Harworth secures £30m credit increase amid Covid-19
The logistics developer has increased its revolving credit facility to £130m, among other steps taken to boost its financial position in challenging market conditions.
The loan increase from its lenders is intended to “provide both operational flexibility and the ability to take advantage of future suitable land and property opportunities”, Harworth said in a trading update to the stock exchange today. The company’s available liquidity will rise to £64m as a result, it said.
Harworth has also cancelled its planned dividend to shareholders for the financial year ended 31 December 2019 due to current economic uncertainty, according to the update.
The company will instead explore the possibility of paying shareholders an additional interim dividend for the 2020 financial year “when it has a clearer view of the ongoing effects of the Covid-19 pandemic”.
Despite the uncertainty, Harworth’s board was cautiously optimistic about the future and said the company was in a “strong position” to weather the storm.
“While it is too early to say with any certainty, the board expects that the disruption caused by the Covid-19 pandemic will likely have a material influence on the company’s results for the financial year to 31 December 2020,” the statement said.
“However, the company’s strong balance sheet and fundamentals means it is well positioned to mitigate any short-term market volatility and to take advantage of any land and property opportunities that arise as a result of present market conditions.
“The board remains confident that the company is strongly positioned to support the UK’s economic recovery.”
In terms of development projects, Harworth said it was “prioritising its capital expenditure on its major development sites that have agreed sales in place for later in the year”. For example, the firm last year struck a £13m deal to sell 19.5 acres of land at Skelton Grange in Leeds to energy firm Wheelabrator Technologies.
In total, work is continuing on six active infrastructure development sites, with staff adhering to the government’s social distancing policies, Harworth said.
The company has been buoyed by recent successes including a 55,600 sq ft letting at Multiply Logistics North, the industrial complex being delivered in joint venture with the Lancashire County Pension Fund, to bathroom supplier PJH Group.
Place North West reported last week that Harworth had submitted a planning application for the fourth and final phase at its Logistics North business park, with a speculative 45,000 sq ft warehouse with 6,000 sq ft office plotted for land off Lomax Way between Salford and Bolton.