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Hammerson losses widen; Cuts net debt to ?2.4bn, slashes 2020 dividend

By Frank Prenesti

Date: Tuesday 25 Feb 2020

(Sharecast News) - Property developer Hammerson held its 2019 dividend but said it would slash next year's payout as losses widened and valuations plunged in the face of the continuing High Street retail crisis.
Full year adjusted EPS came in at 28p against 30.6. The company reported a widened basic loss per share of 102.1p compared with a loss of 34.1p in 2018.

Hammerson has been exposed to the woes of the retail sector as online shopping and soaring costs have hit property owners as stores demand rent cuts. The value of its portfolio fell value 16.2% to ?8.3bn. Net debt was cut to ?2.4bn, below Hammerson's ?3bn target.

The full year dividend was held at 25.9p but said it would rebase the 2020 payout to a sustainable level, removing the direct link between earnings generated and dividend paid and expected to pay a full year 2020 dividend of 14p a share.

Pre-tax losses widened to ?573.4m from ?175.1m as revenue fell 15% to ?190.3m. Net rental income fell 11.2% to ?308.5m, with "tenant restructuring, in the form of CVAs and administrations, the "largest single factor", the company said.

Chief executive David Atkins was last year forced to sell more assets after coming under pressure from US activist investor Elliott Advisors to improve performance.

"With the outlook for the UK retail market remaining uncertain, we believe we should maintain our focus on reducing debt during 2020," he said on Tuesday.

"The magnitude of the challenge facing UK retail is significant. However, as brands look to optimise their store estates and strike the right balance between online and physical retail, the best destinations continue to be highly relevant - this is highlighted by the rise in visitor numbers across all our regions.

"We remain committed to creating a portfolio of exceptional venues and, as we drive a faster pace of change in shifting our brand line-up and repurposing space, we expect to see improved results in the UK."

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