www.harworthgroup.com

INTERIM RESULTS 201910 SEPTEMBER 2019

2

Logistics North (August 2019)

3

AGENDA

1. INVESTMENT CASE, STRATEGY, MARKETS AND PERFORMANCE 4-15 OWEN MICHAELSON, CHIEF EXECUTIVE

2. 2019 FIRST HALF FINANCIAL PERFORMANCE 16-19 JENNY CUTLER, INTERIM FINANCE DIRECTOR

3. STRATEGIC PRIORITIES AND OUTLOOK 20-22 OWEN MICHAELSON, CHIEF EXECUTIVE

4. APPENDICES 23-33

4

INVESTMENT CASE

HARWORTH GROUP PLC IS ONE OF THE UK’S LEADING REGENERATORS OF LAND AND PROPERTY FOR DEVELOPMENT AND INVESTMENT, CONSISTENTLY DELIVERING A MARKET-LEADING RETURN FOR SHAREHOLDERS

Notes: ( 1 ) On re-listing the business in March 2015, additional capital of c.£15m was raised. Given the complicated nature of the transaction, it is not feasible to split this out of the 2015 total return or NNNAV growth (2) Excludes £27.1m from March 2017 capital raise

STRONG PERFORMANCE

LONG-TERM TRACK RECORD OF DELIVERING MARKET LEADING RETURNS

Majority of returns achieved by active management of planning, lettings & sales and effective management of costs

CLEAR STRATEGY

DELIVERY OF SERVICED LAND & INCOME FROM REGENERATION SITES

Focus on acquiring new sites and recycling mature development sites to drive total returns

WELL POSITIONED

SIGNIFICANT LATENT VALUE IN PORTFOLIO COMBINED WITH LOW GEARING

Set up to take advantage of market opportunities and to withstand short-term political headwinds

SOUND MARKETS

FOCUS ON “BEDS AND SHEDS” SECTORS IN THE NORTH AND MIDLANDS

Housing remains UK’s number 1 domestic priority and industrial sector remains steady, supported by solid regional economies

10.8%9.9%

7.0%

12.3%

0%

2.5%

5.0%

7.5%

10.0%

12.5%

15.0%

2015 2016 20172 2018

Net Loan to Value

Target Range of10% - 15%

Full-year Net Loan to Value

19.0%

13.2% 13.2% 13.3%101.9p

114.6p

0.0p

20.0p

40.0p

60.0p

80.0p

100.0p

120.0p

140.0p

160.0p

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

20151 2016 2017 2018

NNNAV Growth per share (%) TR Growth per share (%) NNNAV per share (p)

Total Return and NNNAV Full-year Record

128.9p

145.2p

PART 1

5

STRONG HALF-YEAR OF DELIVERY POLITICAL UPHEAVAL CREATING PLANNING HEADWINDS

STRONG PERFORMANCECONTINUED MARKET-LEADING PERFORMANCE IN THE FIRST HALF

A positive six months resulting in total return (NNNAV growth plus dividends per share) on an annual basis of 13.3% (H1 2018: 11.5%)

NNNAV growth per share in H1 on a six-month basis of 1.4% (H1 2018: 1.5%) reflecting second half weighting of overall business performance

Profit excluding value gains increased to £2.0m (H1 2018: £1.3m), reflecting the full impact of additional income generated from acquisitions in 2018

SOUND MARKETSFOCUS REMAINS ON RESIDENTIAL & INDUSTRIAL SECTORS IN THE NORTH OF ENGLAND AND THE MIDLANDS

The regions we operate in are attractive due to better than average economic growth, occupier demand, property under-supply and affordability

National government policy directly supports our ambitions, although local political headwinds has caused the timing of determination of a handful of our live planning applications to be more uncertain and has prompted a change in our planning promotion strategy for a small number of sites

CLEAR STRATEGYFOCUSED ON DELIVERING VALUE & INCOME FROM CURRENT & FUTURE PORTFOLIO

Continuing to refill portfolio with strategic land and income acquisitions to deliver further value. Six acquisitions made in the first half for a total consideration of £18.8m (including costs)

Investment in regional model in our three core regions to unlock additional land and property opportunities

WELL POSITIONEDPORTFOLIO IS RESILIENT AND APPROPRIATELY CAPITALISED IN ORDER TO WEATHER  ANY SHORT-TERM POLITICAL

HEADWINDS AND TO TAKE ADVANTAGE OF MARKET OPPORTUNITIES

Significant latent value in the portfolio, with outline planning consent in place for 9,842 residential plots and c.10.0m sq. ft of commercial space. Further value will be unlocked from longer-term pipeline of sites, which carries the potential for a further 12,140 residential plots and 11.0m sq. ft of commercial space

Half-year gearing kept low at 10.1% net loan to value (£53.1m net debt) with cash/facility headroom of £53.4m, providing significant firepower for further land and property acquisitions

PART 1

6

VISION & STRATEGY IS CLEAR AND CONSISTENT

M1

M69

M6

M6 Toll

M1

M11

M25

A3(M)

A1(M)

A1(M)

A1(M)

M25

M23

M2M26M3

M4

M20

M40

M40

M42

M5

M50

M5

M6

M6

M6

A74(M)

M74

M56

M62M61

M62

M180M18

M56

M57

M54

M8

Manchester

Leicester

Birmingham

Coventry

Derby Nottingham

Sheffield

Stoke-on-Trent

Liverpool

Bristol

Gloucester

Cardiff

Plymouth

Cambridge

MiltonKeynes

Folkestone

Dover

Felixstowe

London

Middlesbrough

Scarborough

Whitehaven

Dumfries

Carlisle

Leeds

Immingham

Grimsby

York

NewcastleUpon Tyne

Edinburgh

Perth

Glasgow

YORKSHIRE & CENTRAL

51 sites

MIDLANDS

13 sites

NORTH WEST

9 sites

NORTH EAST

15 sites DEVELOPMENTDriving the capital growth of our portfolio through delivery of planning permissions, site remediation and infrastructure, before crystallising land sales

INVESTMENTEnsuring sustainable income generation through asset management of existing rental sites and direct development of new space

SECTORSConcentrating on those property markets with strong, through-the-cycle returns (residential, and industrial & logistics)

REGIONSLeveraging our strong relationships in our core areas in the North of England and Midlands to expand our land and property portfolio

ACQUISITIONSGrowing our portfolio by utilising capital to buy new sites to maintain net asset value growth across the portfolio (including joint ventures)

FINANCINGMaintaining the Group’s low balance sheet gearing to complement risk-appropriate operational gearing

HARWORTH GROUP AIMS TO BE THE LEADING LAND AND PROPERTY REGENERATION SPECIALIST IN THE NORTH OF ENGLAND AND MIDLANDS, DELIVERING AGAINST SIX KEY PRIORITIES IN ITS CORE REGIONS

PART 1

7

OUR MARKETS

GOOD DEMAND FOR LANDContinuing nationwide housing undersupply is driving consistently good demand for prepared land from housebuilders of all types in our regions

COMPARATIVE AFFORDABILITY OF NEW HOMESNew houses on our sites in the North West, Midlands and Yorkshire & Central are more affordable than UK average

GOVERNMENT SUPPORTS ACCELERATION OF BUILD-OUTHousing remains the UK government’s key domestic priority, supported by Help to Buy remaining in place until 2023 for first time buyers and maintenance of NPPF as UK’s key planning document

RESIDENTIALREMAINS THE UK GOVERNMENT’S KEY DOMESTIC PRIORITY

INDUSTRIAL & LOGISTICSFORECAST TO CONTINUE TO OUTPERFORM OTHER ASSET CLASSES

CONSISTENT DEMANDSteady demand for well-located industrial space of all sizes remains in our regions. UK vacancy rate continues to stand at well below 10%

LEADING MARKETIndustrial sector is forecast to continue to outperform both the office and retail asset classes in the medium-term

SUPPORTED BY STAKEHOLDERSOn the whole, local and national support for sustainable new commercial development remains, driven by the desire for economic regeneration and the need for business rate receipts

Supply

Supply and vacancy of logistics and distribution space

0%

5%

10%

15%

20%

25%

0m

10m

20m

30m

40m

50m

60m

70m

80m

90m

100m

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019YTD

Vacancy

Sup

ply

(sq

�)

Vac

ancy

Rat

e

Prospective first-time buyer affordability ratios, by region England and Wales, 2018

North West

Yorkshire & Humber

East Midlands

East

London

South East

South West

West Midlands

Wales

North East

0 2 4 6 8 10 14Affordability ratios

12

PART 1

Source: Savills Big Shed Briefing (July 2019)Source: House Price Statistics for Small Areas and Annual Survey of Hours and Earnings, ONS 2018

8

BUSINESS MODEL CONTINUES TO DRIVE SECTOR-LEADING RETURNS

Rein

vest

men

t of C

apit

al

Acquisitions &land assembly

Masterplanning

Planningapproval

Landpreparation

Infrastructuredevelopment

Plot sale / Build out

Assetmanagement

Recurringincome

Capital receipt

CAPITALREALISATION

Time

Ind

icat

ive

Val

ue A

dd

Competitive advantage comes from our abilityto add value through active managementrather than reliance on market movement

Acquisitions Strategic land Major developments Income generation

PART 1

9

STRONG DELIVERY IN FIRST HALF

MASTER-PLANNING

PLANNING APPROVAL

Six first half strategic land and income acquisitions made for a total consideration of £18.8m (including costs)

These acquisitions have the potential to deliver a further 2,483 residential plots and 0.1m sq. ft of commercial space

Live applications for 1,715 residential plots and c.3.2m sq. ft of commercial space awaiting determination at half-year end1

In early July, outline permission was granted at Bardon Hill for 356k sq. ft of commercial space

Timing of a handful of live applications are more uncertain, owing to change of control in some local authorities

ACQUISITION & LAND ASSEMBLY

Notes: (1) Includes freehold, joint venture, PPA and overage sites

PLOT SALE & BUILD OUT

ASSET MANAGEMENT

Remediation and site infrastructure works ongoing on 16 sites classed as ‘Major Developments’, underpinning our sales and direct development programmes

First half residential land sales of £45.6m projected to deliver 1,091 new homes

Completed or agreed first half commercial land sales of £30.3m (£15.2m Harworth share) at Gateway 45 Leeds joint venture  

18 new or renewed lettings achieved, delivering annualised income of £0.9m

Etherow acquisition added a further £0.7m of annualised income

LAND PREP & INFRASTRUCTURE DEVELOPMENT

PART 1

10

EXECUTING ON SALES

INDUSTRIAL & LOGISTICSCOMMERCIAL SALES COMPLETED OR AGREED AT OUR GATEWAY 45 LEEDS 50/50 JOINT VENTURE WITH EVANS PROPERTY GROUP THAT WILL GENERATE TOTAL PROCEEDS OF £30.3M (£15.2M HARWORTH SHARE)

10 acres of fully serviced commercial land sold to Leeds University to build out its Institute for High Speed Rail, earmarked as the UK’s #1 rail-related higher education facility

2.5 acres sold to Leeds City Council for an extension to its existing park and ride facility

Contracts were exchanged with PLP UK Logistics Venture (UKLV) for the sale of 43 acres to deliver 855k sq. ft of speculative distribution space

RESIDENTIAL76 ACRES OF ENGINEERED RESIDENTIAL LAND SOLD TO HOUSEBUILDERS ACROSS FOUR SITES FOR A TOTAL CONSIDERATION OF £45.6M

26.0 acres sold at Cadley Park, Swadlincote to Avant Homes, where it plans to build 400 homes

19.5 acres sold at Flass Lane, Castleford to Strata Homes for the delivery of 250 new homes 

At Waverley, Harworth made two disposals in June: 10.7 acres of land to Taylor Wimpey for the construction of a further 175 new family homes; and the sale of 11.7 acres to Barratt to build 177 homes

Finally, 8.0 acres of land was sold at Prince of Wales to Avant Homes to build 89 homes

PART 1

Waverley (July 2019) Gateway 45 Leeds (April 2019)

11

INCOME CASE STUDY: ACQUISITION OF ETHEROW INDUSTRIAL ESTATE

10.4-acre Etherow Industrial Estate purchased in June for £6.5 million plus acquisition costs, utilising headroom within existing £100m Revolving Credit Facility (RCF)

Situated two miles east of Junction 4 of the M67 with excellent access to Greater Manchester, Lancashire, Cheshire and Derbyshire

Site comprises 202k sq. ft of built space let to fifteen tenants, including Howdens Joinery, Neville Johnson and Apex Storage.  Etherow currently generates a passing rent of over £682k per annum, representing a net initial yield of 9.8%

Harworth’s Business Space team will use its asset management capabilities to generate additional income and increase its value. The site’s relatively low site coverage of 44.5% also provides an opportunity for the build-out of new commercial space in future

PART 1

12

ACQUISITIONS

Six acquisitions made in H1 for a total consideration of £18.8m including acquisition costs, comprising a mixture of strategic land and income-producing sites that could deliver 2,483 future residential plots, 0.1m sq ft of commercial space, and adds £0.7m per annum of new recurring rental income

We made three purchases in the North West: a 169-acre scheme in Chester for long-term strategic land promotion; a further 13 acres at Moss Nook in St Helens to support build-out of up to 900 homes across the wider site; and Etherow Industrial Estate that adds £0.7m of new rent per annum

In the Midlands, we acquired a 128-acre site in Leicestershire that is now being promoted as a major urban-edge extension close to East Midlands airport   

In Yorkshire & Central, two sites totalling 63-acres were bought to complement two existing landholdings being brought forward for residential uses

PART 1

Cinderhill (July 2019)

Mollington (April 2019)

13

Moss Nook site, St Helens (March 2019)

PART 1

14

ATTRACTIVE PORTFOLIO DIVERSIFICATION

Strategic land Major developments Business space Natural resources Agriculture & Other

Notes: 1) Total value of all property – Investment (£265.4m), Development (£191.6m), Joint ventures (£29.9m), Available for sale (£14.2m), Owner Occupied Assets (£0.8m), plus mark to market value of development properties and overages (£22.8m)

£524.7m1

47% FROM TOP 10 SITES

18%

MELTON COMMERCIAL PARKCOALVILLE

WAVERLEY (NEW COMMUNITY)

NUFARM

FOUR OAKS BUSINESS PARK

ROSSINGTON

GATEWAY 45THORESBY

WAVERLEY AMP

NEXT 10 SITES

35%

REMAINING SITES

CHATTERLEY

£524.7M1AGRICULTURE & OTHER £10.5M

STRATEGIC LAND £39.3M

RESIDENTIAL

MAJOR DEVELOPMENTS £63.3M

COMMERCIAL

NATURAL RESOURCES £52.5M

BUSINESS SPACE £160.0M

PORTFOLIO CONCENTRATION PORTFOLIO SECTOR SPLIT

STRATEGIC LAND £27.1M COMMERCIAL

MAJOR DEVELOPMENTS £172.0m

RESIDENTIAL

10

9

8

76

543

2

1

58% CAPITAL GROWTH

INCOME GENERATION 42%

PART 1

15

LAND PIPELINE

Significant future land pipeline in place, providing consistent supply to underpin future sales and direct development based on current build-out assumptions

A mixture of deals are utilised to unlock maximum value: residential plots are sold as engineered parcels to housebuilders, whilst we are flexible in either selling commercial land to occupiers or directly-developing our own industrial units

This flexibility enables us to adapt to market conditions by ensuring deals satisfy three management tests:

  customer requirements funding and covenants; and risks and projected returns

0

5,000

10,000

15,000

20,000

25,000

RESIDENTIAL PIPELINE: PLOT NUMBERS

COMMERCIAL PIPELINE: SQUARE FEET

0m

5m

10m

15m

20m

25m

CURRENTLY CONSENTED 9.970M

AWAITING DETERMINATION AND 2019

3.381M

2020 ONWARDS 7.630M

Notes: (1) Planning pipeline numbers include sites where we have signed PPAs, joint venture agreements and taken overages. (2) The above charts show indicative planning submission dates correct as at 30 June 2019.

CURRENTLY CONSENTED 9,842

AWAITING DETERMINATION AND 2019 3,865

2020 ONWARDS 8,275

PART 1

16

DELIVERING NET ASSET GROWTH

For the twelve months ending 30 June 2019, EPRA NNNAV per share rose by 12.6% to 147.3p (NAV by 9.9% to 141.3p and EPRA NAV by 12.9% 150.6p)

As at:30/06/18

Value gains Profit excludingvalue gains

Interest &finance costs

Tax Dividends Other(pension, swap, etc)

As at:30/06/19

150.0p

145.0p

140.0p

135.0p

130.0p

125.0p

141.3p

6.0p

3.3p

0.1p

0.1p0.9p0.6p

0.6p

0.4p

1.1p3.3p

4.4p

11.7p

128.6p

2.2p

2.6p

EPRA NAV per share

EPRA NNNAV per share

NAV per share

PART 2

17

GROWING INCOME TO COVER ALL BUSINESS OVERHEADS

Notes: (1) Profits/(losses) from disposals of property categorised as investment, overages, development and assets held for sale (2) Revaluation gains from investment and development properties, joint ventures and overages (3) The above table is stated on an EPRA NNNAV basis

Six months to 30 June 19(£’m)

Capital Growth

Income Generation

Central Overheads

H1 2019 Total H1 2018 Total

Profit excluding value gains (0.8) 6.9 (4.1) 2.0 1.3

Profit from disposals1 3.6 1.1 4.7 0.1

Revaluation gains2 6.4 6.4 10.4

Operating profit before exceptionals which contributed to EPRA NNNAV

9.2 8.0 (4.1) 13.1 11.8

Exceptional items (0.6)

Interest and finance costs 0.1 (1.3) (1.2) (1.7)

Profit before tax 9.3 8.0 (5.4) 11.9 9.5

Tax (2.3) (1.7)

Profit after tax 9.6 7.8

Earnings per share – Statutory 4.67p 1.71p

Dividend per share 0.304p 0.278p

Profit excluding value gainsIncrease reflective of income generating acquisitions

Profit from disposalsProfits achieved at development and investment sites demonstrating our ability to extract value throughout their lifecycle

Dividend per shareInterim dividend of 0.304p per share. This represents a 9.4% rise on 2018 interim dividend

PART 2

Revaluation gainsReflect progress made with sales at Gateway 45, a major development site held in joint venture

18

Openingnet debt

31/12/18

Developmentspend

Disposalproceeds

Profit excludingvalue gains

Interest,finance costs,

pension charges

Cash and workingcapital used in

operations

JVs Dividends Closingnet debt

30/06/19

£80,000k

£75,000k

£30,000k

£70,000k

£65,000k

£60,000k

£55,000k

£50,000k

£45,000k

£40,000k

£35,000k

Acquisitionsspend

53,13618,769

2,035

15,140

2,3181,270

2,041

29,049

15,167

64,443

MANAGING CASH FLOWS TO FUND GROWTH

DISCIPLINED APPROACH WITH INVESTMENT IN INFRASTRUCTURE AND ACQUISITIONS LARGELY FUNDED THROUGH DISPOSALS• Net LTV of 10.1%, within target 10%-15% range; this is the product of strong sales in H1 • Prudent gearing provides headroom and flexibility whilst recognising higher operational gearing

POSITION AS AT 30 JUNE 2019 £’000

DRAWN BANK BORROWINGS – RCF 58,000

INFRASTRUCTURE LOANS 6,950

GROSS INTEREST-BEARING DEBT 64,950

CASH 11,436

CAPITALISED FEES 378

NET DEBT 53,136

NET LOAN/VALUE 10.1%

NET DEBT/NNNAV 11.2%

INTEREST COVER 4.76x

PART 2

19

SUBSTANTIAL CASH AND FACILITY HEADROOM OF £53.4M AT 30 JUNE

CASH PLUS AVAILABLE RCF HEADROOM

Notes: (1) Excludes £27.1m from March 2017 capital raise

Headroom comprises a combination of available debt from the Revolving Credit Facility (RCF) (£42.0m) and cash position (£11.4m)

This headroom provides flexibility for Harworth to transact quickly and decisively on new acquisitions  

£0k

£10,000k

£20,000k

£30,000k

£40,000k

£50,000k

£60,000k

2015 HY 2016 HY 2017 HY1 2018 HY 2019 HY

52,255

19,227

53,43640,592

56,215

REPAYMENT PROFILE OF EXISTING DEBT FACILITIES

£0k

£10,000k

£20,000k

£30,000k

£40,000k

£50,000k

£60,000k

2019 2020 2021 2022 2023

2,811 4,139

58,000

PART 2

Harworth has a £100m RCF from RBS and Santander that does not expire until February 2023

We continue to use, and actively seek out, infrastructure grants and loans to support the acceleration of build-out.  Two public loans currently in place, with £7m currently repayable between 2020 and 2022

20

STRATEGIC PRIORITIES AND OUTLOOK

ACQUISITIONS In exclusive negotiations

on sites within each of our core regions

We continue to act flexibly, with future deals to comprise a mixture of freehold acquisitions, PPAs and options across all of our core regions

SALES Well advanced with 2019

sales, with over 70% of budgeted sales either agreed, in legals or exchanged for a total consideration in excess of book value (as at 10 September 2019)

Further sales targeted at a mixture of housebuilders and commercial occupiers

Surplus land sales to continue, as part of portfolio rationalisation

PLANNING Live applications for 1,715

plots and c. 3.2m sq. ft across 9 sites awaiting determination at half-year end, with 3 applications for a further 2,150 plots and 0.2m sq. ft being prepared

Planning success achieved in July at Bardon Hill in Leicestershire for 356k sq. ft of commercial space

Political headwinds mean that we expect the consideration or determination of a number of these applications to be extended beyond year-end

LETTINGS Tenants being actively sought

for five co-interest and one remaining directly developed commercial unit

Pre-lets continue to be sought on a selective basis to build-out further direct development for income 

Asset management initiatives continue across our other income producing sites

PART 3

21

ACQUISITION FOCUS IS RESOLUTE

Regional operating model improves our access to strategic land and investment acquisition opportunities that will drive future value gains

Our acquisitions resource is now embedded within regional teams

Acquisition focus is resolute and consistent:

  ‘big, dirty and complex’ former industrial sites that require a specialist master developer to redevelop sensitively, such as Ironbridge Power Station;  

  sustainable urban-edge extensions that can be promoted effectively through the local planning system for either residential or commercial uses; and

  high yielding income-producing sites that have asset management or long-term strategic land potential to drive additional returns 

Financial headroom means that we can act quickly & robustly, providing a clean exit to vendors 

PART 3

Representative RAF site

Representative Power Station site

22

STRONG HALF-YEAR OF DELIVERY POLITICAL UPHEAVAL CREATING PLANNING HEADWINDS

STRONG PERFORMANCECONTINUED MARKET-LEADING PERFORMANCE IN THE FIRST HALF

A positive six months resulting in total return (NNNAV growth plus dividends per share) on an annual basis of 13.3% (H1 2018: 11.5%)

NNNAV growth per share in H1 on a six-month basis of 1.4% (H1 2018: 1.5%) reflecting second half weighting of overall business performance

Profit excluding value gains increased to £2.0m (H1 2018: £1.3m), reflecting the full impact of additional income generated from acquisitions in 2018

CLEAR STRATEGYFOCUSED ON DELIVERING VALUE & INCOME FROM CURRENT & FUTURE PORTFOLIO

Continuing to refill portfolio with strategic land and income acquisitions to deliver further value. Six acquisitions made in the first half for a total consideration of £18.8m (including costs)

Investment in regional model in our three core regions to unlock additional land and property opportunities

WELL POSITIONEDPORTFOLIO IS RESILIENT AND APPROPRIATELY CAPITALISED IN ORDER TO WEATHER  ANY SHORT-TERM

POLITICAL HEADWINDS AND TO TAKE ADVANTAGE OF MARKET OPPORTUNITIES

Significant latent value in the portfolio, with outline planning consent in place for 9,842 residential plots and 10m sq. ft of commercial space. Further value will be unlocked from longer-term pipeline of sites, which carries the potential for a further 12,140 residential plots and 11m sq. ft of commercial space

Half-year gearing kept low at 10.1% net loan to value (£53.1m net debt) with cash/facility headroom of £53.4m, providing significant firepower for further land and property acquisitions

PART 1

SOUND MARKETSFOCUS REMAINS ON RESIDENTIAL & INDUSTRIAL SECTORS IN THE NORTH OF ENGLAND AND THE MIDLANDS

The regions we operate in are attractive due to better than average economic growth, occupier demand, property under-supply and affordability

National government policy directly supports our ambitions, although local political headwinds has caused the timing of determination of a handful of our live planning applications to be more uncertain and has prompted a change in our planning promotion strategy for a small number of sites

23 www.harworthgroup.comwww.harworthgroup.com

A BRIEF HISTORY 24

PROPERTY PORTFOLIO IN DETAIL 25

PROPERTY PORTFOLIO - MOVEMENT 26

PROPERTY PORTFOLIO - SALES 27

VALUATION METHODOLOGY 28

INCOME PROFILE IN DETAIL 29

NET ASSET GROWTH IN H1 30

CURRENT FINANCING 31

DISCLAIMER 32

PART 4 - APPENDICES

24

A BRIEF HISTORY

2004 - 2012

PROPERTY DIVISION WITHIN UK COAL PLC

In 1994, RJB Mining (founded in 1974) bought British Coal’s core activities

Having changed its name in 2001, UK Coal established a property division in 2004, which was to become Harworth Estates

In 2010, Owen Michaelson joined UK Coal to head up Harworth Estates

Current management team formed from core of property division, supplemented by sector specialists recruited as Harworth has grown

2012 - 2014

HARWORTH ESTATES WAS 24.9% OWNED BY CFR PLC

In December 2012, after a complex restructuring, UK Coal changed its name to Coalfield Resources plc (CfR) owning 24.9% of Harworth Estates

Remaining 75.1% was owned by the pension trustees but in July 2013, the holding was transferred to the Pension Protection Fund (PPF)

In November 2014, CfR agreed to buy the PPF’s 75.1% holding in Harworth Estates

2015 ONWARDS

RE-LAUNCHED AS HARWORTH GROUP PLC

In February 2015, Harworth agreed a new 5 year £65m RCF with RBS

On 24 March 2015, CFR renames itself as Harworth Group plc

Raised £116m through a share placing. This cash and issued shares were used to acquire the PPF’s shareholding in Harworth Estates. PPF became a 25% shareholder

In March 2017, Harworth raised £27.1m of equity to purchase five new sites which were all acquired in the same year

Became premium listed and qualified for FTSE index inclusion in August 2018

Harworth extended its RCF with RBS and Santander to £100m in April 2018

PROPERTY SALES USED TO PAY DOWN BANK DEBT

PROPERTY SALES USED TO FUND MINING ACTIVITIES

FOCUS ON MAINTAINING MARKET-LEADING RETURNS

PART 4

25

PROPERTY PORTFOLIO IN DETAIL

OWNERSHIP BREAKDOWNACRES SITES

30-JUN-18 31-DEC-18 30-JUN-19 30-JUN-18 31-DEC-18 30-JUN-19

FREEHOLD LAND 17,110 16,718 15,622 98 80 79

LEASEHOLD LAND 176 318 318 3 3 3

COMMERCIAL CLAWBACKS 3,961 3,961 3,961 32 32 32

JOINT VENTURE SITES 376 635 579 5 6 6

SUB TOTAL 21,623 21,632 20,480 138 121 120

MINERAL RIGHTS 726 726 726 12 12 12

THIRD PARTY AGREEMENTS 451 750 750 10 13 13

OPTIONS (THIRD PARTY LAND) 442 197 197 7 4 4

TOTAL 23,242 23,306 22,153 167 150 149

TOP TEN SITES TYPE REGION ACRESHOUSE PLOTS COMMERCIAL SPACE

CONSENTED SOLD/BUILT CONSENTED BUILT

WAVERLEY (RESI) Development Yorkshire & Central 432 3,890 1,570/900 - -

COALVILLE Development Midlands 346 2,016 - - -

NUFARM Investment Yorkshire & Central 112 - - 0.30m sq. ft 0.30m sq. ft

WAVERLEY (AMP) Investment Yorkshire & Central 113 - - 2.10m sq. ft 1.50m sq. ft

THORESBY Development Yorkshire & Central 460 800 - 0.25m sq. ft 0.00m sq. ft

GATEWAY 45 Joint Venture Yorkshire & Central 110 - - 2.60m sq. ft 0.00m sq. ft

MELTON CP Investment Midlands 141 - - 0.30m sq. ft 0.30m sq. ft

ROSSINGTON Development Yorkshire & Central 307 1,200 522/170 0.10m sq. ft 0.05m sq. ft

FOUR OAKS BUSINESS PARK Investment North West 19 - - 0.43m sq. ft 0.43m sq. ft

CHATTERLEY Development North West 129 - - 1.20m sq. ft 0.00m sq. ft

TOTAL 2,169 7,906 2,092/1,070 7.28m sq. ft 2.58m sq. ft

PART 4

26

PROPERTY PORTFOLIO | MOVEMENT AND SALES ANALYSIS | MOVEMENT

Notes: Total value of all property – Investment (£265.4m), Development (£191.6m), Joint ventures (£29.9m), Available for sale (£14.2m), Owner Occupied Assets (£0.8m), plus mark to market value of development properties and overages (£22.8m)

£570.0m

£550.0m

£530.0m

£510.0m

£490.0m

£470.0m

£450.0mProperties at:

31/12/18Development

spendAcquisitions Disposals JVs Revaluation

gainsProperties at:

30/06/19

£525.7m

£10.0m

£18.8m

£33.8m

£2.4m£6.4m

£524.7m

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27

PROPERTY PORTFOLIO | MOVEMENT AND SALES ANALYSIS | SALES

Commercial Residential(1,091 plots)

Agriculture/Other

-£0.1m

£50.0m

£40.0m

£30.0m

£20.0m

£10.0m

£0.0m

£50.0m

£40.0m

£30.0m

£20.0m

£10.0m

£0.0m

Developmentproperties

Investmentproperties

£5.5m

£28.2m

£0.3m£2.7m

£2.9m

£45.6m

£27.7m

£11.7m

£2.1m

£3.6m

£0.5m

£3.4m

£1.2m£0.2m

£4.8m

£11.7m

£0.3m£1.2m

£7.0m

£2.3m

£3.6m

£0.5m

£46.3m

NNNAV Financing ElementCost Accrual Fees Profit/Loss on Sale

PART 4

28

PORTFOLIO IS VALUED TWICE YEARLY. FORMAL YEAR-END VALUATION BY BNP PARIBAS AND SAVILLS, AND HALF YEAR VALUATION BY MANAGEMENT WITH SELECTIVE REVIEW BY BNP PARIBAS AND SAVILLS

VALUATION IS PROPERTY BY PROPERTY ON THE BASIS OF MARKET VALUE (RICS RED BOOK DEFINITION) GIVEN THE HIGHEST AND BEST USE OF THE PORTFOLIO

VALUATION METHODOLOGY

VALUATION TECHNIQUES FOR THE BROAD CATEGORIES OF THE PORTFOLIO ARE:

DEVELOPMENT SITESResidual development appraisals, a form of discounted cash flow which estimates the current site value from future cash flows measured by observable current land and/or completed built development values and estimated developments costs and returns.

STRATEGIC LANDDiscounted cash flows, measured by current land values adjusted to reflect the: quality of the development opportunity; potential development costs; and likelihood of planning consent.

BUSINESS SPACEMarket comparison with direct reference to observable market evidence: rental values; yields; and capital values, adjusted for: the quality of the properties; the covenant profile of the tenants; and the volatility of cash flows.

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29

DEVELOPMENT PROPERTIES Recognition of sales of development properties

OTHER PROPERTY INCOME First PPA success with more income to come through in future years

Promote fees pursued but will occur infrequently (none in H1)

BUSINESS SPACE Full effect of 2018 acquisitions, including Nufarm and Flaxby

Good progress with new and renewed lettings, including those in joint venture at Logistics North

NATURAL RESOURCES Core income from 154.2MW of low-carbon energy developments in place, alongside

income from tipping

OPERATIONS Coal fines contracts in place with two customers across two power stations

Income is now forecast to decline until power stations are due to cease operating in 2025

INCOME IN DETAIL

REVENUE BREAKDOWN£70.0m

HY 2018 HY 2019

£60.0m

£50.0m

£40.0m

£30.0m

£20.0m

£10.0m

£0.0m

Development properties

Other property activities

Operations

Natural resources

Business space

PART 4

30

CONTINUED NET ASSET GROWTH IN H1

For the six months ending 30 June 2019, EPRA NNNAV per share rose by 1.4% to 147.3p (NAV by 2.8% to 141.3p and EPRA NAV by 1.6% 150.6p)

As at:31/12/18

Value gains Profit excludingvalue gains

Interest &finance costs

Tax Dividends Other(pension, swap, etc)

As at:30/06/19

137.5p

141.3p

7.7p

2.1p

0.6p 0.4p 1.1p0.6p

0.2p

6.0p

3.1p

5.5p

0.4p

0.2p

3.3p

150.0p

145.0p

140.0p

135.0p

130.0p

EPRA NAV per share

EPRA NNNAV per share

NAV per share

PART 4

31

CURRENT FINANCING

LENDER SITE AMOUNT DRAWN (£’K) INTEREST RATE END DATE

HOMES ENGLAND Harworth 4,139 2.2% plus EU Reference Rate20 business days from the sale of last

part of site, or December 2022

SHEFFIELD CITY REGION JESSICA

AMP 2,811 2.2% plus EU Reference RateDecember 2020 but with an ability to

extend if development not let

RBS/SANTANDERAll sites.

Floating debenture58,000 ICE Libor rate plus 2.1% February 2023

GROSS INTEREST-BEARING DEBT 64,950

CAPITALISED FEES (378)

TOTAL GROSS BORROWINGS 64,572

WEIGHTED AVERAGE COST OF DEBT IS 3.24% (USING 30 JUNE 19 BALANCES AND RATES) WITH A 0.84% NON-UTILISATION FEE ON UNDRAWN RCF AMOUNTS

£45m fixed at 1.235% plus 210 basis point margin until July 2022

PART 4

32

FOR THE PURPOSE OF THE FOLLOWING DISCLAIMER, REFERENCE TO THIS ‘PRESENTATION’ SHALL BE DEEMED TO INCLUDE REFERENCE TO THE PRESENTATION SLIDES, THE PRESENTERS’ SPEECHES, THE QUESTION AND ANSWER SESSION AND ANY OTHER RELATED VERBAL OR WRITTEN COMMUNICATION.

This presentation, which has been issued by Harworth Group plc (“Harworth”), comprises slides for a presentation in relation to Harworth’s results for the half-year ended 30 June 2019 and is solely for use at such presentation. This presentation is confidential and may not be reproduced, redistributed or passed directly or indirectly to any person or published in whole or in part for any purpose.

This presentation includes forward-looking statements with respect to the business, performance and financial condition of Harworth. These forward-looking statements can be identified by the use of forward-looking terminology, including without limitation the terms “estimates”, “plans”, “anticipates”, “targets”, “aims”, “continues”, “expects”, “intends”, “may”, “will”, “would”, “could” or “should“ or, in each case, their negative or other various or comparable terminology. These statements are made by Harworth’s directors in good faith based on the information available to them at the date of Harworth’s interim results announcement for the half-year ended 30 June

2019. By their nature, these statements may involve risks, uncertainties or assumptions given future events and circumstances which are beyond Harworth’s control, including amongst other things, fluctuations in the property market for the price of land, the timing effect and other uncertainties of future acquisitions, the effect of tax and other legislation or regulations in the United Kingdom, all or any of which can cause results and developments to differ materially from those anticipated. Further details of certain risks and uncertainties were set out in Harworth’s Annual Report and Financial Statements for the year ended 31 December 2018, available to view at www.harworthgroup.com. Nothing in this presentation should be construed as a profit forecast. Except as required by applicable law or regulation, Harworth disclaims any obligation or undertaking to update these statements to reflect events occurring after the date these statements were published.

Actual results may differ materially from those expressed in forward-looking statements. As such, you are cautioned not to put undue reliance on any forward-looking statements. No investment advice is being given in this presentation. No representation, warranty or undertaking is given by, or on behalf of, Harworth or any of its directors, officers, employees and advisers that Harworth will achieve any results set out in such statement or as to the accuracy, completeness or reasonableness of any projections, targets, estimates, forecasts, beliefs, opinions or information contained in or given during this presentation and no liability is accepted or incurred by any of them for or in respect of

the same, provided that nothing in this paragraph shall exclude liability for any representations or warranty made fraudulently.

In making this presentation available, Harworth makes no recommendation to buy, sell or otherwise deal in shares in Harworth or in any other securities or investments whatsoever, and you should neither rely nor act upon, directly or indirectly, any of the information contained in this presentation in respect of any such investment activity. Past performance is no guide to future performance. If you are considering engaging in investment activity, you should seek appropriate independent financial advice and make your own assessment.

By accepting these presentation slides, you agree to be bound by the above conditions and limitations.

This presentation does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase, any shares in Harworth or any other securities, nor shall it or any part of it, nor the fact of its distribution form the basis of, or be relied upon in connection with, any contract or investment decision related thereof.

The financial results contained within this presentation are extracted from Harworth’s interim results announcement for the financial half-year ended 30 June 2019.

DISCLAIMER PART 4

33

Ironbridge Power Station site (July 2019)