What does a company base its dividend payment on if not earnings? Acknowledging that further asset disposals would continue to weigh on earnings, Hammerson (HMSO) announced plans to cut its 2020 dividend by almost half. “People want certainty,” said chief executive David Atkins, arguing that investors should see the 14p annual dividend pledge this year as “rock solid”.
A further devaluation in the wholly owned and joint venture portfolios amplified the pre-tax loss suffered by the retail landlord last year. Like-for-like net rental income fell 4.2 per cent, weighed down by flagship locations in the UK and Ireland. Tenant restructuring activity had the biggest impact, wiping £6m from rents. However, premium and value retail outlets – which account for a third of the portfolio value – put in a stronger performance, reporting rises in underlying net rental income of around a tenth.
The group continued to shed assets, banking £542m – ahead of a target £500m – and exiting retail parks entirely. The proceeds helped reduce net debt by 16 per cent.
Analysts at Panmure Gordon forecast adjusted net asset value (NAV) of 597p at the December 2020 financial year-end, rising to 694p in the following year.
| HAMMERSON (HMSO) | ||||
| ORD PRICE: | 225p | MARKET VALUE: | £1.72bn | |
| TOUCH: | 225.2-225.3p | 12-MONTH HIGH: | 396p | LOW: 203p |
| DIVIDEND YIELD: | 11.5% | TRADING PROP: | £466m | |
| DISCOUNT TO NAV: | 61% | |||
| INVESTMENT PROP: | £6.6bn* | NET DEBT: | 57% | |
| Year to 31 Dec | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 703 | 732 | 92.8 | 22.3 |
| 2016 | 728 | 323 | 40.2 | 24.0 |
| 2017 | 758 | 413 | 49.0 | 25.5 |
| 2018 | 709 | -173 | -22.2 | 25.9 |
| 2019 | 571 | -574 | -75.2 | 25.9 |
| % change | -19 | - | - | |
| Ex-div: | 18 Mar | |||
| Payment: | 30 Apr | |||
| *Includes investments in joint ventures and associates | ||||
