Programme to achieve cost savings

On 9 September, the Harworth 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 (the "Response Document"). 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.

Allen Overy Shearman Sterling LLP is acting as legal adviser to Harworth.

Disclaimers

Except as expressly stated, nothing in this announcement constitutes a quantified financial benefits statement for the purposes of Rule 28 of the Code. The statements which are labelled as containing a quantified financial benefits statement relate to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies and which may in some cases be subject to consultation with employees or their representatives. As a result, the targets, cost savings and efficiency gains referred to may not be achieved, or may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated.

APPENDIX

PART A

Quantified Financial Benefits Statement

This announcement contains a “quantified financial benefits statement” for the purposes of Rule 28 of the Takeover Code, which has been reported on in accordance with the requirements of the Takeover Code in the following form (the “Quantified Financial Benefits Statement”):

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 earlier this year and 94% is planned to be achieved by the end of 2027.

The expected annualised run rate of 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 Quantified Cost Savings are expected to arise principally from reductions in employee-related costs, together with broader overhead efficiencies and the simplification of Harworth's operating platform and delivery model. These actions reflect Harworth's more focused operating requirements following the planned exit from its residential portfolio and other lower-returning assets.

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.

In its Half Year Results, Harworth disclosed that administrative expenses had increased by £0.8m (+4.9%) to £17.9m. The H1 administrative costs included £0.7 million of restructuring costs incurred as part of headcount and cost reduction measures, as well as an increase in IT costs primarily related to Harworth’s digital transformation project.

In total, Harworth expects to incur one-off costs of £3.85 million in aggregate in order to implement the Quantified Cost Savings, of which £0.7 million has already been incurred as referenced above. Of the £3.1 million of one-off costs still to be incurred, £2.2 million is expected to be incurred in the financial year ending 31 December 2027 and £0.9 million is expected to be incurred in the financial year ending 31 December 2028.

PART B

Bases of belief and sources of information

The Group’s total reported cost base, being the administrative expenses as referenced in the audited accounts for the year ending 31 December 2025, was £36.3 million, and has been assumed as the addressable cost base for the cost savings plan.

The total addressable cost base excludes capital expenditure.

The cost savings estimates shown above are based on savings compared to the Group’s cost base for the year ending 31 December 2025.

The estimated cost savings have been prepared based on internal information on costs by function and type and detailed analysis of the future operating model. The estimates have been prepared by the Group’s Executive Directors and approved by the Harworth Board. Key sources of information used to develop these estimates include financial results for the year ended 31 December 2025.

In arriving at the Quantified Financial Benefits Statement, the Harworth Directors have assumed that:

there will be no change in the ownership or control of the Group;

there will be no material change to macroeconomic, political or legal conditions in the markets in which the Group operates which will materially impact on the implementation of or costs to achieve the proposed cost savings; and

there will be no material change in regulatory requirements.

Reporting

As required by Rule 28.1(a) of the Code, Ernst & Young LLP (“EY”), as reporting accountants to Harworth, have provided a report (set out in Part C of this Appendix) stating that, in their opinion, the Quantified Financial Benefits Statement has been properly compiled on the basis stated.

In addition, Barclays and Peel Hunt as financial advisers to Harworth have provided a report (set out in Part D of this Appendix) stating that, in their opinion, and subject to the terms of the report, the Quantified Financial Benefits Statement, for which the Directors of Harworth are responsible, has been prepared with due care and consideration for the purposes of the Takeover Code.

Each of EY, Barclays and Peel Hunt have given and not withdrawn their consent to the publication of their reports in the form and context in which they are included.

PART C

ACCOUNTANT’S REPORT ON QUANTIFIED FINANCIAL BENEFITS STATEMENT

Dear Sirs/Madams

Report on Quantified Financial Benefits Statement by Harworth Group plc (the “Company”)

We report on the statement of quantified cost savings (the “Statement”) made by the directors of the Company (the “Directors”) in the announcement published on 15 September 2026 in connection with the bid defence circular dated 9 September 2026 (the “Announcement”), to the effect that:

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 the headcount reduction programme earlier this year and 94% is planned to be achieved by the end of 2027.

The expected annualised run rate of 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.

In total, Harworth expects to incur one-off costs of £3.85 million in aggregate in order to implement the Quantified Cost Savings, of which £0.7 million has already been incurred. Of the £3.1 million of one-off costs still to be incurred, £2.2 million is expected to be incurred in the financial year ending 31 December 2027 and £0.9 million is expected to be incurred in the financial year ending 31 December 2028.

This report is required by Rule 28.1(a)(i) of the City Code on Takeovers and Mergers (the “Takeover Code”) and is given for the purpose of complying with that requirement and for no other purpose.

Save for any responsibility that we may have to those persons to whom this report is expressly addressed or to the shareholders of the Company as a result of the inclusion of this report in the Announcement, and for any responsibility arising under Rule 28.1(a)(i) of the Takeover Code to any person as and to the extent therein provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with, this report or our statement, required by and given solely for the purposes of complying with Rule 23.2 of the Takeover Code by consenting to its inclusion in the Announcement.

Accordingly, we assume no responsibility in respect of this report to Peel Pepper (UK) Limited (the “Offeror”) or any person connected to, or acting in concert with, the Offeror or to any other person who is seeking or may in future seek to acquire control of the Company (an “Alternative Offeror”) or to any other person connected to, or acting in concert with, an Alternative Offeror.

Opinion

In our opinion, the Statement has been properly compiled on the basis stated.

The Statement has been made in the context of the disclosures set out in Part B of the Appendix to the Announcement setting out the basis of the Directors’ belief (including the principal assumptions and sources of information) supporting the Statement and their analysis and explanation of the underlying constituent elements.

Responsibilities

It is our responsibility to form our opinion, as required by Rule 28.1(a)(i) of the Takeover Code, as to whether the Statement has been properly compiled on the basis stated and to report that opinion to you.

Basis of preparation of the Statement

The Statement has been prepared on the basis stated in Part B of the Appendix to the Announcement.

Basis of opinion

We conducted our work in accordance with the Standards for Investment Reporting issued by the Financial Reporting Council in the United Kingdom. We are independent in accordance with the FRC’s Ethical Standard as applied to Investment Circular Reporting Engagements, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We have discussed the Statement, together with the underlying plans (relevant bases of belief/including sources of information and assumptions), with the Directors and Barclays Bank PLC ("Barclays") and Peel Hunt LLP ("Peel Hunt") (together, the "Financial Advisers"). Our work did not involve any independent examination of any of the financial or other information underlying the Statement.

Yours faithfully

Ernst & Young LLP

PART D

REPORT FROM BARCLAYS AND PEEL HUNT

The Board of Directors

Harworth Group plc

1 Harworth Way

Rotherham

S60 5GR

Dear Sirs/Madams,

We refer to the quantified financial benefits statement, the bases of belief thereof and the notes thereto set out in Parts A and B of the Appendix to the announcement (the “Announcement”) (the “Statement”), for which the board of directors of the Company (the “Directors”) are solely responsible under Rule 28.3 of the City Code on Takeovers and Mergers (the “Code”).

We have discussed the Statement (including the assumptions, bases of calculation and sources of information referred to therein) with the Directors and those officers and employees of the Company who have developed the analysis and financial projections underlying the estimated cost savings to which the Statement relates. The Statement is subject to uncertainty as described in the Announcement and our work did not involve an independent examination, or verification, of any of the financial, property, valuation or other information underlying the Statement.

We have relied upon the accuracy and completeness of all of the financial and other information provided to us by or on behalf of the Company, or otherwise discussed with or reviewed by us, in connection with the Statement, and we have assumed such accuracy and completeness for the purposes of providing this letter.

We do not express any view as to the achievability of the quantified financial benefits, whether on the basis identified by the Directors in the Statement, or otherwise.

We have also reviewed the work carried out by Ernst & Young LLP (“EY”) as reporting accountants to the Company for the purposes of Rule 28.1(a)(i) of the Code and have discussed with EY its opinion addressed to you and us on this matter and the accounting policies and bases of calculation for the Statement, which is set out in Part B of the Appendix to the Announcement.

On the basis of the foregoing, we consider that the Statement, for which you as the Directors are solely responsible, for the purposes of the Code, has been prepared with due care and consideration.

Yours faithfully,

For and on behalf of For and on behalf of

Barclays Bank PLC Peel Hunt LLP