# Harworth targets £7.4m annual cost savings by 2028

- Link: https://www.directorstalkinterviews.com/harworth-targets-7-4m-annual-cost-savings-by-2028/4121262538
- Published: 2026-09-15T07:04:00+01:00
- Author: Amilia Stone

On 9 September, the **Harworth Group plc** (LON:HWG) Board published its response
document in relation to the unrecommended cash offer by Peel Bidco for Harworth 
at a price of 172.5p per Harworth Share. Capitalised terms used but not defined 
in this announcement have the meanings given to them in the Response Document.

**Creating a simpler, lower-cost and higher-returning platform**

In its Response Document, the Harworth Board set out its plan to accelerate key 
initiatives that would result in a simpler, lower-cost, higher returning platform.
Once completed, the Harworth Board believes that it can deliver higher and more 
sustainable returns for Harworth Shareholders, targeting a low double-digit Total
Accounting Return in the longer-term.

One of the key initiatives identified in the Response Document was the alignment
of Harworth’s operating model and cost base with a pure play powered land and industrial&
logistics approach. As trailed in the Response Document, the Harworth Board is today
publishing a Quantified Financial Benefit Statement, as appended in full to this
announcement, providing more details on the key components of future cost savings.

 * By the end of the financial year ending 31 December 2028, the Harworth Board 
   expects to achieve total annualised run rate cost savings of _at least_ £7.4 
   million (the “Quantified Cost Savings”), of which £1.3 million has already been
   realised through a headcount reduction programme initiated earlier this year 
   and 94% is planned to be achieved by the end of 2027.
 * The expected annualised run rate savings at the end of financial years ending
   31 December 2026, 2027, and 2028 are £3.2 million, £6.9 million and £7.4 million
   respectively.
 * Based on Harworth’s administrative expenses of £36.3 million over the 12 months
   to 31 December 2025, the Quantified Cost Savings represent a 20.4% reduction 
   in Harworth’s administrative expenses.

The Harworth Board aims to exceed the Quantified Cost Savings within the timeframes
outlined above, noting that the Quantified Cost Savings _exclude_ further efficiencies
and value which the Harworth Board believes will arise from the full implementation
of Harworth’s digital transformation project, which has been implemented over the
last two years and is due to complete later this year.  

The timeline for achieving the Quantified Cost Savings is not the same as the timeline
for completing Harworth’s transition to a pure play powered land and industrial &
logistics specialist. The Harworth Board believes that costs can be reduced ahead
of this transition being complete.

The Quantified Financial Benefits Statement, together with the bases of belief and
principal assumptions, are set out in Part B of the Appendix to this announcement
alongside reports from Harworth’s reporting accountants and financial advisers in
Parts C and D of the Appendix respectively, as required under Rule 28 of the Code.

**Continued rejection of the Unrecommended Offer**

The Harworth Board remains unanimous and unequivocal in its rejection of the Unrecommended
Offer, which, in its view, fundamentally undervalues Harworth and its near and longer-
term prospects. The Response Document sets out in full the Harworth Board’s views
on the Unrecommended Offer and the reason for the Harworth Board’s unanimous and
unequivocal rejection of the Unrecommended Offer. Harworth Shareholders are strongly
advised to read the Response Document in full before deciding what action to take
in relation to their Harworth Shares.

**THE BOARD RECOMMENDS UNANIMOUSLY THAT HARWORTH SHAREHOLDERS WHO HAVE NOT ACCEPTED
THE UNRECOMMENDED OFFER DO NOT DO SO AND THAT HARWORTH SHAREHOLDERS WHO HAVE ALREADY
ACCEPTED THE UNRECOMMENDED OFFER WITHDRAW THEIR ACCEPTANCES AS SOON AS POSSIBLE.**

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