Hammerson, a prominent commercial property giant with a portfolio of popular shopping centers across Europe, has experienced an impressive turnaround in its financial performance according to its latest half-year trading update. The company reported a pre-tax profit of £50.3 million in the first six months of the year, a stark improvement compared to the loss of £375.5 million in the same period last year. This remarkable recovery can be attributed to several factors, including a significant 48% increase in like-for-like net rental income, lower administration and finance costs, and strong contributions from its Value Retail holding.
One particularly positive aspect highlighted by Hammerson is the recovery in footfall, with levels reaching almost pre-pandemic figures. This resurgence in foot traffic is an encouraging sign for the retail industry as it suggests a return to normalcy following the disruptions caused by the COVID-19 pandemic. Additionally, sales, occupancy rates, and rent collection have all shown improvement, further bolstering the company’s financial recovery.
Furthermore, Hammerson has successfully completed £194 million worth of disposals, effectively reducing its net debt by 6%. The company plans to continue this trend of disposals, with an anticipated £300 million to be completed by the end of 2023. This reduction in debt will significantly contribute to the company’s financial stability and enhance its flexibility moving forward.
Although there was a slight dip in revenue, from £65.3 million to £62 million, Hammerson remains optimistic about its sales performance as overall sales are steadily approaching 2019 levels and even surpassing them in the second quarter. Rita-Rose Gagné, the CEO of Hammerson, expressed satisfaction with the progress made in the first half of the year, emphasizing the strengthening of their tenant profile and the robust occupancy levels across their destinations.
Gagné acknowledged that there may be potential challenges ahead due to the uncertain business environment, but she also highlighted the various opportunities that have been identified to continue creating value. Despite the potential volatility, Hammerson is confident in its ability to navigate through these challenges and capitalize on future opportunities.
Overall, Hammerson’s half-year trading update signifies a significant improvement in its financial performance, marked by its return to profitability and the resurgence in footfall. The company’s strategic actions and dedication to creating value have positioned it as a stronger, more resilient, and financially secure business. With a diverse leasing pipeline and an optimistic outlook for the future, Hammerson is well-positioned to sustain its growth and success within the commercial property industry.
Recommended links:
1. Official Hammerson website
2. Financial Times article on Hammerson’s financial recovery
