Hammerson (HMSO) H2 2024 earnings summary

Executive summary

• 2024 marked a transformative year with strong operational and financial performance, including record leasing, reduced vacancy below 5%, and a clear growth agenda following strategic repositioning and reinvestment in prime assets.

• All destinations are now top-tier retail venues, with less than 5% vacancy and strong rental tension, driving long-term visible income streams.

• Portfolio realigned to 10 landmark city destinations and 80 acres of strategic land, with potential for 7,000 residential units, targeting urban, affluent demographics.

• 262 leases were signed on 1 million sq ft, generating £41 million in rent, up 2% like-for-like, with flagship assets seeing significant sales and footfall growth, including Bullring sales up 11%.

• 170 million visitors (+2% YoY), UK sales up 5%, France up 3%.

Financial highlights

• Adjusted earnings reached £99 million, supported by strong Q4 and a 4% dividend increase; adjusted EPS was 19.9p.

• Like-for-like gross rental income rose 3% (UK +3%, France +8%), while net rental income was down 0.5% YoY.

• Net debt reduced by 40% year-on-year to £799 million, with net debt to EBITDA at 5.8x and LTV at 30%.

• IFRS loss was £526 million, mainly due to Value Retail valuation losses.

• EPRA NTA per share reduced to £3.70, reflecting impairments and revaluations.

Outlook and guidance

• Entry run rate for adjusted earnings in 2025 is £85 million, with anticipated growth from portfolio investments and acquisitions.

• CapEx for 2025 is expected at £85 million, including £30 million for repositioning and £30 million for asset enhancement.

• Dividend payout ratio expected to remain within 80%-85%, and share buyback of up to £140 million planned.

• Medium-term LTV guidance is 30-35%, with flexibility to go higher for strategic opportunities.

• Further earnings growth expected in 2026 from full run rate of investments.