Hammerson plc has released its results for the year ended 31st of December 2020, reporting a IFRS loss of £1.7 billion primarily due to a property revaluation deficit (2019: IFRS loss of £781 million).
The retail-focused fund reported net rental income of £158 million (-41% on a like-for-like basis excluding its premium outlets) which were impacted by Covid-19 closures, tenant restructuring and higher provisions for bad debt and tenant incentives.
With a group occupancy rate of 94.3% (2019: 97.2%), 76% of rent was collected in 2020 during two main national lockdowns with an average rental waiver of 1.4 months and a deferral of 0.3 months.
Hammerson’s leasing was impacted during the pandemic with activity down by 35% compared to the reporting period in 2019 and footfall suffered due to the Covid-19 closures and city centre locations of its flagships but it delivered a measured recovery during the periods of reopening.
However, these Covid-19 closures significantly reduced utility demand with an energy reduction of -18% and carbon emissions of -29%.
“By measure, 2020 was an unprecedented year with every business and household affected by Covid-19” commented Rita-Rose Gagné, Chief Executive of Hammerson. “As our results show, Hammerson was hit hard. The retail sector, already in the grip of major structural change, has been significantly impacted by the restrictions imposed to tackle the pandemic, and we have also seen an increasing number of retail failures. Combined, this has resulted in the largest fall in net rental income and UK asset values in the group’s history”.
- Adjusted earnings and EPS: £36.5m (2019: £214.0m); EPS: 1.6p (2019: 12.8p restated for rights issue).
- Dividend: a final dividend proposed of 0.2p per share, with an enhanced scrip dividend alternative of 2.0p per share.
- Portfolio valuations: a portfolio value of £6,338m (2019: £8,327m).
- Group capital return of -20.9%: UK flagships -35.8%, France flagships -15.3%, Ireland flagships -17.5%, retail parks -23.3%, Value Retail –6.2%.
- Net assets: EPRA Net Tangible Assets (NTA) of £3,317m (-26%) or £0.82 per share (2019: £1.16 restated for rights issue).
- Net debt: net debt of £2,234m reduced by £609m (21%) due principally to proceeds from the rights issue and disposal of substantially all of VIA Outlets.
- Liquidity: £1,748m (2019: £1,210m), including cash of £503m.
- Credit ratios: gearing 70%, unencumbered asset ratio of 1.89x, interest cover ratio 1.81x and fully proportionally consolidated LTV 46%.
- Rights issue and disposals: £532m net proceeds from rights issue and net proceeds from disposals totalling £328m. In 2021, £73m from the sale of Brent South Shopping Park and exchange of the minority stakes in Espace Saint-Quentin and Nicetoile.
“If this pandemic has highlighted anything, it is how much we all crave human contact as inherently social beings. As a business, Hammerson provides the places and social infrastructure where people want and need to be, and I am confident it will have a vital role in shaping neighbourhoods and communities in the future” said Gagné.
“Our immediate focus in 2021 is leading Hammerson through Covid-19 to safety. This means further disposals to strengthen the balance sheet, managing refinancing, and sharpening our operations to maximise income. We will then focus on realising the quality of our destinations to drive the business forward. We are currently working on a thorough strategic and organisational review that will map out a route to future growth to transform the business in the context of what will remain a tough economic and structural backdrop.”