HAMMERSON plc – HALF YEAR 2024 RESULTS
Building on strong first half with transformational disposal to accelerate growth and value creation
Rita-Rose Gagné, Chief Executive of Hammerson, said:
“I am pleased to report we’ve had a strong first half. We are realising the benefits of our investments in recent years and with the agreed disposal of Value Retail, we now have the capacity and capability to accelerate growth and value creation. Our leading city centre destinations are in high demand, supported by our ongoing investment and repositioning. This is evidenced by another year-on-year increase in leasing, up 24%. This is driving top line growth with more to come.
At the same time, we have delivered another outperformance on costs, down 16% year on year. In the first half, we also completed our £500m disposals programme, realigning our core portfolio to leading city centre destinations, whilst further strengthening the balance sheet. We now have a strong, scalable platform as we look to drive further operating leverage.
I am excited by the opportunity ahead and confident we will continue to grow the top-line and earnings off our new base, reflected in the 5% increase in the interim dividend.”
Strong first half and transformational £1.5bn1 transaction generating cash proceeds of c.£600m
- Adjusted earnings of £50m (HY 23: £56m), reflecting impact of disposals. Adjusted EPS 1.0p (HY 23: 1.1p)
- Disposal of non-controlling and yield dilutive interest in Value Retail announced 22 July 2024 ensures clean exit from complex structure at an attractive price, generating c.£600m in cash proceeds
- The Company intends to use proceeds for a combination of: immediate significant deleveraging; reinvestment into higher yielding assets; and a return of up to £140m to shareholders via a share buy back
- Loss for the period (IFRS) of £517m (HY 23: £(1)m), predominantly reflecting impairment of investment in Value Retail from carrying value of £1.1bn. Loss per share (10.4)p (HY 23: (0.0)p)
- Managed Group portfolio value of £2.6bn broadly flat excluding disposals, with revaluation gains in UK and France due to ERV growth. Irish revaluation loss due to yield expansion
- NTA per share 38p (FY 23: 51p)
- Headline LTV of 39% and net debt:EBITDA of 8.0x. On a pro forma basis, reflecting the disposal of the Group’s interest in Value Retail, LTV falls to 25% with net debt:EBITDA of 5.3x
Continued operational and leasing momentum driving top line growth; costs further reduced:
- Like-for-like (‘LFL’) GRI +2%, LFL NRI +2%. Excluding Cabot Circus, in repositioning, LFL GRI +4%; LFL NRI +5%
- Leasing value up 24% year-on-year to £23m, or £13m at share, from 140 deals
- Positive leasing spreads maintained: permanent deals signed +61% vs previous passing (+29% excluding nil previous passing rent); net effective rent +10% vs ERV
- Robust 94% occupancy whilst undertaking proactive repositioning
- Footfall up +1% year-on-year (+2% excluding Cabot Circus); new occupier sales densities c.20% higher than previous occupiers
- Continued cost reduction outperformance with gross administration cost -16% year-on-year, which will deliver in excess of 30% cost reduction since FY 20 by FY 24
Dividend
The Board today declares an interim dividend in respect of 2024 of 0.756p pence per share, up 5% year-on-year and a payout ratio of 76% reflecting the Board’s confidence in future earnings growth and which will be paid as a PID. The Board intends to increase the policy payout ratio from its current policy of 60-70% to 80-85% following the completion of the sale of Value Retail. The dividend declaration will be released as a separate announcement.
