Regeneration specialist, landowner and developer Harworth Group is accelerating its shift away from residential to focus on industrial and logistics (I&L), as residential headwinds drove pre-tax profits and revenue to fall 75% and 28.5% respectively.
In its full-year results to the end of 2025, Harworth reported pre-tax profits of £17.4m, down from 2024’s £69.4m. Meanwhile, revenue fell from £181.6m at the end of 2024 to £129.7m last year.
Cash from property sales fell 46.7% year on year, from £215.8m in 2024 to £115m. This included a 23% fall in the number of residential property sales, from 2,385 to 1,837.
However, Harworth ended the year with I&L taking up 70% of its portfolio value, rising from 63% in 2024. Its I&L portfolio value now stands at £305m, up from £297.2m.
Kitty Patmore, chief financial officer at Harworth, attributed the drop to a mixture of acquiring higher development and management fees as well as the completion of two large “one off” sales in 2024, which accounted for roughly £115m.
“If we take a step back and we look at it based on the revenue and the overall profitability, the business continues to be profitable,” she said. “We’ve got a higher rental income than we had last year.”
The firm highlighted strong performance within its I&L portfolio, with vacancy rates dropping to 1% and grade-A assets increasing in value by 76%.
It completed £47.7m of industrial investment portfolio headline sales, as well as 1.4m sq ft of leasing including 379,000 sq ft of new leases, adding £3.7m of rent, with like-for-like rent up 10.4%.
It also completed, or significantly progressed, enabling works on land with capacity to deliver around 4m sq ft of industrial space.
Last year, Harworth unveiled its plan to shift towards I&L, as its portfolio value had grown 10%, despite a 60% drop in profits.
Chief executive Lynda Shillaw said she was “pleased with the performance of our teams and our operational execution throughout 2025”.
She added residential was a “tougher market than we thought it was going to be at the start of 2025,” primarily due to macro economic conditions and market uncertainty driven by the November Budget.
“The business can still be a little bit lumpy, particularly things like the profit number […] But fundamentally, what we focus on is driving value, creating value and positioning the business for that long-term growth and value returns.”
She also said I&L taking up 70% of Harworth’s portfolio marked a “significant shift”, adding it is a “great place to deliver products” in a market with strong demand.
“As we continue to execute our strategy and reposition the portfolio towards I&L, our long-term through-the-cycle model, management actions and disciplined approach to capital deployment remain essential to creating value for shareholders.
“While we are monitoring the conflict in the Middle East and its potential impact on the UK economy and our markets, we remain encouraged by a continued pipeline of strong interest across our I&L land and property portfolio of 1.6m sq ft.”
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