Hammerson (HMSO) H1 2024 earnings summary

Executive summary

• Strong first half performance driven by recent investments, repositioning, and robust leasing activity, supporting a 5% dividend increase and operational momentum.

• Transformational disposal of Value Retail for c.£600m generated significant cash, enabling deleveraging, reinvestment, and a share buyback of up to £140m.

• Portfolio now focused on dominant city centre destinations in the UK, Ireland, and France, with 93% A-rated assets and robust occupancy.

Financial highlights

• Adjusted earnings for the half-year reached £50m, an 11% decrease year-over-year due to disposals, but with robust cost performance.

• IFRS loss of £517m, mainly due to a £483m impairment on Value Retail and modest revaluation losses.

• Like-for-like GRI and NRI up 4% and 5% year-over-year, respectively; gross admin costs down 16% year-over-year.

• EPRA NTA per share: 38p (FY23: 51p), reflecting disposal and revaluation losses.

Outlook and guidance

• Medium-term framework targets GRI CAGR 4-6%, EPS and DPS CAGR 6-8%, and annualised TAR c.10% (assuming stable yields).

• Board intends to adopt an 80%-85% payout ratio post-Value Retail sale, aligning with UK REIT standards.

• FY24 earnings outlook in line with market consensus; focus on further asset repositioning and capital-light investment.