This year's high profile retail bankruptcies are "an inconvenience, but not the end of the world", says David Atkins, chief executive of Hammerson (HMSO). There's certainly little evidence they damaged the blue-chip landlord last year. Like-for-like net rental income grew 2.1 per cent and adjusted earnings rose 8.3 per cent to 20.9p, thanks to lower debt costs.
After a year of dramatic transition - Hammerson sold its London offices and ploughed the capital into retail assets - Mr Atkins is keeping investors keen with ambitious growth targets. He believes the company can increase net rental income from £259m last year to £320m in 2015. Nearly half the gains will come from committed development projects, particularly its new megamall in Marseille, and last year's acquisitions and ongoing organic growth in rental income will account for the rest.
Profit growth should be even stronger, as expensive bonds issued 10-15 years ago are refinanced at today's exceptionally low interest rates. Hammerson's cost of debt fell from 5.2 per cent to 5 per cent over the year, but should reach as low as 4.5 per cent within three years, says finance director Timon Drakesmith.
Broker Espirito Santo expects adjusted net asset value to grow 3.3 per cent to 560p this year.
HAMMERSON (HMSO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 507p | MARKET VALUE: | £3.61bn | |
| TOUCH: | 506.5-507.5p | 12-MONTH: | 507p | LOW: 386p |
| DIVIDEND YIELD: | 3.5% | TRADING PROP: | £213m | |
| DISCOUNT TO NAV: | 6% | |||
| INVESTMENT PROP: | £5.50bn | NET DEBT: | 52% | |
| Year to 31 Dec | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 661 | -1,612 | -368.9 | 18.90 |
| 2009 | 420 | -453 | -54.1 | 15.45 |
| 2010 | 493 | 620 | 87.2 | 15.95 |
| 2011* | 529 | 302 | 41.1 | 16.60 |
| 2012 | 540 | 93.5 | 12.6 | 17.70 |
| % change | +2 | -69 | -69 | +7 |
Ex-div: 3 Apr Payment: 14 May *Restated to reflect the sale of the London office business | ||||
