25 July
2024
HAMMERSON plc - HALF YEAR
2024 RESULTS
Building on strong first half
with transformational disposal to accelerate growth and value
creation
Rita-Rose Gagné, Chief Executive
of Hammerson, said:
"I am pleased to report we've had a strong first half. We are
realising the benefits of our investments in recent years and with
the agreed disposal of Value Retail, we now have the capacity and
capability to accelerate growth and value creation. Our leading
city centre destinations are in high demand, supported by our
ongoing investment and repositioning. This is evidenced by another
year-on-year increase in leasing, up 24%. This is driving top line
growth with more to come.
At the same time, we have delivered another outperformance on
costs, down 16% year on year. In the first half, we also completed
our £500m disposals programme, realigning our core portfolio to
leading city centre destinations, whilst further strengthening the
balance sheet. We now have a strong, scalable platform as we look
to drive further operating leverage.
I am excited by the opportunity
ahead and confident we will continue to grow the top-line and
earnings off our new base, reflected in the 5% increase in the
interim dividend."
Strong first half and
transformational £1.5bn1 transaction generating cash
proceeds of c.£600m
·
Adjusted earnings of £50m (HY 23: £56m),
reflecting impact of disposals. Adjusted EPS 1.0p (HY 23:
1.1p)
·
Disposal of non-controlling and yield dilutive
interest in Value Retail announced 22 July 2024 ensures clean exit
from complex structure at an attractive price, generating c.£600m
in cash proceeds
·
The Company intends to use proceeds for a
combination of: immediate significant deleveraging; reinvestment
into higher yielding assets; and a return of up to £140m to
shareholders via a share buy back
·
Loss for the period (IFRS) of £517m (HY 23:
£(1)m), predominantly reflecting impairment of investment in Value
Retail from carrying value of £1.1bn. Loss per share (10.4)p (HY
23: (0.0)p)
·
Managed Group portfolio value of £2.6bn broadly
flat excluding disposals, with revaluation gains in UK and France
due to ERV growth. Irish revaluation loss due to yield
expansion
·
NTA per share 38p (FY 23: 51p)
·
Headline LTV of 39% and net debt:EBITDA of 8.0x.
On a pro forma basis, reflecting the disposal of the Group's
interest in Value Retail, LTV falls to 25% with net debt:EBITDA of
5.3x
Continued operational and leasing
momentum driving top line growth; costs further reduced:
·
Like-for-like ('LFL') GRI +2%, LFL NRI +2%.
Excluding Cabot Circus, in repositioning, LFL GRI +4%; LFL NRI
+5%
·
Leasing value up 24% year-on-year to £23m, or
£13m at share, from 140 deals
·
Positive leasing spreads maintained: permanent
deals signed +61% vs previous passing (+29% excluding nil previous
passing rent); net effective rent +10% vs ERV
·
Robust 94% occupancy whilst undertaking proactive
repositioning
·
Footfall up +1% year-on-year (+2% excluding Cabot
Circus); new occupier sales densities
c.20% higher than previous occupiers
·
Continued cost reduction outperformance with
gross administration cost -16% year-on-year, which will deliver in
excess of 30% cost reduction since FY 20 by FY 24
Dividend
The Board today declares an
interim dividend in respect of 2024 of 0.756p pence per share, up
5% year-on-year and a payout ratio of 76% reflecting the Board's
confidence in future earnings growth and which will be paid as a
PID. The Board intends to increase the policy payout ratio
from its current policy of 60-70% to 80-85% following the
completion of the sale of Value Retail. The
dividend declaration will be released as a separate
announcement.
Medium-term financial
framework
After three years of intensive
turnaround, we have entered a new phase with the capacity and
capability to invest to accelerate growth. We have realigned our
portfolio to ten dominant city centre destinations, 93% of which
are A rated by Green Street and are highly attractive to both
visitors and best-in-class occupiers. We continue to reposition our
assets, alongside enhanced placemaking, commercialisation and
digital marketing, responding both to visitor and occupier demand
and to stay ahead of evolving trends and the competition. We have a
strong platform with long-term visibility of income. This backdrop
informs our medium term financial
framework2,
announced on 22 July 2024, following the disposal of the Group's
interest in Value Retail:
·
GRI CAGR: 4-6%
·
EPS CAGR: 6-8%
·
DPS CAGR: 6-8%
· Annualised TAR: c.10% (assuming stable yields)
Share consolidation and Capital
Reduction to increase distributable reserves
As announced on 22 July, Hammerson
is proposing to simplify its share capital through a 1 for 10 share
consolidation, and to increase distributable reserves by reducing
the Company's share premium account. A Circular with more detail,
and a notice convening a general meeting, will be sent to
shareholders in due course.
Results presentation
today:
Hammerson will hold a virtual
presentation for analysts and investors to present its financial
results for the six months ended 30 June 2024, followed by a
Q&A session.
Please join the call five minutes
before the booked start time to allow the operator to transfer you
into the call by the scheduled start time
France:
|
+33 9 7073 3958
|
South Africa:
|
+27 87 550 8441
|
Ireland:
|
+353 1 691 7842
|
UK:
|
+44 20 3936 2999
|
Netherlands:
|
+31 85 888 7233
|
USA:
|
+1 646 787 9445
|
The presentation and press release
will be available at:
https://www.hammerson.com/investors/reports-results-presentations on
the morning of results.
Enquiries:
Rita-Rose Gagné, Chief Executive
Officer
|
Tel:
+44 (0)20 7887 1000
|
|
Himanshu Raja, Chief Financial
Officer
|
Tel:
+44 (0)20 7887 1000
|
|
Josh Warren, Director of Strategy,
Commercial Finance and IR
|
Tel:
+44 (0)20 7887 1053
|
josh.warren@hammerson.com
|
Oliver Hughes, Ollie Hoare and
Charles Hirst, MHP
|
Tel:
+44 (0)20 3128 8100
|
Hammerson@mhpgroup.com
|
Disclaimer
Certain statements made in this
document are forward looking and are based on current expectations
concerning future events which are subject to a number of
assumptions, risks and uncertainties. Many of these assumptions,
risks and uncertainties relate to factors that are beyond the
Group's control and which could cause actual results to differ
materially from any expected future events or results referred to
or implied by these forward-looking statements. Any forward-looking
statements made are based on the knowledge and information
available to Directors on the date of publication of this
announcement. Unless otherwise required by applicable laws,
regulations or accounting standards, the Group does not undertake
any obligation to update or revise any forward-looking statements,
whether as a result of new information, future developments or
otherwise. Accordingly, no assurance can be given that any
particular expectation will be met, and reliance should not be
placed on any forward-looking statement. Nothing in this
announcement should be regarded as a profit estimate or
forecast.
This announcement does not
constitute or form part of any offer or invitation to sell, or any
solicitation of any offer to subscribe for or purchase any shares
or other securities in the Company or any of its group members, nor
shall it or any part of it or the fact of its distribution form the
basis of, or be relied on in connection with, any contract or
commitment or
investment decisions relating
thereto, nor does it constitute a recommendation regarding the
shares or other securities of the Company or any of its group
members. Statements in this announcement reflect the knowledge and
information available at the time of its preparation. Liability
arising from anything in this announcement shall be governed by
English law. Nothing in this announcement shall exclude any
liability under applicable laws that cannot be excluded in
accordance with such laws.
1 £1.5bn transaction reflects
enterprise value, see separate transaction announcement dated 22
July 2024 on www.hammerson.com
for details
2. Assuming timely reinvestment of
net proceeds and completion of the share buy back. Outcomes for
shorter periods will be highly dependent on activity levels and
prevailing market conditions, with variances across different
segments of the Group's portfolio.
Index to key data
Six months ended
|
|
30 June
2024
|
30 June
2023
|
Note/Ref1
|
Income
|
|
|
|
|
Gross rental
income2
|
|
£94.4m
|
£106.3m
|
2
|
Adjusted net rental
income2
|
|
£72.7m
|
£85.1m
|
2
|
Adjusted earnings - Value
Retail
|
|
£11.7m
|
£13.4m
|
2
|
Adjusted net finance
costs2
|
|
£(18.7)m
|
£(25.1)m
|
2
|
Adjusted
earnings3
|
|
£49.5m
|
£55.9m
|
2
|
Revaluation losses - Managed
portfolio2
|
|
£(47.8)m
|
£(43.8)m
|
2
|
Loss for the period
(IFRS)
|
|
£(516.7)m
|
£(1.2)m
|
2
|
Adjusted earnings per
share3
|
|
1.0p
|
1.1p
|
11B
|
Basic loss per share
|
|
(10.4)p
|
(0.0)p
|
11B
|
Interim dividend per share
(cash)
|
|
0.756p
|
0.72p
|
18
|
|
|
|
|
|
Operational
|
|
|
|
|
Like-for-like gross rental income
change2
|
|
2.1%
|
3.1%
|
Financial Review
|
Like-for-like net rental income
change2
|
|
1.7%
|
2.3%
|
Table
3
|
Occupancy -
flagships2
|
|
94.3%
|
95.1%
|
Table
5
|
Leasing
value2
|
|
£13.3m
|
£10.7m
|
n/a
|
Leasing v ERV (principal leases)
2
|
|
+10%
|
+8%
|
n/a
|
Leasing v Passing rent (principal
leases) 2
|
|
+61%
|
+20%
|
n/a
|
Passing
rent2
|
|
£170.0m
|
£184.5m
|
Table 4
|
Like-for-like passing rent
change2
|
|
0.7%
|
4.2%
|
n/a
|
ERV2
|
|
£178.3m
|
£183.0m
|
Table
4
|
Like-for-like ERV change -
flagships2
|
|
0.9%
|
0.1%
|
Financial Review
|
|
|
|
|
|
Capital and financing
|
|
|
|
|
As at
|
|
30 June
2024
|
31
December 2023
|
|
Valuation - Managed
portfolio2
|
|
£2,579m
|
£2,776m
|
3B
|
Total accounting
return3
|
|
(23.4)%
|
(2.1)%
|
Table
15
|
Total property return
- Managed portfolio2
|
|
0.6%
|
1.6%
|
Table
9
|
Capital return - Managed portfolio2
|
|
(2.2)%
|
(4.1)%
|
Table
9
|
Net debt2
|
|
£1,220m
|
£1,326m
|
Table
13
|
Gearing2
|
|
65%
|
55%
|
Table
18
|
Loan to value -
headline2
|
|
39%
|
34%
|
Table
20
|
Liquidity
|
|
£1,138m
|
£1,225m
|
Financial Review
|
Interest
cover2
|
|
4.21x
|
3.91x
|
Table
17
|
Net debt:EBITDA (rolling 12
months) 2
|
|
8.0x
|
8.0x
|
Table
16
|
Net assets
|
|
£1,908m
|
£2,463m
|
Balance
sheet
|
EPRA net tangible assets (NTA) per
share3
|
|
38p
|
51p
|
11C
|
|
|
|
|
|
Key pro forma metrics for Value Retail
disposal4
|
|
30 June
2024
|
31
December 2023
|
|
Net debt2
|
|
£637m
|
n/a
|
Financial review
|
Liquidity
|
|
£1,721m
|
n/a
|
Financial review
|
Loan to
value2
|
|
25%
|
n/a
|
Table
20
|
Gearing2
|
|
34%
|
n/a
|
Table
18
|
Net
debt:EBITDA2
|
|
5.3x
|
n/a
|
Table
16
|
1 Note/Ref
to notes in the interim financial statements, tables in Additional
Information or other sections of this release.
2 Figures
presented on a proportionally consolidated basis, excluding Value
Retail, as per management reporting. See 'Presentation of financial
information' section of the Financial Review for
explanation.
3 These results
include discussion of alternative performance measures (APMs) which
include those described as Adjusted, EPRA and Headline. These are
described on page 9 of the Financial Review and reconciliations for
earnings and net assets measures to their IFRS equivalents are set
out in note 10 to the interim financial statements.
4 Reflects the
impact of the disposal of the Group's interest in Value Retail
announced on 22 July 2024, see note 9 to the interim financial
statements for details.
Chief Executive's REVIEW
We have delivered another strong
half year of operational and strategic progress and announced on 22
July 2024 the sale of the Group's interest in Value Retail.
This disposal builds on Hammerson's track record and momentum of
the last three years to accelerate strategic and financial
delivery. Going forward, Hammerson is a retail-anchored,
specialist cities business well positioned for growth and value
creation, with its entire portfolio comprising leading city centre
destinations and strategic land, 93% of which are A rated by Green
Street.
The exceptional environments we
create for our occupiers and visitors is reflected in strong
operational fundamentals, which underpin
continued high demand for our destinations. Like-for-like gross
rental income and net rental income both increased by 2%. Excluding
the temporary effect of the repositioning of Cabot Circus,
like-for-like gross rental income was up 4% and like-for-like net
rental income 5%.
Flagship footfall and
like-for-like sales in the UK were up 1% and down -3% respectively,
predominantly reflecting the amount of activity we've undertaken in
repositioning assets in recent years where either we've proactively
taken vacant possession of space and/or new occupiers are not yet
in the like-for-like sample. Notwithstanding, the total
spend, based on our banking data, in the UK portfolio was up 1%,
and around 2% points ahead of the national footfall index
(ShopperTrak). Moreover, our data shows that new offers are
performing strongly with sales densities c.20% above the prior
occupiers, so we expect this to flow through into the like-for-like
figures as the new occupiers roll into the sample. We are starting
to see this, for example in Cergy where like-for-like sales were up
5%. In France, flagship footfall and like-for-like sales were
up 4% and 3%. Footfall in Ireland was up 1%.
Flagship occupancy remained strong
at 94%, or 96% excluding Cergy which remains in lease up. In
the UK, Brent Cross, Bullring and Westquay are all over 95%
occupied, as are our three destinations in Ireland. In
France, Les Terrasses du Port is 96% occupied, whilst Les 3
Fontaines, Cergy is the only destination currently with less than
90% as we ramp up leasing of the extension.
We signed 140 leases representing
£23m of headline rent, £13m at our share, up 24% year-on-year. This
included marquee deals with best-in-class existing occupiers, and
new entrants and concepts, all of whom in turn make significant
investments in their physical footprint. Rental levels are growing
with permanent deals signed 10% ahead of ERV on a net effective
basis, and 61% ahead of previous passing rent, or 29% ahead
excluding units with nil previous passing rent. This equates
to additional annualised passing rent of £4m on our £162m flagship
rent roll. Importantly, we continue
to provide solid leasing evidence to our valuers, which is
gradually being reflected in our values where all territories now
have positive reversion for the first time since FY 18.
Just over half of leasing was to best-in-class
fashion occupiers demanded by our customers, and the balance to
non-fashion and services (34%) and F&B and leisure
(11%).
After three years of intensive
turnaround, we have entered a new phase with the capacity and
capability to invest to drive further growth. We are in the final
stages of the implementation and embedding of our operating model,
having reshaped our organisation to focus our energies on value
creation. On-site property management and associated
accounting services in the UK, France and Dundrum have largely been
consolidated with proven scale strategic partners. The realignment
of our IT and digital platform in areas where speed and data
quality is critical is materially complete. Today we are a more
agile, resilient and market facing asset-centric organisation, one
that continues to evolve and reshape our destinations to be fit for
the future. We have again reduced gross administration costs, down
16% year-on-year, and since 2020 will see gross administration
costs reduced in excess of 30% by the end of 2024.
Net finance costs improved 25% to
£19m, largely reflecting the higher interest rates on higher cash
balances. Adjusted earnings were down 11%, due to the impact of
disposals, to £50m, or 1.0p per share.
Despite ERV growth at all
flagships excluding Brent Cross, which was broadly flat, property
values were slightly down due to 50bps of yield expansion in
Ireland. UK and France yields were flat.
We have completed our £500m
disposal programme set out at FY 21, in doing so realigning our
portfolio to ten dominant city centre destinations in growing
catchments, 93% of which are A rated by Green Street, highly
attractive to both visitors and best-in-class occupiers. We
continue to reposition our assets, alongside enhanced placemaking,
commercialisation and digital marketing, both anticipating, and
responding, to visitor and occupier demand and to stay ahead of
evolving trends and the competition.
The disposal of the Group's
interest in Value Retail announced on 22
July 2024 for gross proceeds of c.£600m
will accelerate the delivery of our strategy, providing capital to
maintain balance sheet strength and flexibility, further invest for
growth, and enhance distributions for shareholders.
We expect the disposal to complete in the second
half of the year. At 30 June 2024, the Group's investment had
been reclassified as an asset held for
sale resulting in the recognition of an impairment of £483m.
The lower property values and Value Retail impairment resulted in
an IFRS loss of £517m (HY 23 £1m loss) and an EPRA NTA of 38p per
share, 13p lower than at FY 23.
As previously announced, Hammerson
intends to use the disposal proceeds from Value Retail for a
combination of:
· significant and immediate deleveraging with pro forma LTV of
25% and net debt: EBITDA of 5.3x;
· reinvestment into higher yielding assets, with a priority on
JV consolidation and repurposing asset enhancement initiatives;
and
· a
return of capital to shareholders via a share buy back of up to
£140m, representing 10% of the pre-announcement market
cap.
In addition, the Board of
Hammerson announced its intention to adopt an enhanced payout ratio
policy for ordinary dividends of
c. 80-85% of adjusted earnings.
In the medium term, Hammerson
expects to deliver an annualised total accounting return ("TAR") of
c.10% (assuming stable yields) whilst maintaining its commitment to
a sustainable capital structure and an investment grade credit
rating.
After three years of intensive
turnaround, a material portion of the strategy laid out to the
market at HY 21 has been successfully implemented:
· the
balance sheet has been fixed;
· the
Company is focused on a core portfolio of city centre
destinations;
· ways
of working have been overhauled, digitised and automated, and costs
reduced;
· and
rents are increasing off a new base, while we are investing for
growth.
We still have work to do, however,
and our focus remains on:
· completion of the repurposing of obsolete and underutilised
space;
· further asset repositioning and enhancement;
· the
potential to consolidate JV partners, or in our core markets, in
line with strategy;
· capital light investment to unlock optionality and value on
our c.80 acres of strategic land;
· and
the continued rotation of occupiers to strong, best-in-class brands
most desired by the visitors in each of our unique
catchments.
As we look ahead, we are confident
that we now have the capacity and capability to drive top-line
growth and continue to generate operating leverage to grow scale,
earnings, dividends and total returns.
STRATEGIC
PROGRESS
We own city centre destinations
and adjacent land around which we can reshape entire
neighbourhoods. Our strategy recognises the unique position that we
have in our locations and the opportunities to leverage our
experience and capabilities to create and manage vibrant 24/7,
multi-use, urban 'living spaces' that realise value for all our
stakeholders, connects our communities and delivers a positive
impact for generations to come.
Our aim is simple and clear - to
deliver strong income and total returns for shareholders through
consistent execution against our strategic goals. We are investing
for growth and value creation in our core assets. We are
combining targeted leasing with repurposing and redevelopment
opportunities, which are integral and complementary to our
destinations, directing capital expenditure to our core estates,
where we are able to realise high returns. This asset focus is
underpinned by our now increasingly agile platform, our strong
capital structure and by our commitment to ESG.
In HY 24, we made progress towards
all our goals as follows:
Investment for growth and value
creation
The key source of competitive
advantage for Hammerson is the quality and location of our
destinations in some of Europe's fastest-growing cities and the
focus it now has on these assets. We have some of the best assets
in the very best prime city centre catchments and transportation
hubs, and strong ties with the communities in which we operate and
the local authorities. Additionally, our strategic land represents
a considerable set of unrealised long term opportunities which we
can selectively draw upon.
We continue to invest in our
assets to partner with best-in-class occupiers, increasingly
employing physical space for a diverse range of uses, to cater to
the communities and catchments in which we operate, whether this be
repurposing of obsolete department store space into leisure and
modern retail, or redevelopment to residential, workspace,
healthcare and lifestyle uses. Our investments to date have
attracted some of the very best global brands and generated high
returns.
Following our success at Bullring
where M&S re-anchored the former Debenhams unit alongside TOCA
Social and flagship Inditex brands, we signed a deal in HY 24 to
bring M&S into former department store space in Cabot Circus
where we had secured vacant possession. This is the fourth letting
Hammerson has achieved with M&S as part of their store rotation
programme and demonstrates how we continue to work closely with key
brand partners to achieve a shared vision.
This is the latest in a string of
deals that will enhance Cabot Circus by bringing high-profile
brands and new uses including entertainment, dining, family and
social concepts. Recent new openings include Stradivarius and
sportswear brand, Lids, alongside German Doner Kebab, whilst a new
golf experience at Treetop Golf is also set to open later this
year. We are in advanced negotiations to bring a fresh
leisure, cinema and restaurant offer to the former cinema box
space, where we have also secured vacant possession. Taken
together, we anticipate these two major projects will add c.£4m of
NRI (at 100%) per annum to Cabot Circus, delivering double-digit
IRRs above our cost of capital and a profit on cost of more than
20%. In the medium term, the repositioning of the Quakers
Friars area also affords the opportunity to increase the mix of
uses, including cultural and healthcare, at attractive
returns.
Meanwhile, progress continues at
The Oracle, where terms have been agreed with Hollywood Bowl and TK
Maxx for around two-thirds of the former House of Fraser space, and
we remain in detailed negotiations with other key brand partners
for the remainder. At the other end of the scheme, we await the
outcome of a planning application for the major regeneration of the
eastern quarter, including the former Debenhams, with the potential
to develop c.450 residential units, much in demand in this strong
catchment, in phases alongside renewed landscaping and other
commercial uses.
Other than those
already mentioned key deals and openings in the first half of 2024
included:
·
exchanges with Inditex to bring an upsized
flagship Zara into Bullring to take the remaining former Debenhams
space, and to bring Pull & Bear into Les Terrasses du Port, as
the latter destination continues to outperform our expectations
whilst celebrating its ten-year anniversary since
opening;
·
upsizes involving unit combinations and
reconfigurations with JD Sports at Brent Cross and
Dundrum;
·
renewals with River Island at Brent Cross, and
Sephora at Les Terrasses du Port, also leveraging that relationship
to bring Sephora to Bullring, alongside other key aspirational
non-fashion brands such as Rituals for Bullring whilst Space NK
opened in Dundrum;
·
bringing new concepts and regional firsts such as
Garmin at Westquay, and brands outside of the norm tailored to
local demand like Sapphire at Bullring and Suit Direct at
Westquay;
·
leveraging our success with leading bowling
leisure brand, Lane 7 in Bullring to bring them into Dundrum as
they expand outside of the UK, and increasing the leisure offer at
Cabot Circus with King Pins, and at Pavilions with virtual reality
operator Zero Latency in former storage space;
and
·
new leases and renewals with a diverse range of
F&B operators including German Doner Kebab in Brent Cross, Honi
Poke at Cabot Circus, Copper Branch at Les Terrasses du Port,
Chikin Bang in Cergy, and Rongcheng and Zambrero in Dundrum, whilst
March also saw the opening of EL&N in Bullring, its first site
outside of London.
Looking into the second half, the
pipeline remains strong and reflects the continued investment in
repositioning and diversification of our offering, with key F&B
and leisure deals at advanced stages of negotiation across our
estate and forming a significant percentage of the
pipeline.
Our approach to leasing works in
parallel with our greater emphasis on placemaking and
commercialisation. This not only serves to enliven space and
enhance the experience and environment for customers and occupiers,
but also increasingly contributes meaningfully in its own right in
terms of incremental footfall, income, and engagement across all
channels.
Key highlights in
the first half included:
·
Dizzee Rascal album launches at Bullring and
Cabot Circus;
·
the returns of Charity Super.Mkt and Big Kids
Circus to Brent Cross;
·
the passing of the Olympic Flame by Les Terrasses
du Port, which saw same-day footfall up 40%
year-on-year;
·
a strong motoring flavour at Dundrum with a
three-month Volvo pop up, Specsavers 'crashed' van marketing stunt
in the Millpond, and the Irish launch of the Tesla Cyber
Truck;
·
all alongside the start of our usual series of
summer pop-up events and bars, with a particular focus this year on
sport where we were delighted to be selected for three out of ten
Team GB Fan Zones in Bullring, Cabot Circus and Westquay, whilst
Cergy will host a sports village during the Olympic
Games.
We also continue to invest in data
insights to provide transparent and robust evidence of the true
brand value of our high footfall destinations for both occupiers
and advertisers in an increasingly media oriented world. These
initiatives include a UK market-leading AICCTV customer engagement
tracking system to highlight the brand building value generated
through impressions, store visits, customer journeys to help grow
rents and media income and attract increasingly digitally native
tenants.
Alongside this we are using the
latest open banking data to track headline sales, share of wallet
and leakage to competitors to help develop more targeted leasing
and place-making strategies. This will allow us to move towards a
series of KPIs that are easier to track, benchmark and
commercialise in a multichannel world whilst evolving away from
legacy single-channel orientated KPIs (e.g. OCRs) that are
increasingly less relevant or robust.
We maintain our discipline with
our resourcing and capital expenditure on our development projects
and strategic opportunities; focusing on those initiatives which
give short term routes to value, and those integral projects which
have most synergy with and add most value to our wider estate. We
have continued to advance planning consents, land assembly
agreements and preparatory works across the portfolio, maintaining
the potential to unlock significant future development and
value.
In Ireland, work continues at The
Ironworks, a 122 unit BTR development in Dundrum, where the
concrete frame will be completed shortly, albeit with a short
delay, having recently replaced the main contractor. We remain
optimistic about the rental value when we complete in Autumn 2025,
given the continued demand across the
city.
In France, we continue to progress
incremental repurposing of the final underutilised space at Les 3
Fontaines, Cergy, following the opening of the extension in March
2022, and are in discussions on heads of terms with two retail
partners and preparing consents with the local
authority.
Elsewhere in the portfolio, we
continue to work with planning authorities in both the UK and
Ireland for major consents. Other than those mentioned above, we
continue to await the decisions of ABP in Ireland for our Dublin
Central and Dublin Village proposals. In the period, we have
commenced the planning process for a residential opportunity to
redevelop the existing Edgbaston Street car park on our Birmingham
Estate as we anticipate the future needs of the
city.
At Martineau Galleries, part of
the wider Birmingham Estate and adjacent to the new HS2 terminus,
we remain closely engaged with Birmingham City Council and other
stakeholders to ensure that we have a route to development for this
important multiuse estate, which will complement and benefit from
our other holdings in the city.
At Bishopsgate Goodsyard, we
continue to prepare the development, including the detailed
planning process and the initial demolition works, which includes
obtaining vacant possession of the Boxpark site later this year.
Finally, at Eastgate, Leeds, we are working with Leeds City Council
to unlock the value of the site by updating the extant development
agreement and working with potential sources of new
capital.
Agile platform
As previously reported, FY 23 was
a pivotal year for the transformation of our platform and the
transition is largely complete. In the first half of 2024 we
continued to embed and benefit from new efficiencies and ways of
working, both in terms of systems and automation, and greater
cross-team collaboration.
We also retain a relentless focus
on fixed costs including insurance and work space, further reducing
our footprint in France in the first half. At the same time,
we continue to increase our efforts on employee engagement and
talent management as part of our strategy to retain and develop key
talent and are investing in, and promoting, key talent to be fit
for the future. We are creating a high performance, high engagement
culture with an emphasis on strategic value creation focused on
asset management and delivery, placemaking and the repositioning of
our assets.
At FY 22, we committed to reduce
our gross administration costs by 20% for FY 24, and delivered a
14% reduction in FY 23. We have delivered a further 16%
year-on-year reduction in HY 24 and are well on target to achieve
our guidance, which will take our cumulative reduction to over 30%
since FY 20.
Sustainable and resilient capital
structure
Our capital allocation framework
is consistent. We will maintain a stable and resilient capital
structure, with an IG credit rating, to maintain access to capital
markets. We are committed to a sustainable and growing cash
dividend, covered by cashflow, and balanced with our total returns
focus. We are mindful of our cost of capital, but will remain
opportunistic on capital deployment. After strengthening of the
balance sheet, our priority is to invest for growth and value
creation, and enhance distributions for
shareholders.
Throughout FY 23 and HY 24 we have
maintained our IG credit rating and strong liquidity. In the first
half of 2024, we concluded the £500m disposal programme set out at
FY 21, taking total proceeds received to date to £950m since FY
20.
In the first half of the year, we
have repaid £109m of USPP notes, and extended the maturity of our
undrawn 2022 RCF from 2026 to 2027. Following the buy-out of
the Group's defined benefit pension scheme in December 2022, the
wind-up of the scheme was completed in the first half, removing the
corporate guarantee and ongoing running costs.
The refinancing of our only
secured debt, in the Dundrum JV, is in advanced stages and we
expect to sign a new facility in early August
2024.
Overall, net debt reduced 8% to
£1,220m at 30 June 2024 with net debt:EBITDA unchanged at 8.0x and
LTV of 39%. The Group also had liquidity of £1.1bn in the form
of cash balances (£538m) and undrawn committed RCFs (£600m).
Reflecting the sale of Value Retail, these metrics improve with pro
forma net debt of £637m, net debt:EBITDA of 5.3x and LTV of 25%.
Pro forma liquidity increases to £1.7bn, including pro forma cash
of £1,121m. The Group will also not have any unsecured refinancing
requirements until 2027 not covered by cash
balances.
Environmental, Social and
Governance
In the first half of 2024 we
continued to deliver against our ESG strategy and Net Zero
commitments. Following the development of our Net Zero Asset Plans
(NZAPs) in 2022, in the first half of 2024 we developed revised
Physical Climate Risk Reviews and Nature Assets Plans (NAPs). These
assessments combined to offer a holistic asset centric approach to
managing Climate and Nature risks and opportunities, the two halves
of the global environmental emergency.
We have also further progressed
with the delivery of our NZAP programme and commenced work on
multiple projects including renewable energy generation in France
and improving building management systems, lighting, heating and
ventilation in the UK and Ireland. For the first half of 2024, this
ongoing commitment to energy efficiency has resulted in a 5%
year-on-year reduction in carbon emissions (scope 1, 2 and selected
3), calculated on a like-for-like portfolio
basis.
Our social value agenda and
activities continue to grow with delivery through community work,
placemaking and charitable giving across all destinations. In June,
we held our annual Giving Back Day with colleagues across the Group
supporting 15 local charities and organisations. This event saw
over 150 colleagues and property management partners, deliver 600+
hours of volunteering, support 500+ beneficiaries and build
stronger links to our communities. We are proud that for the
first time all corporate offices and destinations had dedicated
events and 97% of our Hammerson colleagues
participated.
In recognition of the impact of
our social value activities, Bullring and Grand Central won the
Gold Award in the Health category for their mental health support
and awareness project in collaboration with Birmingham Mind at the
International CSR Excellence Awards, run by the Green Organisation.
This award demonstrates how our charitable partnerships are
impactful and deliver positive impacts for the communities we
serve.
FINANCIAL REVIEW
OVERVIEW
The Group had a strong first half in which we
completed our £500m disposal programme with the sale of Union
Square and benefited from the investments made in recent years.
Following the announcement on 22 July 2024 of the disposal of the
Group's interests in Value Retail for c. £600m (€705m) we now have
the capacity and capability to accelerate growth and value
creation.
Adjusted earnings for the six months ended 30
June 2024 of £50m were £6m, or 11% lower than the prior year, with
the impact of disposals reducing net rental income by £7m.
Net rental income on the retained portfolio was £1m higher,
equivalent to like-for-like growth of 2%. Gross
administration and net finance costs were, in total, £11m lower,
this was partly offset by £3m lower fee income due to disposals.
The Group's share of adjusted earnings from Value Retail was £2m
lower with gross rental income growth offset by higher costs,
including interest following recent refinancing activity. Given
confidence in future earnings growth the directors have declared an
interim cash dividend of 0.756p per share, a 5% increase on the
2023 interim dividend.
The IFRS loss for the period was £517m (HY 23:
£1m), the principal difference to adjusted earnings being an
impairment loss on the reclassification to an asset 'held for sale'
of the Group's investment in Value Retail of £483m; revaluation
losses of £73m (Managed portfolio: £48m, Value Retail: £25m), with
the most significant factor being 50bps outward yield shift in
Ireland.
Net assets at 30 June 2024 were £1,908m (FY
23: £2,463m). EPRA NTA per share was 38p (FY 23: 51p), equivalent
to a total accounting return of -23.4% (FY 23: -2.1%). Each
of the measures being adversely impacted by the Value Retail
impairment loss.
Net debt of £1,220m at 30 June 2024 was £106m,
or 8%, lower than at 31 December 2023 principally due to the sale
of Union Square. The Group has ample liquidity in cash and undrawn
committed facilities of £1.1bn (FY23: £1.2bn). Headline LTV was 39%
(FY23: 34%) and net debt:EBITDA was unchanged at 8.0x. Reflecting
the sale of Value Retail, on a pro forma basis, these latter
metrics improve to 25% and 5.3x respectively. The transformational
impact of the Value Retail sale on the Group's net debt, liquidity
and credit metrics is set out further on the following
page.
PRESENTATION OF FINANCIAL
INFORMATION
IFRS vs Management
reporting
The Group's property portfolio comprises
properties that are either wholly owned or co-owned with third
parties. While the Group prepares its financial statements under
IFRS, the Group evaluates the performance of its business for
internal management reporting on a "proportionally consolidated"
basis which aggregates the following:
·
properties, or entities, which are wholly owned or held in
joint operations1 and hence where the results and net
assets are directly included, on a line-by-line basis, in the IFRS
financial statements. These are labelled as 'Reported
Group'.
· the Group's share of properties, or entities, which are
co-owned within joint ventures or associates and are under the
Group's day-to-day management. Under IFRS each are included in
separate line items in the income statement ('Share of results of
joint ventures'/'Share of results of associates') and balance sheet
('Investment in joint ventures'/'Investment in associates'). The
Group's share of results and net assets are labelled 'Share of
Property interests'. Note, that for associates, this
treatment only related to the Group's 25% share in Italie Deux
until it was sold in March 2023 and not Value Retail (see
below).
The combination of properties
within the Reported Group and Share of Property interests is
labelled as the "Managed portfolio".
Management do not proportionally consolidate
the Group's investment in Value Retail, in which we exercise
significant influence, because it is not under the Group's
management, is independently financed and has differing operating
metrics to the Group's Managed portfolio. Accordingly, for both
IFRS and management accounting purposes the results and financial
assets and liabilities are accounted for separately and it is
excluded from the Group's proportionally consolidated key metrics
such as net debt or like-for-like net rental income
growth.
If, in addition to IFRS figures, information
is disclosed under management's reporting basis in the Group's
financial statements it is clearly labelled as being
'proportionally consolidated'. Further supporting analysis and
reconciliations between management and IFRS bases are also included
in this Financial Review and in the Additional Information
section.
Value Retail disposal
On 22 July 2024, the Group
announced it had entered into a binding sale agreement for the
disposal of its entire interests in Value Retail to L Catterton for gross proceeds of
c.£600m (€705m). The Group accounted for its Value Retail interests
as an associated undertaking, however at the balance sheet date the
Directors concluded that, given the significant progress made
towards agreeing and signing the sale agreement, that a sale was
"highly probable" and hence the Group's interests were judged to
have met the criteria outlined in IFRS 5 to be reclassified to
being "held for sale" within current assets.
On reclassification to "held for
sale", in accordance with IFRS 5, the Group's interests have been
re-measured to the lower of the carrying amount and estimated fair
value less sale costs at completion, which is expected in H2 24.
The fair value was based on the contracted sale proceeds, less
estimated transaction costs, and the remeasurement resulted in a
£483m impairment loss being recognised in the period as shown in
the table below:
1 See note 13B to the interim
financial statements for details on the Group's two joint
operations (Pavilions, Swords and Ilac Centre, Dublin).
Value Retail impairment calculation
(see note 9 to interim financial
statements)
Proportionally consolidated
|
|
£m
|
Carrying value of Value Retail at
30 June 2024
|
|
1,087
|
Other assets/liabilities impacted
by disposal in Reported Group
|
|
(21)
|
Value of disposed net assets
|
A
|
1,066
|
|
|
|
Gross proceeds (€705m at 30 June
closing exchange rate)
|
|
598
|
Estimated transaction costs,
including tax
|
|
(15)
|
Net proceeds
|
B
|
583
|
|
|
|
Impairment charge in HY 24
|
A-B
|
(483)
|
The sale has a transformational
impact on the Group and, on a pro forma basis reflecting the £583m
net proceeds, significantly enhances the Group's net debt,
liquidity and credit metrics. However, at 30 June 2024 the
£483m impairment loss results in an adverse impact on the Group's
loan to value and gearing metrics. These metrics are set out in the
table below:
Proportionally consolidated
|
|
|
Additional Information
ref.
|
30 June 2024
|
Pro forma
30 June 2024
|
31 December 2023
Total
|
Net debt
|
|
|
|
£1,220m
|
£637m
|
£1,326m
|
Liquidity
|
|
|
|
£1,138m
|
£1,721m
|
£1,225m
|
Loan to value ‒ Headline
|
|
|
Table
20
|
39%
|
25%
|
34%
|
Loan to value ‒ EPRA
|
|
|
Table
20
|
50%
|
27%
|
48%
|
Gearing
|
|
|
Table
18
|
65%
|
34%
|
55%
|
Net debt: EBITDA
|
|
|
Table
16
|
8.0x
|
5.3x
|
8.0x
|
Unencumbered asset ratio
|
|
|
Table
19
|
2.10x
|
4.84x
|
2.04x
|
In addition, the operations of Value Retail
represent a separate major line of the business and therefore has
been treated as a discontinued operation and the results for the
current and prior financial periods have been separately disclosed
from the continuing segments of the
business.
In addition to the disposal, the Company is
proposing to simplify its share capital through a 1 for 10 share
consolidation, and to increase distributable reserves by reducing
the Company's share premium account. A circular with more detail
and a notice convening a general meeting, at which the necessary
approvals will be sought, will be sent to shareholders in due
course.
Derecognition of Highcross and O'Parinor in HY
23
As explained in the Financial Review in the
2023 Annual Report, during 2023, the Group derecognised its
Highcross and O'Parinor joint ventures in which it had 50% and 25%
interests respectively. These two joint ventures had a total of
£125m of borrowings secured against their individual property
interests, which were non-recourse to the Group.
On 9 February 2023, a receiver was appointed
by the lenders to administer Highcross for the benefit of the
creditors. As a result of no longer having joint control, the Group
derecognised its share of assets and liabilities, including the
property value and £80m of secured borrowings. There was no loss on
derecognition as the Group's joint venture investment in Highcross
had previously been fully impaired.
On 30 June 2023, the lenders to O'Parinor took
control of the joint venture and the Group therefore impaired its
joint venture investment by £22m and derecognised its share of
assets and liabilities in HY 23, including the property value and
£45m of secured borrowings. In February 2024, the
lender subsequently sold the O'Parinor property. The Group did not
receive any recovery of its fully impaired joint venture
investment.
Alternative Performance Measures (APMs)
The Group uses a number of APMs, being
financial measures not specified under IFRS, to monitor the
performance of the business. Many of these measures are based on
the EPRA Best Practice Recommendations (BPR) reporting framework
which aims to improve the transparency, comparability and relevance
of the published results of listed European real estate companies,
with key EPRA measures being EPRA earnings and three EPRA net asset
metrics. Details on the EPRA BPR can be found on www.epra.com
and the Group's EPRA metrics are shown in Table 1 of the Additional
Information.
In addition to presenting the
Group's results on an IFRS and EPRA basis, we also presents the
results on a 'Headline' and 'Adjusted' basis. The former
measure is calculated in accordance with the requirements of the
Johannesburg Stock Exchange listing requirements and the 'Adjusted'
basis reflects the underlying operations of the business and is
calculated on a proportionally consolidated basis. The
Adjusted basis also excludes capital and non-recurring items such
as revaluation movements, gains or losses on the disposal of
properties or investments, as well as other items which the
Directors and management do not consider to be part of the
day-to-day operations of the business. Such items are in the main
reflective of those excluded for EPRA earnings, but additionally
exclude a small number of 'Company only' adjusting items which are
deemed not to be reflective of the normal routine operating
activities of the Group and have been applied consistently in both
accounting periods. We believe that disclosing such non-IFRS
measures enables evaluation of the impact of such items on results
to facilitate a fuller understanding of performance from period to
period.
For the first half of 2024, the two
'Company only' adjusting items comprised:
·
The exclusion of a charge of £2.7m (HY 23: £3.2m) in respect
of business transformation costs as the Group continues its
implementation of strategic change and refining its operating
model. This charge comprises mainly non-capitalisable costs
relating to digital transformation as well as severance and other
costs associated with team and operational
restructuring.
·
The exclusion of a £0.5m (HY 23: £nil) one-off charge
associated with fees incurred on winding up the Group's principal
defined benefit pension scheme as further explained on page
16.
An analysis of the Group's income statement on
both an IFRS and Adjusted basis is included in note 2 to the
interim financial statements and a reconciliation from loss for the
year under IFRS to Adjusted, EPRA and Headline earnings is set out
in note 10A to the interim financial statements.
Other APMs used by the Group cover key
operational, balance sheet and credit related metrics, including
like-for-like analysis, cost ratios, total accounting return, net
debt and associated credit metrics: net debt:EBITDA, gearing, loan
to value and interest cover. Reconciliations of these APMs to
the IFRS figures in the financial statements are included in the
Additional Information section.
INCOME STATEMENT
Analysis of adjusted earnings and loss for the period (IFRS)
- six months ended 30 June
Proportionally consolidated
|
Six months ended 30 June 2024
£m
|
Six months ended 30 June
2023
£m
|
Change
£m
|
Adjusted earnings analysis:
|
|
|
|
Gross rental income
|
94.4
|
106.3
|
(11.9)
|
Net service charge expenses and
cost of sales
|
(21.7)
|
(21.2)
|
(0.5)
|
Net rental income
|
72.7
|
85.1
|
(12.4)
|
Gross administration
expenses
|
(21.5)
|
(25.7)
|
4.2
|
Other income
|
5.4
|
8.2
|
(2.8)
|
Profit from operating
activities
|
56.6
|
67.6
|
(11.0)
|
Value Retail - Adjusted
earnings1
|
11.7
|
13.4
|
(1.7)
|
Operating profit
|
68.3
|
81.0
|
(12.7)
|
Net finance costs
|
(18.7)
|
(25.1)
|
6.4
|
Tax charge
|
(0.1)
|
‒
|
(0.1)
|
Adjusted earnings
|
49.5
|
55.9
|
(6.4)
|
Reconciliation to loss for the period
(IFRS):
|
|
|
|
Revaluation losses - Managed
portfolio
|
(47.8)
|
(43.8)
|
(4.0)
|
Revaluation (losses)/gains - Value
Retail
|
(24.9)
|
26.0
|
(50.9)
|
Loss on sale of
properties
|
(10.8)
|
(17.3)
|
6.5
|
Impairment of Value Retail upon
reclassification to an asset held for sale1
|
(483.0)
|
‒
|
(483.0)
|
Impairment of joint
venture
|
‒
|
(22.1)
|
22.1
|
Business transformation
costs
|
(2.7)
|
(3.2)
|
0.5
|
Costs associated with pension
scheme winding up
|
(0.5)
|
‒
|
(0.5)
|
Other (see note 10A to the interim
financial statements)
|
3.5
|
3.3
|
0.2
|
Loss for the period
(IFRS)
|
(516.7)
|
(1.2)
|
(515.5)
|
|
|
|
|
(Loss)/earnings per
share
|
pence
|
pence
|
pence
|
Basic
|
(10.4)
|
(0.0)
|
(10.4)
|
Adjusted
|
1.0
|
1.1
|
(0.1)
|
|
|
|
|
|
|
1 Discontinued operation, see note
9 to the interim financial statements
For the six months ended 30 June 2024, the
Group reported an IFRS loss of £516.7m (HY 23: £1.2m loss), an
increased loss of £515.5m. The key factor in the increased
year-on-year loss was the £483.0m impairment charge on the
reclassification of the Group's interest in Value Retail to an
asset held for sale. Other factors were a £6.4m reduction in
adjusted earnings and a net £50.9m movement in revaluation
(losses)/gains in Value Retail (HY 24: £(24.9)m loss, HY 23: £26.0m
gain), partly offset by the impairment charge of £22.1m on the
derecognition of the Group's investment in the O'Parinor joint
venture in the first half of 2023.
On an Adjusted basis, earnings reduced by
£6.4m to £49.5m (HY 23: £55.9m). Net rental income was £12.4m
lower, £7.4m was due to disposals partly offset by £1.0m higher
income from the like-for-like Managed portfolio, equivalent to 2%
growth. Gross administration costs were £4.2m, or 16%, lower
reflecting reduced employee and corporate costs. The Group's share
of Value Retail earnings, now shown as a discontinued operation,
fell by £1.7m. Net finance costs were £6.4m lower, reflecting
reduced debt levels and increased income from cash deposits
benefiting from higher interest rates.
A detailed reconciliation from the loss for
the period under IFRS to the Group's results presented on a
management reporting basis (i.e. proportionally consolidated) is
set out in note 2 to the financial statements and further details
on reconciling items between Adjusted earnings and IFRS loss are in
note 10A to the financial statements.
Rental income
Analysis of period-on-period change in rental income -
Managed portfolio
Proportionally consolidated
|
|
|
Gross rental income
|
Like-for-like change
|
|
Adjusted net rental income
|
Like-for-like change
|
Six months ended 30 June 2023
|
|
|
106.3
|
|
|
85.1
|
|
Like-for-like:
|
|
|
|
|
|
|
|
- UK
|
|
|
1.1
|
3.1%
|
|
1.0
|
3.5%
|
- France
|
|
|
0.7
|
2.4%
|
|
0.8
|
4.0%
|
- Ireland
|
|
|
‒
|
0.1%
|
|
(0.8)
|
(4.0)%
|
Total like-for-like
|
|
|
1.8
|
2.1%
|
|
1.0
|
1.7%
|
Disposals
|
|
|
(10.9)
|
|
|
(7.4)
|
|
Developments and other
|
|
|
(1.4)
|
|
|
(4.9)
|
|
Foreign exchange
|
|
|
(1.4)
|
|
|
(1.1)
|
|
Six months ended 30 June
2024
|
|
|
94.4
|
|
72.7
|
|
|
|
Gross rental income decreased by £11.9m to
£94.4m. Disposals reduced income by £10.9m, principally Italie Deux
and Croydon in 2023, Union Square in 2024 and the derecognition of
O'Parinor with effect from 30 June 2023. This was partly offset by
growth in like-for-like income of £1.8m, or 2.1%, with the UK
having the strongest growth at 3.1% driven by Bullring and
Westquay. This reflected growth in variable income from turnover
rent and car park income, income from the Group's strong leasing
performance and surrender premiums as we have proactively recycled
brands towards best-in-class occupiers. Income in France
increased by 2.4% driven by indexation while income in Ireland was
up 0.1% with growth limited by a reduction in occupancy from 96.2%
to 95.7% and the adverse impact of regearing the large overrented
River Island unit at the entrance to Ilac Centre.
Adjusted net rental income decreased by a net
£12.4m to £72.7m. Disposals reduced NRI by £7.4m, principally
Italie Deux in March 2023 and Union Square in March 2024. From a
like-for-like perspective, adjusted NRI grew by 1.7%. The UK
and France increased by 3.5% and 4.0% respectively, principally due
to their strong gross rental income growth. Ireland reported
a like-for-like decrease of -4.0% due the muted gross income growth
and a year-on-year change in tenant impairment and bad debt
charges. 2023 included credits due to the reversal of prior year
bad debt provisions as collection rates improved in HY 23 which
resulted in like-for-like NRI growth in HY 23 of 8.6%.
NRI from the Group's Developments and other
portfolio reduced by £4.9m in 2024. This reduction was due to
a one-off occupier receipt in H1 23 of £1.1m in relation to their
delayed opening at the Les 3 Fontaines extension and increased
provisioning charges and void costs at Martineau Galleries and
Grand Central, both of which are being progressed towards future
developments.
Cabot Circus, Bristol is undergoing major
repositioning in 2024 which has a temporary adverse impact on 2024
rental income. If Cabot Circus is excluded from the Group's
like-for-like analysis, like-for-like gross rental income would be
+3.6% and net rental income would be +4.8%. As explained on
page 5, we are making strong progress with the repositioning having
recently signed M&S to replace House of Fraser.
Further analysis of gross and net rental
income by segment is provided in Table 3 of the Additional
Information.
Analysis of rental income by ownership
Rental income is further analysed below between
the Group's various ownerships.
|
Six months ended 30 June
2024
|
|
|
Share of Property
interests
|
|
|
Reported Group
|
Joint
ventures
|
Associates
|
Subtotal
|
Total
|
Proportionally consolidated
|
£m
|
£m
|
£m
|
£m
|
£m
|
Gross rental income
|
40.1
|
54.3
|
-
|
54.3
|
94.4
|
Net service charge expenses and
cost of sales
|
(10.0)
|
(11.7)
|
-
|
(11.7)
|
(21.7)
|
Net rental income
|
30.1
|
42.6
|
-
|
42.6
|
72.7
|
Change in provision for amounts
not yet recognised in the income statement
|
-
|
-
|
-
|
-
|
-
|
Adjusted net rental income
|
30.1
|
42.6
|
-
|
42.6
|
72.7
|
|
Six months ended 30 June 2023
|
|
|
|
Share of Property
interests
|
|
|
|
Reported Group
|
Joint
ventures
|
Associates
|
Subtotal
|
Total
|
Proportionally consolidated
|
£m
|
£m
|
£m
|
£m
|
£m
|
Gross rental income
|
47.9
|
57.2
|
1.2
|
58.4
|
106.3
|
Net service charge expenses and
cost of sales
|
(8.6)
|
(12.4)
|
-
|
(12.4)
|
(21.0)
|
Net rental income
|
39.3
|
44.8
|
1.2
|
46.0
|
85.3
|
Change in provision for amounts
not yet recognised in the income statement
|
-
|
(0.2)
|
-
|
(0.2)
|
(0.2)
|
Adjusted net rental income
|
39.3
|
44.6
|
1.2
|
45.8
|
85.1
|
|
|
|
|
|
|
|
|
|
Administration expenses
Proportionally consolidated
|
Six months ended
30 June 2024
£m
|
Six months ended 30 June 2023
£m
|
Employee costs
|
13.9
|
17.1
|
Other corporate costs
|
7.6
|
8.6
|
Adjusted gross administration
costs
|
21.5
|
25.7
|
Property fee income
|
(2.9)
|
(4.8)
|
Joint venture and associate
management fee income
|
(2.5)
|
(3.4)
|
Other income
|
(5.4)
|
(8.2)
|
|
|
|
Adjusted net administration expenses
|
16.1
|
17.5
|
Business transformation
costs
|
2.7
|
3.2
|
Net administration
expenses
|
18.8
|
20.7
|
The Group's focus on transformation and cost
reduction has resulted in a £4.2m, or 16%, year-on-year reduction
in adjusted gross administration costs to £21.5m in the first half
of 2024. Other income fell by £2.8m associated with lower fee
income due to disposals, particularly in relation to Italie Deux
and O'Parinor in France. Adjusted net administration expenses
decreased by £1.4m, or 8% against HY 23.
The most significant elements of the gross
administration cost reduction were:
·
Employee costs which were £3.2m (19%) lower reflecting the
organisational restructuring and simplification of the Group's
operating model. Average headcount, excluding employees recharged
to tenants, reduced from 209 in HY 23 to 139 in HY 24.
·
Other corporate costs, comprising mainly professional fees,
premises costs and IT costs, fell by £1.0m (12%), with the most
significant savings being premises costs in the UK and
France.
Business transformation costs of £2.7m in the
first half of 2024 comprised mainly fees for contractors and
consultants on the Group's digitalisation programme and office
relocation costs in Paris. These transformation costs related
directly to the Group's strategic and operational review undertaken
in 2021 and have been excluded from adjusted earnings as they do
not reflect underlying trading.
Loss on sale of properties
During the first half of the year, we realised
gross proceeds of £117m from property disposals, with £111m raised
from the sale of Union Square, Aberdeen and £6m raised from the
disposal of ancillary units at O'Parinor. The sale of Union
Square completed the Group's £500m disposal programme announced at
FY 21, since when we have raised gross proceeds of
£950m.
Compared to their 31 December 2023 valuations,
and after selling costs, these two transactions resulted in a loss
on the sale of properties of £11m, and were at an average 8%
discount (based on gross proceeds) to 31 December 2023 book
value.
Results - Share of Property
interests
A listing of our interests in joint ventures is
included in note 13 to the interim financial statements. On an IFRS
basis, the Group's share of results in the first half of 2024 was
£9.6m (HY 23: £7.6m). The £2.0m improvement was principally due to
lower revaluation losses in HY 24 of £31.0m compared with losses of
£33.5m in HY 23 and £1.5m lower year-on-year net finance costs
following the derecognition and subsequent disposal of
O'Parinor.
On an Adjusted basis, our share of results
from joint ventures was £40.6m (HY 23: £41.1m). The £0.5m
year-on-year reduction was principally due to the disposals of the
Group's investments in Croydon in 2023 and derecognition of
O'Parinor with effect from 30 June 2023.
Given that five out of six of our UK flagship
destinations and Dundrum, the largest asset of our Ireland
flagships, are held in joint ventures the financial and operating
performance of these assets is consistent with the proportionally
consolidated performance explained in this Review and shown in the
Additional Information. The two French flagship destinations are
wholly owned.
Results - Value Retail (including reclassification to an
asset held for sale)
As explained above, at 30 June
2024 the Group reclassified its investment in Value Retail to an
asset held for sale and treated its results in the current and
prior financial periods as a discontinued operation. This
resulted in an impairment charge of £483.0m and further details are
in note 9 to the interim financial statements.
On an IFRS basis, the Group's
share of Value Retail's results in the first half of 2024 were a
loss of £9.6m compared with a profit of £32.1m in HY 23. The
year-on-year decrease of £41.7m was principally due to revaluation
losses recognised in 2024 of £24.9m compared with gains of £26.0m
in 2023.
On an Adjusted basis, our share of
results from Value Retail was £11.7m compared with £13.4m in 2023.
The reduction in adjusted earnings was due to increased property
outgoings of £1.5m, administration costs of £2.3m, £1.1m higher tax
charges and, a £3.8m increase in finance costs related to the
refinancing of the loans secured against Fidenza, Wertheim and
Ingolstadt which was completed in H2 23. This was partly offset by
increased gross rental income of £7.0m associated with sales growth
and the benefits from indexed rents.
Net finance costs
|
|
Six months ended
30 June 2024
|
|
Six months ended
30 June 2023
|
Proportionally consolidated
|
Reported Group
£m
|
Share of Property
interests £m
|
Total
£m
|
Reported Group
£m
|
Share of Property
interests £m
|
Total
£m
|
Finance income
|
18.2
|
2.8
|
21.0
|
13.5
|
1.2
|
14.7
|
Gross interest costs
|
(35.8)
|
(3.9)
|
(39.7)
|
(35.2)
|
(4.6)
|
(39.8)
|
Adjusted net finance costs
|
(17.6)
|
(1.1)
|
(18.7)
|
(21.7)
|
(3.4)
|
(25.1)
|
Change in fair value of
derivatives
|
0.4
|
(1.0)
|
(0.6)
|
(9.8)
|
(0.2)
|
(10.0)
|
IFRS net finance costs
|
(17.2)
|
(2.1)
|
(19.3)
|
(31.5)
|
(3.6)
|
(35.1)
|
|
|
|
|
|
|
|
|
Adjusted net finance costs were
£18.7m, a decrease of £6.4m, or 25%, compared with HY 23. This was
predominately due to £6.3m higher interest
income associated with the increased cash balances following
disposals and higher interest rates in HY 24 compared with HY
23.
In April, £338m of interest rate
swaps were entered into to lock in finance income at an average
rate of 4.7% on cash deposits matching the value of the bonds
maturing in October 2025.
Tax
Due to the Group having tax exempt
status in its principal operating countries the tax charge, on a
proportionally consolidated basis, remained low at £0.1m (HY 23:
£nil).
The tax charge is low as the Group
benefits from being a UK REIT and French SIIC and its Irish assets
are held in a QIAIF. The Group is committed to remaining in these
tax exempt regimes and further details on these regimes are given
in note 7 to the interim financial statements. In order to satisfy
the REIT conditions, the Company is required, on an annual basis,
to pass certain business tests. The Group expects to meet all
requirements for maintaining its REIT status for the foreseeable
future.
Dividends
The Board has declared an interim
dividend of 0.756 pence per share, payable as a PID on 30 September
2024 to shareholders on the register on 23 August 2024. This
represents a 5% increase on the 2023 interim dividend of 0.72p per
share. There will be no scrip alternative although the dividend
reinvestment plan (DRIP) remains available to
shareholders.
Following the completion of the
sale of the Group's investment in Value Retail announced on 22 July
2024, the Board intend to increase the policy payout ratio from its
current policy of 60-70% to 80-85%.
As explained on page 37, the
reclassification of Value Retail to an asset held for sale resulted
in the recognition of a £483m impairment charge. This adversely
impacts Hammerson plc's distributable reserves which totalled £649m
at 31 December 2023. In addition to the
disposal, the Company is therefore proposing to increase
distributable reserves by reducing the Company's share premium
account. A circular with more detail and a notice convening a
general meeting, at which the necessary approval will be sought,
will be sent to shareholders in due course.
NET ASSETS
A detailed analysis of the balance
sheet on a proportionally consolidated basis is set out in Table 12
of the Additional Information with a summary reconciling to EPRA
NTA set out in the table below:
Summary net assets
|
|
|
30 June 2024
|
31 December 2023
|
|
|
|
|
Reported Group
£m
|
Share of Property
interests
£m
|
EPRA
adjustments
£m
|
EPRA NTA
£m
|
Reported Group
£m
|
Share of Property
interests
£m
|
EPRA
adjustments
£m
|
EPRA NTA
£m
|
Investment properties
|
|
|
1,233
|
1,346
|
-
|
2,579
|
1,396
|
1,380
|
-
|
2,776
|
Investment in joint
ventures
|
|
|
1,177
|
(1,177)
|
-
|
-
|
1,193
|
(1,193)
|
-
|
-
|
Investment in associates
‒ Value
Retail
|
|
|
-
|
-
|
-
|
-
|
1,115
|
-
|
79
|
1,194
|
Assets/liabilities held for
sale ‒ Value
Retail1
|
|
|
583
|
-
|
-
|
583
|
-
|
-
|
-
|
-
|
Net trade receivables
|
|
|
24
|
20
|
-
|
44
|
28
|
13
|
-
|
41
|
Net debt2
|
|
|
(1,069)
|
(151)
|
-
|
(1,220)
|
(1,163)
|
(163)
|
-
|
(1,326)
|
Other net liabilities
|
|
|
(40)
|
(38)
|
1
|
(77)
|
(106)
|
(37)
|
-
|
(143)
|
Net assets
|
|
|
1,908
|
-
|
1
|
1,909
|
2,463
|
-
|
79
|
2,542
|
EPRA NTA per
share3
|
|
|
|
|
|
38p
|
|
|
|
51p
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Reflects the reclassification to an "asset held
for sale" on 30 June 2024, see note 9 to the interim financial
statements for details
2 See Table 13
in Additional Information for further details.
3 EPRA
adjustments in accordance with EPRA best practice, principally in
relation to deferred tax, as shown in note 10B to the interim
financial statements.
During the first half of 2024, net assets
decreased by £555m, or 23% to £1,908m. Net assets, calculated on an
EPRA Net Tangible Assets (NTA) basis, were £1,909m, or 38p per
share, a reduction of 13p compared to 31 December 2023 and is
equivalent to a total accounting return of -23.4% (see Table 15 in
Additional Information).
The key components of the movement between
IFRS net assets and EPRA NTA are shown in the table
below:
Movement in net assets
Proportionally consolidated including Value
Retail
|
Net assets
£m
|
EPRA
adjustments
£m
|
EPRA NTA
£m
|
EPRA NTA per share
|
1 January 2024
|
2,463
|
79
|
2,542
|
51
|
Adjusted
earnings
|
50
|
-
|
50
|
1
|
Property revaluation - Managed
portfolio
|
(48)
|
-
|
(48)
|
(1)
|
Property revaluation - Value
Retail
|
(25)
|
-
|
(25)
|
(1)
|
Disposal losses
|
(11)
|
-
|
(11)
|
-
|
Impairment losses on
reclassification of Value Retail to asset held for sale
|
(483)
|
(79)
|
(562)
|
(11)
|
Dividends
|
(39)
|
-
|
(39)
|
(1)
|
Foreign exchange and other
movements
|
1
|
1
|
2
|
-
|
30 June 2024
|
1,908
|
1
|
1,909
|
38
|
MANAGED PORTFOLIO - PROPERTY
ANALYSIS
Portfolio valuation
At 30 June 2024, the majority of our UK
flagship destinations have been valued by JLL and CBRE, the French
portfolio by JLL, and the Irish portfolio and Brent Cross have been
valued by C&W. C&W also valued the Value Retail Villages
with the 30 June 2024 valuation being used as the basis for the
reclassification to an asset held for sale. The valuer
responsibilities are unchanged from
31 December 2023 and the range of valuation provision provides
diversification of valuation expertise across the Group.
There continues to be a limited number of
comparable transactions in the Group's investment markets, although
leasing evidence has been strong in H1 24. In the UK and France,
yields have been stable in the first half of the year as inflation
and the cost of debt has fallen. Following significant
valuation falls since 2017, an increasing number of commentators
are now calling the bottom of the market in the UK highlighting the
positive market dynamics for prime assets. This is a
continuation of the polarisation trend based on asset quality from
both an occupational and investment perspective which we
highlighted at FY 23. In Ireland, sentiment has weakened with a
number of aborted or stalled transactions being cited as the basis
for valuers marking market yields higher in 2024.
At 30 June 2024, the Managed portfolio was
valued at £2,579m, a reduction of £197m since 31 December 2023.
This movement was primarily due to the disposal of Union Square and
net revaluation losses of £48m. The movement in the portfolio
valuation is shown in the table below.
Movements in property valuation
Proportionally consolidated
|
UK
£m
|
France
£m
|
Ireland
£m
|
Total flagships
£m
|
Development and other
£m
|
Managed portfolio
£m
|
At 1 January 2024
|
863
|
1,003
|
630
|
2,496
|
280
|
2,776
|
Disposals
|
(121)
|
(6)
|
‒
|
(127)
|
‒
|
(127)
|
Capital expenditure
|
5
|
7
|
1
|
13
|
3
|
16
|
Revaluation
gains/(losses)
|
12
|
‒
|
(49)
|
(37)
|
(11)
|
(48)
|
Yield
|
‒
|
‒
|
(48)
|
(48)
|
‒
|
(48)
|
Income
|
12
|
‒
|
(1)
|
11
|
‒
|
11
|
Development and other costs
|
‒
|
‒
|
‒
|
‒
|
(11)
|
(11)
|
Foreign exchange
|
‒
|
(22)
|
(14)
|
(36)
|
(2)
|
(38)
|
At 30 June 2024
|
759
|
982
|
568
|
2,309
|
270
|
2,579
|
Disposals
Disposals of £127m related to the sale of
Union Square in March and ancillary units at O'Parinor in
February.
Capital expenditure
During 2024, capital expenditure on the
Managed portfolio was £16m, of which £13m was on the Group's
Flagship portfolio reflecting reconfiguration works and lease
incentives associated with our strong leasing performance. The most
significant reconfiguration works were on the former House of
Fraser store at The Oracle which is being split into three new
units. Two of these units have been let to Hollywood Bowl and TK
Maxx and we are in advanced discussions on the final unit.
£7m was invested in our two French destinations to support
the strong leasing performance and refreshing Les Terrasses du
Port, which celebrated its 10th anniversary in
May.
£3m was spent on our development projects in
the first half of the year. 40% of this was at the on-site
Ironworks residential scheme at Dundrum with the balance
predominately spent on advancing The Goodsyard project and the
repurposing of void space at Cergy 3 to complement the major
extension at the asset which opened in 2022. We continue to
be disciplined with our expenditure on these schemes focusing on
initiatives which give short term routes to value and those
integral projects which add value to our wider estates.
Table 11 of the Additional Information
provides further analysis of capital expenditure incurred in the
first half of the year.
Revaluation gains/(losses)
In the first half of 2024, we recognised a
total revaluation loss on the Managed portfolio of £48m. UK
flagships reported a £12m revaluation gain associated with income
growth, with ERVs marked up associated with the strong leasing
performance. There was no change in underlying values in France,
while Ireland reported a £49m revaluation loss, with £48m due to
outward yield shift of 50bps.
The Group's Developments and other portfolio
recorded a £11m revaluation loss. Approximately half of the loss
was at Martineau Galleries in Birmingham where valuers reduced the
end value of the future office element of the scheme. The remainder
of the loss was due to additional project costs being factored into
residual appraisals.
Further valuation analysis is
included in Table 9 of the Additional Information.
Like-for-like ERV1
Flagship destinations
Proportionally consolidated
|
Six months ended
30 June 2024
%
|
Year ended
31 December 2023
%
|
Six months ended
30 June 2023
%
|
UK
|
1.5
|
1.8
|
‒
|
France
|
0.6
|
2.5
|
0.2
|
Ireland
|
0.5
|
0.2
|
0.1
|
|
0.9
|
1.7
|
0.1
|
1
Calculated on a constant currency basis for properties owned
throughout the relevant reporting periods.
Like-for-like ERVs increased by
0.9% in the first half of the year, driven by the Group's strong
leasing performance. The UK reported the highest increase at 1.5%,
with the strongest performances at Cabot Circus (2.9%) as it
undergoes repositioning and Bullring (2.8%) benefiting from the
investment in repurposing over recent years. French ERV
growth has been hindered by the higher vacancy at Les 3 Fontaines,
Cergy. Ireland reported growth of 0.5% driven by recent leasing
performance.
Property returns analysis
The Group's managed property
portfolio generated a total property return of +0.6% in the first
half of the year, comprising an income return of +2.8% offset by a
capital return of -2.2%.
|
|
|
|
|
|
Six months ended 30 June
2024
|
|
Proportionally
consolidated
|
|
|
UK
%
|
France
%
|
Ireland
%
|
Flagship
Destinations
%
|
Developments and
other
%
|
Managed
portfolio
%
|
Income return
|
|
|
3.8
|
2.2
|
2.9
|
2.9
|
1.3
|
2.8
|
Capital return
|
|
|
0.3
|
-
|
(7.9)
|
(1.9)
|
(4.0)
|
(2.2)
|
Total
return
|
|
|
4.1
|
2.2
|
(5.2)
|
0.9
|
(2.7)
|
0.6
|
|
|
|
|
|
|
|
Year ended 31 December
2023
|
|
Proportionally
consolidated
|
|
|
|
UK
%
|
France
%
|
Ireland
%
|
Flagship
Destinations%
%
|
Developments and
other
%
|
Managed portfolio
%
|
Income return
|
|
|
|
8.7
|
4.6
|
5.7
|
6.3
|
2.7
|
5.9
|
Capital return
|
|
|
|
(2.4)
|
(4.3)
|
(5.6)
|
(4.0)
|
(6.2)
|
(4.1)
|
Total
return
|
|
|
|
6.1
|
0.1
|
(0.2)
|
2.0
|
(3.6)
|
1.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTMENT IN JOINT VENTURES AND ASSOCIATES
Details of the Group's joint
ventures and associates are shown in notes 13 and 14, respectively,
to the interim financial statements.
Joint ventures
During the year, our investment in
joint ventures decreased by £16m to £1,177m (FY 23: £1,193m). The
reduction was principally due to a revaluation loss of £31m and
cash distributions paid to the Group of £31m partly offset by
adjusted earnings of £41m.
Associates
Following the sale of the Group's
25% interest in Italie Deux in March 2022, Value Retail was the
Group's sole investment in associate until its reclassification to
an asset for sale as at 30 June 2024 resulting in an impairment
charge of £483m in HY 24. In the first half of the year, prior to
reclassification, the investment reported a revaluation loss of
£25m and distributions of £14m (£12m in cash), partly offset by
adjusted earnings of £12m.
TRADE RECEIVABLES
Collection rates have been stable during 2024.
At 30 June 2024, 97% of rent due in 2023 and 94% of H1 24 rent had
been collected.
On a proportionally consolidated basis, net
trade receivables at 30 June 2024 were £44m (FY 23: £41m),
reflecting gross trade receivables of £62m (FY 23: £60m) against
which a provision of £19m (FY 23: £19m) has been
applied.
PENSIONS
In June 2024, the Group's principal pension
scheme, a UK defined benefit scheme (the 'Scheme') was wound up.
This followed the purchase of a bulk annuity policy ('buy-in') in
December 2022 with Just Retirement Limited to fully insure all
future payments to members of the Scheme. The Trustees of the
Scheme triggered the winding-up of the Scheme in December 2023
allowing the Company to terminate its liability to make further
contributions to the Scheme. In the first half of 2024, the
Trustees completed the assignment of the bulk annuity policy to
individual Scheme members and transferred the administration to
Just Retirement Limited. The winding up process resulted in a cost
of £0.5m, which, given the one-off nature of this action has been
excluded from the Group's adjusted earnings.
FINANCING AND CASH FLOW
Financing strategy
Our financing strategy is to borrow
predominantly on an unsecured basis to maintain flexibility.
Secured loans are occasionally used, mainly in conjunction with
joint venture partners. Value Retail also uses predominantly
secured debt in its financing strategy. All secured debt is
non-recourse to the rest of the Group.
The Group's debt is arranged to maintain
access to short term liquidity and long term financing. Short term
liquidity is principally through syndicated revolving credit
facilities. Long term debt comprises the Group's fixed rate
unsecured bonds and private placement notes. At 30 June 2024, the
Group also had a secured loan in the Dundrum joint venture and
Value Retail's financing is based on secured debt. Acquisitions may
initially be financed using short term funds before being
refinanced with longer term funding depending on the Group's
financing position in terms of maturities, future commitments or
disposals, and market conditions.
Derivative financial instruments are used to
manage exposure to fluctuations in foreign currency exchange rates
and interest rates but are not employed for speculative
purposes.
The Board regularly reviews the Group's
financing strategy and approves financing guidelines against which
it monitors the Group's financial structure. Where there is any
non-compliance with the guidelines, this should not be for an
extended period and the Group objective is to maintain an
investment grade credit rating. The key financing metrics are set
out below.
Key financial metrics
Proportionally consolidated excluding Value Retail unless
otherwise stated
|
|
|
|
Calculation
in Additional
Information
|
30 June 2024
|
31 December 2023
|
Net debt
|
|
|
|
Table 13
|
£1,220m
|
£1,326m
|
Liquidity
|
|
|
|
|
£1,138m
|
£1,225m
|
Weighted average interest rate -
net debt
|
|
|
|
|
2.1%
|
2.4%
|
Weighted average interest rate -
gross debt
|
|
|
|
|
3.4%
|
3.3%
|
Weighted average maturity of
debt
|
|
|
|
|
2.2 years
|
2.5 years
|
FX hedging
|
|
|
|
|
92%
|
91%
|
Net debt : EBITDA
|
|
|
|
Table 16
|
8.0x
|
8.0x
|
Loan to value -
Headline1
|
|
|
|
Table 20
|
39%
|
34%
|
Loan to value - Full proportional
consolidation (of Value Retail)2
|
|
|
|
Table 20
|
n/a
|
44%
|
Loan to value - EPRA
|
|
|
|
Table 21
|
50%
|
48%
|
Metrics with associated Group unsecured financial
covenants
|
|
|
Covenant
|
|
|
|
Interest cover
|
|
|
≥
1.25x
|
Table 17
|
4.21x
|
3.91x
|
Gearing - Selected
bonds3
|
|
|
≤
175%
|
Table 18
|
65%
|
55%
|
- Other borrowings and facilities
|
|
|
≤
150%
|
Table 18
|
65%
|
55%
|
Unencumbered asset ratio
|
|
|
≥
1.5x
|
Table 19
|
2.10x
|
2.04x
|
Secured borrowings/equity
shareholders' funds
|
|
|
≤
50%
|
|
13%
|
11%
|
Fixed rate debt as a proportion of
total debt
|
|
|
n/a
|
|
100%
|
84%
|
1
Headline: Loan excludes Value Retail net debt and Value includes
Value Retail net assets.
2 At 31 December
2023 Full proportional consolidation of Value Retail ('VR'): Loan
includes Group's share of VR net debt and Value includes share of
VR's values. Following the reclassification of Value Retail to an
asset held for sale at 30 June 2024 this ratio is no longer
relevant, see note 9 to the interim financial statements for
details.
3 Applicable to
bonds maturing in 2025 and 2027 (as set out in note 16 to
the interim financial statements).
As explained on page 37, the reclassification
of the Group's investment in Value Retail to an asset held for sale
and subsequently announced disposal will have a
transformational impact on the Group's net debt, liquidity and
credit metrics. However, at 30 June 2024 the £483m impairment
loss on reclassification results in an adverse impact on loan to
value and gearing as shown in the table above.
Credit ratings
In March, Moody's re-affirmed the Group's
senior unsecured investment grade credit rating as Baa3 and revised
the outlook from stable to positive. In April, Fitch re-affirmed
the Group's senior unsecured rating at BBB+.
Borrowings and covenants
The terms of the Group's unsecured borrowings
contain a number of covenants which provide protection to the
lenders and bondholders as set out in the Key financial metrics
table above. At 30 June 2024, the Group had significant headroom
against these metrics.
In addition, Dundrum and Value Retail have
secured debt facilities which include covenants specific to those
properties, including financial covenants for loan to value and
interest cover. There is no recourse to the Group.
Managing foreign exchange exposure
The Group's exposure to foreign exchange
translation differences on euro-denominated assets is managed
through a combination of euro borrowings and derivatives. At 30
June 2024, the value of euro-denominated liabilities as a
proportion of the value of euro-denominated assets was 92%, a 1%
increase on FY 23 (91%). Interest on euro-denominated debt also
acts as a partial hedge against exchange differences arising on net
income from our overseas operations. Sterling strengthened against
the euro during the first half of the year by 2%.
CASH FLOW AND NET DEBT
Movement in net debt (£m)
http://www.rns-pdf.londonstockexchange.com/rns/7378X_1-2024-7-24.pdf
On a proportionally consolidated
basis, net debt decreased by 8% to £1,220m (FY 23: £1,326m). At 30
June 2024, the Group's net debt comprised loans of £1,757m, less
cash and cash equivalents of £538m, of which £434m is held by the
Reported Group. Disposals during the year generated net proceeds of
£116m. Cash generated from operations of £41m comprised profit from
operating activities of £54m less a net £13m reduction in working
capital and other non-cash items. We also received £12m of
distributions from Value Retail. These cash inflows were partly
offset by cash dividends paid of £45m, net interest of £34m and
capital expenditure of £20m.
Liquidity
The Group's liquidity at 30 June
2024, calculated on a proportionally consolidated basis, comprising
cash of £538m and unutilised committed facilities of £600m, was
£1,138m, £87m lower than at the beginning of the year. The
key cash flows resulting in this reduction were the repayment on
maturity of £109m of senior private placement notes and the
maturity of £50m of the Group's revolving credit facilities, partly
offset by £117m of gross disposal proceeds.
During the first six months of the
year, we obtained lender consent to extend £463m of the Group's
revolving credit facilities by one year such that they now mature
in 2027 as shown on the chart below.
Debt and facility profile
Maturity profile of loans and facilities at 30 June 2024
(£m)
http://www.rns-pdf.londonstockexchange.com/rns/7378X_2-2024-7-24.pdf
The Group's weighted average maturity of debt
is 2.2 years (FY 23: 2.5 years). The Group's cash balance of £538m
covers the £338m sterling bonds due in 2025 and approximately 75%
of the 2026 maturities.
In relation to the €600m (Group's 50% share
€300m) secured loan held by the Dundrum joint venture which matures
in September 2024, the JV is in advanced stages of refinancing and
we expect to sign a new loan in early August 2024.
Maturity analysis of loans at 30 June 2024
|
|
|
30 June 2024
|
31 December 2023
|
|
Maturity
|
|
£m
|
£m
|
Sterling bonds
|
2025 - 2028
|
|
841.7
|
840.6
|
Sustainability linked euro
bond
|
2027
|
|
588.4
|
600.8
|
Unamortised facility
fees
|
2025 - 2026
|
|
(2.3)
|
(2.2)
|
Senior notes (Private
Placements)
|
2026 - 2031
|
|
75.1
|
185.3
|
Total loans - Reported
Group
|
|
|
1,502.9
|
1,624.5
|
Dundrum secured debt - Share of
Property interests
|
2024
|
|
254.5
|
260.0
|
Total loans - proportionally
consolidated
|
|
|
1,757.4
|
1,884.5
|
Cash and cash
equivalents
|
|
|
(537.4)
|
(569.6)
|
Fair value of currency
swaps
|
|
|
-
|
11.4
|
Net debt - proportionally
consolidated
|
|
|
1,220.0
|
1,326.3
|
Risks and uncertainties
The Directors have considered the
principal risks and uncertainties disclosed in the Annual Report
for the year ended 31 December 2023, which are summarised below,
and do not consider these to have materially changed in the first
half of 2024. Full disclosure of these risks, including the
factors which mitigate them, are set out within the Risk and
uncertainties section of the Annual Report 2023. As part of
their formal risk review in H2 24, given the transformational
impact of the disposal of the Group's investment in Value Retail
announced on 22 July 2024, the Directors expect to amend and update
a number of the principal risks set out below.
A. Macroeconomic
Residual risk:
High
|
Adverse changes to the geopolitical landscape
and macroeconomic environment in which the Group operates have the
potential to hinder the ability to deliver the strategy and
financial performance.
|
B. Retail market
Residual risk:
Medium
|
In the context of the ever-evolving retail
marketplace, the Group fails to anticipate and address structural
market changes. This could impair leasing performance, result in a
sub-optimal occupier mix and thus impact the ability to attract
visitors, and grow footfall/spend and income at the Group's
properties.
|
C. Investment market and valuations
Residual risk:
Medium
|
Investor appetite for retail led assets is
reduced due to macroeconomic or retail market factors including
increased borrowing costs, economic downturn, and consumer and
occupier confidence. This could adversely impact property
valuations and risk hindering the liquidity of the Group's
portfolio. This in turn could reduce the availability of funds for
reinvestment and/or refinancing of debt.
|
D. Climate
Residual risk:
Medium
|
Climate risks, particularly the reduction in
carbon emissions and addressing the risk of physical impacts to our
assets as a result of climate related incidents, are not
appropriately managed. This could adversely impact valuations and
investor sentiment and may result in an increased final year bond
coupon if the Group's sustainability linked bond targets are not
met. Extreme weather events may also impact our assets.
|
E. Tax
Residual risk: Medium
|
The Group suffers financial loss and
reputational damage from a new or increased tax levy or due to
non-compliance with local tax legislation.
|
F. Legal and regulatory compliance
Residual risk: Medium
|
The failure to comply with laws and
regulations relevant to the Group. These laws and regulations cover
the Group's role as a multi-jurisdiction listed company; an owner
and operator of property; an employer; and as a developer. Failure
to comply could result in the Group suffering reputational damage,
financial penalties and/or other sanctions. Changes or new
requirements may place administrative and cost burdens on the Group
and divert resources away from strategic objectives.
|
G. Non-retail/multi-use markets
Residual risk: Medium
|
The Group fails to target the optimal
(non-retail) property sectors for future repurposing or
developments or has insufficient access to capital and the skills
required to deliver its urban estates vision. Occupier or investor
demand for non-retail sectors weakens or evolves such that the
Group's repurposing or development plans are
sub-optimal.
|
H. Cyber security
Residual risk: Medium
|
The Group's information technology systems
fail or are subject to an attack which breaches their technological
defences. A failure could lead to operational disruption, financial
demands or reputational damage due to assets being brought down
and/or loss of commercially sensitive data.
|
I. Health and safety
Residual risk: Medium
|
There is a risk of serious work-related
injury, death and/or ill health to the Group's colleagues,
customers or contractors, and anyone else who visits the Group's
properties or premises. This may be due to the Group's actions or
activities, or from external threats such as terrorism. In
addition, an incident or public health issue, such as a pandemic,
is likely to have an adverse operational impact. Insufficient
insight into health and safety risks and mitigations or a failure
to embed a strong safety culture could increase the Group's
exposure to reputational damage, fines and sanctions.
|
J. Capital structure
Residual risk: Medium
|
Lack of access to capital on attractive terms
could lead to the Group having insufficient liquidity to enable the
delivery of the Group's strategic objectives.
|
K. Partnerships
Residual risk:
High
|
A significant proportion of the Group's
properties are held in conjunction with third parties which has the
potential to limit our ability to implement our strategy and
reduces our control and therefore liquidity if partners are not
strategically aligned.
|
L. Property development
Residual risk: Medium
|
Property development is inherently risky due
to its complexity, management intensity and uncertain outcomes,
particularly for major schemes with multiple phases and long
delivery timescales. Unsuccessful projects result in adverse
financial and reputational outcomes.
|
M. Transformation
Residual risk: Medium
|
The Group fails to deliver its strategic
objective of creating an agile platform due to sub-optimal
transformation projects. Other issues could arise due to
transformation initiatives being delivered late, overbudget or
causing significant disruption to business-as-usual
activity.
|
N. People
Residual risk: Medium
|
A failure to retain or recruit key management
and other colleagues to build skilled and diverse teams could
adversely impact operational and corporate performance, culture and
ultimately the delivery of the Group's strategy. As the Group
evolves its strategy it must continue to motivate and retain
people, ensure it offers the right colleague proposition and
attract new skills in a changing market.
|
Independent review report to Hammerson plc
Report on the condensed consolidated interim financial
statements
Our conclusion
We have reviewed Hammerson plc's
condensed consolidated interim financial statements (the 'interim
financial statements') in the Half Year 2024 Results of Hammerson
plc for the six month period ended 30 June 2024 (the
'period').
Based on our review, nothing has
come to our attention that causes us to believe that the interim
financial statements are not prepared, in all material respects, in
accordance with UK adopted International Accounting Standard 34,
'Interim Financial Reporting', International Accounting Standard
34, 'Interim Financial Reporting', as adopted by the European
Union, the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority, and the
Transparency (Directive 2004/109/EC) Regulations 2007.
The interim financial statements
comprise:
· the Consolidated Balance Sheet as at 30 June 2024;
· the Consolidated Income Statement and Consolidated Statement
of Comprehensive Income for the period then ended;
· the Consolidated Cash Flow Statement for the period then
ended;
· the Consolidated Statement of Changes in Equity for the
period then ended; and
· the explanatory notes to the interim financial
statements.
The interim financial statements
included in the Half Year 2024 Results of Hammerson plc have been
prepared in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting', International Accounting Standard 34, 'Interim Financial
Reporting' as adopted by the European
Union, the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority, and the
Transparency (Directive 2004/109/EC) Regulations 2007.
Basis for conclusion
We conducted our review in
accordance with International Standard on Review Engagements (UK)
2410, 'Review of Interim Financial Information Performed by the
Independent Auditor of the Entity' issued by the Financial
Reporting Council for use in the United Kingdom ("ISRE (UK) 2410").
A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures.
A review is substantially less in
scope than an audit conducted in accordance with International
Standards on Auditing (UK) and, consequently, does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
We have read the other information
contained in the Half Year 2024 Results and considered whether it
contains any apparent misstatements or material inconsistencies
with the information in the interim financial
statements.
Conclusions relating to going concern
Based on our review procedures,
which are less extensive than those performed in an audit as
described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the Directors
have inappropriately adopted the going concern basis of accounting
or that the Directors have identified material uncertainties
relating to going concern that are not appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410.
However, future events or
conditions may cause the Group to cease to continue as a going
concern.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the
Directors
The Half Year 2024 Results,
including the interim financial statements, is the responsibility
of, and has been approved by the Directors. The Directors are
responsible for preparing the Half Year 2024 Results in accordance
with the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority and in accordance
with the Transparency (Directive 2004/109/EC) Regulations 2007. In
preparing the Half Year 2024 Results, including the interim
financial statements, the Directors are responsible for assessing
the Group's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going
concern basis of accounting unless the Directors either intend to
liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Our responsibility is to express a
conclusion on the interim financial statements in the Half Year
2024 Results based on our review. Our conclusion, including our
Conclusions relating to going concern, is based on procedures that
are less extensive than audit procedures, as described in the Basis
for conclusion paragraph of this report. This report, including the
conclusion, has been prepared for and only for the Company for the
purpose of complying with the Disclosure Guidance and Transparency
Rules sourcebook of the United Kingdom's Financial Conduct
Authority and in accordance with the Transparency (Directive
2004/109/EC) Regulations 2007 and for no other purpose. We do not,
in giving this conclusion, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown
or into whose hands it may come save where expressly agreed by our
prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
24 July 2024
statement OF DIRECTORS' RESPONSIBILITIES
The Directors' confirm that, to
the best of their knowledge, the condensed consolidated interim
financial statements (the 'interim financial statements') in the
Half Year 2024 Results have been prepared in accordance with UK
adopted International Accounting Standard 34 (IAS 34), IAS 34 as
adopted by the European Union, the Transparency (Directive
2004/109/EC) Regulations 2007, the SAICA Financial Reporting Guides
as issued by the Accounting Practices Committee and that the Half
Year 2024 Results includes a fair review of the information
required by the Disclosure Guidance and Transparency Rules (DTR)
4.2.7R and DTR 4.2.8R, namely:
The interim financial statements
comprise:
·
An indication of
important events that have occurred during the first six months of
the financial year and their impact on the condensed set of
financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
·
Any material related
party transactions that have taken place in the first six months of
the financial year and any material changes in the related party
transactions described in the Company's last Annual
Report.
A list of the current Directors is
maintained on the Hammerson plc website: www.hammerson.com. The
maintenance and integrity of the Hammerson plc website is the
responsibility of the Directors. The work carried out by the
auditors does not involve consideration of these matters and,
accordingly, the auditors accept no responsibility for any changes
that might have occurred to the interim financial statements since
they were initially presented on the website.
Legislation in the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Signed on behalf of the Board on 24
July 2024
Rita-Rose Gagné
|
Himanshu Raja
|
Director
|
Director
|
Consolidated income statement
Six
months ended 30 June 2024 - unaudited
|
|
|
Note
|
Six months ended
30 June 2024
Unaudited
£m
|
Six
months ended
30 June
20231
Unaudited
£m
|
Revenue
|
|
|
2,4
|
59.4
|
69.1
|
|
|
|
|
|
|
Profit
from operating activities2
|
|
|
2
|
11.2
|
18.7
|
|
|
|
|
|
|
Revaluation loss on properties
|
|
|
2
|
(16.8)
|
(10.3)
|
Other net
(losses)/gains
|
|
|
2
|
(10.8)
|
3.1
|
|
|
|
|
|
|
Share of
results of joint ventures
|
|
|
13B
|
9.6
|
7.6
|
Impairment of joint ventures
|
|
|
8
|
-
|
(22.1)
|
Share of
results of associate
|
|
|
14A
|
-
|
1.2
|
Operating
loss
|
|
|
|
(6.8)
|
(1.8)
|
|
|
|
|
|
|
Finance
income
|
|
|
6
|
18.2
|
13.5
|
Finance
costs
|
|
|
6
|
(35.4)
|
(45.0)
|
Loss before
tax
|
|
|
|
(24.0)
|
(33.3)
|
|
|
|
|
|
|
Tax
charge
|
|
|
7
|
(0.1)
|
-
|
Loss from continuing
operations
|
|
|
|
(24.1)
|
(33.3)
|
(Loss)/Profit from discontinued operations
|
|
|
9B
|
(492.6)
|
32.1
|
Loss for the
period
|
|
|
|
(516.7)
|
(1.2)
|
|
|
|
|
|
|
Basic and diluted loss per
share
|
|
|
|
|
|
Continuing operations
|
|
|
|
(0.5)p
|
(0.7)p
|
Discontinued operations
|
|
|
|
(9.9)p
|
0.7p
|
Total
|
|
|
11B
|
(10.4)p
|
(0.0)p
|
1. The
results reported for the six months ended 30 June 2023 have been
reclassified to represent discontinued operations in line with the
requirements of IFRS 5 "Non-current assets held for sale and
discontinued operations". See note 9 for further
details.
2
For the six months ended 30 June 2024, includes a
net charge of £1.8m (30 June 2023: net credit of £1.7m) relating to
provisions for impairment of trade (tenant) receivables as set out
in note 15.
Consolidated statement of COMPREHENSIVE
income
Six
months ended 30 June 2024 - unaudited
|
|
Six months ended
30 June 2024
Unaudited
£m
|
Six months ended
30 June 2023
Unaudited
£m
|
|
|
|
|
Loss for the period
|
|
(516.7)
|
(1.2)
|
|
|
|
|
Other comprehensive income/(expenses):
|
|
|
|
Recycled through the profit
or loss on disposal of overseas property
interests
|
|
|
|
Exchange
gain previously recognised in the translation reserve
|
|
-
|
(100.3)
|
Exchange
loss previously recognised in the net investment hedge
reserve
|
|
-
|
80.2
|
Net
exchange gain relating to equity
shareholders1
|
|
-
|
(20.1)
|
|
|
|
|
Items that may subsequently
be recycled through profit or loss
|
|
|
|
Foreign
exchange translation differences
|
|
(30.6)
|
(48.9)
|
Foreign
exchange translation differences of discontinued
operations
|
|
0.2
|
(16.2)
|
Gain on
net investment hedge
|
|
37.0
|
57.4
|
Net gain
on cash flow hedge
|
|
-
|
0.3
|
Share of
other comprehensive (losses)/gains of discontinued
operations
|
|
(4.4)
|
9.4
|
|
|
2.2
|
2.0
|
Items that will not
subsequently be recycled through profit or loss
|
|
|
|
Net
actuarial gains/(losses) on pension schemes
|
|
0.1
|
(0.2)
|
|
|
|
|
Other
comprehensive income/(loss) for the period
|
|
2.3
|
(18.3)
|
|
|
|
|
Total
comprehensive loss from continuing
operations
|
|
(17.6)
|
(44.8)
|
Total
comprehensive (loss)/profit from
discontinued operations
|
|
(496.8)
|
25.3
|
Total
comprehensive loss for the period
|
|
(514.4)
|
(19.5)
|
1 For the
six months ended 30 June 2023 this relates to the sale of Italie
Deux and Italik and the derecognition of O'Parinor as described in
note 8.
Consolidated balance sheet
As at 30
June 2024 - unaudited
|
|
Note
|
30 June 2024
Unaudited
£m
|
31 December 2023
Audited
£m
|
Non-current
assets
|
|
|
|
|
Investment properties
|
|
12
|
1,232.9
|
1,396.2
|
Interests
in leasehold properties
|
|
|
31.7
|
32.7
|
Right-of-use assets
|
|
|
0.7
|
3.9
|
Plant and
equipment
|
|
|
0.5
|
0.9
|
Investment in joint ventures
|
|
13C
|
1,177.3
|
1,193.2
|
Investment in associate
|
|
14C
|
-
|
1,115.0
|
Other
investments
|
|
|
9.2
|
8.8
|
Trade and
other receivables
|
|
|
0.6
|
1.9
|
Restricted monetary assets
|
|
|
21.4
|
21.4
|
|
|
|
2,474.3
|
3,774.0
|
Current
assets
|
|
|
|
|
Trade and
other receivables
|
|
15
|
62.9
|
74.1
|
Derivative financial instruments
|
|
|
1.1
|
5.2
|
Restricted monetary assets
|
|
|
-
|
2.2
|
Cash and
cash equivalents
|
|
|
433.9
|
472.3
|
|
|
|
497.9
|
553.8
|
Assets held for
sale
|
|
9D
|
605.7
|
-
|
|
|
|
1,103.6
|
553.8
|
Total
assets
|
|
|
3,577.9
|
4,327.8
|
Current
liabilities
|
|
|
|
|
Trade and
other payables
|
|
|
(80.3)
|
(129.8)
|
Obligations under head leases
|
|
|
(0.2)
|
(0.1)
|
Loans
|
|
16A
|
-
|
(108.6)
|
Tax
|
|
|
(0.2)
|
(0.3)
|
Derivative financial instruments
|
|
|
(0.2)
|
(2.3)
|
|
|
|
(80.9)
|
(241.1)
|
Liabilities associated with
assets held for sale
|
|
9D
|
(22.7)
|
-
|
|
|
|
(103.6)
|
(241.1)
|
Non-current
liabilities
|
|
|
|
|
Trade and
other payables
|
|
|
(25.8)
|
(55.5)
|
Obligations under head leases
|
|
|
(36.3)
|
(37.3)
|
Loans
|
|
16A
|
(1,502.9)
|
(1,515.9)
|
Deferred
tax
|
|
|
(0.4)
|
(0.4)
|
Derivative financial instruments
|
|
|
(1.2)
|
(15.0)
|
|
|
|
(1,566.6)
|
(1,624.1)
|
Total
liabilities
|
|
|
(1,670.2)
|
(1,865.2)
|
Net assets
|
|
|
1,907.7
|
2,462.6
|
Equity
|
|
|
|
|
Share
capital
|
|
|
250.1
|
250.1
|
Share
premium
|
|
|
1,563.7
|
1,563.7
|
Other
reserves
|
|
19
|
112.1
|
105.5
|
Retained
earnings
|
|
|
(9.9)
|
549.7
|
Investment in own shares
|
|
|
(8.3)
|
(6.4)
|
Equity shareholders'
funds
|
|
|
1,907.7
|
2,462.6
|
EPRA net tangible assets
value per share
|
|
11C
|
38p
|
51p
|
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six
months ended 30 June 2024 - unaudited
|
|
Share capital
|
Share premium
|
Other reserves
|
Retained earnings
|
Investment in own
shares
|
Equity shareholders'
funds
|
|
|
1
|
|
2
|
|
1
|
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
At 1
January 2024
|
|
250.1
|
1,563.7
|
105.5
|
549.7
|
(6.4)
|
2,462.6
|
|
|
|
|
|
|
|
|
Foreign
exchange translation differences3
|
|
-
|
-
|
(30.4)
|
-
|
-
|
(30.4)
|
Gain on
net investment hedge
|
|
-
|
-
|
37.0
|
-
|
-
|
37.0
|
Loss on
cash flow hedge
|
|
-
|
-
|
(0.2)
|
-
|
-
|
(0.2)
|
Loss on
cash flow hedge recycled to net finance costs
|
|
-
|
-
|
0.2
|
-
|
-
|
0.2
|
Share of
other comprehensive loss of associates3
|
|
-
|
-
|
-
|
(4.4)
|
-
|
(4.4)
|
Net
actuarial gains on pension schemes
|
|
-
|
-
|
-
|
0.1
|
-
|
0.1
|
Loss for
the period3
|
|
-
|
-
|
-
|
(516.7)
|
-
|
(516.7)
|
Total comprehensive
income/(loss)
|
|
-
|
-
|
6.6
|
(521.0)
|
-
|
(514.4)
|
|
|
|
|
|
|
|
|
Share-based employee remuneration
|
|
-
|
-
|
-
|
1.9
|
-
|
1.9
|
Purchase
of own shares and treasury shares
|
|
-
|
-
|
-
|
-
|
(3.4)
|
(3.4)
|
Cost of
shares awarded to employees
|
|
-
|
-
|
-
|
(1.5)
|
1.5
|
-
|
Dividends
|
|
-
|
-
|
-
|
(39.0)
|
-
|
(39.0)
|
At 30 June
2024
|
|
250.1
|
1,563.7
|
112.1
|
(9.9)
|
(8.3)
|
1,907.7
|
Six
months ended 30 June 2023 - unaudited
|
|
Share capital
|
Share premium
|
Other reserves
|
Retained earnings
|
Investment in own
shares
|
Equity shareholders'
funds
|
|
|
1
|
|
2
|
|
1
|
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
At 1
January 2023
|
|
250.1
|
1,563.7
|
135.4
|
646.0
|
(8.8)
|
2,586.4
|
|
|
|
|
|
|
|
|
Recycled
net exchange gains on disposal of overseas property
interests
|
|
-
|
-
|
(20.1)
|
-
|
-
|
(20.1)
|
Foreign
exchange translation differences3
|
|
-
|
-
|
(65.1)
|
-
|
-
|
(65.1)
|
Gain on
net investment hedge
|
|
-
|
-
|
57.4
|
-
|
-
|
57.4
|
Loss on
cash flow hedge
|
|
-
|
-
|
(3.1)
|
-
|
-
|
(3.1)
|
Loss on
cash flow hedge recycled to net finance costs
|
|
-
|
-
|
3.4
|
-
|
-
|
3.4
|
Share of
other comprehensive gain of associates3
|
|
-
|
-
|
-
|
9.4
|
-
|
9.4
|
Net
actuarial losses on pension schemes
|
|
-
|
-
|
-
|
(0.2)
|
-
|
(0.2)
|
Loss for
the period3
|
|
-
|
-
|
-
|
(1.2)
|
-
|
(1.2)
|
Total comprehensive
(loss)/income
|
|
-
|
-
|
(27.5)
|
8.0
|
-
|
(19.5)
|
|
|
|
|
|
|
|
|
Share-based employee remuneration
|
|
-
|
-
|
-
|
1.7
|
-
|
1.7
|
Cost of
shares awarded to employees
|
|
-
|
-
|
-
|
(0.2)
|
0.2
|
-
|
Proceeds
on award of own shares to employees
|
|
-
|
-
|
-
|
0.1
|
-
|
0.1
|
At 30 June
2023
|
|
250.1
|
1,563.7
|
107.9
|
655.6
|
(8.6)
|
2,568.7
|
1
Share capital includes shares held in treasury
and shares held in an employee share trust, which are held at cost
and excluded from equity shareholders' funds through 'Investment in
own shares'.
2
Other reserves comprise Translation, Net
investment and Cash flow hedge reserves.
3
Relates to continuing and discontinued
operations.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year
ended 31 December 2023 - audited
|
|
Share capital
|
Share premium
|
Other reserves
|
Retained earnings
|
Investment in own
shares
|
Equity shareholders'
funds
|
|
|
1
|
|
2
|
|
1
|
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
At 1
January 2023
|
|
250.1
|
1,563.7
|
135.4
|
646.0
|
(8.8)
|
2,586.4
|
|
|
|
|
|
|
|
|
Recycled
exchange gains on disposal of overseas property
interests
|
|
-
|
-
|
(20.1)
|
-
|
-
|
(20.1)
|
Foreign
exchange translation differences3
|
|
-
|
-
|
(49.3)
|
-
|
-
|
(49.3)
|
Gain on
net investment hedge
|
|
-
|
-
|
39.3
|
-
|
-
|
39.3
|
Loss on
cash flow hedge
|
|
-
|
-
|
(3.4)
|
-
|
-
|
(3.4)
|
Loss on
cash flow hedge recycled to net finance costs
|
|
-
|
-
|
3.6
|
-
|
-
|
3.6
|
Share of
other comprehensive loss of associates3
|
|
-
|
-
|
-
|
(8.8)
|
-
|
(8.8)
|
Net
actuarial losses on pension schemes
|
|
-
|
-
|
-
|
(1.4)
|
-
|
(1.4)
|
Loss for
the period3
|
|
-
|
-
|
-
|
(51.4)
|
-
|
(51.4)
|
Total comprehensive
loss
|
|
-
|
-
|
(29.9)
|
(61.6)
|
-
|
(91.5)
|
|
|
|
|
|
|
|
|
Share-based employee remuneration
|
|
-
|
-
|
-
|
3.6
|
-
|
3.6
|
Cost of
shares awarded to employees
|
|
-
|
-
|
-
|
(2.4)
|
2.4
|
-
|
Dividends
|
|
-
|
-
|
-
|
(35.9)
|
-
|
(35.9)
|
At 31 December
2023
|
|
250.1
|
1,563.7
|
105.5
|
549.7
|
(6.4)
|
2,462.6
|
Consolidated cash flow statement
Six
months ended 30 June 2024 - unaudited
|
|
Note
|
Six months ended
30 June 2024
Unaudited
£m
|
Six months ended
30 June 2023
Unaudited
£m
|
Profit from operating
activities
|
|
|
11.2
|
18.7
|
Net movements in working capital
and restricted monetary assets
|
|
20A
|
(17.3)
|
(2.1)
|
Non-cash items
|
|
20A
|
3.0
|
5.1
|
Cash (utilised in)/generated from
operations
|
|
|
(3.1)
|
21.7
|
|
|
|
|
|
Interest received
|
|
|
20.3
|
11.7
|
Interest paid
|
|
|
(53.6)
|
(47.6)
|
Debt and loan facility issuance
and extension fees
|
|
|
(0.8)
|
(0.6)
|
Tax paid
|
|
|
‒
|
(0.1)
|
Distributions and other
receivables from joint ventures
|
|
|
23.9
|
48.9
|
Cash flows from operating activities
|
|
|
(10.2)
|
34.0
|
|
|
|
|
|
Investing activities
|
|
|
|
|
Capital expenditure
|
|
|
(8.0)
|
(10.2)
|
Sale of properties (including
trading properties)
|
|
|
116.3
|
47.8
|
Sale of investments in joint
ventures
|
|
|
‒
|
69.0
|
Sale of investments in
associates
|
|
|
‒
|
96.7
|
Advances
to joint ventures
|
|
|
(4.4)
|
(5.9)
|
Distributions and capital returns
received from associates
|
|
|
12.3
|
42.7
|
Cash flows from investing activities
|
|
|
116.2
|
240.1
|
|
|
|
|
|
Financing activities
|
|
|
|
|
Proceeds from award of own
shares
|
|
|
‒
|
0.1
|
Purchase of own shares
|
|
|
(3.4)
|
-
|
Repayment of borrowings
|
|
|
(91.9)
|
(11.9)
|
Equity dividends paid
|
|
18
|
(45.0)
|
-
|
Cash flows from financing activities
|
|
|
(140.3)
|
(11.8)
|
|
|
|
|
|
(Decrease)/Increase in cash and cash
equivalents
|
|
|
(37.4)
|
262.3
|
|
|
|
|
|
Opening cash and cash equivalents
|
|
20B
|
472.3
|
218.8
|
Exchange translation
movement
|
|
20B
|
(1.0)
|
(1.5)
|
Closing cash and cash equivalents
|
|
20B
|
433.9
|
479.6
|
The cash flows above relate to
continuing and discontinued operations. See note 9 for further
information on discontinued operations.
Notes to the CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
1. BASIS OF PREPARATION, CONSOLIDATION AND PRINCIPAL
ACCOUNTING POLICIES
A. GENERAL INFORMATION
The condensed consolidated interim
financial statements for the six months ended 30 June 2024 are
unaudited and do not constitute statutory accounts within the
meaning of section 434 of the Companies Act 2006, but have been
reviewed by the auditor. Statutory accounts for the year
ended 31 December 2023, which have been prepared in accordance with
both UK adopted International Accounting Standards and
International Financial Reporting Standards (IFRS) adopted pursuant
to Regulation (EC) No 1606/2002 as it applies in the European
Union, were approved by the Directors on 28 February 2024 and have
been delivered to the Registrar of Companies. The report of
the auditor on those accounts was unqualified, did not draw
attention to any matters by way of emphasis and did not contain any
statement under section 498(2) or (3) of the Companies Act
2006.
B. BASIS OF PREPARATION
These condensed consolidated
interim financial statements for the six months ended 30 June 2024
have been prepared on a going concern basis and in accordance with
International Accounting Standards 34, 'Interim Financial
Reporting' (IAS 34) contained in UK and EU adopted IFRS and the
Disclosure Guidance and Transparency Rules of the UK Financial
Conduct Authority as well as SAICA Financial Reporting Guides as
issued by the Accounting Practices Committee.
New accounting standards,
amendments to standards and IFRIC interpretations which became
applicable during the period or have been published but are not yet
effective, were either not relevant or had no, or are not expected
to have a material, impact on the Group's results or net
assets.
The interim financial statements
have been prepared on the basis of the accounting policies as set
out in the Group's audited financial statements for the year ended
31 December 2023 which were prepared in accordance with IFRS (as
adopted by the UK) and have been applied consistently year on year.
The only exception to this relates to the classification and
measurement of assets as 'held for sale' and the presentation of a
'discontinued operation' associated with the disposal of the
Group's interest in Value Retail as explained in note 9. The
Group's accounting policy for assets held for sale is that a
property or investment may be classed as 'held for sale' if it
meets the criteria of IFRS 5 at the balance sheet date. If an
investment in a joint venture or associate is reclassified to
assets held for sale, equity accounting ceases on the date of
reclassification and any subsequent gains or losses on
remeasurement are recognised in the income statement as impairment
gains or losses and presented in Loss from discontinued operations.
In the event that assets held for sale form an identifiable
business segment, the results for both the current and prior year
are reclassified as 'discontinued operations'.
C. SIGNIFICANT JUDGEMENTS AND ESTIMATES
Estimation uncertainty
As disclosed in the Group's
audited financial statements for the year ended 31 December 2023
the Group's key sources of estimation uncertainty continues to
relate to property valuations due to its inherent subjectivity,
reliance on assumptions and sensitivity to market fluctuations. The
property portfolio is valued by external valuers in accordance with
RICS Valuation - Global Standards.
Inputs to the valuations, some of
which are 'unobservable' as defined by IFRS 13, include
capitalisation yields (nominal equivalent yield) and market rental
income (ERV). These are dependent on individual market
characteristics. With other factors remaining constant, an increase
in rental income would increase valuations, whilst increases in
capitalisation yields and discount rates would reduce values and
vice versa. However, there are interrelationships between
unobservable inputs as they are determined by market conditions.
For example, an increase in rent may be offset by an increase in
yield, resulting in no net impact on the valuation. A sensitivity
analysis, showing the impact on valuations of changes in yields and
market rental income is set out in note 12A.
Significant judgements
The Group's significant accounting
judgements are consistent with those disclosed in the Group's
audited financial statements for the year ended 31 December 2023
with the exception of the reclassification to assets held for sale
of the Group's investment in Value Retail as explained
below.
Value Retail - Reclassification to assets held for sale and
discontinued
operation
On 22 July 2024, the Group
announced it had entered into a binding sale agreement for the
disposal of its entire interests in Value Retail. The Group
has accounted for its Value Retail interests as an associated
undertaking, however at the balance sheet date the Directors
concluded that, given the significant progress made towards
agreeing and signing a sale agreement, that a sale was "highly
probable" and hence the Group's interests were judged to have met
the criteria outlined in IFRS 5 to be reclassified to "held for
sale" within current assets.
On reclassification to "held for
sale", in accordance with IFRS 5, the Group's interests have been
re-measured to the lower of the carrying amount and estimated fair
value less sale costs at completion, which is expected in H2 24.
The fair value was based on the contracted sale proceeds and the
remeasurement resulted in a £483m impairment loss being recognised
in the period.
In addition, the sale of Value
Retail represents a separate major line of business and hence has
been treated as a discontinued operation and the results for the
current and prior financial periods have been separately disclosed
from the continuing segments of the business.
D. GOING CONCERN
Introduction
The interim financial statements for
the period ended 30 June 2024 have been prepared on a going concern
basis. In order to determine this outcome the Directors have
undertaken a detailed assessment of the Group's projected financial
position over the period to 31 December 2025 ('the going concern
period'). This period has been selected as it coincides with the
first six monthly covenant test date for the Group's unsecured
borrowing facilities falling due after the minimum 12 months going
concern period.
Financial position
The Group has a robust financial
position from both a liquidity and debt covenant perspective. At 30
June 2024, on a proportionally consolidated basis excluding Value
Retail, liquidity was £1,138m, comprising £538m of cash and £600m
of undrawn revolving committed facilities this compares to gross
unsecured debt maturing over the going concern period of
£338m.
The Group has three principal
unsecured debt covenants: gearing, interest cover and unencumbered
asset ratio, with the latter covenant only applicable to the
Group's private placement notes. The key variables impacting the
three principal covenants are net asset movements (due principally
to property valuation changes) for the gearing covenant; property
valuations for the unencumbered asset ratio covenant; and changes
in net rental income for the interest cover covenant. Net interest
cost also impacts the interest cover ratio, although at 30 June
2024, 100% of the Group's gross debt is at fixed interest rates,
which limits the volatility of this element of the covenant over
the going concern period.
Level of reduction ('headroom') in
key variable at each date to reach covenant threshold
Covenant
|
30 June
2024
|
Key variable1
|
Headroom
|
Gearing
|
64.7%
|
Property valuations
|
42%
|
Unencumbered assets
ratio
|
2.10x
|
Property valuations
‒ Unencumbered assets
only
|
28%
|
Interest cover
|
4.21x
|
Net rental income
|
70%
|
1
Managed portfolio calculated on a proportionally
consolidated basis
The Group also has exposure to
secured borrowings in its Dundrum joint venture and its Value
Retail investment. At 30 June 2024, the Group's share of loans
which mature over the going concern period totalled £416m. These
secured facilities are non-recourse to the rest of the Group and
subject to covenants, principally relating to loan to value and
interest cover. While the loan secured against Dundrum matures in
September 2024, the JV is in advanced stages to refinance the loan
and expects a new loan to be signed in early August 2024. Value
Retail also has two loans which mature over the going concern
period.
Assessment approach
The assessment was based on the
Group's 2024 Business Plan and contained projected earnings,
balance sheet, cash flow, liquidity and covenant metrics including
headroom. The assessment also took into account the Group's
principal risks, with "Investment markets & valuations" and
"Capital structure" being the key risks from a going concern
perspective due to their intrinsic link to the Group's debt
covenants and liquidity. The assessment did not include the
future proceeds from the sale of Value Retail which was announced
on 22 July and recognised as an asset held for sale at 30 June 2024
(see note 9).
The assessment included various
stress tests based on valuation yields and ERVs as at 30 June 2024
and incorporated the following modelling assumptions:
· the
redemption of the Group's senior private placement notes which
totalled £75m at 30 June 2024. The Group has the right to redeem
these notes in order to avoid a breach of the unencumbered asset
ratio
· the
derecognition of secured borrowings and assets held by the Dundrum
joint venture and Value Retail assuming these loans were not
refinanced or repaid at maturity and lenders took enforcement
action
Having reviewed the results of the
stress tests, current external forecasts, recent precedents and
plausible future adverse impacts to valuations and net rental
income, the Directors are satisfied that the Group has sufficient
liquidity and covenant headroom over the going concern
period.
Conclusion
The assessment process
demonstrated that the Group is forecast to remain in a robust
financial position and will have adequate resources to continue in
operation over the going concern period to 31 December 2025.
Accordingly, the Directors have concluded that the interim
financial statements should be prepared on a going concern
basis.
E. FOREIGN CURRENCY
The principal foreign currency
denominated balances are in euro where the translation exchange
rates used are:
Consolidated income
statement (average rate):
|
Six months ended
30 June 2024
|
Six months ended
30 June 2023
|
Quarter 1
|
€1.168
|
€1.133
|
Quarter 2
|
€1.172
|
€1.150
|
Consolidated balance sheet
(closing rate):
|
30 June 2024
|
31 December 2023
|
Period end rate
|
€1.179
|
€1.153
|
2. PROFIT/(LOSS) FOR THE PERIOD
As described in the Financial
Review and note 3, for management reporting purposes the Group
evaluates the performance of its business by aggregating its share
of joint ventures and associates which are under the Group's
management ('Share of Property interests') on a proportionally
consolidated basis with its properties or entities which are wholly
owned or in joint operations ('Reported
Group').
Adjusted earnings, which are also
calculated on a proportionally consolidated basis, is the Group's
primary profit measure and is the basis of information which is
reported to the Board. The following table sets out a
reconciliation from the Group's loss for the period under IFRS to
Adjusted earnings.
|
|
|
|
|
|
|
|
Six months ended 30 June
2024
|
|
|
|
|
Proportionally consolidated
|
|
|
Reported Group
|
Share of Property
interests
|
Sub-total before
adjustments
|
Capital and other
adjustments1
|
Adjusted
|
|
Note
|
£m
|
£m
|
£m
|
£m
|
£m
|
Revenue
|
4
|
59.4
|
63.5
|
122.9
|
-
|
122.9
|
|
|
|
|
|
|
|
Gross rental
income2
|
3A,
4
|
40.1
|
54.3
|
94.4
|
-
|
94.4
|
Service charge income
|
4
|
14.0
|
9.2
|
23.2
|
-
|
23.2
|
|
|
54.1
|
63.5
|
117.6
|
-
|
117.6
|
Service charge expenses
|
|
(16.2)
|
(10.7)
|
(26.9)
|
-
|
(26.9)
|
Cost of sales
|
5
|
(7.8)
|
(10.2)
|
(18.0)
|
-
|
(18.0)
|
Net rental income
|
|
30.1
|
42.6
|
72.7
|
-
|
72.7
|
|
|
|
|
|
|
|
Gross administration
costs
|
5
|
(24.2)
|
-
|
(24.2)
|
2.7
|
(21.5)
|
Other income
|
4
|
5.3
|
0.1
|
5.4
|
-
|
5.4
|
Net administration
expenses
|
|
(18.9)
|
0.1
|
(18.8)
|
2.7
|
(16.1)
|
|
|
|
|
|
|
|
Profit from operating
activities
|
|
11.2
|
42.7
|
53.9
|
2.7
|
56.6
|
|
|
|
|
|
|
|
Revaluation losses on
properties
|
12
|
(16.8)
|
(31.0)
|
(47.8)
|
47.8
|
-
|
|
|
|
|
|
|
|
(Loss)/Profit on sale of properties
|
8
|
(11.0)
|
0.2
|
(10.8)
|
10.8
|
-
|
Costs associated with pension
scheme wind-up
|
|
(0.5)
|
-
|
(0.5)
|
0.5
|
-
|
Change in fair value of other
investments
|
|
0.5
|
-
|
0.5
|
(0.5)
|
-
|
Profit on sale of joint ventures
and associates
|
|
0.2
|
(0.2)
|
-
|
-
|
-
|
Other net losses
|
|
(10.8)
|
-
|
(10.8)
|
10.8
|
-
|
|
|
|
|
|
|
|
Share of results of joint
ventures
|
13B
|
9.6
|
(9.6)
|
-
|
-
|
-
|
Operating (loss)/profit
|
|
(6.8)
|
2.1
|
(4.7)
|
61.3
|
56.6
|
|
|
|
|
|
|
|
Net finance costs
|
6
|
(17.2)
|
(2.1)
|
(19.3)
|
0.6
|
(18.7)
|
(Loss)/Profit before tax
|
|
(24.0)
|
-
|
(24.0)
|
61.9
|
37.9
|
Tax charge
|
7
|
(0.1)
|
-
|
(0.1)
|
-
|
(0.1)
|
(Loss)/Profit from continuing operations
|
|
(24.1)
|
-
|
(24.1)
|
61.9
|
37.8
|
(Loss)/Profit from discontinued
operations3
|
9B
|
(492.6)
|
-
|
(492.6)
|
504.3
|
11.7
|
(Loss)/Profit for the period
|
|
(516.7)
|
-
|
(516.7)
|
566.2
|
49.5
|
|
|
|
|
|
|
|
|
1
Adjusting items, described above as 'Capital and other adjustments', are set out
in note 10A.
2
Proportionally consolidated figure includes £5.5m
(six months ended 30
June 2023: £6.2m) of contingent rents calculated by
reference to occupiers' turnover.
3
Discontinued operations reflect Value Retail, see
note 9 for further details.
|
|
|
|
|
|
|
|
Six months ended 30 June
2023
|
|
|
|
|
Proportionally consolidated
|
|
|
Reported Group
|
Share of Property
interests
|
Sub-total before
adjustments
|
Capital and other
adjustments1
|
Adjusted
|
|
Note
|
£m
|
£m
|
£m
|
£m
|
£m
|
Revenue
|
4
|
69.1
|
67.6
|
136.7
|
-
|
136.7
|
|
|
|
|
|
|
|
Gross rental
income2
|
3A,
4
|
47.9
|
58.4
|
106.3
|
-
|
106.3
|
Service charge income
|
4
|
13.0
|
9.1
|
22.1
|
-
|
22.1
|
|
|
60.9
|
67.5
|
128.4
|
-
|
128.4
|
Service charge expenses
|
|
(14.0)
|
(11.1)
|
(25.1)
|
-
|
(25.1)
|
Cost of sales
|
5
|
(7.6)
|
(10.4)
|
(18.0)
|
(0.2)
|
(18.2)
|
Net rental income
|
|
39.3
|
46.0
|
85.3
|
(0.2)
|
85.1
|
|
|
|
|
|
|
|
Gross administration
costs
|
5
|
(28.8)
|
(0.1)
|
(28.9)
|
3.2
|
(25.7)
|
Other income
|
4
|
8.2
|
-
|
8.2
|
-
|
8.2
|
Net administration
expenses
|
|
(20.6)
|
(0.1)
|
(20.7)
|
3.2
|
(17.5)
|
|
|
|
|
|
|
|
Profit from operating
activities
|
|
18.7
|
45.9
|
64.6
|
3.0
|
67.6
|
|
|
|
|
|
|
|
Revaluation losses on
properties
|
|
(10.3)
|
(33.5)
|
(43.8)
|
43.8
|
-
|
|
|
|
|
|
|
|
Disposals
|
|
|
|
|
|
|
- Profit/(Loss) on sale of properties
|
8
|
0.3
|
(17.6)
|
(17.3)
|
17.3
|
-
|
- Recycled exchange gains on disposal of overseas
interests
|
|
20.1
|
-
|
20.1
|
(20.1)
|
-
|
Change in fair value of other
investments
|
|
0.3
|
-
|
0.3
|
(0.3)
|
-
|
Loss on sale of joint ventures and
associates
|
|
(17.6)
|
17.6
|
-
|
-
|
-
|
Other net gains
|
|
3.1
|
-
|
3.1
|
(3.1)
|
-
|
|
|
|
|
|
|
|
Share of results of joint
ventures
|
13B
|
7.6
|
(7.6)
|
-
|
-
|
-
|
Impairment of joint
venture
|
|
(22.1)
|
-
|
(22.1)
|
22.1
|
-
|
Share of results of
associates
|
14A
|
1.2
|
(1.2)
|
-
|
-
|
-
|
Operating
(losses)/profit
|
|
(1.8)
|
3.6
|
1.8
|
65.8
|
67.6
|
|
|
|
|
|
|
|
Net finance costs
|
6
|
(31.5)
|
(3.6)
|
(35.1)
|
10.0
|
(25.1)
|
(Loss)/Profit before tax
|
|
(33.3)
|
-
|
(33.3)
|
57.1
|
42.5
|
Tax charge
|
7
|
-
|
-
|
-
|
-
|
-
|
(Loss)/Profit from continuing operations
|
|
(33.3)
|
-
|
(33.3)
|
38.4
|
42.5
|
Profit from discontinued
operations3
|
9B
|
32.1
|
-
|
32.1
|
18.7
|
13.4
|
(Loss)/Profit for the period
|
|
(1.2)
|
-
|
(1.2)
|
57.1
|
55.9
|
3. SEGMENTAL ANALYSIS
The Group's reportable segments
are determined by the internal performance reported to the Chief
Operating Decision Makers which has been determined to be the Group
Executive Committee. Such reporting is both by sector and
geographic location as these demonstrate different characteristics
and risks, are managed by separate teams and are the basis on which
resources are allocated.
As described in the Financial
Review, the Group evaluates the
performance of its portfolio by aggregating its wholly owned
properties and joint operations in the 'Reported Group' with its
ownership share of joint ventures and associates which are under
the Group's management ('Share of Property interests') on a
proportionally consolidated line-by-line basis. The Group does not
proportionally consolidate the Group's investment in Value Retail
as this is not under the Group's management, and instead monitors
the performance of this investment separately from the Group's
Managed portfolio.
The Group's activities presented
on a proportionally consolidated basis including Share of Property
interests are:
·
Flagship destinations
·
Developments and other
As explained in notes 1C and 9,
following the announcement by the Group on
22 July 2024 that it had entered into a binding agreement for the
disposal of its entire interests in Value Retail, this segment has
been re-presented as a discontinued operation and has been excluded
from the "Investment property by segment" table below.
Total assets are not monitored by
segment and resource allocation is based on the distribution of
property assets between segments.
A. Income and profit by
segment
|
Gross rental income
|
Adjusted net rental
income
|
|
Six months ended
30 June 2024
|
Six months ended
30 June 2023
|
Six months ended
30 June 2024
|
Six months ended
30 June 2023
|
|
£m
|
£m
|
£m
|
£m
|
Flagship destinations
|
|
|
|
|
UK
|
39.4
|
43.5
|
30.4
|
33.9
|
France
|
27.0
|
32.4
|
21.6
|
26.9
|
Ireland
|
19.5
|
20.0
|
17.1
|
18.3
|
|
85.9
|
95.9
|
69.1
|
79.1
|
Developments and other
|
8.5
|
10.4
|
3.6
|
6.0
|
Managed portfolio - proportionally
consolidated
|
94.4
|
106.3
|
72.7
|
85.1
|
Less Share of Property interests -
continuing operations
|
(54.3)
|
(58.4)
|
|
|
Reported Group - continuing
operations
|
40.1
|
47.9
|
|
|
B. Investment property assets
by segment
|
30 June 2024
|
31 December 2023
|
|
|
Property valuation
|
Capital
expenditure
|
Revaluation
gains/(losses)1
|
Property valuation
|
Capital
expenditure
|
Revaluation
losses1
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Flagship destinations
|
|
|
|
|
|
|
UK
|
758.9
|
5.1
|
12.1
|
863.1
|
13.9
|
(21.8)
|
France
|
981.4
|
6.6
|
0.1
|
1,003.3
|
14.3
|
(15.2)
|
Ireland
|
568.4
|
1.2
|
(49.1)
|
629.7
|
5.4
|
(37.5)
|
|
2,308.7
|
12.9
|
(36.9)
|
2,496.1
|
33.6
|
(74.5)
|
Developments and other
|
270.5
|
3.4
|
(10.9)
|
280.0
|
13.3
|
(44.6)
|
Managed portfolio - proportionally
consolidated
|
2,579.2
|
16.3
|
(47.8)
|
2,776.1
|
46.9
|
(119.1)
|
Less Share of Property
interests2
|
(1,346.3)
|
(8.3)
|
31.0
|
(1,379.9)
|
(27.3)
|
73.9
|
Reported Group - continuing
operations
|
1,232.9
|
8.0
|
(16.8)
|
1,396.2
|
19.6
|
(45.2)
|
|
|
|
|
|
|
|
|
|
1
Continuing operations
2 The property
valuation of Share of Property interests comprises UK Flagship
destinations: £758.9m (2023: £741.8m); France flagship
destinations: £nil (2023: £nil), Ireland flagship destinations:
£436.2m (2023: £485.2m) and Developments and other £151.2m (2023:
£152.9m).
4. REVENUE
|
|
|
|
Six months ended
30 June 2024
|
Six months ended
30 June 2023
|
|
|
|
Note
|
£m
|
£m
|
Base rent
|
|
|
|
31.7
|
36.4
|
Turnover rent
|
|
|
|
1.1
|
2.0
|
Car park
income1
|
|
|
|
4.5
|
5.3
|
Lease incentive
recognition
|
|
|
|
1.4
|
1.3
|
Other rental income
|
|
|
|
1.4
|
2.9
|
Gross rental income
|
|
|
2
|
40.1
|
47.9
|
Service charge
income1
|
|
|
2
|
14.0
|
13.0
|
Other income
|
|
|
|
|
|
- Property fee
income1
|
|
|
|
2.9
|
4.8
|
- Joint venture and associate
management fees1
|
|
|
|
2.4
|
3.4
|
|
|
|
|
5.3
|
8.2
|
|
|
|
|
|
|
Total -
continuing operations
|
|
|
|
59.4
|
69.1
|
1 Revenue
for these categories amounted to £23.8m (six months ended 30 June
2023: £26.5m) and is recognised under IFRS 15 'Revenue from
Contracts with Customers'. All other revenue is recognised in
accordance with IFRS 16 'Leases'.
5. COSTS
|
|
|
Six months ended
30 June 2024
|
Six months ended
30 June 2023
|
|
|
Note
|
£m
|
£m
|
Cost of sales
|
|
|
|
|
Ground rents payable
|
|
|
0.5
|
0.5
|
Inclusive lease costs recovered
through rent
|
|
|
0.7
|
1.3
|
Other property
outgoings
|
|
|
6.6
|
5.8
|
|
|
|
7.8
|
7.6
|
Gross administration costs
|
|
|
|
|
Employee costs
|
|
|
13.9
|
17.1
|
Depreciation
|
|
|
0.8
|
2.1
|
Other administration
costs
|
|
|
6.8
|
6.4
|
Business transformation
costs
|
|
10A
|
2.7
|
3.2
|
|
|
|
24.2
|
28.8
|
|
|
|
|
|
Total -
continuing operations
|
|
|
32.0
|
36.4
|
6. NET FINANCE COSTS
|
|
|
Six months ended
30 June 2024
|
Six months ended
30 June 2023
|
|
|
|
£m
|
£m
|
Finance income
|
|
|
|
|
Interest receivable on
derivatives
|
|
|
5.8
|
7.5
|
Bank and other interest
receivable
|
|
|
12.4
|
6.0
|
|
|
|
18.2
|
13.5
|
Finance costs
|
|
|
|
|
Interest on bank loans and
overdrafts
|
|
|
(2.2)
|
(2.1)
|
Interest on bonds and related
charges
|
|
|
(30.3)
|
(29.1)
|
Interest on senior notes and
related charges
|
|
|
(2.0)
|
(2.7)
|
Interest on obligations under head
leases and other lease obligations
|
|
|
(1.1)
|
(1.2)
|
Other interest payable
|
|
|
(0.2)
|
(0.1)
|
Gross interest costs
|
|
|
(35.8)
|
(35.2)
|
Fair value gains/(losses) on
derivatives
|
|
|
0.4
|
(9.8)
|
|
|
|
(35.4)
|
(45.0)
|
|
|
|
|
|
Net
finance costs - continuing operations
|
|
|
(17.2)
|
(31.5)
|
7. TAX CHARGE
|
|
Six months ended
30 June 2024
|
Six months ended
30 June 2023
|
|
|
£m
|
£m
|
Foreign
current tax
|
|
0.1
|
-
|
Tax charge - continuing
operations
|
|
0.1
|
-
|
The Group's tax charge remains low
because it has tax exempt status in its principal operating
countries. The Group has been a REIT in the UK since 2007 and a
SIIC in France since 2004. These tax regimes exempt the Group's
property income and gains from corporate taxes, provided a number
of conditions in relation to the Group's activities are met. These
conditions include, but are not limited to, distributing at least
90% of the Group's UK tax exempt profits as property income
distributions (PID) with equivalent tests of 95% on French tax
exempt property profits and 70% of tax exempt property gains. The
residual businesses in both the UK and France are subject to
corporation tax as normal. The Irish assets are held in a QIAIF
which provides similar tax benefits to those of a UK REIT but which
subjects dividends and certain excessive interest payments to a 20%
withholding tax. The Group is committed to remaining in these tax
exempt regimes.
The Group operates in a number of
jurisdictions and is subject to periodic reviews and challenges by
local tax authorities on a range of tax matters during its normal
course of business. Tax impacts can be uncertain until a conclusion
is reached with the relevant tax authority or through a legal
process. The Group uses in-house expertise when assessing uncertain
tax positions and seeks the advice of external professional
advisors where appropriate. The Group believes that its tax
liability accruals are adequate for all open tax years based on its
assessment of many factors, including tax laws and prior
experience.
8. DISPOSALS AND IMPAIRMENT ON DERECOGNITION OF JOINT
VENTURES
Six months ended 30 June 2024
Disposals
On 15 March 2024 the Group raised
gross proceeds of £111m from the disposal of its 100% interest in
Union Square, Aberdeen, which was 8% below its 31 December 2023
book value. Also, in March 2024, the Group completed the sale of
the ancillary wholly owned property at O'Parinor for £6m, in line
with the 31 December 2023 book value.
These disposals, in addition to
other properties net credit adjustments to selling costs of £0.2m,
resulted in a total net loss on disposal of £10.8m.
Six months ended 30 June 2023
Disposals
On 31 March 2023, the Group raised
gross proceeds of €164m (£144m) from the disposal of its 25%
associate stake in Italie Deux in Paris and the wholly owned Italik
extension. 75% of the Italik extension had been classified as a
trading property up to the point of disposal.
On 21 April 2023, the Group
completed the sale of its 50% joint venture investment in Centrale
and Whitgift in Croydon for gross proceeds of £70m. Also during the
year the Group raised further gross proceeds of £2m from the sale
of ancillary non-core land.
In total these disposals resulted in
a net loss on disposal of £17.3m.
Impairment on derecognition of joint
ventures
At 31 December 2022, the Group's
Highcross and O'Parinor joint ventures, in
which the Group had 50% and 25% interests respectively,
had £125m of borrowings secured against the
property interests which were non-recourse to the
Group. In both cases the loans were
in breach of certain conditions and the
Group had been working constructively with the respective lenders
on options to realise 'best value' for all
stakeholders.
On 9 February 2023, a receiver was
appointed to administer Highcross for the benefit of the creditors
and, as a result of no longer having joint control the Group
derecognised its share of assets and liabilities, including the
property value and £80m of borrowings. There was no loss on
derecognition as the Group's joint venture investment in Highcross
had been fully impaired at 31 December 2021, from which date the
Group had ceased recognising the results of this joint venture in
the consolidated income statement.
On 30 June 2023, the lenders on
O'Parinor took control of the joint venture. At that point the
Group fully impaired its joint venture investment by £22.1m and
derecognised its share of assets and liabilities, including the
property value and £45m of secured borrowings.
9. DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES
CLASSIFIED AS HELD FOR SALE
A. VALUE RETAIL DISPOSAL
On 22 July 2024, the Group
announced it had entered into a binding sale agreement for the
disposal of its entire interests in Value Retail for gross proceeds
of €705m (£598m at 30 June 2024 exchange rate). The Group has
historically accounted for its Value Retail interests as an
associated undertaking, however at the balance sheet date the
Directors concluded that, given the significant progress made
towards agreeing and signing the sale agreement, that a sale was
"highly probable" and hence the Group's interests were judged to
have met the criteria outlined in IFRS 5 to be reclassified to
being "held for sale" within current assets.
On reclassification to an asset
"held for sale", in accordance with IFRS 5, the Group's interests
have been re-measured to the lower of the carrying amount and
estimated fair value less sale costs at completion, which is
expected in H2 24. The fair value was based on the contracted sale
proceeds less estimated transaction costs, including tax, of £15m,
and the remeasurement resulted in a £483.0m impairment loss being
recognised in the period. The fair value represents a Level 2
measurement basis as defined in IFRS 13 (see note 17).
In addition, the sale of Value
Retail represents a separate major line of the business and hence
has been treated as a discontinued operation and the results for
the current and prior financial periods have been separately
disclosed from the continuing segments of the business.
B. (LOSS)/PROFIT FOR THE PERIOD
|
|
|
Six months ended
30 June 2024
£m
|
Six months ended
30 June 2023
£m
|
Gross rental
income
|
|
|
80.8
|
73.8
|
Net rental
income
|
|
|
58.2
|
52.7
|
Administration expenses
|
|
|
(28.1)
|
(25.8)
|
Profit from operating
activities
|
|
|
30.1
|
26.9
|
Revaluation (losses)/gains on properties
|
|
|
(24.9)
|
26.0
|
Impairment recognised on reclassification to held for
sale
|
|
|
(483.0)
|
-
|
Operating
(loss)/profit
|
|
|
(477.8)
|
52.9
|
|
|
|
|
|
Interest
costs
|
|
|
(19.4)
|
(16.3)
|
Fair
value losses on derivatives
|
|
|
(2.4)
|
(4.9)
|
Fair
value gains on participative loans - other movement
|
|
|
2.4
|
3.4
|
Fair
value gains on participative loans - revaluation
movement
|
|
|
2.2
|
10.4
|
Net finance
costs
|
|
|
(17.2)
|
(7.4)
|
|
|
|
|
|
(Loss)/Profit before
tax
|
|
|
(495.0)
|
45.5
|
Current
tax charge
|
|
|
(1.7)
|
(0.6)
|
Deferred
tax credit/(charge)
|
|
|
4.1
|
(12.8)
|
(Loss)/Profit for the
period
|
|
|
(492.6)
|
32.1
|
Adjustments for adjusted earnings (note 10A)
|
|
|
504.3
|
(18.7)
|
Adjusted earnings for the
period
|
|
|
11.7
|
13.4
|
Figures above reflect the Group's
share of Value Retail's results, except the impairment recognised
on reclassification to held for sale which relates to the Reported
Group.
At 30 June the Group had an
interest of 40% (FY 23: 40%) calculated based on a net asset basis
(adjusted for participative loans).
C. CASH FLOWS
|
|
|
|
Six months ended
30 June 2024
£m
|
Six months ended
30 June 2023
£m
|
Distributions and capital returns received from
associates
|
12.3
|
42.7
|
Cash inflows from investing
activities
|
|
|
|
12.3
|
42.7
|
There were no cash flows from
operating or financing activities in current or prior
periods.
D. SUMMARY OF ASSETS AND LIABILITIES ASSOCIATED WITH
ASSETS HELD FOR SALE
|
|
|
30 June 2024
|
|
Reported
Group1
£m
|
Investment in
associates2
£m
|
Total
£m
|
Non-current
assets
|
|
|
|
Investment properties
|
-
|
1,753.9
|
1,753.9
|
Other
non-current assets
|
1.7
|
96.2
|
97.9
|
|
1.7
|
1,850.1
|
1,851.8
|
Current
assets
|
|
|
|
Cash and
cash equivalents
|
-
|
61.7
|
61.7
|
Other
current assets
|
-
|
33.7
|
33.7
|
|
-
|
95.4
|
95.4
|
Total
assets
|
1.7
|
1,945.5
|
1,947.2
|
Current
liabilities
|
|
|
|
Loans
|
-
|
(192.9)
|
(192.9)
|
Other
payables
|
-
|
(54.7)
|
(54.7)
|
|
-
|
(247.6)
|
(247.6)
|
Non-current
liabilities
|
|
|
|
Loans
|
-
|
(557.2)
|
(557.2)
|
Participative loan
|
-
|
(97.6)
|
(97.6)
|
Other
payables, including deferred tax
|
(22.7)
|
(166.5)
|
(189.2)
|
|
(22.7)
|
(821.3)
|
(844.0)
|
Total
liabilities
|
(22.7)
|
(1,068.9)
|
(1,091.6)
|
Net assets
|
(21.0)
|
876.6
|
855.6
|
Reverse
participative loans
|
-
|
210.4
|
210.4
|
Net asset value
pre-impairment3
|
(21.0)
|
1,087.0
|
1,066.0
|
Impairment recognised on reclassification to held for
sale
|
|
|
(483.0)
|
Net assets held for sale (as
presented on the consolidated balance sheet)
|
|
|
583.0
|
Split:
Assets
held for sale
Liabilities held for sale
|
|
|
605.7
(22.7)
|
1 Reported
Group includes a €2.0m (£1.7m) loan to an intermediate holding
company of Value Retail and £22.7m of distributions received in
advance from Value Retail, both items are included in the
sale.
2 At Group
share.
3
Includes accumulated impairment to the investment
in Value Retail of £94.3m (2022: £94.3m) which was recognised in
the year ended 31 December 2020 and is equivalent to the notional
goodwill on this investment.
The impairment loss of £483.0m was
calculated based on gross proceeds in the sale agreement, less
expected transaction costs, including tax, of £15m, compared to the
value of the net assets shown above, including the investment
properties which have been remeasured to fair value at the date of
reclassification.
In addition, the cumulative other
comprehensive income in relation to foreign exchange and hedge
reserve movements relating to the Group's investment in Value
Retail will be recycled to the income statement on completion of
the disposal.
10. PERFORMANCE MEASURES - (LOSS)/EARNINGS AND NET
ASSETS
As explained on page 9 of the
Financial Review, the Group uses a number of alternative
performance measures ('APMs'), being financial measures not
specified under IFRS, to monitor the performance of the
business. In addition to the IFRS figures, we present
EPRA, Headline and Adjusted earnings and three EPRA net asset
measures. The reconciliation of each of these measures to
IFRS is presented below:
A. Earnings measures (continuing
and discontinued operations)
|
|
|
Six months ended
30 June 2024
£m
|
Six months ended
30 June 2023
£m
|
|
|
Footnote
|
|
|
Loss for the period -
total
|
A
|
|
(516.7)
|
(1.2)
|
Adjustments:
|
|
|
|
|
Revaluation losses on managed
portfolio
|
|
|
47.8
|
43.8
|
Disposals:
|
|
|
|
|
- Loss on sale of
properties
|
|
1
|
10.8
|
17.3
|
- Recycled exchange gains on disposal of overseas property
interests
|
|
2
|
‒
|
(20.1)
|
Joint venture related:
|
|
|
|
|
- Impairment of joint venture
|
|
3
|
‒
|
22.1
|
Value Retail related (discontinued
operation):
|
|
|
|
|
- Revaluation losses/(gains)
|
|
|
24.9
|
(26.0)
|
- Deferred tax
|
|
4
|
(4.1)
|
12.8
|
- Impairment on reclassification to an asset held for
sale
|
|
5
|
483.0
|
‒
|
Sub-total: Adjustments for Headline
earnings
|
B
|
|
562.4
|
49.9
|
Value Retail related (discontinued
operation):
|
|
|
|
|
- Change
in fair value of derivatives
|
|
4,
6
|
2.4
|
4.9
|
- Change
in fair value of participative loans - revaluation
movement
|
|
4,
6
|
(2.2)
|
(10.4)
|
- Change
in fair value of financial asset
|
|
4,
6
|
0.3
|
‒
|
Included in net finance
costs:
|
|
|
|
|
- Change
in fair value of derivatives
|
|
6
|
0.6
|
10.0
|
- Change
in fair value of other investments
|
|
7
|
(0.5)
|
(0.3)
|
Sub-total: Adjustments for EPRA earnings
|
C
|
|
563.0
|
54.1
|
Included in profit from operating
activities:
|
|
|
|
|
- Costs
associated with pension scheme wind-up
|
|
8
|
0.5
|
‒
|
- Business transformation costs
|
|
9
|
2.7
|
3.2
|
- Change
in provision for amounts not yet recognised in the income
statement
|
|
10
|
‒
|
(0.2)
|
Total: Adjustments for adjusted earnings
|
D
|
|
566.2
|
57.1
|
|
|
|
|
|
Headline earnings
|
A+B
|
|
45.7
|
48.7
|
EPRA earnings
|
A+C
|
|
46.3
|
52.9
|
Adjusted earnings
|
A+D
|
|
49.5
|
55.9
|
1 As shown
in note 2, includes loss on sale of properties of £11.0m (HY 23:
£0.3m profit) and profit on sale of joint ventures and associates
of £0.2m (HY 23: £17.6m loss). Also see note 8 for further
details.
2 For HY 23
exchange gains previously recognised in equity until disposal in
relation to Italie Deux and O'Parinor
.
3 For HY 23
impairment resulting from derecognition of the O'Parinor joint
venture, see note 8 for details.
4 In accordance
with EPRA guidance, the tax effects of EPRA adjustments (including
those for disposals) is excluded .
5 Impairment
charge recognised on reclassification of Group's interests in Value
Retail at 30 June 2024, see note 9 for details.
6 Change in fair
value of derivatives and participative loans: such items are
excluded because they represent gains and losses arising
from market rather than settlement
revaluation methodologies which differ from the accruals basis upon
which all other non-investment
property related assets and liabilities are
measured. Such a treatment is a form of
revaluation gain or loss created by an assumption that the
derivatives or loans will be settled before their maturity. Such
gains and losses are excluded from
adjusted earnings as they are unrealised
and conflict with the commercial reasons for entering into such
arrangements and are expected to be held to
maturity.
7 Relates to
the fair value movement based on the fair
value of the underlying net assets of the Group's 7.3% investment
in VIA Outlets Zweibrücken B.V.
8
As explained on page 16, in the first half of
2024 the Group wound up its principal defined benefit pension
scheme and incurred fees of £0.5m on this one-off activity which
management have determined do not represent the underlying
activities of the Group.
9
Business transformation costs
comprise:
|
|
|
Six months ended
30 June 2024
£m
|
Six months ended
30 June 2023
£m
|
Employee severance
|
|
|
-
|
0.8
|
System related costs
|
|
|
2.3
|
1.5
|
Other costs (principally premises
related costs)
|
|
|
0.4
|
0.9
|
|
|
|
2.7
|
3.2
|
Such costs relate to the strategic
and operational review undertaken following the change in
management and which is an integral part of the Group's strategy
announced during 2021. The related costs are incremental and do not
form part of underlying trading. These costs have been incurred
since the announcement of the strategy and further transformation
activities will take place in 2024.
10 Reflects a charge
for expected credit losses in accordance with the technical
interpretation of IFRS 9 irrespective of whether the income to
which the provision relates has been recognised in the income
statement or is deferred on the balance sheet. Because of the
mismatch this causes between the cost of provision being recognised
in one accounting period and the related revenue being recognised
in a different accounting period, the adjustment eradicates this
distortion.
B. Net Asset measures
The Group uses the EPRA best
practice guidelines incorporating three measures of net asset
value: EPRA Net Tangible Assets (NTA), Net Reinstatement Value
(NRV) and Net Disposal Value (NDV). EPRA NTA is considered to be
the most relevant measure for the Group. A reconciliation
between IFRS net assets and the three EPRA net asset valuation
metrics is set out below.
|
|
|
|
30 June 2024
|
|
Footnote
|
Reported Group
£m
|
Share of Property
interests
£m
|
Value
Retail1
£m
|
Total
£m
|
|
Reported balance sheet net assets
(equity shareholders' funds)
|
|
1,907.7
|
-
|
-
|
1,907.7
|
|
Change in fair value of
borrowings
|
2
|
30.5
|
-
|
-
|
30.5
|
|
EPRA NDV
|
|
|
|
|
1,938.2
|
|
Deduct change in fair value of
borrowings
|
2
|
(30.5)
|
-
|
-
|
(30.5)
|
|
Deferred tax - 50%
share
|
3
|
0.2
|
-
|
-
|
0.2
|
|
Fair value of currency swaps as a
result of interest rates
|
4
|
1.3
|
-
|
-
|
1.3
|
|
Fair value of interest rate
swaps
|
|
0.3
|
(0.4)
|
-
|
(0.1)
|
|
EPRA NTA
|
|
|
|
|
1,909.1
|
|
Deferred tax - remaining 50%
share
|
3
|
0.2
|
-
|
-
|
0.2
|
|
Purchasers' costs
|
5
|
162.5
|
-
|
-
|
162.5
|
|
EPRA NRV
|
|
|
|
|
2,071.8
|
|
|
|
|
|
31 December 2023
|
|
|
Footnote
|
Reported Group
£m
|
Share of Property
interests
£m
|
Value Retail
£m
|
Total
£m
|
|
Reported balance sheet net assets
(equity shareholders' funds)
|
|
2,462.6
|
-
|
-
|
2,462.6
|
|
Change in fair value of
borrowings
|
2
|
36.7
|
(0.2)
|
-
|
36.5
|
|
EPRA NDV
|
|
|
|
|
2,499.1
|
|
Deduct change in fair value of
borrowings
|
2
|
(36.7)
|
0.2
|
-
|
(36.5)
|
|
Deferred tax - 50%
share
|
3
|
0.2
|
0.1
|
100.7
|
101.0
|
|
Fair value of currency swaps as a
result of interest rates
|
4
|
1.0
|
-
|
-
|
1.0
|
|
Fair value of interest rate
swaps
|
|
0.7
|
(1.3)
|
(22.0)
|
(22.6)
|
|
EPRA NTA
|
|
|
|
|
2,542.0
|
|
Deferred tax - remaining 50%
share
|
3
|
0.2
|
-
|
100.7
|
100.9
|
|
Purchasers' costs
|
5
|
302.9
|
-
|
-
|
302.9
|
|
EPRA NRV
|
|
|
|
|
2,945.8
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Following the reclassification of the Group's investment in Value
Retail as an asset held for sale the EPRA net asset adjustments
have been excluded in the calculations as at 30 June
2024.
2 Applicable for
EPRA NDV calculation only and hence the adjustment is reversed for
EPRA NTA and EPRA NRV.
3 As per the
EPRA guidance we have chosen to exclude of 50% of deferred tax for
EPRA NTA purposes .
4 Excludes
impact of foreign exchange .
5 Represents
property transfer taxes and fees payable should the Group's entire
property portfolio be acquired at period end market rates. (June
2024 excludes Value Retail, per footnote 1 above, and December 2023
includes Value Retail).
11. (LOSS)/EARNINGS PER SHARE AND NET ASSET VALUE PER
SHARE
The calculations of the
(loss)/earnings per share (EPS) measures set out below are based on
the (loss)/profit for the period calculation on an IFRS, Headline,
EPRA and Adjusted basis as shown in note 10A and the weighted
average number of shares in issue during
the period.
Headline earnings per share has
been calculated in accordance with the requirements of the
Johannesburg Stock Exchange listing requirements. EPRA has issued
recommended bases for the calculation of certain per share
information which includes net asset value per share as well as
earnings per share.
Basic EPS measures are calculated
by dividing the earnings attributable to the equity shareholders of
the Company by the weighted average number of shares outstanding
during the period. Diluted EPS measures are calculated on the same
basis as Basic EPS but with a further adjustment to the weighted
average number of shares outstanding to assume conversion of all
potentially dilutive ordinary shares. Such potentially dilutive
ordinary shares comprise share options and awards granted to
colleagues where the exercise price is less than the average market
price of the Company's ordinary shares during the period and any
unvested shares which have met, or are expected to meet, the
performance conditions at the end of the period. To the extent that
there is no dilution, this arises due to the anti-dilutive effect
of all such shares.
Net assets per share metrics
comprise net assets calculated in accordance with EPRA guidelines,
as set out in note 10B, divided by the number of shares in issue at
the period end.
A. Number
of ordinary shares for per share calculations
|
|
|
|
|
|
Six months ended
30 June 2024
|
Six months ended
30 June 2023
|
Weighted average number of
shares
|
|
million
|
million
|
For purposes of basic EPS
|
|
4,975.7
|
4,969.5
|
Effect of potentially dilutive
shares (share options)
|
|
11.5
|
13.4
|
For purposes of diluted EPS (excluding Reported
Group)
|
|
4,987.2
|
4,982.9
|
|
|
30 June 2024
|
31 December 2023
|
|
|
million
|
million
|
Shares in issue (for purposes of net asset
per share calculations)
|
|
5,002.3
|
5,002.3
|
|
|
|
|
B.
(Loss)/Earnings per share
|
|
|
(Loss)/earnings
|
|
(Loss)/earnings per
share
|
|
|
|
|
|
|
|
Basic
|
|
Diluted
|
|
|
|
Six months ended
30 June 2024
£m
|
Six months ended
30 June 2023
£m
|
|
Six months ended
30 June 2024
pence
|
Six months ended
30 June 2023
pence
|
Six months ended
30 June 2024
pence
|
Six months ended
30 June 2023
pence
|
Continuing operations
|
|
|
(24.1)
|
(33.3)
|
|
(0.5)p
|
(0.7)p
|
(0.5)p
|
(0.7)p
|
Discontinued operations
|
|
(492.6)
|
32.1
|
|
(9.9)p
|
0.7p
|
(9.9)p
|
0.7p
|
IFRS
|
|
|
(516.7)
|
(1.2)
|
|
(10.4)p
|
(0.0)p
|
(10.4)p
|
(0.0)p
|
Headline
|
|
|
45.7
|
48.7
|
|
0.9p
|
1.0p
|
0.9p
|
1.0p
|
EPRA
|
|
|
46.3
|
52.9
|
|
0.9p
|
1.1p
|
0.9p
|
1.1p
|
Adjusted
|
|
|
49.5
|
55.9
|
|
1.0p
|
1.1p
|
1.0p
|
1.1p
|
C. Net
Asset Value per share
|
|
Net asset value
|
|
Net asset value per
share
|
|
|
|
30 June 2024
|
31 December 2023
|
|
30
June 2024
|
31 December 2023
|
|
|
£m
|
£m
|
|
pence
|
pence
|
EPRA NDV
|
|
1,938.2
|
2,499.1
|
|
39p
|
50p
|
EPRA NTA
|
|
1,909.1
|
2,542.0
|
|
38p
|
51p
|
EPRA NRV
|
|
2,071.8
|
2,945.8
|
|
41p
|
59p
|
|
|
|
|
|
|
|
|
|
12. PROPERTIES
|
|
30 June 2024
|
31 December 2023
|
|
|
|
|
Investment properties
|
Investment properties
|
Trading
properties
|
Total
|
|
|
|
|
£m
|
£m
|
£m
|
£m
|
At beginning of period
|
|
|
|
1,396.2
|
1,461.0
|
36.2
|
1,497.2
|
Revaluation losses
|
|
|
|
(16.8)
|
(45.2)
|
-
|
(45.2)
|
Capital expenditure
|
|
|
|
8.0
|
19.6
|
-
|
19.6
|
Disposals (see note 8)
|
|
|
|
(127.7)
|
(11.9)
|
(36.2)
|
(48.1)
|
Exchange adjustment
|
|
|
|
(26.8)
|
(27.3)
|
-
|
(27.3)
|
At end of period
|
|
|
|
1,232.9
|
1,396.2
|
-
|
1,396.2
|
Properties are stated at fair
value, valued by professionally qualified external valuers in
accordance with RICS Valuation - Global Standards as
follows:
CBRE
|
UK flagships, Developments and
other properties
|
Jones Lang LaSalle
|
UK flagships, French flagships,
Developments and other properties,
|
Cushman and Wakefield
|
Brent Cross, Irish flagships,
Development and other
|
Due to the estimation and judgement
required in the valuations which are derived from data that is not
publicly available, consistent with EPRA's guidance, these
valuations are classified as Level 3 in the IFRS 13 fair value
hierarchy. A reconciliation of the Group portfolio valuation to
Reported Group is shown in note 3B.
A.
Investment properties - sensitivity analysis on valuations
(including Group's share of Value Retail)
|
|
Valuation
|
Nominal equivalent
yield
|
Estimated rental value
(ERV)
|
Proportionally consolidated
|
|
£m
|
-100bp
£m
|
+100bp
£m
|
+10%
£m
|
-10%
£m
|
Flagship destinations
|
|
|
|
|
|
|
- UK
|
|
759
|
110
|
(85)
|
76
|
(76)
|
- France
|
|
982
|
241
|
(162)
|
98
|
(98)
|
- Ireland
|
|
568
|
108
|
(78)
|
57
|
(57)
|
|
|
2,309
|
459
|
(325)
|
231
|
(231)
|
Developments and other
|
|
270
|
n/a
|
n/a
|
n/a
|
n/a
|
Managed portfolio
|
|
2,579
|
n/a
|
n/a
|
n/a
|
n/a
|
B. Joint operations
Investment properties included a
50% interest in the Ilac Centre and a 50% interest in Pavilions,
totalling £132.2m (31 December 2023: £144.5m). These properties are
jointly controlled in co-ownership with Irish Life Assurance
plc.
13. INVESTMENT IN JOINT VENTURES
The Group's investments in joint
ventures form part of the Share of Property interests to arrive at
management's analysis of the Group on a proportionally consolidated
basis as explained in note 3 and set out in note 2.
The Group and its partners invest
principally by way of equity investment. However, where applicable,
non-equity (loan) balances have been included within non-current
other payables as a liability of the joint venture. Joint ventures
comprise prime urban real estate consisting of Flagship
destinations and Developments and other properties.
A. Investments at 30 June
2024
|
|
|
|
Joint
venture
|
Partner
|
Principal
property
|
Share
|
United
Kingdom
|
|
|
|
Bishopsgate Goodsyard Regeneration Limited
|
Ballymore
Properties
|
The
Goodsyard
|
50%
|
Brent
Cross Partnership
|
Aberdeen
Standard Investments
|
Brent
Cross
|
41%
|
Bristol
Alliance Limited Partnership
|
AXA Real
Estate
|
Cabot
Circus
|
50%
|
Grand
Central Limited Partnership
|
CPP
Investments
|
Grand
Central
|
50%
|
The Bull
Ring Limited Partnership
|
CPP
Investments
|
Bullring
|
50%
|
The
Oracle Limited Partnership
|
ADIA
|
The
Oracle
|
50%
|
The West
Quay Limited Partnership
|
GIC
|
Westquay
|
50%
|
Ireland
|
|
|
|
Dundrum
Retail Limited Partnership/Dundrum Car Park Limited
Partnership
|
PIMCO
|
Dundrum
|
50%
|
In the first half of 2023, and as
explained in note 8, the Group disposed of its 50% interest in
Croydon and also derecognised its 50% investment in Highcross and
25% investment in O'Parinor. The results
of disposals of interests in joint ventures are included up to the
point of disposal.
B. Results
Group
share
|
|
|
|
|
Six months ended
30 June 2024
£m
|
Six months ended
30 June 2023
£m
|
Gross rental
income
|
|
|
|
|
54.3
|
57.2
|
Net rental
income
|
|
|
|
|
42.6
|
44.8
|
Administration income/(expenses)
|
|
|
|
|
0.1
|
(0.1)
|
Profit from operating
activities
|
|
|
|
|
42.7
|
44.7
|
Revaluation losses on properties
|
|
|
|
|
(31.0)
|
(33.5)
|
Operating
profit
|
|
|
|
|
11.7
|
11.2
|
Finance
income
|
|
|
|
|
2.8
|
1.2
|
Finance
costs
|
|
|
|
|
(4.9)
|
(4.8)
|
Profit for the period -
continuing operations
|
|
|
|
|
9.6
|
7.6
|
C. Assets and
liabilities
Group
share
|
|
|
|
|
30 June 2024
£m
|
31 December 2023
£m
|
Non-current
assets
|
|
|
|
|
|
|
Investment properties
|
|
|
|
|
1,346.3
|
1,379.9
|
Other
non-current assets
|
|
|
|
|
16.5
|
16.7
|
|
|
|
|
|
1,362.8
|
1,396.6
|
Current
assets
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
|
|
|
103.5
|
97.3
|
Other
current assets
|
|
|
|
|
27.4
|
23.6
|
|
|
|
|
|
130.9
|
120.9
|
Current
liabilities
|
|
|
|
|
|
|
Loans -
secured
|
|
|
|
|
(254.5)
|
(260.0)
|
Other
payables
|
|
|
|
|
(44.9)
|
(46.0)
|
|
|
|
|
|
(299.4)
|
(306.0)
|
Non-current
liabilities
|
|
|
|
|
|
|
Obligations under head leases
|
|
|
|
|
(15.8)
|
(15.8)
|
Other
payables
|
|
|
|
|
(1.2)
|
(2.5)
|
|
|
|
|
|
(17.0)
|
(18.3)
|
Net assets
|
|
|
|
|
1,177.3
|
1,193.2
|
D. Reconciliation of movements in
investment in joint ventures
|
|
|
30 June 2024
|
31 December 2023
|
|
|
Note
|
£m
|
£m
|
At beginning of period
|
|
|
1,193.2
|
1,342.4
|
Share of results of joint
ventures
|
|
|
9.6
|
9.4
|
Advances
|
|
|
4.4
|
8.3
|
Cash distributions (including
interest)1
|
|
|
(19.6)
|
(55.0)
|
Other receivables
|
|
|
(1.9)
|
(6.8)
|
Disposals
|
|
8
|
‒
|
(98.9)
|
Exchange and other
movements
|
|
|
(8.4)
|
(6.2)
|
At end of period
|
|
|
1,177.3
|
1,193.2
|
1 Comprises distributions of
£13.7m (2023: £47.7m) and interest of £5.9m (2023:
£7.3m).
14. INVESTMENT IN ASSOCIATES
As explained in note 9 the Group's
investment in Value Retail was reclassified as an "asset held for sale" with effect from 30
June 2024 and the Group's share of results from Value Retail have
been reclassified to discontinued operations. Subsequently,
on 22 July 2024 the Group announced that it had entered into a
binding agreement for the disposal of its entire interests in Value
Retail.
The Group's other associate, a 25%
stake in Italie Deux, Paris was sold in March 2023. The results of
this investment, up until its disposal, formed part of the Share of
Property interests to arrive at management's analysis of the Group
on a proportionally consolidated basis as explained in note 3 and
set out in note 2.
A. Results
|
|
|
Six months ended 30 June
2024
|
Six months ended 30 June
2023
|
Group
share
|
|
|
Total
£m
|
Italie Deux
£m
|
Gross and net rental
income
|
|
|
‒
|
1.2
|
Profit for the
period
|
|
|
‒
|
1.2
|
B. Assets and
liabilities
|
|
|
30 June 2024
|
31 December 2023
|
Group
share
|
|
|
Value Retail
£m
|
Value Retail
£m
|
Non-current
assets
|
|
|
|
|
Investment properties
|
|
|
‒
|
1,885.7
|
Other
non-current assets
|
|
|
‒
|
93.0
|
|
|
|
‒
|
1,978.7
|
Current
assets
|
|
|
|
|
Cash and
cash equivalents
|
|
|
‒
|
64.4
|
Other
current assets
|
|
|
‒
|
43.2
|
|
|
|
‒
|
107.6
|
Total
assets
|
|
|
‒
|
2,086.3
|
Current
liabilities
|
|
|
|
|
Loans
|
|
|
‒
|
(87.8)
|
Other
payables
|
|
|
‒
|
(103.2)
|
|
|
|
‒
|
(191.0)
|
Non-current
liabilities
|
|
|
|
|
Loans
|
|
|
‒
|
(706.1)
|
Participative loan
|
|
|
‒
|
(98.5)
|
Other
payables, including deferred tax
|
|
|
‒
|
(188.1)
|
|
|
|
‒
|
(992.7)
|
Total
liabilities
|
|
|
‒
|
(1,183.7)
|
Net assets
|
|
|
‒
|
902.6
|
Reverse
participative loans
|
|
|
‒
|
212.4
|
|
|
|
‒
|
1,115.0
|
C. Reconciliation of
movements in investment in associates
|
|
|
30 June 2024
|
31 December 2023
|
|
|
|
|
Value Retail
£m
|
Value Retail
£m
|
Italie Deux
£m
|
Total
£m
|
|
At
beginning of period
|
|
|
|
1,115.0
|
1,189.4
|
107.7
|
1,297.1
|
|
Share of
results1
|
|
|
|
(9.6)
|
14.8
|
1.2
|
16.0
|
|
Distributions
|
|
|
|
(14.2)
|
(66.3)
|
-
|
(66.3)
|
|
Share of
other comprehensive gain of associate2
|
|
|
|
(4.4)
|
(8.8)
|
-
|
(8.8)
|
|
Disposals
|
|
|
|
‒
|
-
|
(108.6)
|
(108.6)
|
|
Exchange
and other movements
|
|
|
|
0.2
|
(14.1)
|
(0.3)
|
(14.4)
|
|
Transfer
to assets held for sale
|
|
|
|
(1,087.0)
|
‒
|
-
|
-
|
|
At end of
period
|
|
|
|
‒
|
1,115.0
|
-
|
1,115.0
|
|
|
|
|
|
|
|
|
|
|
|
1 Share of
results classified as discontinued operations, see note 9 for
details.
2 Relates to the
change in fair value of derivative financial instruments in an
effective hedge relationship within Value Retail.
15. TRADE AND OTHER RECEIVABLES
Included in the current trade and
other receivables balance of £62.9m (31 December 2023: £74.1m) are
the following amounts in respect of trade (tenant) receivables,
together with the respective provisions calculated in accordance
with the expected credit loss methodology set out in IFRS
9:
Trade (tenant) receivables -
provisioning
|
|
|
30 June 2024
|
31 December 2023
|
|
|
|
Gross trade receivables
|
Provision
|
Net trade receivables
|
Gross receivables
|
Provision
|
Net trade receivables
|
Proportionally
consolidated
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
UK
|
|
|
26.6
|
(6.5)
|
20.1
|
25.7
|
(6.1)
|
19.6
|
France
|
|
|
31.9
|
(10.2)
|
21.7
|
29.5
|
(10.7)
|
18.8
|
Ireland
|
|
|
3.8
|
(1.8)
|
2.0
|
4.6
|
(1.8)
|
2.8
|
Managed
portfolio
|
|
|
62.3
|
(18.5)
|
43.8
|
59.8
|
(18.6)
|
41.2
|
Less:
Share of Property interests
|
|
|
(24.6)
|
5.2
|
(19.4)
|
(18.2)
|
4.6
|
(13.6)
|
Reported
Group
|
|
|
37.7
|
(13.3)
|
24.4
|
41.6
|
(14.0)
|
27.6
|
Net trade receivables as presented
do not include deposits, which are included in trade and other
payables, but taken together with VAT, do form part of the
assessment of the required provision.
16. LOANS
A. Loan profile
Unsecured
debt
|
Maturity
|
|
|
30 June
2024 £m
|
31 December 2023 £m
|
Senior notes - shown in current
liabilities
|
2024
|
|
|
-
|
108.6
|
|
|
|
|
|
|
£338.3m 3.5% sterling
bonds
|
2025
|
|
|
337.5
|
337.3
|
Senior notes
|
2026
|
|
|
59.4
|
60.7
|
£211.6m 6% sterling
bonds
|
2026
|
|
|
211.2
|
211.1
|
€700.0m 1.75% euro
bonds1
|
2027
|
|
|
588.4
|
600.8
|
£300.0m 7.25% sterling
bonds
|
2028
|
|
|
293.0
|
292.2
|
Senior notes
|
2028
|
|
|
10.8
|
11.0
|
Senior notes
|
2031
|
|
|
4.9
|
5.0
|
Unamortised facility
fees
|
|
|
|
(2.3)
|
(2.2)
|
Total - shown in non-current
liabilities
|
|
|
|
1,502.9
|
1,515.9
|
|
|
|
|
|
|
|
|
|
|
1,502.9
|
1,624.5
|
1 The
coupon is linked to two sustainability performance targets, both of
which will be tested in December 2025 against a 2019 benchmark. If
the targets are not met, a total of 37.5 basis points per annum, or
€2.625m (£2.3m) per target, will be payable in addition to the
final year's coupon. The Group has made certain assumptions which
support not increasing the effective interest rate, as a result of
the possibility of failing to meet the targets. Planned future
initiatives which will assist the Group in achieving the targets
include the introduction of energy efficient projects, the
generation of additional on or off-site energy and driving
compliance with relevant energy performance legislation. The Group
continues to make steady progress against both targets.
B. Undrawn committed facilities
The Group has the following
revolving credit facilities (RCF), which are in sterling unless
otherwise indicated, expiring as follows:
|
Expiry
|
|
|
30 June 2024
£m
|
31 December 2023
£m
|
£150m RCF signed June
2021
|
2024
|
|
|
-
|
50.0
|
JPY7.8bn RCF signed June
2021
|
2026
|
|
|
38.2
|
43.2
|
£150m RCF signed June
20211
|
2026
|
|
|
100.0
|
100.0
|
£463m RCF signed April
20221
|
2026
|
|
|
-
|
463.0
|
£463m RCF signed April
20222
|
2027
|
|
|
463.0
|
‒
|
Total2
|
|
|
|
601.2
|
656.2
|
1 In the
2023 interim financial statements the £150m RCF signed June 2021
and the £463m RCF signed April 2022 were amalgamated. These
separate RCFs have been split out in the current period to provide
additional disclosure.
2 In April 2024,
the Group exercised its option to extend the maturity of the £463m
2022 RCFs by one year from 2026 to 2027.
3 £0.8m (2023:
£0.8m) of RCFs have been utilised (although not drawn) to support
ancillary facilities leaving £600.4m (2023: £655.4m) available to
the Group.
17. FINANCIAL INSTRUMENTS AND RISK
MANAGEMENT
A. Financial risk management
and strategy
The Group's financial risk
management strategy seeks to set financial limits for treasury
activity to ensure they are in line with the Group's risk appetite.
The Group's activities expose it to certain financial risks
comprising liquidity risk, market risk (comprising interest rate
and foreign currency risk), credit risk and capital
risk.
The Group's treasury function,
which operates under treasury policies approved by the Board,
maintains internal guidelines for interest cover, gearing,
unencumbered assets and other credit ratios and both the current
and projected financial position against these guidelines is
monitored regularly.
To manage the risks set out above,
the Group uses certain derivative financial instruments to mitigate
potentially adverse effects on the Group's financial performance.
Derivative financial instruments are used to manage exposure to
fluctuations in foreign currency exchange rates and interest rates
but are not employed for speculative purposes.
B. Financial instruments held at
fair value
Definitions
The Group's financial instruments
are categorised by level of fair value hierarchy prescribed by
accounting standards. The different levels are defined as
follows:
· Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities.
· Level 2: inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either
directly (actual prices) or indirectly (derived from actual
prices).
· Level 3: inputs for the asset or liability that are not based
on observable market data (from unobservable inputs).
Fair value valuation technique
Financial
instrument
|
Valuation
technique for determining fair value
|
Unsecured bonds
|
Quoted market prices
|
Senior notes
|
Present value of cash flows
discounted using prevailing market interest rates
|
Unsecured bank loans and
overdrafts
|
Present value of cash flows
discounted using prevailing market interest rates
|
Fair value of currency swaps and
interest rate swaps
|
Present value of cash flows
discounted using prevailing market interest rates
|
Other investments including
participative loans to Value Retail
|
Underlying net asset values of the
interests in Villages1
|
1 The
assets of the Villages comprise mainly investment properties held
at fair value as determined by professional valuers. At 30
June 2024, the Group's investment in Value Retail was reclassified
to an asset held for sale, see note 9 for details.
Fair value hierarchy analysis
|
|
|
|
|
30 June 2024
|
31 December 2023
|
|
|
Hierarchy
|
|
|
Carrying amount
£m
|
Fair value £m
|
Carrying amount
£m
|
Fair value £m
|
Unsecured bonds
|
|
Level
1
|
|
|
1,430.1
|
1,401.4
|
1,441.4
|
1,407.4
|
Senior notes
|
|
Level
2
|
|
|
75.1
|
71.0
|
185.3
|
180.4
|
Unamortised facility
fees
|
|
Level
2
|
|
|
(2.3)
|
-
|
(2.2)
|
-
|
Fair value of currency
swaps
|
|
Level
2
|
|
|
-
|
-
|
11.4
|
11.4
|
Borrowings
|
|
|
|
|
1,502.9
|
1,472.4
|
1,635.9
|
1,599.2
|
Fair value of interest rate
swaps
|
|
Level
2
|
|
|
(0.3)
|
(0.3)
|
0.7
|
0.7
|
Participative loans to
associates1
|
|
Level
3
|
|
|
210.4
|
210.4
|
212.4
|
212.4
|
Fair value of other
investments
|
|
Level
3
|
|
|
9.2
|
9.2
|
8.8
|
8.8
|
1 At 30 June 2024, the
Group's investment in Value Retail was reclassified to an asset
held for sale, see note 9 for details.
C: Analysis of movements in
Level 3 financial instruments
|
|
30 June 2024
|
31 December 2023
|
Level 3
financial instruments
|
|
Participative
loans1
£m
|
Other investments £m
|
Total
£m
|
Participative loans
£m
|
Other investments £m
|
Total
£m
|
Balance at beginning of
period
|
|
212.4
|
8.8
|
221.2
|
205.9
|
9.8
|
215.7
|
Total gains/(losses)
|
|
|
|
|
|
|
|
- in share of results of associates
|
|
4.6
|
-
|
4.6
|
15.6
|
-
|
15.6
|
- in the consolidated income statement
|
|
-
|
0.5
|
0.5
|
-
|
(1.1)
|
(1.1)
|
- in other comprehensive income
|
|
(4.7)
|
(0.1)
|
(4.8)
|
(4.4)
|
0.1
|
(4.3)
|
Other movements -
advances
|
|
(1.9)
|
-
|
(1.9)
|
(4.7)
|
-
|
(4.7)
|
Balance at end of
period
|
|
210.4
|
9.2
|
219.6
|
212.4
|
8.8
|
221.2
|
1 At 30 June 2024, the
Group's investment in Value Retail was reclassified to an asset
held for sale, see note 9 for details.
18. DIVIDENDS
The Directors have declared an
interim dividend of 0.756 pence per share, payable on 30 September
2024 to shareholders on the register at the close of business on 23
August 2024 and represents a 5% increase to the 2023 interim
dividend of 0.72 pence per share. The dividend will be paid
entirely as a cash PID, net of withholding tax where appropriate.
There will be no scrip alternative although the dividend
reinvestment plan (DRIP) remains available to
shareholders.
|
|
|
Cash dividend per share
|
Six months ended 30 June 2024
£m
|
Six months ended 30 June
2023
£m
|
Prior period dividends
|
|
|
|
|
|
2023 final dividend
|
|
|
0.78p
|
39.0
|
-
|
|
|
|
|
|
|
Cash flow analysis:
|
|
|
|
|
|
Dividends
paid1
|
|
|
|
39.0
|
-
|
Withholding tax - 2023 interim
dividend
|
|
|
6.0
|
-
|
|
|
|
|
45.0
|
-
|
|
|
|
|
|
|
2024 interim dividend2
|
|
|
0.756p
|
37.6
|
-
|
1
Comprises cash payments after deduction of withholding tax, where
applicable.
2
The 2024 interim dividend was declared on 24 July
2024 and has therefore not been included as a liability as at 30
June 2024.
19. OTHER RESERVES
|
|
30 June 2024
£m
|
31 December 2023 £m
|
Translation reserve
|
|
421.8
|
452.2
|
Net investment hedge
reserve
|
|
(309.7)
|
(346.7)
|
|
|
112.1
|
105.5
|
20. NOTES TO THE CASH FLOW STATEMENT
A. Analysis of items included in
operating cash flows
|
|
|
Six months ended 30 June 2024
£m
|
Six months ended 30 June
2023
£m
|
Movements in working
capital:
|
|
|
|
|
- Decrease in
receivables
|
|
|
1.4
|
12.3
|
- Decrease in
payables
|
|
|
(20.9)
|
(10.0)
|
|
|
|
(19.5)
|
2.3
|
Decrease/(Increase) in restricted
monetary assets
|
|
|
2.2
|
(4.4)
|
Total - continuing operations
|
|
|
(17.3)
|
(2.1)
|
|
|
|
Six months ended 30 June 2024
£m
|
Six months ended 30 June
2023
£m
|
Non-cash items - continuing operations
|
|
|
|
|
Increase in accrued rents
receivable
|
|
|
(1.4)
|
(1.3)
|
Decrease in loss allowance
provisions1
|
|
|
1.6
|
1.8
|
Amortisation of lease incentives
and other costs
|
|
|
0.3
|
0.5
|
Depreciation
|
|
|
0.8
|
2.3
|
Other non-cash items including
share-based payment charge
|
|
|
1.7
|
1.8
|
|
|
|
3.0
|
5.1
|
1
Comprises movement in provisions against trade
(tenant) receivables and unamortised tenant incentives.
B. Analysis of movements in net
debt
|
|
30 June 2024
|
31 December 2023
|
|
|
Cash and cash equivalents
£m
|
Borrowings £m
|
Net debt
£m
|
Cash and cash equivalents
£m
|
Borrowings £m
|
Net debt
£m
|
At 1 January
|
|
472.3
|
(1,635.9)
|
(1,163.6)
|
218.8
|
(1,677.0)
|
(1,458.2)
|
Cash flow
|
|
(37.4)
|
(91.9)
|
(129.3)
|
254.6
|
(15.1)
|
239.5
|
Change in fair value of currency
swaps
|
|
-
|
(0.4)
|
(0.4)
|
-
|
(1.9)
|
(1.9)
|
Exchange and other non-cash
movements
|
|
(1.0)
|
225.3
|
224.3
|
(1.1)
|
58.1
|
57.0
|
At end of period
|
|
433.9
|
(1,502.9)
|
(1,069.0)
|
472.3
|
(1,635.9)
|
(1,163.6)
|
21. CONTINGENT LIABILITIES AND COMMITMENTS
A. Contingent
liabilities
|
|
30 June 2024
£m
|
31 December 2023
£m
|
Reported Group:
|
|
|
|
- guarantees given
|
|
5.8
|
23.1
|
- claims arising in the normal
course of business
|
|
18.8
|
15.6
|
Share of Property Interests -
claims arising in the normal course of business
|
|
12.4
|
12.4
|
|
|
37.0
|
51.1
|
In addition, the Group operates in
a number of jurisdictions and is subject to periodic challenges by
local tax authorities on a range of tax matters during the normal
course of business. The tax impact can be uncertain until a
conclusion is reached with the relevant tax authority or through a
legal process. The Group addresses this by closely monitoring these
potential instances, seeking independent advice and maintaining
transparency with the authorities it deals with as and when any
enquiries are made. As a result, the Group has identified a
potential tax exposure attributable to the ongoing applicability of
tax treatments adopted in respect of certain tax structures within
the Group. The range of potential outcomes is a possible outflow of
minimum £nil and maximum £117m
(31 December 2023: minimum £nil and maximum £122m). The Directors
have not provided for this amount because they do not believe an
outflow is probable.
B. Capital commitments on
investment properties
|
|
30 June 2024
£m
|
31 December 2023
£m
|
Reported Group
|
|
2.6
|
0.4
|
Share of Property
interests
|
|
43.9
|
45.5
|
|
|
46.5
|
45.9
|
22. POST BALANCE SHEET EVENTS
On 22 July 2024, the Group
announced it had entered into a binding sale agreement for the
disposal of its entire interests in Value Retail to L Catterton for gross proceeds of c.
£600m (€705m). The disposal is subject to customary antitrust
approvals and completion of the sale is expected in H2
24.
In addition to the disposal, the
Company is proposing to simplify its share capital through a 1 for
10 share consolidation, and to increase distributable reserves by
reducing the Company's share premium account. A circular with more
detail and a notice convening a general meeting, at which the
necessary approvals will be sought, will be sent to shareholders in
due course.
ADDITIONAL INFORMATION
|
Table
|
|
|
Table
|
Summary EPRA performance measures
|
1
|
|
Balance sheet information
|
|
|
|
|
Balance
sheet
|
12
|
Managed portfolio analysis
|
|
|
Net
debt
|
13
|
Adjusted net rental
income
|
2
|
|
Movement in net debt
|
14
|
Rental income (GRI and
NRI)
|
3
|
|
Total
accounting return ('TAR')
|
15
|
Rental data
|
4
|
|
|
|
Vacancy
|
5
|
|
Financing metrics
|
|
Lease expires and breaks
|
6
|
|
Net debt:EBITDA
|
16
|
Top ten tenants
|
7
|
|
Interest
cover
|
17
|
Cost ratio
|
8
|
|
Gearing
|
18
|
Valuation analysis
|
9
|
|
Unencumbered asset ratio
|
19
|
Net initial yield
|
10
|
|
Loan to
value
|
20
|
Capital expenditure
|
11
|
|
EPRA loan
to value
|
21
|
Hammerson is a member of the
European Public Real Estate Association (EPRA) and has
representatives who actively participate in a number of EPRA
committees and initiatives. This includes working with peer group
companies, real estate investors and analysts and the large audit
firms, to improve the transparency, comparability and relevance of
the published results of listed real estate companies in
Europe.
As with other real estate companies,
we have adopted the EPRA Best Practice Recommendations (BPR) and
were awarded a Gold Award for compliance with the EPRA BPR in the
EPRA Annual Report Survey 2023. Further information on EPRA and the
EPRA BPR can be found on their website www.epra.com. A summary of
our EPRA metrics are shown in Table 1.
SUMMARY EPRA PERFORMANCE MEASURES
|
|
|
|
|
|
|
Table 1
|
|
|
|
|
|
|
Performance measure
|
|
|
Note
/Table1
|
Six months ended
30 June 2024
|
Six months ended
30 June 2023
|
|
|
|
|
|
|
|
|
Earnings
|
|
|
10A
|
£46.3m
|
£52.9m
|
|
Earnings per share (EPS)
|
|
|
11B
|
0.9p
|
1.1p
|
|
Cost ratio (including vacancy
costs)
|
|
|
Table
8
|
41.1%
|
36.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
30 June 2024
|
31 December 2023
|
|
Net Disposal Value (NDV) per
share
|
|
|
11C
|
39p
|
50p
|
|
Net Tangible Assets value (NTA) per
share
|
|
|
11C
|
38p
|
51p
|
|
Net Reinstatement Value (NRV) per
share
|
|
|
11C
|
41p
|
59p
|
|
Net Initial Yield (NIY)
|
|
|
Table
10
|
5.9%
|
5.9%
|
|
Topped-up Net Initial
Yield
|
|
|
Table
10
|
6.1%
|
6.3%
|
|
Vacancy rate
|
|
|
Table
5
|
6.3%
|
5.8%
|
|
Loan to value
|
|
|
Table
20
|
49.8%
|
48.1%
|
|
1 Note
reference is to notes in the interim financial statements and Table
reference is to tables in the Additional Information
section.
MANAGED PORTFOLIO ANALYSIS
The information presented in this section is on a management reporting basis (i.e.
proportionally consolidated) for
the Group's Managed portfolio.
Where applicable, the information
presented within the 'Development and other' segment only reflects
available data in relation to the investment properties within this
segment. See page 63 for the key properties in this
segment.
Adjusted net rental income
|
|
|
|
Table 2
|
|
|
|
Proportionally consolidated
|
|
Six months ended
30 June 2024
£m
|
Six months ended
30 June 2023
£m
|
Base rent
|
|
70.1
|
78.8
|
Turnover rent
|
|
5.5
|
6.2
|
Car park income
|
|
12.2
|
12.9
|
Commercialisation
income
|
|
3.1
|
4.8
|
Surrender premiums
|
|
1.7
|
0.1
|
Lease incentive
recognition
|
|
1.2
|
1.5
|
Other rental income
|
|
0.6
|
2.0
|
Gross rental income
|
|
94.4
|
106.3
|
Ground rents payable
|
|
(0.8)
|
(0.8)
|
Inclusive lease costs recovered
through rent
|
|
(2.1)
|
(3.9)
|
Other property
outgoings
|
|
(18.8)
|
(16.5)
|
Cost of sales
|
|
(21.7)
|
(21.2)
|
|
|
|
|
Adjusted net rental income
|
|
72.7
|
85.1
|
Rental income (GRI and NRI)
Table 3
Like-for-like rental income is
calculated as the percentage change in GRI/NRI for investment
properties owned throughout both the current and prior periods,
after taking account of exchange translation movements.
A. Gross Rental Income
|
|
|
|
|
|
Six months ended 30 June 2024
|
Proportionally consolidated
|
|
Properties
owned throughout 2023/24
£m
|
Change in
like-for-like GRI
%
|
Disposals
£m
|
Developments
and other
£m
|
Total
GRI
£m
|
UK
|
|
36.3
|
3.1
|
3.1
|
-
|
39.4
|
France
|
|
28.0
|
2.4
|
0.1
|
(1.1)
|
27.0
|
Ireland
|
|
19.5
|
0.1
|
-
|
-
|
19.5
|
Flagship destinations
|
|
83.8
|
2.1
|
3.2
|
(1.1)
|
85.9
|
Developments and other
|
|
-
|
n/a
|
-
|
8.5
|
8.5
|
Managed portfolio1
|
|
83.8
|
2.1
|
3.2
|
7.4
|
94.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended 30 June
2023
|
|
|
|
Properties
owned throughout 2023/24
£m
|
Exchange
£m
|
Disposals
£m
|
Developments
and other
£m
|
Total
GRI
£m
|
UK
|
|
|
35.2
|
-
|
8.2
|
-
|
43.5
|
France
|
|
|
27.3
|
0.9
|
4.3
|
-
|
32.4
|
Ireland
|
|
|
19.5
|
0.5
|
-
|
-
|
20.0
|
Flagship destinations
|
|
|
82.1
|
1.4
|
12.5
|
-
|
95.9
|
Developments and other
|
|
|
-
|
-
|
1.6
|
8.8
|
10.4
|
Managed portfolio
|
|
|
82.1
|
1.4
|
14.1
|
8.8
|
106.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Managed portfolio value on which like-for-like growth is based was
£2,309m at 30 June 2024.
B. Net Rental Income
|
|
|
|
|
|
Six months ended 30 June 2024
|
Proportionally consolidated
|
|
Properties
owned throughout 2023/24
£m
|
Change in
like-for-like NRI
%
|
Disposals
£m
|
Developments
and other
£m
|
Total
adjusted
NRI
£m
|
Change in provision
£m
|
Total
NRI
£m
|
UK
|
|
28.4
|
3.5
|
2.7
|
(0.7)
|
30.4
|
-
|
30.4
|
France
|
|
22.4
|
4.0
|
0.1
|
(0.9)
|
21.6
|
-
|
21.6
|
Ireland
|
|
17.1
|
(4.0)
|
-
|
-
|
17.1
|
-
|
17.1
|
Flagship destinations
|
|
67.9
|
1.7
|
2.8
|
(1.6)
|
69.1
|
-
|
69.1
|
Developments and other
|
|
-
|
n/a
|
-
|
3.6
|
3.6
|
-
|
3.6
|
Managed portfolio1
|
|
67.9
|
1.7
|
2.8
|
2.0
|
72.7
|
-
|
72.7
|
|
|
|
|
|
|
|
Six months ended 30 June
2023
|
|
|
|
Properties
owned throughout 2023/24
£m
|
Exchange
£m
|
Disposals
£m
|
Developments
and other
£m
|
Total
adjusted
NRI
£m
|
Change in provision
(see note 10A)
£m
|
Total
NRI
£m
|
UK
|
|
|
27.4
|
-
|
6.7
|
(0.2)
|
33.9
|
0.1
|
34.0
|
France
|
|
|
21.6
|
0.7
|
3.5
|
1.1
|
26.9
|
-
|
26.9
|
Ireland
|
|
|
17.9
|
0.4
|
-
|
-
|
18.3
|
-
|
18.3
|
Flagship destinations
|
|
|
66.9
|
1.1
|
10.2
|
0.9
|
79.1
|
0.1
|
79.2
|
Developments and other
|
|
|
-
|
-
|
-
|
6.0
|
6.0
|
0.1
|
6.1
|
Managed portfolio
|
|
|
66.9
|
1.1
|
10.2
|
6.9
|
85.1
|
0.2
|
85.3
|
|
|
|
|
|
|
|
|
|
|
|
1 Managed portfolio value on which
like-for-like growth is based was £2,309m at 30 June
2024
Rental data
Table 4
Six months ended 30 June
2024
|
|
|
|
|
30 June 2024
|
|
Proportionally
consolidated
|
Gross rental
income
£m
|
Adjusted net rental
income
£m
|
|
Vacancy
rate
%
|
Average
rents
passing
£/m2
|
Rents
passing
£m
|
Estimated rental value
£m
|
Rents passing for reversion
£m
|
Reversion/
(over-rented)
%
|
|
|
|
1
|
2
|
3
|
4
|
5
|
6
|
UK
|
39.4
|
30.4
|
|
4.8
|
440
|
70.9
|
69.8
|
68.5
|
2.1
|
France
|
27.0
|
21.6
|
|
7.5
|
470
|
53.8
|
59.7
|
53.9
|
10.7
|
Ireland
|
19.5
|
17.1
|
|
4.3
|
460
|
36.9
|
38.8
|
35.1
|
10.4
|
Flagship destinations
|
85.9
|
69.1
|
|
5.7
|
450
|
161.6
|
168.3
|
157.5
|
6.9
|
Developments and other
|
8.5
|
3.6
|
|
15.9
|
200
|
8.4
|
10.0
|
8.8
|
13.7
|
Managed portfolio
|
94.4
|
72.7
|
|
6.3
|
420
|
170.0
|
178.3
|
166.3
|
7.3
|
Six months ended 30 June
2023
|
|
|
|
|
31 December 2023
|
|
UK
|
43.5
|
33.9
|
|
4.9
|
400
|
87.3
|
82.3
|
83.7
|
(1.8)
|
|
France
|
32.4
|
26.9
|
|
6.9
|
450
|
53.0
|
61.3
|
54.2
|
13.2
|
|
Ireland
|
20.0
|
18.3
|
|
3.8
|
480
|
39.0
|
39.5
|
37.1
|
6.4
|
|
Flagship destinations
|
95.9
|
79.1
|
|
5.4
|
430
|
179.3
|
183.1
|
175.0
|
4.6
|
|
Developments and other
|
10.4
|
6.0
|
|
13.6
|
190
|
8.5
|
10.0
|
9.2
|
8.9
|
|
Managed portfolio
|
106.3
|
85.1
|
|
5.8
|
400
|
187.8
|
193.1
|
184.2
|
4.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
See Table 5 for analysis of vacancy.
2
Average rents passing at the period end before
deducting head rents and excluding rents from anchor units, car
parks and commercialisation.
3
Rents passing are the annual rental income
receivable at the period end from an investment property, after any
rent-free periods and after deducting head rents and car parking
and commercialisation running costs totalling £9.8m (FY 23:
£12.6m).
4
The estimated rental value (ERV) at the period
end calculated by the Group's valuers. At 30 June 2024, includes
ERV for vacant space of £10.0m (FY 23: £9.9m) as per Table 5 and
ERV for space undergoing reconfiguration of £2.5m - UK £1.8m,
Ireland £0.7m (FY 23: £2.6m - UK £2.3m, Ireland £0.3m). ERVs in the
above table are included within the unobservable inputs to the
portfolio valuations as defined by IFRS 13.
5
Rents passing for reversion is adjusted for
tenant incentives and inclusive costs to give a better comparison
to ERV which is on a net effective basis.
6
The reversion/(over-rented) figures show a direct
comparison between the valuers' ERV and rents passing for
reversion, with both sets of figures being on a net effective
basis. The reversion/(over-rented) figures therefore show the
future change in the Group's rental income from the settlement of
review rents or a combination of letting:
- units at prevailing ERVs at the
next lease event i.e. break or expiry (see Table 6)
- vacant units (see Table
5)
- units undergoing reconfiguration
(see note above).
Vacancy
Table 5
|
|
30 June 2024
|
31
December 2023
|
Proportionally consolidated
|
|
ERV of vacant space
£m
|
Total ERV for
vacancy1
£m
|
Vacancy
rate
%
|
ERV of vacant space
£m
|
Total ERV for
vacancy1
£m
|
Vacancy
rate
%
|
UK
|
|
2.7
|
57.0
|
4.8
|
3.2
|
65.9
|
4.9
|
France
|
|
4.4
|
58.9
|
7.5
|
4.2
|
60.6
|
6.9
|
Ireland
|
|
1.5
|
34.3
|
4.3
|
1.3
|
35.2
|
3.8
|
Flagship destinations
|
|
8.6
|
150.2
|
5.7
|
8.7
|
161.7
|
5.4
|
Developments and other
|
|
1.4
|
8.5
|
15.9
|
1.2
|
8.5
|
13.6
|
Managed portfolio
|
|
10.0
|
158.7
|
6.3
|
9.9
|
170.2
|
5.8
|
1 Total
ERV differs from Table 4 due to the exclusion of car park ERV and
head rents payable which distort the vacancy metric.
Lease expiries and breaks (at 30 June 2024)
Table 6
|
Rental income based on
passing rents that expire/break
in
|
ERV of leases that expire/break
in
|
Weighted average unexpired
lease term
|
Proportionally consolidated
|
Holding over
£m
|
2024
£m
|
2025
£m
|
2026
£m
|
Total
£m
|
Holding over
£m
|
2024
£m
|
2025
£m
|
2026
£m
|
Total
£m
|
to break years
|
to expiry years
|
UK
|
3.7
|
7.5
|
7.4
|
9.1
|
27.7
|
4.1
|
6.7
|
6.3
|
8.1
|
25.2
|
5.9
|
7.7
|
France
|
3.5
|
0.4
|
1.5
|
1.5
|
6.9
|
2.8
|
0.3
|
2.0
|
1.8
|
6.9
|
3.0
|
6.7
|
Ireland
|
0.9
|
2.3
|
2.4
|
2.8
|
8.4
|
1.5
|
2.4
|
2.6
|
2.7
|
9.2
|
5.2
|
6.7
|
Flagship destinations
|
8.1
|
10.2
|
11.3
|
13.4
|
43.0
|
8.4
|
9.4
|
10.9
|
12.6
|
41.3
|
4.7
|
7.1
|
Developments and other
|
1.0
|
0.6
|
2.0
|
0.8
|
4.4
|
1.0
|
0.6
|
1.4
|
0.6
|
3.6
|
6.4
|
7.7
|
Managed portfolio
|
9.1
|
10.8
|
13.3
|
14.2
|
47.4
|
9.4
|
10.0
|
12.3
|
13.2
|
44.9
|
4.8
|
7.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The table above compares rents
passing (as per Table 4) on a headline basis for those units with
leases expiring or subject to a tenant break in each year compared
to the ERV of those units determined by the Group's valuers on a
net effective basis (as per Table 4).
Top ten tenants (ranked by passing rent at 30 June
2024)
Table 7
Proportionally consolidated
|
|
|
Passing rent
£m
|
% of total
passing rent
|
Inditex
|
|
|
11.5
|
6.8
|
H&M
|
|
|
5.6
|
3.3
|
Next
|
|
|
4.8
|
2.8
|
JD Sports
|
|
|
3.8
|
2.2
|
Watches of Switzerland
|
|
|
3.2
|
1.9
|
River Island
|
|
|
2.8
|
1.6
|
Selfridges
|
|
|
2.4
|
1.4
|
Superdry
|
|
|
2.2
|
1.3
|
CK Hutchison
|
|
|
2.1
|
1.3
|
Boots
|
|
|
1.9
|
1.1
|
|
|
|
40.3
|
23.7
|
Table 8
Proportionally consolidated
|
|
Six months ended
30 June 2024
£m
|
Six months ended
30 June 2023
£m
|
Adjusted gross administration
costs
|
|
21.5
|
25.7
|
Business transformation
costs
|
A
|
2.7
|
3.2
|
Gross administration
costs
|
|
24.2
|
28.9
|
Property fee income
|
|
(2.9)
|
(4.8)
|
Management fee
receivable
|
|
(2.5)
|
(3.4)
|
Property outgoings
|
|
20.9
|
20.4
|
Less inclusive lease costs
recovered through rent
|
|
(2.1)
|
(3.9)
|
Total operating
costs
|
B
|
37.6
|
37.2
|
Less
vacancy costs
|
|
(5.8)
|
(4.3)
|
Total operating costs
excluding vacancy costs
|
C
|
31.8
|
32.9
|
|
|
|
|
Gross
rental income
|
|
94.4
|
106.3
|
Ground rents payable
|
|
(0.8)
|
(0.8)
|
Less inclusive lease costs
recovered through rent
|
|
(2.1)
|
(3.9)
|
Gross rental income for cost
ratio
|
D
|
91.5
|
101.6
|
|
|
|
|
Cost ratio including vacancy
costs
|
B/D
|
41.1%
|
36.6%
|
Cost ratio excluding vacancy
costs
|
C/D
|
34.8%
|
32.4%
|
Cost ratio including vacancy
costs (excluding business transformation costs)
|
(B-A)/D
|
38.1%
|
33.5%
|
The Group's business model for
developments is to use a combination of in-house resource and
external advisors. The cost of external advisors is capitalised to
the cost of developments. The cost of employees working on
developments is generally expensed, but capitalised subject to
meeting certain criteria related to the degree of time spent on and
the stage of progress of specific projects. Employee costs of £0.2m
(2023: £nil) were capitalised as development costs and are not
included within 'Gross administration costs'.
Table 9
|
|
|
|
|
|
|
|
30 June
2024
|
Proportionally consolidated
|
|
|
Properties
at valuation
£m
|
Revaluation gains/(losses)
in the year
£m
|
Income
return
%
|
Capital
return
%
|
Total
return
%
|
Initial
yield
%
|
Nominal
equivalent
yield1
%
|
|
UK
|
|
|
758.9
|
12.2
|
3.8
|
0.3
|
4.1
|
7.3
|
7.9
|
|
France
|
|
|
981.4
|
0.1
|
2.2
|
-
|
2.2
|
4.5
|
5.1
|
|
Ireland
|
|
|
568.4
|
(49.1)
|
2.9
|
(7.9)
|
(5.2)
|
5.9
|
6.3
|
|
Flagship destinations
|
|
|
2,308.7
|
(36.9)
|
2.9
|
(1.9)
|
0.9
|
5.7
|
6.3
|
|
Developments and other
|
|
|
270.5
|
(10.9)
|
1.3
|
(4.0)
|
(2.7)
|
9.2
|
9.6
|
|
Managed portfolio
|
|
|
2,579.2
|
(47.8)
|
2.8
|
(2.2)
|
0.6
|
5.9
|
6.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31
December 2023
|
|
|
|
Properties
at valuation
£m
|
Revaluation losses
in the year
£m
|
Income
return
%
|
Capital
return2
%
|
Total
return2
%
|
Initial
yield
%
|
Nominal
equivalent
yield1
%
|
|
UK
|
|
|
863.1
|
(21.8)
|
8.7
|
(2.4)
|
6.1
|
7.8
|
8.1
|
|
France3
|
|
|
1,003.3
|
(15.2)
|
4.6
|
(4.3)
|
0.1
|
4.4
|
5.1
|
|
Ireland
|
|
|
629.7
|
(37.5)
|
5.7
|
(5.6)
|
(0.2)
|
5.4
|
5.8
|
|
Flagship destinations
|
|
|
2,496.1
|
(74.5)
|
6.3
|
(4.0)
|
2.0
|
5.8
|
6.3
|
|
Developments and other
|
|
|
280.0
|
(44.6)
|
2.7
|
(6.2)
|
(3.6)
|
8.2
|
9.6
|
|
Managed portfolio
|
|
|
2,776.1
|
(119.1)
|
5.9
|
(4.1)
|
1.6
|
5.9
|
6.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Nominal
equivalent yields are included within the unobservable inputs to
the portfolio valuations as defined by IFRS 13. The nominal
equivalent yield for the Reported Group was 5.4% (31 December 2023:
5.7%).
2 Capital and
Total return figures in 2023 include the losses on disposals and
impairment charges on derecognised assets (Highcross and
O'Parinor).
3
Returns included 100% of Italik (75% of which was
classified as a trading property) until its sale in March
2023.
Table 10
Proportionally consolidated
|
|
|
Note/Table
|
30 June 2024
£m
|
31 December 2023
£m
|
Reported Group (Wholly owned and
joint operations)
|
|
|
3B
|
1,232.9
|
1,396.2
|
Share of Property
interests
|
|
|
3B
|
1,346.3
|
1,379.9
|
Net investment portfolio valuation on a proportionally
consolidated basis
|
|
|
3B
|
2,579.2
|
2,776.1
|
Less:
Developments1
|
|
|
|
(188.1)
|
(192.3)
|
Completed investment portfolio
|
|
|
|
2,391.1
|
2,583.8
|
Purchasers'
costs2
|
|
|
|
158.3
|
171.9
|
Grossed up completed investment portfolio
|
|
A
|
|
2,549.4
|
2,755.7
|
|
|
|
|
|
|
Annualised cash passing rental
income
|
|
|
|
166.2
|
182.4
|
Non recoverable costs
|
|
|
|
(13.1)
|
(15.5)
|
Rents payable
|
|
|
|
(3.8)
|
(4.1)
|
Annualised net rent
|
|
B
|
|
149.3
|
162.8
|
Add:
|
|
|
|
|
|
Notional rent on expiration of
rent-free periods3
|
|
|
|
5.0
|
7.8
|
Future rent on signed
leases
|
|
|
|
2.6
|
1.7
|
Topped-up annualised net rent
|
|
C
|
|
156.9
|
172.3
|
Add back: Non recoverable
costs
|
|
|
|
13.1
|
15.5
|
Passing rents
|
|
Table 4
|
170.0
|
187.8
|
|
|
|
|
|
|
Net initial yield
|
|
B/A
|
|
5.9%
|
5.9%
|
'Topped-up' net initial yield
|
|
C/A
|
|
6.1%
|
6.3%
|
1 Included
within the Developments and other portfolio.
2 Purchasers'
costs equate to 6.6% (31 December 2023: 6.7%) of the value of the
completed investment portfolio.
3
Weighted average remaining rent-free period is
0.4 years (31 December 2023: 0.5 years).
Table 11
|
|
|
Six months ended 30 June
2024
|
Six months ended 30 June
2023
|
Proportionally consolidated
|
|
Note
|
Reported
Group
£m
|
Share of
Property
interests
£m
|
Proportionally
consolidated
£m
|
Reported
Group
£m
|
Share of
Property
interests
£m
|
Proportionally
consolidated
£m
|
Developments
|
|
|
1
|
2
|
3
|
1
|
4
|
5
|
Capital expenditure - creating
area
|
|
|
-
|
-
|
-
|
1
|
-
|
1
|
Capital expenditure - no
additional area
|
|
|
5
|
3
|
7
|
3
|
7
|
10
|
Tenant incentives
|
|
|
2
|
3
|
5
|
2
|
-
|
2
|
Total
|
|
3B
|
8
|
8
|
16
|
7
|
11
|
18
|
Conversion from accruals to cash
basis
|
|
|
-
|
4
|
4
|
(1)
|
(1)
|
(2)
|
Total on cash basis
|
|
|
8
|
12
|
20
|
6
|
10
|
16
|
BALANCE SHEET INFORMATION
Note 2 to the interim financial
statements shows the Group's proportionally consolidated income
statement. The Group's proportionally consolidated balance sheet
and net debt are shown in Tables 12
and 13
respectively. As explained in note 3 to the
interim financial statements, the Group's interest in Value Retail
is not proportionally consolidated as it is not under the Group's
management.
Table 12
|
|
30 June 2024
|
31 December 2023
|
|
|
Note
|
Reported
Group
£m
|
Share of
Property
interests
£m
|
Proportionally
consolidated
£m
|
Reported
Group
£m
|
Share of
Property
interests
£m
|
Proportionally
consolidated
£m
|
Non-current assets
|
|
|
|
|
|
|
|
Investment properties
|
|
1,232.9
|
1,346.3
|
2,579.2
|
1,396.2
|
1,379.9
|
2,776.1
|
Interests in leasehold
properties
|
|
31.7
|
15.4
|
47.1
|
32.7
|
15.4
|
48.1
|
Right-of-use assets
|
|
0.7
|
-
|
0.7
|
3.9
|
-
|
3.9
|
Plant and equipment
|
|
0.5
|
-
|
0.5
|
0.9
|
-
|
0.9
|
Investment in joint
ventures
|
|
1,177.3
|
(1,177.3)
|
-
|
1,193.2
|
(1,193.2)
|
-
|
Investment in
associates
|
|
-
|
-
|
-
|
1,115.0
|
-
|
1,115.0
|
Other investments
|
|
9.2
|
-
|
9.2
|
8.8
|
-
|
8.8
|
Trade and other
receivables
|
|
0.6
|
1.1
|
1.7
|
1.9
|
1.3
|
3.2
|
Restricted monetary
assets
|
|
21.4
|
-
|
21.4
|
21.4
|
-
|
21.4
|
|
|
2,474.3
|
185.5
|
2,659.8
|
3,774.0
|
203.4
|
3,977.4
|
Current assets
|
|
|
|
|
|
|
|
Trade and other
receivables
|
|
62.9
|
26.7
|
89.6
|
74.1
|
22.0
|
96.1
|
Derivative financial
instruments
|
|
1.1
|
0.3
|
1.4
|
5.2
|
1.4
|
6.6
|
Restricted monetary
assets
|
|
-
|
0.4
|
0.4
|
2.2
|
0.2
|
2.4
|
Cash and cash
equivalents
|
|
433.9
|
103.5
|
537.4
|
472.3
|
97.3
|
569.6
|
|
|
497.9
|
130.9
|
628.8
|
553.8
|
120.9
|
674.7
|
Assets held for sale
|
|
605.7
|
-
|
605.7
|
-
|
-
|
-
|
Total assets
|
|
3,577.9
|
316.4
|
3,708.8
|
4,327.8
|
324.3
|
4,652.1
|
Current liabilities
|
|
|
|
|
|
|
|
Trade and other
payables
|
|
(80.3)
|
(44.9)
|
(125.2)
|
(129.8)
|
(46.0)
|
(175.8)
|
Obligations under head
leases
|
|
(0.2)
|
-
|
(0.2)
|
(0.1)
|
-
|
(0.1)
|
Loans
|
|
-
|
(254.5)
|
(254.5)
|
(108.6)
|
(260.0)
|
(368.6)
|
Tax
|
|
(0.2)
|
-
|
(0.2)
|
(0.3)
|
-
|
(0.3)
|
Derivative financial
instruments
|
|
(0.2)
|
-
|
(0.2)
|
(2.3)
|
-
|
(2.3)
|
|
|
(80.9)
|
(299.4)
|
(380.3)
|
(241.1)
|
(306.0)
|
(547.1)
|
Liabilities associated with assets
held for sale
|
|
(22.7)
|
-
|
(22.7)
|
-
|
-
|
-
|
|
|
(103.6)
|
(299.4)
|
(403.0)
|
(241.1)
|
(306.0)
|
(547.1)
|
Non-current liabilities
|
|
|
|
|
|
|
|
Trade and other
payables
|
|
(25.8)
|
(1.2)
|
(27.0)
|
(55.5)
|
(2.4)
|
(57.9)
|
Obligations under head
leases
|
|
(36.3)
|
(15.8)
|
(52.1)
|
(37.3)
|
(15.8)
|
(53.1)
|
Loans
|
|
(1,502.9)
|
-
|
(1,502.9)
|
(1,515.9)
|
-
|
(1,515.9)
|
Deferred tax
|
|
(0.4)
|
-
|
(0.4)
|
(0.4)
|
(0.1)
|
(0.5)
|
Derivative financial
instruments
|
|
(1.2)
|
-
|
(1.2)
|
(15.0)
|
-
|
(15.0)
|
|
|
(1,566.6)
|
(17.0)
|
(1,583.6)
|
(1,624.1)
|
(18.3)
|
(1,642.4)
|
Total liabilities
|
|
(1,670.2)
|
(316.4)
|
(1,986.6)
|
(1,865.2)
|
(324.3)
|
(2,189.5)
|
|
|
|
|
|
|
|
|
Net assets
|
|
1,907.7
|
-
|
1,907.7
|
2,462.6
|
-
|
2,462.6
|
EPRA adjustments
|
10B
|
|
|
1.4
|
|
|
79.4
|
EPRA NTA
|
11C
|
|
|
1,909.1
|
|
|
2,542.0
|
EPRA NTA per share
|
11C
|
|
|
38p
|
|
|
51p
|
|
|
|
|
|
|
|
|
|
|
Table 13
|
|
|
30 June 2024
|
31 December 2023
|
Proportionally consolidated
|
|
|
Reported
Group
£m
|
Share of
Property
interests
£m
|
Total
£m
|
Reported
Group
£m
|
Share of
Property
interests
£m
|
Total
£m
|
Cash and cash
equivalents
|
|
|
433.9
|
103.5
|
537.4
|
472.3
|
97.3
|
569.6
|
Loans
|
|
|
(1,502.9)
|
(254.5)
|
(1,757.4)
|
(1,624.5)
|
(260.0)
|
(1,884.5)
|
Fair value of currency
swaps
|
|
|
-
|
-
|
-
|
(11.4)
|
-
|
(11.4)
|
Net debt
|
|
|
(1,069.0)
|
(151.0)
|
(1,220.0)
|
(1,163.6)
|
(162.7)
|
(1,326.3)
|
Table 14
Proportionally consolidated
|
|
Six months ended
30 June 2024
£m
|
Year ended
31 December 2023
£m
|
Six months ended
30 June 2023
£m
|
|
Opening net
debt
|
|
(1,326.3)
|
(1,732.1)
|
(1,732.1)
|
|
Profit
from operating activities
|
|
53.9
|
117.3
|
64.6
|
|
(Increase)/Decrease in receivables and restricted monetary
assets
|
|
(1.6)
|
16.5
|
2.1
|
|
Decrease
in payables
|
|
(15.0)
|
(31.0)
|
(8.6)
|
|
Adjustment for non-cash items
|
|
3.4
|
0.7
|
1.7
|
|
Cash generated from
operations
|
|
27.7
|
103.5
|
59.8
|
|
Interest
received
|
|
23.3
|
43.6
|
13.1
|
|
Interest
paid
|
|
(57.1)
|
(93.5)
|
(51.4)
|
|
Redemption premiums and fees from early repayment of
debt
|
|
(0.8)
|
4.3
|
-
|
|
Debt and
loan facility issuance and extension fees
|
|
-
|
(0.6)
|
(0.6)
|
|
Operating
distributions received from Value Retail
|
|
12.3
|
73.6
|
42.7
|
|
Tax
paid
|
|
-
|
(0.4)
|
(0.4)
|
|
Cash flows from operating
activities
|
|
18.6
|
130.5
|
63.2
|
|
Capital
expenditure
|
|
(20.1)
|
(42.9)
|
(16.0)
|
|
Derecognition of JV cash
|
|
-
|
(15.6)
|
(15.6)
|
|
Derecognition of joint venture secured debt
|
|
-
|
125.0
|
125.0
|
|
Cash held
within sold or derecognised entities
|
|
-
|
(8.4)
|
(8.4)
|
|
Sale of
properties
|
|
116.3
|
216.4
|
215.3
|
|
Cash flows from investing
activities
|
|
96.2
|
274.5
|
300.3
|
|
Purchase
of own shares
|
|
(3.4)
|
-
|
-
|
|
Proceeds
from awards of own shares
|
|
-
|
0.1
|
0.1
|
|
Equity
dividends paid
|
|
(44.9)
|
(30.0)
|
-
|
|
Cash flows from financing
activities
|
|
(48.3)
|
(29.9)
|
0.1
|
|
Exchange
translation movement
|
|
39.8
|
30.7
|
50.9
|
|
Closing net
debt
|
|
(1,220.0)
|
(1,326.3)
|
(1,317.6)
|
|
Total accounting return ('TAR')
Table 15
|
|
30
June 2024
|
31 December 2023
|
|
|
|
NTA
£m
|
NTA per share
pence
|
NTA
£m
|
NTA per share
pence
|
EPRA NTA
at 1 January
|
A
|
2,542.0
|
50.8
|
2,633.7
|
52.7
|
EPRA NTA
at period end
|
|
1,909.1
|
38.2
|
2,542.0
|
50.8
|
Movement
in NTA
|
|
(632.9)
|
(12.6)
|
(91.7)
|
(1.9)
|
Cash
dividends in the period
|
|
39.0
|
0.8
|
35.9
|
0.7
|
|
B
|
(593.9)
|
(11.8)
|
(55.8)
|
(1.2)
|
|
|
|
|
|
|
Total accounting return
|
B/A
|
|
(23.4)%
|
|
(2.1)%
|
|
|
|
|
|
|
|
|
FINANCING METRICS
Table 16
Proportionally
consolidated
|
|
Note /
Table
|
30 June 2024
£m
|
December 2023
£m
|
Net debt
|
A
|
Table
13
|
1,220.0
|
1,326.3
|
Net debt (pro forma for sale
of Value Retail)
|
B
|
|
637.0
|
n/a
|
Adjusted operating
profit
|
|
|
150.3
|
163.0
|
Amortisation of tenant incentives
and other items within net rental income
|
|
|
(3.5)
|
(3.6)
|
Share-based
remuneration
|
|
|
3.8
|
3.6
|
Depreciation
|
|
|
1.6
|
3.0
|
EBITDA ‒ rolling 12 month
basis
|
C
|
|
152.2
|
166.0
|
EBITDA
‒ rolling 12 month basis (pro
forma for sale of Value Retail)
|
D
|
|
121.8
|
n/a
|
Net debt:EBITDA
|
A/C
|
|
8.0x
|
8.0x
|
Net debt:EBITDA (pro forma
for sale of Value Retail)
|
B/D
|
|
5.3x
|
n/a
|
Table 17
Proportionally
consolidated
|
|
Note
|
Six months ended
30 June 2024
£m
|
Year ended
31 December 2023
£m
|
Adjusted net rental income
|
|
2
|
72.7
|
167.5
|
Less net rental income in
associates: Italie Deux
|
|
14A
|
‒
|
(1.1)
|
|
A
|
|
72.7
|
166.4
|
Adjusted net finance costs
|
|
2
|
18.7
|
45.9
|
Less interest on lease obligations
and pensions
|
|
|
(1.4)
|
(3.3)
|
|
B
|
|
17.3
|
42.6
|
Interest cover
|
A/B
|
|
4.21x
|
3.91x
|
Table 18
Proportionally
consolidated
|
|
Note /
Table
|
30 June 2024
£m
|
31 December 2023
£m
|
Net debt
|
|
Table
13
|
1,220.0
|
1,326.6
|
Unamortised borrowing costs
--
|
|
|
15.8
|
18.4
|
Net debt for gearing
|
A
|
|
1,234.6
|
1,344.7
|
Net debt for
gearing (pro forma for sale of Value
Retail)
|
B
|
|
651.6
|
n/a
|
Equity shareholders' funds - 'Consolidated net tangible
worth'
|
C
|
|
1,907.7
|
2,462.6
|
Gearing
|
A/C
|
|
64.7%
|
54.6%
|
Gearing (pro forma for sale
of Value Retail)
|
B/C
|
|
34.2%
|
n/a
|
Table 19
Proportionally
consolidated
|
|
|
Note /
Table
|
30 June 2024
£m
|
31 December 2023
£m
|
Managed property
portfolio
|
|
|
3B
|
2,579.2
|
2,776.1
|
Less encumbered assets1
|
|
|
|
(437.6)
|
(487.7)
|
Total unencumbered assets
|
|
A
|
|
2,141.6
|
2,288.4
|
Net debt
|
|
|
Table
13
|
1,220.0
|
1,326.3
|
Unamortised borrowing costs
|
|
|
|
15.8
|
18.4
|
Cash held
within investments in encumbered entities1
|
|
|
|
44.9
|
39.4
|
Less encumbered debt1
|
|
|
|
(254.4)
|
(260.2)
|
Total unsecured debt
|
|
B
|
|
1,025.1
|
1,123.9
|
Total unsecured
debt (pro forma for sale of Value
Retail)
|
|
C
|
|
442.1
|
n/a
|
Unencumbered asset ratio
|
|
A/B
|
|
2.10x
|
2.04x
|
Unencumbered asset ratio
(pro forma for sale of Value Retail)
|
|
A/C
|
|
4.84x
|
n/a
|
1 At 30
June 2024 and 31 December 2023 encumbered assets, cash and debt
relate to Dundrum Town Centre.
Table 20
Proportionally
consolidated
|
|
Note /
Table
|
30 June 2024
£m
|
31 December 2023
£m
|
Net debt - 'Loan'
|
A
|
Table
13
|
1,220.0
|
1,326.3
|
Managed property
portfolio
|
B
|
3B
|
2,579.2
|
2,776.1
|
Investment in Value
Retail1
|
C
|
9D/14B
|
583.0
|
1,115.0
|
'Value'
|
D
|
|
3,162.2
|
3,891.1
|
Loan to value - Headline
|
A/D
|
|
38.6%
|
34.1%
|
Loan to value - Headline
(pro forma for sale of Value Retail)
|
(A-C)/B
|
|
24.7%
|
n/a
|
Net debt - Value Retail
|
E
|
|
-
|
729.6
|
Property portfolio - Value
Retail
|
F
|
14B
|
-
|
1,885.7
|
Loan to value - Full proportional consolidation of Value
Retail2
|
(A+E)/(B+F)
|
|
n/a
|
44.1%
|
Net payables - Group
|
G
|
|
64.7
|
187.3
|
Loan to value - EPRA (Table
21)
|
(A+E+G)/(B+F)
|
|
49.8%
|
48.1%
|
Loan to value - EPRA (pro
forma for sale of Value Retail)
|
(A-C+G)/B
|
|
27.2%
|
n/a
|
1
Investment at 30 June 2024 reflects impaired
carrying value as an asset held for sale, see note 9 for
details.
2
Following the reclassification of Value Retail to
an asset held for sale at 30 June 2024 this ratio is no longer
relevant, see note 9 to the interim financial statements for
details.
Table 21
|
|
|
|
|
30 June 2024
|
Proportionally consolidated
|
|
|
Reported
Group
£m
|
Share of
joint ventures
£m
|
Share of
associates2
£m
|
Non-controlling
interests
£m
|
Total
£m
|
Include:
|
|
|
|
|
|
|
|
Loans
|
|
|
1,502.9
|
254.5
|
-
|
-
|
1,757.4
|
Foreign currency
derivatives
|
|
|
-
|
-
|
-
|
-
|
-
|
Net payables1
|
|
|
46.7
|
18.0
|
-
|
-
|
64.7
|
Exclude:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
(433.9)
|
(103.5)
|
-
|
-
|
(537.4)
|
Net debt
|
|
A
|
1,115.7
|
169.0
|
-
|
-
|
1,284.7
|
Include:
|
|
|
|
|
|
|
|
Investment properties at fair
value
|
|
|
1,232.9
|
1,346.3
|
-
|
-
|
2,579.2
|
Total property value
|
|
B
|
1,232.9
|
1,346.3
|
-
|
-
|
2,579.2
|
EPRA LTV
|
|
A/B
|
|
|
|
|
49.8%
|
|
|
|
|
|
31
December 2023
|
Proportionally consolidated
|
|
|
Reported
Group
£m
|
Share of
joint ventures
£m
|
Share of associates
£m
|
Non-controlling
interests
£m
|
Total
£m
|
Include:
|
|
|
|
|
|
|
|
Loans
|
|
|
1,624.5
|
260.0
|
793.9
|
-
|
2,678.4
|
Foreign currency
derivatives
|
|
|
11.4
|
-
|
-
|
-
|
11.4
|
Net payables1
|
|
|
87.0
|
23.9
|
76.4
|
-
|
187.3
|
Exclude:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
(472.3)
|
(97.3)
|
(64.4)
|
-
|
(634.0)
|
Net debt
|
|
A
|
1,250.6
|
186.6
|
805.9
|
-
|
2,243.1
|
Include:
|
|
|
|
|
|
|
|
Investment properties at fair
value
|
|
|
1,396.2
|
1,379.9
|
1,885.7
|
-
|
4,661.8
|
Total property value
|
|
B
|
1,396.2
|
1,379.9
|
1,885.7
|
-
|
4,661.8
|
EPRA LTV
|
|
A/B
|
|
|
|
|
48.1%
|
Rows with zero balances have
intentionally been excluded from the EPRA specified format in the
above tables.
1
Net payables includes the following balance sheet
accounts: interests in leasehold properties, right-of-use assets,
trade and other receivables (current and non-current), restricted
monetary assets (current and non-current), trade and other payables
(current and non-current), obligations under head leases (current
and non-current), tax and deferred tax (at 50%), including those
that have been reclassified for sale.
2
As the Group's investment in Value Retail has
been reclassified as an asset held for sale at 30 June 2024 it has
been excluded from the EPRA Loan to value calculation at 30 June
2024. See note 9 for further details.
KEY PROPERTIES
Managed
portfolio
|
Location
|
Accounting classification
where not wholly-owned
|
|
Ownership
|
Area
m2
|
No. of tenants
|
Passing rent
£m
|
|
|
|
|
|
|
|
|
Flagship destinations
|
|
|
|
|
|
|
|
UK
|
|
|
|
|
|
|
|
Brent Cross
|
London
|
Joint venture
|
|
41%
|
105,400
|
112
|
12.0
|
Bullring1
|
Birmingham
|
Joint venture
|
|
50%
|
120,300
|
149
|
24.6
|
Cabot Circus2
|
Bristol
|
Joint venture
|
|
50%
|
106,100
|
105
|
10.2
|
The Oracle
|
Reading
|
Joint venture
|
|
50%
|
71,600
|
98
|
10.3
|
Westquay
|
Southampton
|
Joint venture
|
|
50%
|
94,200
|
107
|
13.8
|
France
|
|
|
|
|
|
|
|
Les 3
Fontaines3
|
Cergy
|
|
|
100%
|
76,600
|
197
|
23.5
|
Les Terrasses du Port
|
Marseille
|
|
|
100%
|
62,800
|
166
|
30.4
|
Ireland
|
|
|
|
|
|
|
|
Dundrum Town Centre
|
Dublin
|
Joint venture
|
|
50%
|
124,800
|
151
|
26.4
|
Ilac Centre
|
Dublin
|
Joint operation
|
|
50%
|
28,200
|
63
|
3.2
|
Pavilions
|
Swords
|
Joint operation
|
|
50%
|
44,400
|
93
|
7.3
|
|
|
|
|
|
|
|
|
Developments and other (key properties)
|
|
Bristol
Broadmead2
|
Bristol
|
Joint venture
|
|
50%
|
34,800
|
60
|
2.6
|
Dublin Central
|
Dublin
|
|
|
100%
|
n/a
|
n/a
|
n/a
|
Dundrum Phase II
|
Dublin
|
Joint venture
|
|
50%
|
n/a
|
n/a
|
n/a
|
Grand
Central1
|
Birmingham
|
Joint venture
|
|
50%
|
38,400
|
50
|
3.5
|
Eastgate
|
Leeds
|
|
|
100%
|
n/a
|
n/a
|
n/a
|
Martineau
Galleries1
|
Birmingham
|
|
|
100%
|
35,200
|
38
|
2.2
|
Pavilions land
|
Swords
|
|
|
100%
|
n/a
|
n/a
|
n/a
|
The Goodsyard
|
London
|
Joint venture
|
|
50%
|
n/a
|
n/a
|
n/a
|
Value Retail4
|
|
Asset held for
sale5
|
|
|
|
|
|
Bicester Village
|
Bicester
|
|
|
50%
|
28,000
|
159
|
79.9
|
La Roca Village
|
Barcelona
|
|
|
41%
|
25,900
|
145
|
23.4
|
Las Rozas Village
|
Madrid
|
|
|
38%
|
16,600
|
98
|
14.7
|
La Vallée Village
|
Paris
|
|
|
26%
|
21,600
|
109
|
25.3
|
Maasmechelen Village
|
Brussels
|
|
|
27%
|
20,000
|
103
|
6.2
|
Fidenza Village
|
Milan
|
|
|
34%
|
21,100
|
117
|
7.2
|
Wertheim Village
|
Frankfurt
|
|
|
45%
|
20,900
|
113
|
10.5
|
Ingolstadt Village
|
Munich
|
|
|
15%
|
21,000
|
112
|
3.8
|
Kildare Village
|
Dublin
|
|
|
41%
|
21,600
|
119
|
11.9
|
|
|
|
|
|
|
|
|
|
1
Collectively known as the Birmingham Estate.
2 Collectively
known as the Bristol Estate.
3 Property
includes areas held under co-ownership, figures above reflect
Hammerson's ownership interests only.
4 Passing rent
for Value Retail represents annualised base and turnover rent at
Hammerson's ownership share.
5 Held as an
asset held for sale at 30 June 2024, see note 9 for
details.
Glossary
Adjusted earnings
|
Reported amounts excluding certain
items in accordance with EPRA guidelines and also certain
exceptional items which the Directors believe are not reflective of
the Group's normal day-to-day operating activities.
|
Average cost of debt or weighted
average interest rate (WAIR)
|
The cost of finance expressed as a
percentage of the weighted average debt during the
period.
|
Borrowings
|
The aggregate of loans and fair
value of currency swaps but excluding the fair value of the
interest rate swaps, as this latter item crystallises over the life
of the instruments rather than at maturity.
|
Capital return
|
The change in property value during
the period after taking account of capital expenditure,
acquisitions and disposals and calculated on a monthly
time-weighted and constant currency basis.
|
Commercialisation
|
Promotional activity to generate
income and engage with communities including advertising, events,
kiosks, and pop-ups
|
Company Voluntary Arrangement
(CVA)
|
A legally binding agreement with
creditors to restructure liabilities, including future lease
liabilities.
|
EBITDA
|
Earnings before interest, tax,
depreciation and amortisation.
|
EPRA
|
The European Public Real Estate
Association, a real estate industry body, of which the Company is a
member. This organisation has issued Best Practice Recommendations
with the intention of improving the transparency, comparability and
relevance of the published results of listed real estate companies
in Europe.
|
Equivalent yield (true and
nominal)
|
The capitalisation rate applied to
future cash flows to calculate the gross property value. The cash
flows reflect future rents resulting from lettings, lease renewals
and rent reviews based on current ERVs. The true equivalent yield
(TEY) assumes rents are received quarterly in advance, while the
nominal equivalent yield (NEY) assumes rents are received annually
in arrears. These yields are determined by the Group's external
valuers.
|
ERV
|
The estimated market rental value
of the total lettable space in a property (after deducting head
rents, and car parking and commercialisation running costs)
calculated by the Group's external valuers.
|
ESG
|
Using environmental, social and
governance factors to evaluate companies and countries on how far
advanced they are with sustainability.
|
F&B
|
Food and beverage.
|
Gearing
|
Net debt expressed as a percentage
of equity shareholders' funds calculated as per the covenant
definition in the Group's unsecured borrowings.
|
Gross property value or Gross
asset value (GAV)
|
Property value before deduction of
purchasers' costs, as provided by the Group's external
valuers.
|
Gross rental income
(GRI)
|
Income from leases, car parks and
commercialisation, after amortising lease incentives.
|
Headline rent
|
The annual rental income derived
from a lease, including base and turnover rent but after rent-free
periods.
|
Inclusive lease
|
A lease, often for a short period,
under which the rent includes costs such as service charge, rates
and utilities. Instead, the landlord incurs these costs as part of
the overall commercial arrangement.
|
Income return
|
Income derived from property taken
as a percentage of the property value on a time-weighted and
constant currency basis after taking account of capital
expenditure, acquisitions and disposals.
|
Initial yield (or Net initial
yield (NIY))
|
Annual cash rents receivable (net
of head rents and the cost of vacancy, and, in the case of France,
net of an allowance for costs of approximately 5%, primarily for
management fees), as a percentage of gross property value, as
provided by the Group's external valuers. Rents receivable
following the expiry of rent-free periods are not included. Rent
reviews are assumed to have been settled at the contractual review
date at ERV.
|
Interest cover
|
Adjusted net rental income divided
by adjusted net finance costs before capitalised interest and
interest charges on lease obligations and pensions, both excluding
associates.
|
Interest rate or currency swap (or
derivatives)
|
An agreement with another party to
exchange an interest or currency rate obligation for a
pre-determined period.
|
Joint venture and associate
management fees
|
Fees charged to joint ventures and
associates for accounting, secretarial, asset and development
management services.
|
Leasing value/volume
|
Comprises new lettings and
renewals exchanged in the period. Value reflects passing rent and
volume reflects number of leases signed.
|
Leasing vs Passing rent
|
A comparison of Headline rent from
leasing to the Passing rent at the most recent balance sheet
date.
|
Like-for-like (LFL)
GRI/NRI
|
The percentage change in GRI/NRI
for flagship properties owned throughout both current and prior
periods, calculated on a constant currency basis. Properties
undergoing a significant extension project are excluded from this
calculation during the period of the works. For interim reporting
periods properties sold between the balance sheet date and the date
of the announcement are also excluded from this metric.
|
Loan to value (LTV)
|
Net debt expressed as a percentage
of property portfolio value. The Group has three measures of LTV
which are shown in Table 20 of the Additional Information
section.
|
Net effective rent
(NER)
|
Annual rent from a unit calculated
by taking the total rent payable over the term of the lease to the
earliest termination date and deducting all tenant
incentives.
|
|
Net rental income (NRI)
|
GRI less net service charge
expenses and cost of sales. Additionally, the change in provision
for amounts not yet recognised in the income statement is excluded
to calculate adjusted NRI.
|
|
NTA (EPRA)
|
EPRA Net tangible assets: An EPRA
net asset per share measure calculated as equity shareholders'
funds with adjustments made for the fair values of certain
financial derivatives, deferred tax and any goodwill
balances.
|
|
Occupancy rate
|
The ERV of the area in a property
or portfolio, excluding developments, which is let, expressed as a
percentage of the total ERV, excluding the ERV for car parks, of
that property or portfolio.
|
|
Occupational cost ratio
(OCR)
|
The proportion of retailer's sales
compared with the total cost of occupation, including rent, local
taxes (i.e. business rates) and service charge. Calculated
excluding department stores.
|
|
Over-rented
|
The amount, or percentage, by
which the ERV falls short of rents passing, together with the ERV
of vacant space.
|
|
Passing rents or rents
passing
|
The annual rental income
receivable from an investment property after rent-free periods,
head rents, car park costs and commercialisation costs. This may be
more or less than the ERV (see over-rented and reversionary or
under-rented).
|
|
Pre-let
|
A lease signed with a tenant prior
to the completion of a development or other major
project.
|
|
Principal lease
|
A lease signed with a tenant with
a secure term of greater than one year.
|
|
Property fee income
|
Amounts recharged to tenants or
co-owners for property management services including, but not
limited to service charge management and rent collection
fees.
|
|
Property Income Distribution
(PID)
|
A dividend, generally subject to
withholding tax, that a UK REIT is required to pay from its
tax-exempt property rental business and which is taxable for
UK-resident shareholders at their marginal tax rate.
|
|
Property interests (Share
of)
|
The Group's non-wholly owned
properties which management proportionally consolidate when
reviewing the performance of the business. These exclude Value
Retail which is not proportionally consolidated.
|
|
Property outgoings
|
The direct operational costs and
expenses incurred by the landlord relating to property ownership
and management. This typically comprises void costs, net service
charge expenses, letting related costs, marketing expenditure,
repairs and maintenance, tenant incentive impairment, bad debt
expense relating to items recognised in the income statement and
other direct irrecoverable property expenses. These costs are
included within the Group's calculation of like-for-like NRI and
the cost ratio.
|
|
Proportional
consolidation
|
The aggregation of the financial
results of the Reported Group and the Group's Share of Property
interests under management (i.e. excluding Value Retail) as set out
in note 2.
|
|
QIAIF
|
Qualifying Investor Alternative
Investment Fund. A regulated tax regime in the Republic of Ireland
which exempts participants from Irish tax on property income and
chargeable gains subject to certain requirements.
|
|
REIT
|
Real Estate Investment Trust. A
tax regime which in the UK exempts participants from corporation
tax both on UK rental income and gains arising on UK investment
property sales, subject to certain requirements.
|
|
Rent collection
|
Rent collected as a percentage of
rent due for a particular period after taking account of any rent
concessions granted for the relevant period.
|
|
Reported Group
|
The financial results as presented
under IFRS.
|
|
Rents passing for
reversion
|
Passing rent adjusted for tenant
incentives and inclusive costs to be on a net effective basis. This
will increase or decrease due to changes to rents passing at rent
review or the next lease event (i.e. expiry or break), or by
leasing vacant space or space undergoing
reconfiguration.
|
|
Reversionary or
under-rented
|
The amount, or percentage, by
which the ERV exceeds the rents passing, together with the
estimated rental value of vacant space.
|
|
Scope 1 emissions
|
Direct emissions from owned or
controlled sources.
|
|
Scope 2 emissions
|
Indirect emissions from the
generation of purchased energy.
|
|
Scope 3 emissions
|
All indirect emissions (not
included in Scope 2) that occur in the value chain of the reporting
company, including both upstream and downstream
emissions.
|
|
SAICA
|
South African Institute of
Chartered Accountants.
|
|
SIIC
|
Sociétés d'Investissements
Immobiliers Côtées. A tax regime in France which exempts
participants from the French tax on property income and gains
subject to certain requirements.
|
|
Temporary lease
|
A lease with a period of one year
or less, measured to the earlier of lease expiry or tenant
break.
|
|
Total accounting return
(TAR)
|
The growth in EPRA NTA per share
plus dividends paid, expressed as a percentage of EPRA NTA per
share at the beginning of the period. The return excludes the
dilution impact from scrip dividends.
|
|
Total development cost
|
All capital expenditure on a
development or other major project, including capitalised
interest.
|
|
Total property return (TPR) (or
total return)
|
NRI, excluding the change in
provision for amounts not yet recognised in the income statement,
and capital growth expressed as a percentage of the opening book
value of property adjusted for capital expenditure, calculated
on a monthly time-weighted and constant currency basis.
|
|
Total shareholder return
(TSR)
|
Dividends and capital growth in a
Company's share price, expressed as a percentage of the share price
at the beginning of the period.
|
|
Turnover rent
|
Rental income which is linked to
an occupier's revenues.
|
|
Vacancy rate
|
The ERV of the area in a property,
or portfolio, excluding developments, which is currently available
for letting, expressed as a percentage of the ERV of that property
or portfolio.
|
|
WAULB/WAULT
|
Weighted Average Unexpired Lease
to Break/Term.
|
|
Yield on cost
|
Passing rents expressed as a
percentage of the total development cost of a property.
|
|
|
|
|
|
|
The announcement above has also been released on the SENS
system of the Johannesburg Stock Exchange and on Euronext
Dublin.