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As per its continental peers, Hammerson avoided any negative revaluations in H1 23. A number of transactions enabled a reduction in debt to the less risky level of 46%.
Companies: Hammerson plc
AlphaValue
Despite a couple of positive items on the operational side, the LTV ratio was broadly flat. It is still too high in absolute terms when looking at the proportionate level.
The Q3 22 trading update provided little in the way of significant information. Will rising concerns in the UK make for something more significant in FY 23?
Improving occupancy stalled in H1 22 in almost all areas. Even Value Retail (luxury travel retail) experienced vacancy up 100bp within this half year. The path to recovery is anything buy linear.
By releasing a low level of negative revaluations coupled with improving operational parameters in H2 21, Hammerson demonstrated a landing performance. Looking in more detail at the company’s report, it is far from showing signs of a strong restart.
Occupancy’s degradation is slowing. Despite the encouraging level of new lettings, ERVs were down in the UK. Both France and Ireland look safer.
End market rents (ERVs) were down 11% in FY 20, i.e. a 17% three-year cut. The LTV of 46% will require further adjustment measures soon. The UK flagship has lost half of its value since December 2017.
Vacancy strongly increased in Q2 20. LTV surpassed the 50% mark on 30 June 2020 due to strong value destruction in H1 20. Hammerson announced a £550m cash capital increase coupled with a disposal of £270m. Its ex-post pro forma net debt should be £2.2bn, i.e. LTV of 42% on a proportionate basis. Too high?
The covid-19 pandemic has had a devastating effect on the share price of property companies, with 31% wiped off the value of their total market capitalisation during the first quarter of 2020.
Companies: AEWU CREI BOOT HLCL THRL SUPR RESI RGL GR1T SOHO PHP EBOX ASLI UTG AGR BLND CAL SHED WHR WKP GRI PCA NRR HMSO
QuotedData
Negative revaluations accounted for £1bn in FY 19 (£828m once the positive contribution of Premium Outlets was included) vs. £10bn of gross assets in FY 18, or a c.9% loss of FY 18 GAV in a single year. As for all the British Property sector, keep in mind that FY 19 valuations do not account for the entire consequences of either 2019-nCoV or Brexit.
Hammerson has disposed of new assets in the UK at a price 22% below their June 2019 book value, or a yield of 8.7% from the buyer’s side. The crisis is not over.
There have been few structural shifts in the property sector as profound as the one currently taking place in retail. Consumer spending patterns have drastically changed over the past five years, with online sales now accounting for 19.7% of all retail spend in the UK (August 2019, source: ONS), compared to 11.5% in August 2014. When you look at fashion retailing specifically, online sales accounted for 26.8% of consumer spend on clothing in 2018 (source: Mintel).
Companies: SHC NRR CAL HMSO
QuotedData Professional
There were both strong declines in rents (lfl) and negative revaluations in the UK. The yield decompression explained the bulk of the 7% NAV drop in H1 19 and the impact of the coming revenue decline is not fully accounted for in our view. As expected, the healthy Outlet asset pocket and the French cushion were insufficient to compensate the now worrisome context in the UK (Idea Kicker Hammerson, 22 May 2019). Another downgrade is to come.
Continental exposure protected Hammerson from a bloodbath (read Intu Latest). Nevertheless UK valuations are down by 9% on H2 2018.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Hammerson plc. We currently have 0 research reports from 10 professional analysts.
Companies: Property Franchise Group PLC
Canaccord Genuity
Feature article: Two worlds divided by a common language Summary Few people would deny that raising capital in 2023 and 2024 has been very challenging. The key components of the market, the “two worlds” of corporates and investors, are nowadays often far apart in how they assess value – pre-COVID, this was much less of an issue. This has resulted in frustration and inertia, which, on a sustained basis, can have a significant negative impact on companies and the economy. This issue needs urgen
Companies: NBPE ICGT RECI HAT STX VTA APAX DUKE
Hardman & Co
TPFG has completed another significantly earnings enhancing acquisition, building on its strong M&A track record. It has acquired well-known brands Fine & Country and The Guild of Property Professionals for a total consideration of £20m (£15m initial, £5m deferred), funded through a new debt facility with Barclays. The consideration implies a 5.7x Dec. ’23 EV/EBITDA multiple, which we see as attractive. The acquisition is expected to be immediately earnings enhancing - we upgrade our adj. P
Singer Capital Markets
Springfield has entered into a strategic collaboration with Barratt for the development of the group’s Durieshill site. Springfield and Barratt will work together to develop this new, sustainable 3,000 home village within commuting distance of Edinburgh and Glasgow. Barratt has made a cash payment of £10m to Springfield and will, in consideration for half the land at Durieshill, provide and fund the infrastructure development for the entire site over the next five years. The cash payment of £10
Companies: Springfield Properties PLC
Equity Development
Springfield has entered into a major partnership with Barratt Developments (BDEV) to accelerate the creation of the Scottish housebuilder’s planned ‘village’ of over 3,000 homes near the strategically connected city of Stirling. The sale of the land to Barratt, as part of a new 50:50 strategic collaboration between Springfield and Barratt, will reduce debt by more than its previous guidance and should contribute to planned growth in the medium term.
Progressive Equity Research
IPU is seeking to capitalise on a potential UK recovery by increasing gearing…
Companies: Invesco Perpetual UK Smaller Companies Investment Trust PLC
Kepler | Trust Intelligence
Target Healthcare REIT’s Q324 update shows a fifth successive quarter of positive NAV total return, with indexed rent reviews driving increased earnings and property values. Tenant profitability continues to strengthen, reflected in a high level of rent cover and rent collection. Dividends are well covered by adjusted earnings and we expect further DPS growth.
Companies: Target Healthcare REIT PLC
Edison
Performance of clean energy shares was weak in 2023 other than in storage. 2024 is likely to see storage continue to perform but renewables, bioenergy and hydrogen could also see an improved environment in the year. While elections in the US and the EU could result in weaker support for clean energy, these are to an extent offset by progress at COP28 and the extent to which electorates recognise climate change in the face of almost unavoidable evidence.
Companies: PV1 TLG DRX PHE CYAN NESF AGLX EQT IES CORRE REFL ATOM
Longspur Clean Energy
The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no
Companies: AEIT ROOF DGI9 INPP GSF SEIT USFP HICL ORIT BSIF TRIG NESF SEQI HEIT GRP GCP FSFL 3IN AERI PINT RNEW BBGI GSEO DORE TENT GRID CORD HGEN AEET
Springfield has entered a strategic collaboration with Barratt for the development of its 3,000 home Durieshill development near Stirling. In consideration for half of the land, Barratt has paid £10m in cash (now received) and it will provide and fund the infrastructure development for the entire site over c.5 years. The £10m cash consideration accelerates the debt reduction plan, with FY24 net debt now expected to be £41m vs. previous guidance of £55m. The provision of site infrastructure
TRIG’s portfolio continues to evolve, despite equity capital markets being closed…
Companies: Renewables Infrastructure Group Limited GBP Red.Shs
Triple Point Social Housing REIT’s (SOHO’s) Q124 update confirms a continuing improvement in rent collection. The newly set FY24 DPS target is unchanged compared to FY23 at 5.46p as the board considers the impact of asset sales and transfers. This represents a yield of 9.0%. Strong indexed rental income continues to support income and capital values.
Companies: Triple Point Social Housing REIT PLC
Headline Q1 net profit of GEL1.04bn included negative goodwill of GEL686m arising from the Ameriabank acquisition. Adjusted profit of GEL369m was a touch light of our estimate, but on lower other income, while costs came in higher on increased investment spend. However, the Group net interest margin increased slightly on 4Q23, unchanged also on the prior year, and better than expected, against a backdrop of faster cuts in interest rates by the National Bank of Georgia this year. Economic growth
Companies: Bank of Georgia Group Plc
Cavendish
The Hardman & Co Healthcare Index (HHI) has been running since 2009. Its main function is to highlight the attractions of life sciences investments over the long term. For the second year running, apart from global economic influences affecting world markets, performance in 2023 was dented by the capital-intensive nature of the sector. The HHI fell 3.7%, to 483.8, underperforming the main London markets – FTSE 100 (+3.8%) and FTSE All-Share (3.8%) but outperforming the FTSE AIM All-Share Index (
Companies: TXG ETXPF NDVA TSVT BCOW Z29 TXG NCYT GNS SUN AMS OMG APH EKF EAH IMM AGL DEMG AGY TSTL IPO GDR TRX HVO CTEC OXB DEST VLG IXI VAL INDV AGR AVCT BAI 123F IMCR BCOW
finnCap announced this morning a proposed new CEO and the appointment of new directors. Sam Smith, finnCap’s CEO, has announced her intention to step down from the position and move into an advisory role within the group. John Farrugia, currently Managing Partner of finnCap Cavendish, will become a director of the group and then CEO after Sam Smith steps down.
Companies: Cavendish Financial PLC
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