Hammerson’s earnings have risen by 60% following its radical overhaul to create a “better, more agile, and resilient business”.
In its full-year results for 2022, published this morning, the developer posted earnings of £105m, up from £66m in 2021.
Valuation falls of £281m meant the REIT still made an IFRS loss of £164.2m, but this is a marked improvement on 2021’s valuation fall of £461m and losses of £429m.
Gross administration costs were down 17%, and it said more reductions would come in 2023 and 2024.
The group’s portfolio value of £5.1bn was down 5%, due to both revaluation deficit and recent disposals.
Chief executive Rita-Rose Gagné said: “Today, Hammerson is a better, more agile, and resilient business. Our results are evidence of another year of significant strategic, operational and financial progress, against a volatile macroeconomic and market backdrop.
She added: “We have focused on what we can control,” pointing to more efficient operations, growing like-for-like gross rental income – up 29% – and reduced costs. “Notwithstanding downward revaluations at the end of the year, we have maintained a stable balance sheet.”
Over the past two years, Hammerson has simplified and focused its core portfolio on city centres. The resulting sales have delivered £628m of gross proceeds.
This, Gagné said, had “strengthened the balance sheet, recycled capital for investment in our core assets and developments, and have made rapid progress on the transformation of our operating model and platform, resulting in a significantly reduced and reducing cost structure”.
She added that the aim of diversifying was still at the forfront. “We are actively repurposing our destinations, with an increased emphasis on commercialisation, marketing and placemaking, in turn creating exceptional spaces for our occupiers and customers. We have brought a sharper focus to our development pipeline to create value and optionality.”
Gagné acknowledged that the former giant of retail real estate, which had sailed so close to collapse, had further to go on its journey to recovery. “We have set ourselves more to do and continue to be focused on disciplined execution of our strategy. Looking forward, we have strong momentum and are well placed to deliver another year of robust adjusted earnings and cashflow in 2023 and anticipate a return to cash dividends.”
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