Dredging through the sea of mud created in the wake of the referendum, we find retail property landlord Hammerson (HMSO) maintaining a cautiously optimistic stance for the markets in which it operates.
There are two significant plus factors to be found in its £9bn property portfolio. The first is that there is no exposure to the London office market, while 40 per cent of the portfolio is invested in shopping malls outside the UK. And while headline profit appears to have collapsed, this is entirely as a result of a much lower valuation uplift on the portfolio. In fact, net rental income rose by over 5 per cent to £168m in the six months to June, and management indicated its confidence in future trading with a 6 per cent rise in the half-year dividend.
A total of 158 new leases were signed in the first half, but crucially a further 20 new leases have already been signed up after the referendum result. On the development side, committed development capital expenditure is relatively low at £115m, and the two schemes due to open in the next six months at Victoria Gate and WestQuay Watermark are already 80 per cent pre-let.
Analysts at broker Peel Hunt are forecasting adjusted net asset value at the December year-end of 745p (from 710p in 2015).
| HAMMERSON (HMSO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 550p | MARKET VALUE: | £4.36bn | |
| TOUCH: | 550-550.5p | 12-MONTH HIGH: | 690p | LOW: 400p |
| DIVIDEND YIELD: | 4.2% | DEVELOPMENT PROP: | £319m | |
| DISCOUNT TO NAV: | 23% | NET DEBT: | 58% | |
| INVESTMENT PROP: | £9.3bn* | |||
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 662 | 329 | 41.6 | 9.5 |
| 2016 | 718 | 167 | 20.7 | 10.1 |
| % change | +8 | -49 | -50 | +6 |
Ex-div: 25 Aug Payment: 10 Oct *Includes investment in joint ventures | ||||
