Hammerson begins a £300m buyback programme – In its interim results report published today, listed property REIT Hammerson (HMSO) has announced that it has begun a share buyback programme for £300 million. The company confirmed that the programme had begun in a separate announcement released shortly after the interim statement was published.
The buyback programme is part of a move by the company to focus on capital efficiency. In their opinion, the board has concluded that, at present an on-market buyback of the company’s shares, investing in their portfolio at a discount to NAV, offers the best risk-weighted capital returns. A total of up to £300m from realised disposal proceeds will be returned to shareholders over the next 12 months. The proposed buyback will be accretive to EPS and NAV per share.
The company confirmed that it remains committed to maintaining a prudent balance sheet and will deleverage over the medium term using disposal proceeds to pay down debt, with the ambition to reduce LTV to a mid-30% level.
Half-year 2018 performance
- Group valuations stable with continued growth in Premium Outlets and Ireland offsetting a small yield-driven valuation decline in the UK
- Adjusted earnings per share unchanged at 15.1p
- Solid demand for our retail space from retailers, £13.6m of new leases signed, 4% ahead of ERV and 5% ahead of previous passing rent
- 97.2% occupancy and a small uplift in leasing volume at our UK shopping centres (£6.8m HY2018 vs £6.6m HY2017) despite an unusually turbulent retail backdrop
- 104 units across the portfolio are in administration or are subject to CVAs, with 87 of those units currently trading. These have reduced HY2018 NRI by £2.1m. The full year impact is anticipated to be £5.8m (1.5% of passing rent).
- £300 million of disposals achieved this year including four UK retail parks, in total 10% below December book value
- Construction commenced on extensions at Les 3 Fontaines, Cergy and Italie Deux, Paris and on track to deliver an attractive estimated yield on cost of around 6%
- Value Retail portfolio sales up 6% with Bicester Village trading well; remerchandising and reconfigurations supported retail sales growth of 6% at VIA Outlets
- LTV marginally up at 37% and substantial liquidity of £878m – company reported as having spent £6m on the INTU acquisition attempt.
HMSO : Hammerson begins a £300m buyback programme