The rights issue stole the headlines on the day of Hammerson's results, which were largely in line with expectations. And with gearing having risen to 115 per cent - 10 per cent of the rise is attributable to euro debt on Hammerson's then the need to deleverage looks clear.
The hefty loss reflects the falling value of Hammerson's property portfolio; now worth £1.68bn less than it was a year ago. This valuation dates from the end-year and does not take the worrying new valuation evidence from British Land's deal into account. Nevertheless, there were some positives. Like-for-like rental income rose 3.7 per cent in the period to £300m, and only 1.8 per cent of the rent roll is from tenants in administration (although this will ). Indeed, recent development completions could boost this figure. Four major developments were completed in the period, but only partially let, and the portfolio's occupancy level has dipped to 95.4 per cent from 98.2 per cent accordingly.
Ongoing developments will require £195m of capital expenditure in 2009, though no new construction starts are planned. Hammerson raised £245m from disposals in the period, and further asset sales are being progressed, notably Bishops Square and Les Trois Quartiers.
Broker KBC Peel Hunt forecasts post-rights issue NAV of 393p in 2009, and a dividend of 18p.
| HAMMERSON (HMSO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 425p | MARKET VALUE: | £ 1,231.9m | |
| TOUCH: | 424-425p | 12M HIGH | 1,166p | LOW: 361p |
| DIVIDEND YIELD: | 6.6% | DEV PROPERTIES: | £428m | |
| DISCOUNT TO NAV: | 56% | |||
| INVEST PROPERTIES: | £6.03bn | NET DEBT: | 115% | |
| Year to 31 Dec | Net asset value (p) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2004 | 869 | 0.41 | 156 | 17.90 |
| 2005 | 1097 | 0.70 | 198 | 19.71 |
| 2006 | 1460 | 0.79 | 358 | 21.68 |
| 2007 | 1498 | 0.11 | 34.9 | 27.30 |
| 2008 | 970 | -1.61 | -544 | 27.90 |
| % change | -35 | - | - | +2 |
Ex-div18 Feb Payment:22 May | ||||
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