Hammerson posts huge loss as retail suffers during pandemic

Hammerson’s portfolio down to £6.34bn

Hammerson (LON:HMSO) confirmed an annual loss that more than doubled as the value of its properties fell and its rental income dropped as a result of the coronavirus pandemic.

The retail centre owner announced an IFRS loss of £1.7bn during 2020, compared to a £781m loss the year before.

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Hammerson’s net rental income plunged by 49% to £157.6m due to lockdowns, in addition to tenant restructuring and higher provisions for bad debts and tenant incentives. The value of the FTSE 250 company’s portfolio, including London’s Brent Cross shopping centre and Birmingham’s Bullring, fell to £6.34bn from £8.3bn.

Hammerson’s commercial properties were already under pressure, as customers are increasingly opting to shop online. The pandemic has exacerbated this trend. The company has been badly affected by restrictions due to coronavirus as non-essential shops remained closed for a large chunk of the year.

Hammerson proposed a 0.2p final dividend with an enhanced payout if taken as scrip. The full-year dividend was 0.4p, or 4p as scrip, compared with 5.1p a year earlier.

Rita-Rose Gagné, Chief Executive of Hammerson, commented on the results and the year ahead:

“As our results show, Hammerson was hit hard. The retail sector, already in the grip of major structural change, has been significantly impacted by the restrictions imposed to tackle the pandemic, and we’ve also seen an increasing number of retail failures. Combined, this has resulted in the largest fall in net rental income and UK asset values in the Group’s history.”

“However, if this pandemic has highlighted anything, it is how much we all crave human contact as inherently social beings. As a business, Hammerson provides the places and social infrastructure where people want and need to be, and I am confident it will have a vital role in shaping neighbourhoods and communities in the future.”

“Our immediate focus in 2021 is leading Hammerson through Covid-19 to safety. This means further disposals to strengthen the balance sheet, managing refinancing, and sharpening our operations to maximise income. We will then focus on realising the quality of our destinations to drive the business forward. We are currently working on a thorough strategic and organisational review that will map out a route to future growth to transform the business in the context of what will remain a tough economic and structural backdrop.”

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