HAMMERSON PLC Strong first half, return to cash dividend, confident in the future
"We are pleased to have delivered a strong first half and announce a return to a cash dividend as we look to the future with confidence. Our leasing momentum in 2022 has continued into the first half of 2023 and we have a strong pipeline for the second half. Our core portfolio continues to attract the best occupiers which, combined with our emphasis on commercialisation and placemaking, is creating exceptional destinations for customers. At the same time, we continue to transform our operating model and platform, bringing more integrated and efficient ways of working while reducing costs.
We have further simplified our portfolio with the exit from minority stakes in
Our strategy is driven by the repositioning of our unique city centre destinations in some of
Operational momentum continues
- Footfall and like-for-like sales remain strong, with the former up +4% year-on-year (
- 134 leasing deals concluded in the period representing £18.3m of headline rent (£10.7m at our share, ) (+13% LFL)
. Principal leasing +20% ahead of previous passing rent (HY 22: +31%)
. Net effective rent +8% vs ERV (HY 22: +1%)
. WAULB 7.1 years; 9.4 years WAULT
. Strong leasing pipeline for the second half, with a further £15m deals in solicitors' hands
- Flagship occupancy up +1% point year-on-year to 95%
- Rent collection: FY 22 now at 98%; HY 23 95%
- Value Retail GRI up +13%, 156 leases signed and 55 new openings, footfall and sales up +13% and +14% year-on-year respectively
Robust financial performance
- Adjusted earnings up +15% to £56m (HY 22: £48m) benefitting from:
. Like-for-like GRI up +3% reflecting the continuation of strong leasing trends; like-for-like NRI up +2% YoY
. Gross administration costs down -12% year-on-year to £26m, on track to meet target of reducing costs by -20% by FY 24, which will bring cumulative savings of 30% since FY 20
. Net finance costs -13% reflecting debt retirement and increased interest receipts from cash
- Adjusted earnings per share up 0.1p to 1.1p; basic loss per share of 0.0p (HY 22 earnings per share: 1.0p)
- Value Retail adjusted earnings of £13.4m (HY 22: £13.7m): GRI growth offset by higher finance and operational costs
- Value Retail cash distribution of £43m received
- Interim cash dividend per share of 0.72p per share, to be paid entirely as a PID, new dividend policy announced
- Group portfolio value of £4.7bn (FY 22: £5.1bn), values broadly stable, reduction principally due to disposals
. Capital return -0.3% (HY 22 -0.4%); Total return +2.5% (HY 22: 2.1%)
- IFRS loss of £1m (HY 22: £50m profit)
- EPRA NTA per share 52p (FY 22: 53p)
Stronger balance sheet
- Net debt down 24% to £1,318m (FY 22: £1,732m):
. Completed £215m disposals in the first half, bringing total since start of FY 22 to £410m. Remain on track to complete £500m programme by end of FY 23
. Derecognition of £125m of secured debt following exit from Highcross and O'Parinor joint ventures
- Headline LTV 33% (FY 22: 39%), fully proportionally consolidated (FPC) LTV 43% (FY 22: 47%)
- Net debt to EBITDA of 7.7x (FY 22: 10.4x)
- Ample liquidity of £1.2bn (FY 22: £1.0bn), including undrawn committed facilities and £563m of cash
Outlook
Whilst the macroeconomic outlook remains uncertain, we have strong leasing and operational momentum and are well placed to deliver another year of robust adjusted earnings and cash flow. We have maintained our strong operational grip on the business and are on track for both our cost reduction and disposals targets. Given our progress of the last few years, we are returning to a cash dividend.
.
(C) 2023 M2 COMMUNICATIONS, source
