity ahead. Here, the market dynamics are very favourable with the UK's demand for cloud services, AI computing and data storage continuing to accelerate. While London continues to dominate market share, attention to campuses and regional locations is rising amid power constraints in the southeast and also supportive government policy for development in the regions. The timeline on this chart illustrates our track record and the opportunity ahead of us. Our first hyperscale powered land sale to Microsoft at Skelton Grange is now progressing towards completion and we also announced last month that we have entered exclusivity with a leading data center provider on a powered land scale at a second site to deliver hyperscale data center. The site already has an accepted power connection offer and has strong planning prospects. Beyond these transactions we've identified a further four potential hyperscale data center opportunities. All are owned freehold or controlled through options or joint ventures and all but one are already progressing through the planning system with stakeholder engagement underway on the remaining site. Our advantage is not power alone. These opportunities combine control of strategic sites, planning expertise, infrastructure capability and access to power. Those characteristics are scarce and increasingly valuable as hyperscales seek regional locations that offer speed to market, suitable infrastructure and transport connectivity. our model remains focused on unlocking and monetizing the land value in a capital limited way and at an early stage which is well before power on dates an exercise undertaken by jll has identified that the potential future profits from our existing power land portfolio to beyond skelton grange as service power land for data centers are estimated to be 292 million this assumes full ownership planning achieved and power secured but represents significant
embedded value that we are working hard to realize i will now hand you over to kitty who will take you through our financial performance in the first half of the year thank you linda harvest financial performance in the first half reflected continued operational progress across the powered land and industrial logistics portfolio but also macro driven valuation pressure particularly in residential markets. Operational momentum was resilient during the first half, underpinned by progress across our powered land and industrial logistics pipeline. Across our industrial logistics pipeline, we continued site enabling works to produce our largest ever substantially construction-ready land bank, providing flexibility to capture demand through pre-lets, land sales and selected speculative development. Occupy demand remained were robust with three pre-lets completed or in legals post-period end and negotiations are ongoing across a further one and a half million square feet of space. Meanwhile in our powered land pipeline we progressed the final Microsoft land sale at Skelton Grange towards completion and identified five further potential data centre sites in our land bank capable of being delivered in the short to medium term. Post-period end we entered exclusivity on the second of these for a hyperscale data centre site and we also accepted a new 200 megawatt power offer. Finally, against a challenging backdrop we progressed four-year sales with 58% of budgeted four-year sales either completed, exchanged or in legals. This includes 952 service plots in our residential portfolio where during the half we sold land for over 150 plots to a national house builder at Benthal Grange in Ironbridge. Moving on to our financial performance. Total accounting return was negative 3.7%, driven primarily by a reduction in EPRA NDV per share from 224.4 pence at 31st December 2025 to 214.8 pence. This was driven primarily by residential market headwinds, namely softer demand in house builder end markets and market construction cost inflation. Industrial and logistics valuations remained broadly stable as management actions to drive value across industrial logistics and data centre sites largely offset macroeconomic driven cost increases in labour and materials. Total property sales in half one were £13.2 million compared to 18.9 in the prior year period. And post-period, we completed a further £8.1 million disposal. Headline sales pricing across these transactions was marginally ahead of book value before transaction costs and the discounting of any deferred consideration to present value. Consistent with previous years, the net loan-to-portfolio value increased in the first half to 20.3%. This reflects the normal phasing of our cash flow, with investment in sites occurring ahead of sales receipts, which are generally weighted towards the second half. At all times, we remained well within our self-imposed maximum level of 25%. Reflecting its confidence in the business, the board has approved to pay an interim dividend of 0.592 pence per share an increase of 10% in line with the group's policy underpinning their confidence in the company's ability to grow recurring income. This slide shows a breakdown of our 14.9 million pound portfolio value loss during the half. Our industrial and logistics major developments remain a source of strong value creation generating a 12.7 million pound valuation gain as we advanced key sites including Skelton Grange and our broader data centre, powered land and industrial logistics pipeline. This gain was offset by £14.7 million loss in industrial logistics strategic land, where macro-driven development cost inflation, particularly on those sites nearing planning permission and delivery, outpaced near-term value recognition. The Industrial Logistics Investment Portfolio recorded a £4.3 million loss, driven by a planned repositioning at one asset, which increased vacancy. Excluding that asset, the portfolio increased in value by £0.8 million, demonstrating its underlying strong fundamentals, supported by ERV growth and lettings progress. As I've already touched on, our residential exposure was a material headwind. Both major developments and strategic land recorded losses, 15.8 million and 1.2 million respectively, reflecting softer demand and increased market-driven costs. Our portfolio of natural resources, agricultural land and other assets generated 8.4 million of valuation gains, boosted by new biodiversity net gain schemes and an improved outlook for income on some energy sites. Combined, these movements resulted in a net portfolio value loss of £14.9 million in the first half. Our balance sheet remains solid and we continue to deploy leverage strategically to support investment in our largest ever construction-ready land bank whilst maintaining flexibility. net debt increased to 190 million at 30th of june from 145.9 million at 31st of december reflecting our continued investment in high returning industrial logistics sites and the normal phasing of half one expenditure ahead of half two sales receipts the net loan to portfolio value stands at 20.3 percent comfortably within our 25 percent self-imposed maximum And with available liquidity of £99.5 million, comprising £90 million of undrawn revolving credit facility capacity, plus £9.5 million of cash, this provides substantial firepower to progress our development pipeline while maintaining flexibility. Our £275m revolving credit facility includes a £50m uncommitted accordion option, with no refinancing requirements until November 2029 and an option to extend by a further year. This all gives us confidence to continue investing in our sites, as well as optionality to capitalise on selective opportunities. In short, our robust balance sheet position, combined with disciplined capital allocation and asset management and sales, provides us with sufficient liquidity to progress the highest returning sites, whilst keeping gearing within our internal targets. The quality of our investment portfolio and its income generation characteristics continue to improve as we unlock the substantial unrealised value within our portfolio. At 30th of June, the investment portfolio was valued at £301.4 million and was 77% grade A by value. The portfolio is benefiting from strong leasing momentum. The three pre-lets, now completed or in legals, will add £3.7 million of annualised rental income at a 17% premium to combined estimated rental value when they transfer into the investment portfolio. And following the period end, we sold Ethero Industrial Estate for £8.1 million at a 3% premium to book value, further supporting the current portfolio valuation. This sale is consistent with our approach of selling assets and the secondary assets in particular once the business plan has been completed, whilst recycling capital into higher quality grade A stock and creating a portfolio increasingly focused on modern sustainable assets with longer-term income and reversionary potential. This disciplined approach moves us decisively towards our 100% Grade A target. That concludes the financial and operational review for the first half, and now I'll hand you back to Linda to provide a strategic update.
Thank you, Kitty. I now want to turn attention to our strategy. Since the launch of our current strategic plan in 2021, we have delivered a strong track record of growth and returns. This includes securing planning on over 9 million square feet of industrial logistics space with a GDV of around 1.3 billion and with a consistently high success rate on planning applications. Concluding headline sales totaling 700 million across both our industrial logistics and residential portfolios at an average 24% profit on historic cost. and acquiring a total of 15.4 million square feet of industrial logistics land with an estimated GDV of over 2.3 billion and over the five years to the 31st of December 2025 delivering an average total accounting return of 8.1 percent representing upper quartile performance amongst our peers in the listed sector. Having executed our current strategic plan consistently since 2021 and successfully positioning the business to drive future medium to long-term returns from our industrial and logistics land bank, we are today announcing an acceleration of key initiatives to align capital allocation and organisation design to the structural shifts in our primary markets. This slide shows the four key elements of this acceleration. We believe these reflect the changed external environment and provide a path to long-term value creation, allowing future investment requirements to be substantially funded through the internally generated capital. Having been agreed in principle by the Harworth Board earlier this year, the implementation of this platform is already underway. And once completed, we believe it can deliver higher and more sustainable returns for Harworth shareholders, targeting low double-digit total accounting returns in the long term. And now I'd like to talk you through each of these elements in turn. Starting with becoming a pure play powered land and industrial and logistics specialist. This slide shows the return on capital employed across different segments of our business over the past three years and you can see that industrial logistics land and developments including data centres have delivered an average annual return on capital employed of 24%. In 2024, we announced our intention to position our portfolio to 85% industrial logistics and thereby reduce residential exposure to below 15% by 2029. Due to the scale and strength of opportunities across our industrial and logistics and powerland pipeline, we're confirming today our intention to exit the residential sector entirely and accelerate the reallocation of capital to higher returning opportunities aligned to industrial and logistics and powered land. Our data centre strategy is focused on identifying, advancing and then selling sites capable of supporting hyperscale data centres, as well as smaller scale digital infrastructure projects across our portfolio. Our 0.8 gigawatt UK powered land pipeline is one of the largest secured powered land pipelines held by UK-listed real estate platform, and we have identified opportunities to increase the total Powered Land pipeline to 1.9 gigawatts. As the chart shows, by disposing of sites at the Powered Land stage, we believe that we can monetise a substantial proportion of the value uplift associated with data centre development. Crucially, we could do this earlier than would be the case under a conventional build and retain delivery model, significantly reducing capital requirements, execution risk and development timelines relative to the build and retain model. Moving on to refocusing on strategic land, enabling works and selective development. Our distinctive capabilities lie in assembling and master planning complex strategic sites, securing planning and power and carrying out remediation and infrastructure works and creating construction ready development opportunities. These are the activities where we create the most value and where through the scale of our land bank we have a clear competitive advantage. And as you can see from this slide we have a strong track record of delivering this area over the past five years with over 9 million square feet of planning permissions secured, 7.5 million square feet of development and land sales and 6 million square feet of land serviced or with enabling works underway. Our industrial logistics pipeline is extensive with 3.8 million square feet substantially construction ready and a further 9.6 million square feet in the medium-term pipeline. As we bring our pipeline forward, we will retain the flexibility to sell service land to occupiers and investors, build out on balance sheet or in partnership, and sell or retain built assets. Haworth has an established track record in all of these areas, and this flexible approach helps us to actively manage the risk profile of the business and recycle capital more efficiently. JLL have assessed the potential future development profits for 75% of the service land, substantially construction-ready and medium-term pipeline set out in the table above. JLL's opinion of the additional potential net realisable value of this pipeline, including future development profits, is £174 million. Crucially, this net realisable value is not included in the group's formal valuations as per Redbook guidance, and it is therefore not reflected in our EPR at NDV. when combined with hardware's ability to sell or selectively develop and hold its industrial logistics sites subject to market demand and potential returns our development pipeline provides a significant growth opportunity the value of which is not reflected in our epra ndv now onto sizing the investment portfolio to support funding while recycling to optimize returns our investment portfolio was valued at 301 million as at the 30th of june 2026 and is 77% grade A by value. Transferring developments into our investment portfolio serves three main purposes. Firstly, providing a recurring source of income supporting cash generation. Secondly, facilitating debt financing on the land and development pipeline. And thirdly, value creation through asset management and selected disposals. Over the last five financial years, it has delivered an average unlevered return on capital employed of 8.2% per annum in excess of the cost of debt. And going forward, the investment portfolio will be more actively managed to crystallise asset management and valuation gains on an ongoing basis, with the principal aim of supporting the group's debt funding while also optimising returns. As a result, the portfolio will no longer be managed to a target size, but is expected to reach a medium-term stabilised value in the order of 500 million to 600 million. This approach will also release capital for higher return in strategic land and development opportunities. And finally, transitioning to a pure-play powered land and industrial logistics platform will create a simpler business model. Alongside our digital and wider operational transformation, which we've been implementing over the last two years, this will bring significant operational efficiencies. combined these two factors will support material reductions in our cost base we intend to quantify these cost savings in a quantified financial benefits statement which requires reports from harvest reporting accountants and financial advisors the preparation of these reports is underway so that we can publish details of our targeted cost savings as soon as possible so to the outlook we're firmly focused on pursuing the optimal way to preserve and deliver the full embedded value of Harworth to our shareholders. We believe that the acceleration of key initiatives to alter the capital allocation and organisation design of Harworth reflects the changed external environment and provides a path to long-term value creation. If we identify that we hold surplus capital, including following sales and material assets, and having assessed future accretive capital deployment opportunities, the board will consider returning some or all of this surplus capital to shareholders enabling them to benefit directly from the value creation initiatives as they are executed and having been agreed in principle by a board earlier this year the implementation of this platform is already underway once completed we believe that it can deliver higher and more sustainable returns for hardware shareholders and we're targeting low double digit total accounting returns in the longer term this concludes our presentation thank you
