Hammerson (HMSO) H2 2024 earnings summary

Executive summary

• 2024 marked a transformative year with strong operational and financial performance, including record leasing, a robust balance sheet, and reduced vacancy below 5%.

• Portfolio realigned to 10 landmark city destinations and 80 acres of strategic land, focused on prime locations with resilient demographics and high retail spend concentration, with potential for c.7,000 residential units.

• 170 million visitors (+2% YoY), with UK sales up 5%, France up 3%, and Bullring sales up 11%.

• Record 262 leases signed, generating £41m of rent (up 2% like-for-like), with long-term deals 56% above previous passing rent and 13% ahead of ERV.

• Adjusted earnings reached £99m; full year dividend increased by 4%.

Financial highlights

• Adjusted earnings: £99m (down from £116m YoY); adjusted EPS: 19.9p (down from 23.4p).

• Dividend increased by 4%, with cash dividend per share at 15.63p (up from 15.00p).

• Like-for-like gross rental income up 3% excluding assets under repositioning; UK up 3%, France up 8%, Ireland down 3%.

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

• IFRS loss of £526m, mainly due to £497m valuation losses on Value Retail.

Outlook and guidance

• Entry run rate for adjusted earnings in 2025 is £85m, with further growth expected from investments and acquisitions.

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

• Dividend payout ratio expected to remain within 80%-85% range; share buyback of up to £140m 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.