Hammerson (HMSO) H2 2023 earnings summary

Executive summary

• Adjusted earnings rose 11% to £116m, supported by strong leasing and operational performance; occupancy held at 95%.

• Portfolio focus shifted to dominant city-centre destinations after completion of a £500m disposal programme; net debt fell 23% YoY to £1,326m.

• Management highlighted growth and value-creation opportunities across the core portfolio, supported by a leaner operating model and ongoing ESG initiatives.

Financial highlights

• Like-for-like net rental income increased 3.6%; adjusted earnings rose to £116m from £105m in FY 2022.

• IFRS loss narrowed to £51m from £164m; cash dividend was 1.5p per share, versus 0.2p in FY 2022.

• Total Accounting Return was -2.1%, versus -6.8%; Total Property Return was 3.2%, versus -0.7%.

• Net debt declined 23% to £1,326m; EPRA NTA decreased 4% to 51p per share.

Outlook and guidance

• FY 2024 target: a further 10% YoY reduction in costs, following a 14% reduction in FY 2023 and a 17% reduction in FY 2022.

• Leasing pipeline stood at £25m, with more than 50% in solicitors’ hands; 22 deals signed early in FY 2024 represented £6m of headline rent.

• Management expressed confidence in top-line and earnings growth from the lower-cost, realigned portfolio and highlighted near- and long-term development opportunities.