Harworth Group

Website: Harworth Group
Index: FTSE 250
EPIC: HWG
Supersector: Real Estate
Sector: Real Estate Investment and Services
Subsector: Real Estate Holding and Development
Market Cap: £434.95M
Payout Frequency: Semi-Annual

Harworth Group Dividend Analysis and Summary

Key dividend details

Analysis: sustainability and growth

Coverage: FY25 basic EPS of 2.9p vs total DPS of 1.775p implies dividend cover of roughly ~1.6x. EPS is volatile for a land/development business (driven by revaluations and sales mix), so coverage should also be viewed against cash generation and balance sheet capacity.
Cash and liquidity: Year-end liquidity of £127.1m and net LTV of 15.6% (below the <20% year-end target) support a modest, progressive dividend despite 2025 operating cash outflow as the Group invested in enabling works and development.
Recurring support: Investment Portfolio headline rent rose to £18.3m (like-for-like rent +10.4%) with 1.0% EPRA vacancy, providing a growing recurring income base. The projected £53.2m Microsoft Skelton Grange phase-2 payment within 12 months would further bolster cash, albeit one-off.
Growth trajectory: The Board reaffirmed the +10% p.a. dividend growth policy and delivered it in FY25. Achievability hinges on continued rental growth and capital recycling from residential into Industrial & Logistics (I&L), where the portfolio is now 70% weighted and performing well.

Support from financial performance and capital allocation

Performance mix: FY25 Total Accounting Return was 1.7% (vs 9.1% in FY24), with I&L value gains (£73.6m) offset by residential value losses (£28.7m). Profit after tax was £9.5m, sufficient to cover the dividend, but underlying profitability remains sensitive to transaction timing and valuations.
Capital allocation: Management is prioritising I&L growth (target 85% weighting by 2029) and Investing in enabling works to unlock future high-value deals. The enlarged £275m RCF (accordion to £325m) and selective disposals support this. Given these ambitions, the dividend remains intentionally modest versus the investment pipeline.
Interest and leverage: Net debt rose to £145.9m and finance costs to £15.2m; post year-end, an interest-rate cap on £50m at 4.5% reduces some rate risk. Low LTV provides headroom to sustain the dividend through cycles.

Structural changes and commentary relevant to future dividends

Refinancing: RCF increased to £275m with improved margin ratchet – enhances liquidity and flexibility; neutral-to-supportive for dividend capacity.
Portfolio actions: Acquisition of the remaining 50% of Gateway 45 JV (adjacent to Microsoft Skelton Grange) consolidates control over a key I&L/data centre corridor – supportive of medium-term cash generation.
Data centre/power-enabled land: 0.8GW of power connections conditionally secured or in pipeline; potential for high-value transactions could strengthen future distributions if realised.
Dividend policy: Explicitly reaffirmed at +10% p.a. growth; no share consolidation, M&A beyond the JV buy-in, or policy changes flagged.

Risks and flags to dividend stability

Cash conversion risk: FY25 saw operating cash outflow (£52m) as the Group invested heavily; dividend affordability remains reliant on continued disposals and receipts (including deferred consideration) alongside rental income.
Market sensitivity: Residential headwinds (valuation losses, lower plot pricing) and elongated deal timelines could pressure cash flows if prolonged; however, the dividend quantum is small relative to liquidity.
Interest-rate and macro risk: Elevated finance costs (£15.2m) and potential rate or geopolitical shocks could tighten coverage; partial hedging now in place.
Execution risk: Strategy depends on planning progress, enabling works, and monetising power-enabled/data-centre opportunities; delays would defer cash realisation.

Dividends Used in Calculation:

Ex-Dividend Date	Payment Date	Type	Amount	Currency
24/04/2025	23/05/2025	Final	1.1250p	GBX
25/09/2025	04/11/2025	Interim	0.5380p	GBX

Total (Annual Dividends Per Share): 1.66p

Dividend Yield = Annual Dividends Per Share (1.66p) ÷ Share Price (135p) = 1.23%

Ex Dividend Date	Payment Date	Type	Amount	Currency
23/04/2026	22/05/2026	Final	1.2370p	GBX
25/09/2025	04/11/2025	Interim	0.5380p	GBX
24/04/2025	23/05/2025	Final	1.1250p	GBX
19/09/2024	24/10/2024	Interim	0.4890p	GBX
25/04/2024	24/05/2024	Final	1.0220p	GBX
21/09/2023	20/10/2023	Interim	0.44p	GBX
04/05/2023	26/05/2023	Final	0.93p	GBX
22/09/2022	21/10/2022	Interim	0.40p	GBX
05/05/2022	27/05/2022	Final	0.85p	GBX
23/09/2021	22/10/2021	Interim	0.37p	GBX
06/05/2021	28/05/2021	Final	1.47p	GBX
15/10/2020	13/11/2020	Interim	0.33p	GBX
30/04/2020	29/05/2020	Final	0.70p	GBX
19/09/2019	18/10/2019	Interim	0.30p	GBX
02/05/2019	31/05/2019	Final	0.63p	GBX
20/09/2018	19/10/2018	Interim	0.28p	GBX
03/05/2018	01/06/2018	Final	0.57p	GBX
14/09/2017	13/10/2017	Interim	0.25p	GBX
04/05/2017	30/05/2017	Final	0.52p	GBX
03/11/2016	01/12/2016	Interim	0.23p	GBX
18/08/2016	09/09/2016	Final	0.05p	GBX

Year	Interim	Final	Currency	Total	Change
2023	0.440	0.930	GBX	1.370	9.600
2022	0.400	0.850	GBX	1.250	-32.060
2021	0.370	1.470	GBX	1.840	78.640
2020	0.330	0.700	GBX	1.030	10.750
2019	0.300	0.630	GBX	0.930	9.410
2018	0.280	0.570	GBX	0.850	10.380
2017	0.250	0.520	GBX	0.770	175.000
2016	0.230	0.050	GBX	0.280

Number of Shares:

Payment	Paid	Amount
Next	–	–
Previous	–	–