HAMMERSON plc – RESULTS FOR THE YEAR ENDED 31 DECEMBER 2021
Rebuilding a strong business
Rita-Rose Gagné, Chief Executive of Hammerson, said:
“Since the beginning of 2021, we have made fundamental changes in our business, realigning our portfolio with £623m of disposals, significantly strengthening the balance sheet, re-setting our organisation and putting in place a clear strategy for value creation focused on our prime urban estates.
The pandemic has accelerated trends in our operating environment, with people engaging with physical space in new ways. Our role is to create and curate relevant, appealing and sustainable spaces for the future.
We are already seeing the tangible results from our strategy with strong occupier leasing demand, reduced vacancies, improved collections, a lower cost base and clear path to value creation from our land bank.
We have more to do. Today we are a forward-looking organisation with our assets at the heart of driving value creation.”
Summary financial and operating performance:
• Adjusted earnings up 122% to £81m (FY20: £37m), benefiting from increased net rental income, a strong recovery in Value Retail earnings, and lower finance costs. 2021 earnings benefit from a £17m year-on-year increase in surrender premiums and a £12m net rental income contribution from in year disposals
• Adjusted earnings per share up 38% to 1.8p (FY20: 1.3p – restated1)
• IFRS loss of £429m (FY20: £1,735m loss) largely due to £470m Group portfolio revaluation deficit (H1 £361m, H2 £109m). Basic loss per share of (9.8)p (2020: (62.4)p – restated1)
• Group portfolio value of £5.4bn, with capital returns beginning to stabilise in the second half: FY -7.9%, H2 -1.7%
• EPRA net tangible assets (NTA) per share reduced to 64p from 69p at 30 June and 82p at FY20
Strengthened balance sheet
•£503m of disposals contracted in 2021, including £70m from Silverburn due to complete in March 2022
- Net debt down 19% to £1.8bn at 31 December 2021
- Ample liquidity of £1.5bn in undrawn committed facilities and cash at 31 December 2021
- Headline LTV 39% (FY20: 40%), fully proportionally consolidated (FPC) LTV 47% (FY20: 46%)
•Further £120m disposal of Victoria, Leeds completed in 2022 bringing total disposals to £623m since the beginning of 2021
- pro forma net debt down 27% to £1.6bn, liquidity £1.7bn
- pro forma headline LTV 37%, FPC LTV 45%
• Investment grade credit rating re-affirmed by Moody’s in February 2022; outlook changed from negative to stable
Strong operational trends
• Strong footfall recovery in all territories when restrictions relaxed; occupier sales ahead of footfall
• Strong demand for prime space: flagship leasing value of £25m, up 150% on 2020; flagship occupancy improved to 96% from 93% at half year
• Headline leasing broadly in line with previous passing rent, net effective rent -11% vs ERV (H1 -18%, H2 -5%)
• Strong momentum on leasing into 2022, with YTD deals above previous passing rent and in line with ERV
• Maintained focus on rent and arrears collection: FY20 now at 99%; FY21 90%; FY22 YTD 83%
• Strong recovery in footfall, brand sales and leasing in Value Retail
Dividend
• Subject to shareholder approval, the Board is proposing a final dividend of 0.2 pence per share in cash with an enhanced scrip dividend alternative of 2.0 pence per share. Both the Final 2021 Dividend and the Enhanced Scrip Dividend Alternative will be paid as a Property Income Distribution ("PID"), net of withholding tax where appropriate.