In This Article:
Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Hammerson PLC (HMSNF) has significantly strengthened its balance sheet, with a Loan-to-Value (LTV) ratio of 30% post-reinvestment.
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The company achieved a record year of leasing, signing 262 leases covering 1 million square feet, generating 41 million in rent, up 2% like-for-like.
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Footfall increased by 2%, with 170 million visitors, and sales performance was strong, up 5% in the UK and 3% in France.
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Operational costs were reduced by 16% year-on-year, surpassing guidance, and adjusted earnings reached 99 million.
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Hammerson PLC (HMSNF) has a clear pathway to net zero by 2030, having already reduced carbon emissions by 43% like-for-like.
Negative Points
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Reported Gross Rental Income (GRI) was down 21 million year-on-year due to disposals.
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Ireland's valuations were down 13% due to a distressed debt sale interpretation, impacting overall performance.
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Like-for-like Net Rental Income (NRI) was flat, with underlying NRI down in Ireland by 6% due to strong comps and over-rented units.
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The IFRS loss was 526 million, with 497 million attributable to valuation losses and impairments on value retail.
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The company faces challenges in the Irish market, with high occupancy but negative like-for-like changes due to tough comparisons and over-rented units.
Q & A Highlights
Q: What gives you confidence in achieving the 85 million earnings base for 2025, considering the leasing activity? A: The confidence stems from the strategic positioning of our portfolio in prime locations, which attracts brands consolidating to fewer, better places. The scarcity of such spaces and their operational efficiency for occupiers support strong demand, despite market uncertainties. (Unidentified_1)
Q: Can you explain the drivers behind the 16% admin cost savings and whether further cost reductions are expected? A: The cost savings were driven by a reduction in headcount and a simplified business model. Investments in automation and AI have also contributed to efficiency. While the bulk of cost reductions are complete, we aim to leverage these efficiencies as we scale up. (Unidentified_1)
Q: What are the expected returns on the 85 million CapEx, and how do you decide on such investments? A: The hurdle rate is above the weighted average cost of capital. For repurposing investments like Bullring and Dundrum, initial underwrites were 15-20% IRRs, which we exceeded. We remain cautious about medium and long-term CapEx, focusing on incremental value. (Unidentified_2)