Hammerson Logo

2007 Full Year Results

25.02.2008

Financial Highlights

2007 2006 Change
Net rental income £275.7m £237.4m +16.1%
Profit before tax £110.4m £792.4m  
Adjusted profit before tax(1) £117.3m £94.5m +24.1%
Basic earnings per share 34.9p 357.5 p  
Adjusted earnings per share(1) 40.3 p 32.8 p +22.9%
Dividend per share(2) 27.30 p 21.68 p +25.9%
Equity shareholders’ funds £4,355m £4,165m +4.6%
Net asset value per share, EPRA basis(1) £15,45 £15.00 +3.0%
Return on shareholders’ equity(3) 4.5% 25.3%  
Gearing 57% 54%  

Key Points

  • A strong operating performance saw like-for-like rental income growth of 7.4% leading to increases of 24.1% in adjusted profit before tax and of 22.9% in adjusted earnings per share.
  • Over 70 new leases were signed generating additional annual rents of
    £8.3 million, whilst some 120 expiring leases were renewed. The vacancy rate reduced to 1.8% at 31 December 2007, compared with 3.4% at the end of 2006.
  • Adjusted NAV increased by 3.0% for the full year. An increase of 9.0% in the first six months was partially offset by a reduction of 5.5% in the second half of the year.
  • In the UK, following a capital return of 4.0% in the first six months of 2007, the second six months saw a negative capital return of 7.0%. The overall adverse yield change of 52 basis points in the second half was mitigated by the benefit of additional rents and higher rental values.
  • In France, values increased throughout the year, giving rise to a capital return for 2007 of 16.5%.
  • Capital expenditure amounted to £824 million, whilst £537 million was raised from disposals.
  • Six principal developments currently underway have an estimated total cost of £950 million and are projected to generate annual income following completion and letting of £75 million, of which £27 million has been contracted.
  • The group has a strong balance sheet and had cash and undrawn committed facilities of around £600 million at the year end.

Notes

  1. The calculations for basic and adjusted figures are shown on pages 17 and 20 and in note 6 on pages 31 and 32.
  2. Recommended final dividend of 15.3 pence per share (2006: 15.3p) making a total for 2007 of 27.3 pence. It is intended that 7.7 pence per share will be paid as a PID, net of withholding tax where appropriate, and the remainder of 7.6 pence paid as a normal dividend. Further details are shown in note 5 on page 31.
  3. Excluding deferred tax.

John Nelson, Chairman of Hammerson, said:

In the face of the most difficult conditions in financial and UK property investment markets in recent years, I am very pleased to report a strong operational performance by Hammerson in 2007 with good growth in rental income and earnings. The group’s adjusted earnings per share increased by 23%, or 7.5 pence, to 40.3 pence, reflecting new lettings, rent reviews, rent indexation in France and the completion of developments. The proposed full year dividend for 2007 is increased by 25.9%.

Our retail and office portfolio is of the highest quality and we benefit from our substantial investment in France. This provides the potential for further good income growth over the next three years, both from the existing investment assets and the current development projects as they are completed and let. Notwithstanding the current uncertain market conditions, I am confident that we shall maintain Hammerson’s progress in the future.

Enquiries:

John Richards, Chief Executive
Tel: 020 7887 1000

Simon Melliss, Group Finance Director
Tel: 020 7887 1000

Christopher Smith, Director of Corporate Affairs
Tel: 020 7887 1019
christopher.smith@hammerson.com