REG - Hammerson PLC - Final Results
09/03/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230309:nRSI3627Sa&default-theme=true
RNS Number : 3627S Hammerson PLC 09 March 2023
Thursday 9 March 2023
HAMMERSON plc - FULL YEAR 2022 RESULTS
Another year of good progress
Rita-Rose Gagné, Chief Executive of Hammerson, said:
"Today, Hammerson is a better, more agile, and resilient business. Our results
are evidence of another year of significant strategic, operational and
financial progress, against a volatile macroeconomic and market backdrop. We
have focused on what we can control - sharper operations growing like-for-like
gross rental income and reducing the cost base - delivering a significant
increase in adjusted earnings. Notwithstanding downward revaluations at the
end of the year, we have maintained a stable balance sheet.
In the last two years, we have simplified and focused the core portfolio on
city centres, delivering £628m of gross proceeds, strengthened the balance
sheet, recycled capital for investment in our core assets and developments,
and have made rapid progress on the transformation of our operating model and
platform, resulting in a significantly reduced and reducing cost structure.
We have enlivened and reinvigorated our assets by introducing new occupiers,
uses and concepts. We are actively re-purposing our destinations, with an
increased emphasis on commercialisation, marketing and placemaking, in turn
creating exceptional spaces for our occupiers and customers. We have brought a
sharper focus to our development pipeline to create value and optionality.
We have set ourselves more to do and continue to be focused on disciplined
execution of our strategy. Looking forward, we have strong momentum and are
well placed to deliver another year of robust adjusted earnings and cashflow
in 2023 and anticipate a return to cash dividends."
Summary financial and operating performance
· Adjusted earnings up 60% to £105m (2021: £66m) benefiting from:
− Like-for-like GRI up 8% as occupiers pivot to best-in-class
destinations; Like-for-like NRI up 29% year-on-year
− Gross administration costs down 17%, with more to come in 2023 and
2024
− Lower finance costs following deleveraging
− A continued recovery in adjusted earnings at Value Retail (+£12m)
· Adjusted earnings per share up 62% to 2.1p; basic loss per share of
-3.3p (2021: -8.7p)
· Group portfolio value of £5.1bn (2021: £5.4bn), down 5% due to
revaluation deficit and disposals
− Capital return for the year of -5.8% (2021: -7.7%) and a total
return of -0.7% (2021: -3.9%)
· IFRS loss of £164m (2021: £429m loss), largely due to a £282m
revaluation deficit, of which 96% was in Q4
· EPRA NTA per share 53p (2021: 64p), 7.5p impact from enhanced scrip
dividend
Stable balance sheet
· Net debt down 4% to £1,732m at 31 December 2022 (2021: £1,799m)
− Headline LTV 39% (2021: 39%)
− Fully proportionally consolidated (FPC) LTV 47% (2021: 46%)
− Net debt to EBITDA of 10.4x (2021: 13.4x)
− Ample liquidity of £1bn, including undrawn committed facilities
and £0.3bn of cash
· Completed £195m disposals in the year and re-affirming guidance of a
further £300m disposals by December 2023
· Value Retail successfully refinanced over £1bn of debt facilities in
relation to La Vallée and Bicester
Strong operational trends
· Footfall improved 11% points from January to December 2022, ending
the year at 90% of 2019 levels; sales remained ahead of 2019 levels
· Positive footfall and sales trends have continued into the first few
months of the year
· 317 leasing deals concluded in 2022 (+2% excluding disposals),
representing £45m of headline rent (£25m at our share) (+10% LFL)
− Headline leasing 34% ahead of previous passing (2021: flat)
− Net effective rent +2% vs ERV (2021: -11%)
− Diverse mix: 43% best-in-class fashion; 21% to restaurant, food
and social; balance to non-fashion and services
− Average WAULT 9.5 years; 8.0 years WAULB
− Strong leasing pipeline for 2023
· Flagship occupancy +1% to 96% from half year; stable year-on-year
· Rent collection normalising: 2022 now at 95%; Q1 2023 90%
· Strong recovery in footfall and sales continues in Value Retail
Dividend
The payments of cash and enhanced scrip dividends approved by shareholders and
made in 2022 have satisfied our REIT and SIIC distribution requirements for
2022. The Board will therefore not be recommending a further payment in
respect of 2022 but continues to anticipate re-instating a cash dividend for
2023, which will be at least the minimum required to continue to meet our
REIT/SIIC distribution obligations.
Outlook
Near term
Whilst we remain very mindful of the uncertain macroeconomic outlook, we have
a strong operational grip on the business and are targeting a further 20%
reduction in gross administration costs by the end of 2024, and to complete
the £500m disposal programme by the end of the year. We have strong
momentum and are well placed to deliver another year of robust underlying
earnings and cashflow and anticipate a return to cash dividends during the
year.
Medium term
Best-in-class occupiers recognise the importance of city centre locations and
the symbiotic nature of their physical and online channels, and we are working
in partnership to deliver our proposition to this new reality. This
integrated experience is the Hammerson offering and will continue to attract
the very best occupiers during the ongoing flight to quality. We are well
placed to benefit from these trends. Rents and rates have been largely
re-based, vacancy is tight, and we have long term certainty in our lease
expiry, and attractive yields in our managed portfolio, that offer the
potential to deliver attractive total returns.
Our unique development opportunities provide a distinctive opportunity to
create further value by bringing a broader mix of uses to the existing estate
through integral and complementary repurposing and development which will
enhance the proposition of the whole estate. Meanwhile, we will also create
option value on stand-alone projects.
We have a strong platform and over the medium term we see multiple
opportunities to continue to unlock deep value.
Results presentation today:
Hammerson will hold an online presentation for analysts and investors to
present its financial results for the year ended
31 December 2022, followed by a Q&A session.
Date & time: Thursday 9 March at 09.00 am (GMT)
Webcast link: https://kvgo.com/IJLO/Hammerson_2022_Full_Year_Results
Conference call: Quote Hammerson when prompted by the operator
Please join the call 5 minutes before the booked start time to allow the
operator to transfer you into the call by the scheduled start time
France: +33 (0) 1 7037 7166
Ireland: +353 (0) 1 436 0959
Netherlands: +31 (0) 20 708 5073
South Africa: +27 (0) 0800 980 512
UK: +44 (0) 33 0551 0200
USA: +1 786 697 3501
The presentation and press release will be available on:
www.hammerson.com/investors/reports-results-presentations/2022-full-year-results
(http://www.hammerson.com/investors/reports-results-presentations/2022-full-year-results)
on the morning of results
(https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.hammerson.com%2Finvestors%2Freports-results-presentations&data=04%7C01%7CCatrin.Sharp%40hammerson.com%7Ca8ef032d9e274070a57408d95598709b%7C22f66ba69d6948fb9f4e2f3259a62519%7C1%7C0%7C637634935469893159%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=xzz%2BF53VOmeqc36lDgae3M6RODXGzuT7Gqt0q1cZiX8%3D&reserved=0)
.
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 (mailto:josh.warren@hammerson.com)
Natalie Gunson, Communications Director Tel: +44 (0)20 7887 4672 natalie.gunson@hammerson.com (mailto:natalie.gunson@hammerson.com)
Oliver Hughes, Ollie Hoare and Charles Hirst, MHP Tel: +44 (0)20 3128 8100 Hammerson@mhpgroup.com (mailto: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.
Index to key data
Unless otherwise stated, figures have been prepared on a proportionally
consolidated basis, excluding premium outlets as outlined in the presentation
of information section of the Financial Review.
2022 2021 Note / Ref
Income
Gross rental income † £215.2m £250.4m 2
Adjusted earnings - Value Retail a £27.4m £15.9m 2
Adjusted finance costs a £54.0m £71.8m 7
Adjusted earnings † a £104.9m £65.5m 2
Revaluation losses - managed portfolio † £(221.0)m £(444.1)m 2
Revaluation losses - Group portfolio, including Value Retail £(281.7)m £(456.1)m Table 9
Loss for the year (IFRS) £(164.2)m £(429.1)m 2
Adjusted earnings per share † a, b 2.1p 1.3p 11B
Basic loss per share b (3.3)p (8.3)p 11B
Final dividend per share (cash/enhanced scrip) - 0.2p/2.0p 19
Dividends for the year (cash/enhanced scrip) 0.2p/2.0p 0.4p/4.0p 19
Operational
Like-for-like net rental income † +29.2% +10.4% Table 6
Occupancy - flagships 96.3% 95.5% Table 4
Leasing activity £25.4m £24.7m n/a
Leasing v ERV (principal leases) +2% -11% n/a
Leasing v Passing rent (principal leases) † +34% -2% n/a
Passing rent † £210.3m £214.8m Table 2
Like-for-like passing rent change +1% -4% n/a
ERV £209.2m £219.4m Table 2
Like-for-like ERV change -2.2% -6.7% Financial Review
EPRA cost ratio (including vacancy costs) † 38.0% 52.5% Table 8
Capital and financing
Managed portfolio value £3,220m £3,479m 3B
Group portfolio value (including Value Retail) £5,107m £5,372m 3B
Total property return (including premium outlets) † -0.7% -3.9% Table 9
Capital return (including premium outlets) † -5.8% -7.7% Table 9
Net debt † c £1,732m £1,799m Table 13
Gearing † 67.8% 66.4% Table 19
Loan to value - headline † 39.3% 38.9% Table 18
Loan to value - fully proportionally consolidated † 47.1% 46.1% Table 18
Liquidity † £996m £1,478m Financial Review
Interest cover † 3.24x 2.30x Table 17
Net debt: EBITDA † 10.4x 13.4x Table 16
Net assets £2,586m £2,746m Table 12
EPRA net tangible assets (NTA) per share 53p 64p 11C
† 2021 income statement figures have been restated to reflect
the IFRIC Decision on Concessions and balance sheet figures have been restated
to reflect the IFRIC Decision on Deposits with further information on both
IFRIC decisions set out in note 1B to the financial information.
a These results include discussion of alternative performance
measures (APMs) which include those described as Adjusted, EPRA and Headline
as well as constant currency (where current period exchange rates are applied
to the prior period's results). Adjusted, EPRA and Headline measures are
described in note 1B to the financial information and reconciliations for
earnings and net assets measures to their IFRS equivalents are set out in note
10 to the financial information.
b Adjusted earnings per share and basic loss per share for 2021
have been restated to reflect the bonus element of scrip dividends as set out
in note 11 to the financial information.
c Proportionally consolidated - basis as set out in notes 1C and
3 to the financial information.
Chief Executive's STATEMENT
We have delivered another strong year of strategic, operational and financial
progress against a challenging economic backdrop. At the beginning of 2022, we
could not have foreseen the extent of the volatility of the economic and
political environment that unfolded driven by geopolitical events in Ukraine,
China's zero covid policy, and political change in the UK.
We do not yet know the full impact of the cost of living crisis, a period of
higher inflation and interest rates, and continued supply chain disruption.
Moreover, this year highlighted the value of sustainable sources of energy.
Our commitment to ESG and Net Zero remains absolute, and we finished the year
with fully costed Net Zero Asset Plans for every flagship asset in the managed
portfolio.
We set out a clear strategy in June 2021 and our performance in 2022
underscores our belief that we are strongly positioned to deliver attractive
total returns over the medium term. Over the last two years, the new
management team and I have focused on two key objectives:
· Simplifying the business to stabilise the core income stream and to
return it to underlying growth, reflected in like-for like GRI growing in 2022
by 8%
· Starting to rebuild value in our existing portfolio whilst at the
same time creating optionality on how we unlock the deep development value in
our portfolio
We will continue to be disciplined allocators of capital and select the best
returns for shareholders, mindful of our own cost of capital and all options
for capital deployment including debt retirement, and distributions for
shareholders.
Despite this uncertain and volatile backdrop, we have been disciplined in the
execution against these objectives focusing on what we can control. Our
operational and financial performance is proof positive that our strategy is
working:
· We are enlivening and reinvigorating our assets by introducing new
occupiers, uses and concepts. In recognition of the importance of placemaking,
we attracted a senior leader in a newly-created role who has already brought
an increased emphasis on commercialisation, marketing, and advertising to
create exceptional spaces for our customers and occupiers. We are actively
repurposing our destinations and creating a sense of place that brings people
and experiences together
· We signed 317 leases representing £45m of headline rent (£25m at
our share) demonstrating the attractiveness of our destinations and the
continued flight to quality by occupiers
· We have re-aligned the organisation to be asset-centric, more agile
and focused on occupiers and customers. The rapid progress on the re-set of
our operational model delivered a 17% reduction in gross administration costs.
We have already taken steps that will deliver further efficiency gains in 2023
and 2024
· We have continued to strategically refocus the portfolio on city
centre destinations and to simplify our portfolio, disposing of £628m of
non-core assets since the start of 2021
· Our resulting financial position is stable, with net debt down 4% to
£1,732m, headline LTV 39% and fully proportionally consolidated LTV 47%. Our
net debt to EBITDA improved to 10.4x from 13.4x in 2021. We have ample
liquidity in cash and undrawn committed facilities of c.£1bn
· Underpinning all this progress, we are evolving to a sustainable
high-performance culture, with increased focus on training and talent
development
FINANCIAL AND OPERATIONAL REVIEW
Adjusted earnings were up 60% to £105m reflecting a strong operating
performance across the board.
Like-for-like GRI increased 8% following two strong years of leasing
performance and reduced vacancy resulting, in some leasing tension returning
in our destinations. Significant improvements in collections performance,
and the growth in GRI resulted in like-for-like NRI improving 29%
year-on-year.
In 2021 we committed to reduce our gross administration costs by 15-20% by
2023 which we have already delivered with a 17% reduction year-on-year.
There are more efficiencies to come from the digitalisation of our business.
Deleveraging remains an important priority and in 2022, we generated gross
proceeds of £195m from the disposal of non-core assets, resulting in reduced
finance costs. There was, however, a lack of liquidity in investment markets
in the second half of the year. We have refinanced RCFs and redeemed the
remaining 2023 eurobonds.
Our financial position is stable. Net debt was £67m lower, reflecting
disposals completed during the year. Headline LTV was unchanged at 39%, while
fully proportionally consolidated LTV, including the Group's proportionate
share of Value Retail debt was 47% (2021: 46%). Net debt to EBITDA was 10.4x
down from 13.4x in 2021, reflecting both lower debt and the improved earnings
performance.
EPRA NTA was £2,634m at 31 December 2022 (2021: £2,840m), a decline of 7%
year-on-year, predominantly due to the impact of market-wide yield expansion
and ERV decline on property valuations, reflecting higher base interest rates
in the second half.
Overall, the Group recorded an IFRS loss of £164m (2021: £429m loss),
largely due to a £282m revaluation deficit, of which 96% was in Q4.
Sales and footfall
The quality of our destinations and our stronger asset-centric focus means
that the footfall and sales in our destinations continue to exceed national
averages.
During 2022 we saw a sustained recovery in footfall and sales performance.
Footfall for the whole of 2022 was 39% up year-on-year (UK+41%, France +36%
and Ireland +35%), and finished the year at around 90% of 2019 levels.
Footfall recovered steadily throughout the year with the Group seeing an 11%
point improvement between January and December. On the ground activity remains
robust with strong footfall, sales and leasing trends continuing into the
first few months of 2023.
Sales recovered strongly as consumers are shopping less frequently but
visiting our destinations with more purpose, also avoiding increasingly
expensive delivery and return costs charged by online retailers. The
improvement in store like-for-like performance also illustrates fewer better
performing retailers reflective of our shift away from reliance on legacy
fashion to a broader mix of best-in-class retail, food and social, services
and leisure. Overall, like-for-like turnover rents for 2022 were up 111%
year-on-year, total like-for-like sales were up double digit year-on-year, and
+3% vs. 2019.
Occupancy
Our core portfolio is well positioned to benefit from the increasing
polarisation in the market and the flight to quality. Vacancy levels remain
low across our assets with the UK and France at 4% and Ireland at only 2%. We
are beginning to see leasing tension return in the core portfolio. Having some
vacant space allows us to trial new concepts as well as initiate our
longer-term strategic plans to make our destinations more relevant to evolving
customer behaviour and spend.
Collections
Rent collections, both in terms of overall proportion collected and pace after
the due date have continued to improve as trading normalised post the
pandemic. As at February 2023, 2022 Group collections were 95%, with the UK
and Ireland largely back to pre- pandemic norms and France slightly behind.
For Q1 2023, Group rent collections were 90%. This compares with 90% for 2021
and 83% for Q1 2022 at this time last year.
Value Retail
Value Retail saw the performance of the Villages recover close to pre-pandemic
levels. Brand sales increased by 34% year-on-year and were only 5% lower than
2019 levels. Footfall across the Villages was resilient; down only 9% on 2019.
Spend per visit increased by 5% on 2019 following improved digital marketing
of domestic high net worth customers. Value Retail expects to benefit from the
return of the international traveller in 2023. These trends continue into
2023.
Overall, Value Retail signed 332 leases during the year, showcasing the
attractiveness of the premium outlet sector. Occupancy for the year was at
94%. There have been 96 new openings in 2022; Dolce & Gabbana opened their
fifth Value Retail store in Las Rozas, Christian Louboutin opened a new store
at La Vallée and Cecconi's opened at Bicester.
The Group's share of adjusted earnings were £27.4m, up 72% on 2021. GRI has
increased due to the recovery of turnover rents from 12 months of full
trading. At 31 December 2022, the Group's interest in Value Retail's property
portfolio was c.£1.9bn and the net assets were £1.2bn; the difference is
principally due to £0.7bn of net debt within the Villages which is
non-recourse to the Group. Value Retail also successfully refinanced over
£1bn of debt facilities principally in relation to La Vallée and Bicester.
The average LTV across the Villages is 36%.
OUTLOOK
Near term
Whilst we remain very mindful of the uncertain macroeconomic outlook, we have
a strong operational grip on the business and are targeting a further 20%
reduction in gross administration costs by the end of 2024, and to complete
the £500m disposal programme by the end of the year. We have strong
momentum and are well placed to deliver another year of robust underlying
earnings and cashflow and anticipate a return to cash dividends during the
year.
Medium term
Best-in-class occupiers recognise the importance of city centre locations and
the symbiotic nature of their physical and online channels, and we are working
in partnership to deliver our proposition to this new reality. This
integrated experience is the Hammerson offering and will continue to attract
the very best occupiers during the ongoing flight to quality. We are well
placed to benefit from these trends. Rents and rates have been largely
re-based, vacancy is tight, and we have long term certainty in our lease
expiry, and attractive yields in our managed portfolio, that offer the
potential to deliver attractive total returns.
Our unique development opportunities provide a distinctive opportunity to
create further value by bringing a broader mix of uses to the existing estate
through integral and complementary repurposing and development which will
enhance the proposition of the whole estate. Meanwhile, we will also create
option value on stand-alone projects.
We have a strong platform and over the medium term we see multiple
opportunities to continue to unlock deep value.
STRATEGIC AND BUSINESS REVIEW
We own city centre flagship destinations and adjacent land around which we can
reshape entire neighbourhoods. Our strategy recognises the unique position
that we have in our urban locations and the opportunities to leverage our
experience and capabilities to create and manage exceptional city centre
destinations 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 chart a path to growth that delivers total
returns for shareholders through consistent execution against our strategic
goals:
· Reinvigorate our assets
· Accelerate development
· Create an agile platform
· Deliver a sustainable and resilient capital structure
Underpinning our strategy is our commitment to ESG. We refreshed our strategy
in the first half of 2022 to demonstrate our commitment to Net Zero by 2030 to
deliver benefits to our stakeholders, including comprehensive asset by asset
plans to achieve our commitments.
We have made significant progress towards all our goals as follows:
Reinvigorate our assets
The quality and location of our assets is a key source of competitive
advantage for Hammerson. We have some of the best assets in the very best
prime city centre catchments and transportation hubs, and, due to the strong
ties we have in the communities in which we operate, supportive local
authorities.
There are both near and medium term opportunities to grow income through the
repositioning of our assets. For example we see opportunities to repurpose
department stores for both retail, experience and multi-use such as
residential or office use which will in turn benefit the whole destination.
Under-utilised space can also be repurposed for alternative uses with new
income streams such as creating new and engaging spaces, with a greater focus
on placemaking and a fresh approach to marketing and reach into social media
channels, and attracting new occupiers and services. Our city centre locations
are also attractive focal points for click and collect and last mile
logistics.
In 2022, it was important to build on the momentum from the strong performance
in 2021 and it was gratifying to see the strategy in action with 317 leases
signed in 2022, 2% more than 2021 excluding disposals. In value terms, we
secured £45m by value (£25m at our share) up 10% on a like-for-like basis
and our strongest leasing performance since 2018.
For principal deals, headline rent was 34% above previous passing rent,
equating to additional passing rent of £5.5m. Net effective rent deals were
2% above ERV.
We continue to pursue a leasing policy to diversify our mix, with non-fashion
and services accounting for 32%, and restaurant, food and social 21%.
Best-in-class and exciting new concepts in fashion remains core to our offer
and demanded by customers, accounting for the balance, a high proportion of
which were renewals including new concepts and experiences.
Short-term leasing of less than one year (2022: 74 deals) remains important to
maintain vibrancy, trial new concepts, mitigate annual void costs of c.£2m,
and allow time to secure longer term deals with the best occupier for a given
unit.
Placemaking not only continues to enliven space and enhance the experience for
customers and occupiers, but also contributes meaningfully in its own right.
Our resulting commercialisation income is up 13% on a like-for-like basis.
Indeed, as we look forward to an occupational market with a greater
technological and social media integration in our spaces, we are moving from a
stage of stabilisation and initial reinvigoration of the assets to one where
the focus switches to a greater emphasis on experience, more focused and
sophisticated marketing and advertising, and completing our planned
repurposing.
We have continued to engage with major occupiers at a portfolio level,
resetting and growing key relationships with those we see as key for the
future of our destinations. For example:
· We have regeared four Apple stores across the portfolio, bringing in
new concepts, with a further two under discussion
· We have secured new deals, renewals and expansions with Inditex and
H&M, and key upsizes with JD Sports
· We have signed two new Nike concepts into Bullring (Rise) and Dundrum
(Live)
· We have secured renewals with key footfall and income drivers such as
Indigo and Monoprix in Les Terrasses du Port
· We continue to bring other new occupiers and the newest concepts into
the portfolio, such as Lane 7 bowling at Bullring, Reserved at Brent Cross,
the first Watches of Switzerland in Ireland at Dundrum, and VR Sandbox on the
Birmingham Estate, driving vibrancy, footfall and new revenue streams.
At the same time, we incubated digitally native brands into white-boxed and
permanent units across the portfolio, including further openings for Gym &
Coffee in Ireland, La Coque Française in our Colab project in France, and
Kick Game taking permanent space at Bullring.
Commercialisation and placemaking often go hand in hand boosting footfall and
revenues for occupiers, and enhancing the customer experience. It is worth
highlighting in particular:
· Pop-ups across the portfolio with key brands from diverse sub-sectors
including: Barclays, Costa, Polestar, Dyson and Armani
· The Commonwealth Games with events and pop-ups across the Birmingham
Estate which attracted an estimated television audience in the hundreds of
millions and footfall over the 11 weeks of the games of 1.8m
· Our supercar weekend in Dundrum attracting more than 30% additional
footfall
· Les Cabanons des Terrasses during the summer in Marseille
· Our usual stellar roster of seasonal outdoor bars and restaurants
We shifted our approach to marketing, switching agencies and using our spend
in a more focused and higher-returning manner, generating a significant
improvement in impressions and engagement from our customers, specifically:
· A greater focus on digital marketing over traditional channels (75%
of spend in Q4), including trials with TikTok and Snap Chat for the first time
· Shifting our marketing away from general brand awareness to
leveraging our data to target more catchment specific marketing
· Bringing awareness of the local offer at our assets
· Working with local influencers and celebrities to build and enhance
our brand equity
In terms of the repurposing of department stores, we successfully completed
the repurposing of the former House of Fraser unit in Dundrum to Brown Thomas
and Penneys, with the backfill of the latter affording the opportunity to
bring Dunnes Stores into Dundrum for the first time. In the UK, we have
completed the feasibility studies and submitted a planning application for a
major repurposing of former retail space, predominantly department store, at
New Street Station, Birmingham, to create an amenity rich workspace-led
proposal, 'Drum', directly served by the UK's most connected rail station.
At Bullring, work continues on the repurposing of the former Debenhams unit
and we are excited to hand over to our new occupiers - TOCA Social and Marks
& Spencer - later this year. Moreover, this project kickstarted the
regeneration of this end of the scheme and underpinned a flurry of leasing
demand in 2022.
In Reading, we have worked with the local council to submit a planning
application for the major regeneration of the eastern quarter of The Oracle;
to demolish obsolete department store space and develop around 450 rental
apartments alongside renewed landscaping and commercial uses. At the same
time, this will densify the core retail, restaurant, food and social pitch
along the riverside into our existing scheme.
In France, we completed the 34,000m(2) extension in Les 3 Fontaines, with new
units for a selection of major international brands including Lego, Lacoste,
Rituals, Inditex and H&M. As part of the broader repositioning of the
asset, we brought in a florist, bakery and improved restaurant and food
options to the adjacent Rue des Galeries, elevating the tone of this important
thoroughfare into our asset. We continue to investigate the potential to
complete a final phase of the redevelopment and bring in a major new retail
offer.
Finally in Dundrum, we have brought in alternative uses with the construction
of The Ironworks, a 122 unit residential development, the first of its kind on
the Dundrum Estate and a major proof of concept for the future of the wider
Dundrum Estate.
Environmental, Social and Governance
To acknowledge the breadth of the sustainability agenda, we have realigned our
strategy to Environmental, Social and Governance. In terms of the
Environmental, our commitment to Net Zero by 2030 is absolute, and we achieved
an 12% reduction in like-for-like emissions in 2022. During the year we
invested in an independent assessment of our assets to align to the Paris
agreement. We developed detailed asset-level plans with a clearly defined
pathway to Net Zero, with an interim stage at 2025, aligned with the targets
for our sustainability-linked bond issued in 2021.
These plans are fully costed as part of the Group's annual business planning
process, with total expenditure over the period to 2028 of under £40m on the
current asset base. During 2022 we also delivered a range of projects from EV
charging, upgraded lighting and property management systems to PV arrays on
our assets.
To match our asset-centric operating model, we revised our approach to Social
with a new Board-approved strategy that determined that all social value
activities would deliver for our local communities, acknowledging that each
community in which we operate and support has diverse and specific needs.
During the year, the Group provided assistance to colleagues in response to
the emerging cost of living crisis. A salary supplement was awarded to all
colleagues on annual salaries of less than £/€60,000. The Group has also
made differentiated pay awards in March 2023 benefitting those in lower salary
bands. As well as realising savings, the move of the head office to Marble
Arch House aligned with a refresh of the Group's values and approach to ways
of working, which was well received by colleagues.
In terms of Governance, we revised our structures with the ambition to operate
in a more diligent way, with all elements of ESG embedded across the business.
A central part of this is recognition that Diversity, Equality and Inclusion
is far more than a box ticking exercise, but rather encourages ways of working
that foster better decision-making processes through inclusion and open
dialogue. Valuing this, it is pleasing to report that our senior- management
sponsored Affinity Groups continue to attract broad engagement across the
Group. We recognise that evolving and improving our Governance structures will
remain a focus for Hammerson.
Accelerate development
Our strategy is to accelerate the development of the land and opportunities we
own in the centre of some of Europe's highest growth and most exciting cities,
particularly in and around London, Birmingham, Bristol and Dublin.
Over the last 12 months, we have further segmented our development
opportunities between those that are integral to our existing assets such as
department store repurposing; those that are complementary to our existing
destinations and the development of which will benefit the whole estate; and
those that stand-alone.
Our immediate focus has been on progressing our integral opportunities such as
The Ironworks in Dundrum and Grand Central repurposing in Birmingham. In
addition, we have a broad pipeline of complementary opportunities, which are
projects adjacent or in close proximity to our existing assets and which have
potential to increase our scale and critical mass and unlock development
returns, as well as further halo and diversification effect on the retained
estate.
Finally, we own valuable development opportunities in key cities that are
stand-alone from our current estates, but which have the strength of location
and potential scale to create critical mass and returns of their own. In the
near term we remain focused on capital light initiatives to unlock value and
generate optionality to take developments forward, to potentially bring in
relevant partners with sectoral expertise or aligned capital, or to seek
liquidity and focus on those projects with the highest returns and impact on
our retained estate.
At Dublin Central, we have received further planning consents, which endorse
our proposals to regenerate this important site and have begun discussions
with potential operators and occupiers as part of plans to commence the first
phases of development. We have also continued to work with Transport for
Ireland to integrate a new metro station within the site.
At Martineau Galleries, part of the wider Birmingham Estate, we have continued
to work with Birmingham City Council and the West Midlands Combined Authority
to finalise details for the scheme and prepare for the first phases of
demolition and development adjacent to the new Curzon Street HS2 station and
the new tram connections.
At Brent Cross, we are working with the London Borough of Barnet to develop a
holistic brief for long term regeneration, which includes in the short term
reactivating the surrounding land for complementary uses that support the
asset and local customer and will integrate with local infrastructure and the
development of Brent Cross Town.
In Dundrum Phase II, we have submitted a planning application for nearly 900
residential apartments alongside other new town centre uses and transport
connections.
In Bristol, we have been engaged with the City Council as they develop their
post-Covid city centre development strategy and we have started to explore the
potential uses and phasing of development on our land holdings, potentially to
include residential, student, office and life science uses alongside
additional customer facing city centre uses.
Turning to our stand-alone projects, in the UK we signed the s106 agreement
for Bishopsgate Goodsyard, which has allowed us to commence the next stages of
design, enabling and marketing for this development working with our partner
Ballymore to set up the project management and delivery. In Leeds we are
progressing the master planning process for our remaining c.10 acres of land
and considering our next steps.
Create an agile platform
Improving and right sizing our platform, and creating more agile, responsive
and efficient ways of working remains a priority. We took early action in 2021
and in the first half of 2022, shifting from a top-heavy, geographically
oriented and siloed organisation to a simplified, asset-centric operating
model. As a result, we achieved a 17% year-on-year reduction in gross
administration costs in 2022, achieving our initial target of a 15-20%
reduction by 2023.
We have taken further steps including more efficient ways of working,
increasing speed of leasing, collections and prompt payments to our suppliers,
and the consolidation of our property management suppliers in the UK, which
formally started in February 2023. At the same time, we continue to implement
more integrated, connected, and automated systems to drive further efficiency.
Necessarily, the actions we have taken over the last two years have resulted
in a reduction of headcount, down 42% since 2019, and 25% year-on-year. We
have not been immune to the challenges of navigating hybrid working, the
'Great Resign' and pressures from an increase in cost of living, and indeed we
saw higher voluntary colleague turnover during the year. We continue to
invest in and promote key talent for the future, however, most notably this
year in leasing, asset management, ESG and placemaking and marketing. Overall,
we are targeting a further 20% reduction in gross administration costs by the
end of 2024.
We have also made some progress in simplifying our asset structures. For
example, we were delighted to expand our partnership in Birmingham with CPPIB,
forming a new 50/50 joint venture at Bullring in the second half of the year,
following their acquisition of Nuveen's one third stake. There is more to
do.
Deliver a sustainable and resilient capital structure
We have continued to re-align our portfolio through a disciplined programme of
disposals of non-core assets, re-focusing the Group on a core portfolio of
prime city centre estates, reducing indebtedness and generating capital for
redeployment into core assets and developments.
Generating total gross proceeds of £195m, we completed the sale of Victoria
for £120m and our 50% share of Silverburn for £70m, plus other non-core
land. Net debt reduced by 4% to £1.7bn. The Group remains committed to total
disposal proceeds of c.£500m over 2022 and 2023. Our track record of
executing £628m of sales in the last two years in challenging conditions and
the attractiveness of our assets gives us confidence we will deliver this
target.
We refinanced £820m of expiring RCFs in late April into a new £463m facility
on a 3+1+1 maturity with a smaller group of banks reducing cost. In December,
we redeemed the remaining €236m of the 2023 eurobond at par.
In addition, we completed the triennial review of the defined benefit pension
plan and moved to a full buy-in basis completed on 9 December 2022 with £nil
contribution from the Company, a £2m surplus, and the reduction of the £120m
Hammerson plc guarantee to £10m.
We remain committed to an IG credit rating. I am pleased to report that Fitch
reaffirmed our rating and revised our outlook to stable in May, as did Moody's
also with a stable outlook in December.
At 31 December 2022, the Group had liquidity of £1.0bn in the form of cash
balances (£0.3bn) and undrawn committed RCFs of £0.7bn, and had no
significant unsecured refinancing requirements until 2025 not covered by
existing cash.
CONCLUSION
As evidenced above, a significant amount of change has taken place over the
last two years, but there is more to do. Delivering that change whilst
progressing our strategic, operational and financial KPIs against a
challenging backdrop is a testament to the strength of the management team,
the Board and the support of all our stakeholders. I am sincerely grateful.
In early January, we moved to a new head office in Marble Arch, marking a
reset. It is a more efficient and collaborative space, and more reflective of
who we are today. We are well positioned to continue to deliver another year
of progress, and more agile to tackle challenges and capture opportunities
that times like these offer.
FINANCIAL REVIEW
OVERVIEW
Over the last two years, the Group has made significant financial progress in
re-basing its gross rental income, reducing costs and in strengthening the
balance sheet.
IFRS reported losses decreased to £164m compared with a loss of £429m in
2021, predominantly due to the impact of market-wide yield and ERV expansion
on property valuations, reflecting higher base interest rates in the second
half.
Adjusted earnings for the year ended 31 December 2022 increased by 60% to
£105m as a result of improved performance across the business. On a
like-for-like basis, gross rental income increased by 8% and like-for-like net
rental income improved by 29%. Our gross administration costs reduced 17%
year-on-year with more efficiencies to come from continuing to refine our
operating model and from automation and digitalisation. We also reduced
finance costs as a result of the continued deleveraging of the balance sheet,
and we saw an improved recovery from Value Retail.
EPRA NTA was £2,634m at 31 December 2022, a decline of 7% year-on-year (2021:
£2,840m), and EPRA NTA per share was 53p (2021:64p).
Net debt reduced by 4% to £1,732m at 31 December 2022 (2021: £1,799m)
benefitting from £166m of cash generated from operations and gross disposal
proceeds of £195m bringing total disposals since the beginning of 2021 to
£628m. These were partially offset by capital expenditure of £76m and
adverse foreign exchange movements of £131m.
Headline LTV was 39% and LTV on a fully proportional consolidation basis was
47%. Our net debt: EBITDA improved to 10.4x from 13.4x in 2021. The Group
has ample liquidity in cash and undrawn committed facilities of c. £1bn.
During the year, Moody's and Fitch's senior unsecured investment grade credit
ratings were re-affirmed as Baa3 and BBB+, respectively and outlooks from both
rating agencies were changed from negative to stable reflecting the
significant improvements in the business, debt reduction and the recovery from
the Covid-19 pandemic.
PRESENTATION OF FINANCIAL INFORMATION
The Group's property portfolio comprises properties that are either wholly
owned or co-owned with third parties.
Whilst the Group prepares its financial statements under IFRS (the 'Reported
Group'), the Group evaluates the performance of its portfolio for internal
management reporting by aggregating its wholly owned businesses together with
its share of joint ventures and associates which are under the Group's
management ('Share of Property interests') on a proportionally consolidated
basis, line by line, including, where applicable, discontinued operations (in
total described as the Group's 'Managed portfolio').
Both the IFRS and Management reporting bases are presented in the financial
statements.
The Group's investment in Value Retail is not proportionally consolidated
because it is not under the Group's management, is independently financed and
has differing operating metrics to the Group's managed portfolio. Accordingly,
it is accounted for separately as share of results of associates as reported
under IFRS and is also excluded from the Group's proportionally consolidated
key metrics such as net debt or like-for-like net rental income growth.
However, for certain of the Group's Alternative Performance Measures (APMs),
for enhanced transparency, we do disclose metrics combining both the managed
portfolio and Value Retail. These include property valuations and returns and
certain credit metrics.
Following the full impairment of our share in the Highcross joint venture as
at 31 December 2021, the Group has ceased to recognise the results of this
joint venture in the income statement, however, the Group's share of its
assets and liabilities continue to be incorporated in note 13 to the financial
information. Since the year end, it was agreed that it was in the best
interests of the lenders in the longer term to appoint a receiver to
administer the asset for the benefit of the creditors. Accordingly, owing to
control being in the hands of the receiver, going forward, Highcross will
cease to be incorporated into the Group's financial statements.
Management reporting and IFRS accounting treatment
Comprising properties which are Accounting treatment
Management reporting
Managed portfolio - Wholly owned and Share of Property interests Proportionally consolidated
Value Retail - Held as an associate Single line - results/investment in associates
IFRS
Managed portfolio:
- Reported Group - Wholly owned Fully consolidated
- Jointly owned Consolidation of Group's share
- Share of Property interests - Held in joint ventures Single line - results/investment in joint ventures
- Held in associates Single line - results/investment in associates
- Discontinued operations* - UK retail parks portfolio Single line - discontinued operations
Value Retail - Held as an associate Single line - results/investment in associates
* Only applicable for 2021, whereby proportionally consolidated figures
include results up to the date of disposal.
New accounting pronouncements resulting in restatements of 2021
During the year, the following agenda decisions were issued which have been
considered as follows:
• In April 2022, the IFRIC issued an agenda decision in respect of
the presentation of 'Demand deposits with restrictions on use arising from a
contract with a third party' ('the IFRIC Decision on Deposits') with further
information provided in note 1B to the financial information. The impact is
to change the classification of certain amounts held by third party managing
agents in respect of tenant deposits and service charges such that they have
been reclassified from restricted monetary assets to cash and cash
equivalents. The effects of the restatement are set out in note 16 to the
financial information.
• In October 2022, the IFRIC issued an agenda decision in respect of
'Lessor forgiveness of lease payments (IFRS 9 and IFRS 16)' (the 'IFRIC
Decision on Concessions'). This concluded that the losses incurred on granting
retrospective rent concessions should be charged to the income statement on
the date that the legal rights to income are conceded (i.e. immediate
recognition in full). Historically, the Group's treatment of such
concessions, which arose as a result of the Covid-19 pandemic, was to
recognise these as lease modifications such that the impact was initially held
on the balance sheet and then spread forward into the income statement over
the lease term or period to first break. The impact is that 2021 figures
have been restated whereby Reported Group revenue, gross rental income, net
rental income and revaluation losses are affected although operating profit
and income statement figures below are unaffected. The equivalent Adjusted
figures are also affected including those down to Adjusted earnings. A more
detailed analysis of the effects is set out in note 6 to the financial
information.
Where figures in this Financial Review have been restated, these are marked
†.
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. Details on the
EPRA BPR can be found on www.epra.com and the Group's key EPRA metrics are
shown in Table 1 of the Additional information.
We present the Group's results on an IFRS basis but also on an EPRA, Headline
and Adjusted basis as explained in note 1B to the financial information. The
Adjusted basis enables us to monitor the underlying operations of the business
on a proportionally consolidated basis as described in the basis of
preparation and 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 excluded items are
in the main reflective of those excluded for EPRA earnings, but additionally
exclude certain cash and non-cash items which we believe are not reflective of
the normal routine operating activities of the Group. 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. These items, together with EPRA and Headline adjustments are
set out in more detail in note 10A to the financial information.
For 2022, adjusting items additional to EPRA adjusting items comprised:
• Exclusion of a charge of £5.1m (2021: £8.6m) in respect of
business transformation as the Group continues its implementation of strategic
change and comprises mainly non-capitalisable costs associated with digital
transformation as well as severance costs following the reorganisation which
occurred mainly in the second half of 2021.
• A credit of £2.4m (2021: credit of £8.1m) for expected credit
losses charged to the income statement but where the related income is
deferred on the balance sheet such that the exclusion of this removes the
distortive mismatch this causes.
• Income of £1.6m from assets held for sale which relates to the
Group's 50% joint venture investment in Silverburn, sold in March 2022. The
IFRS and EPRA accounting treatment is to offset the operating income until
disposal against the loss on sale, therefore it is excluded from Adjusted
earnings. As a result we have added the income back in order to reflect the
fact that the property remained under the Group's joint ownership and
management up until completion of the disposal and is considered to still be
part of underlying earnings.
INCOME STATEMENT
Summary income statement
Reported Group
The Group's IFRS reported loss was £164.2m (2021: £429.1m loss). The most
significant elements of the reduction were reduced valuation losses of £82.7m
(2021: £169.6m), where the key factors influencing this were the market
driven yield shift in the second half of the year of £68m, a reduction in the
share of losses in joint ventures to £41.5m (2021: losses of £171.3m) where
again a reduced valuation deficit of £138.3m (2021: £274.5m) was a key
contributor and an adverse swing in the Group's share of Value Retail of
£25.3m again driven by valuation losses.
Proportionally consolidated
The Group evaluates the performance of its portfolio for internal management
reporting by aggregating its wholly owned businesses together with its share
of joint ventures and associates which are under the Group's management
('Share of Property interests') on a proportionally consolidated basis, line
by line, including, where applicable, discontinued operations. A detailed
reconciliation from Reported Group to the proportionally consolidated basis is
set out in note 2 to the financial information and a summary reconciling to
Adjusted earnings is set out below:
2022 2021
a Proportionally consolidated Proportionally consolidated
Summary income statement Before adjustments Adjustments Before adjustments Adjustments
Adjusted Adjusted
£m £m £m £m £m £m
Net rental income † 177.2 (2.4) 174.8 182.5 (8.1) 174.4
Net administration expenses (47.9) 5.1 (42.8) (60.0) 8.6 (51.4)
Profit from operating activities † 129.3 2.7 132.0 122.5 0.5 123.0
Revaluation losses - Managed portfolio † (221.0) 221.0 - (444.1) 444.1 -
Disposals and assets held for sale (1.0) 1.0 - (10.3) 10.3 -
Fair value changes and other impairments (0.1) 0.1 - (0.3) 0.3 -
Other net (losses)/gains (1.1) 1.1 - (10.6) 10.6 -
Join venture impairment - - - (11.5) 11.5 -
Share of results of associates (Value Retail) (5.3) 32.7 27.4 20.0 (4.1) 15.9
Operating (loss)/profit † (98.1) 257.5 159.4 (323.7) 462.6 138.9
Net finance costs (65.6) 11.6 (54.0) (103.6) 31.8 (71.8)
Tax charge (0.5) - (0.5) (1.8) 0.2 (1.6)
(Loss)/profit for the period † (164.2) 269.1 104.9 (429.1) 494.6 65.5
(Loss)/earnings per share Reported Adjusted Reported Adjusted
pence pence pence pence
Basic b (3.3)p (8.7)p
Adjusted † b 2.1p 1.3p
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions with further information provided in notes 1B and 6 to the
financial information.
a Proportionally consolidated figures are set out in more detail in note
2 and adjustments are described in more detail in note 10A to the financial
information.
b In addition to the IFRIC Decision on Concessions, comparative figures
for 2021 have also been restated to take account of the bonus element of scrip
dividends as explained further in note 11B to the financial information.
Previously reported figures were: Reported Group: (9.8)p; Adjusted: 1.8p.
The table below bridges Adjusted earnings between the two periods.
Reconciliation of movements in Adjusted earnings*
Adjusted earnings
£m
31 December 2021 † 65.5
Increase in net rental income excluding disposals 20.7
Decrease in net finance costs 17.8
Decrease in gross administration costs 11.9
Decrease in tax charge 1.1
Increase in Value Retail earnings 11.5
Decrease in net rental income arising from disposals (20.3)
Decrease in property fee income and management fees receivable (3.3)
31 December 2022 104.9
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions with further information provided in notes 1B and 6 to the
financial information.
* Decreases and increases are all on an Adjusted basis and therefore
exclude adjusting items as set out in note 10A to the financial information.
Rental income
Analysis of rental income
GRI and NRI for the Group are analysed below to break out Share of Property
interests.
2022
Share of Property interests
Reported Group Joint Associates Subtotal Discontinued operations Total
ventures
Proportionally consolidated £m £m £m £m £m £m
Gross rental income 90.2 119.4 5.6 125.0 - 215.2
Net service charge expenses and cost of sales (12.9) (23.9) (1.2) (25.1) (38.0)
Net rental income 77.3 95.5 4.4 99.9 - 177.2
Change in provision for amounts not yet recognised in the income statement (2.4)
Adjusted net rental income 174.8
2021
Share of Property interests
Reported Group Joint Associates Subtotal Discontinued operations Total
ventures
Proportionally consolidated £m £m £m £m £m £m
Gross rental income † 90.3 143.1 6.0 149.1 11.0 250.4
Net service charge expenses and cost of sales (23.1) (42.3) (1.3) (43.6) (1.2) (67.9)
Net rental income † 67.2 100.8 4.7 105.5 9.8 182.5
Change in provision for amounts not yet recognised in the income statement (8.1)
Adjusted net rental income † 174.4
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions with further information provided in notes 1B and 6 to the
financial information.
Gross Rental Income (GRI)
GRI decreased to £215.2m from £250.4m, reflecting the impact of disposals
and lower surrender premiums than in 2021. These were partly offset by
increased turnover and car park income, lower concessions and income from
completion of the extension at Les 3 Fontaines.
Proportionally consolidated 2022 2021 Change in like-for-like
£m
£m
Like-for-like managed portfolio: *
- UK † 86.8 78.4 10.8%
- France † 41.2 38.8 6.1%
- Ireland † 37.1 35.3 5.1%
† 165.1 152.5 8.3%
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions with further information provided in notes 1B and 6 to the
financial information.
* Like-for-like GRI for the managed portfolio is calculated based on
properties owned throughout both current and prior periods, calculated on a
constant currency basis such that the comparatives have been restated
accordingly.
Net Rental Income (NRI)
NRI decreased to £177.2m from £182.5m. Adjusted NRI was broadly unchanged at
£174.8m (2021: £174.4m). In addition to the GRI movements highlighted above,
NRI benefited from a significant improvement in collections enabling release
of provisions for bad debts and tenant incentive impairments together with
growth in variable income streams. This resulted in an improvement of the
Adjusted NRI:GRI (after ground rents payable) ratio to 81.2% (2021:
69.6%).
Proportionally consolidated 2022 2021 Change in like-for-like
£m
£m
Like-for-like managed portfolio: a
- UK † 70.8 54.0 31.3%
- France † 36.3 26.8 35.4%
- Ireland † 33.6 28.2 19.3%
140.7 109.0 29.2%
Disposals 3.5 23.8
Developments and other † 30.6 41.8
Foreign exchange - (0.2)
Adjusted net rental income † 174.8 174.4
Change in provision for amounts not yet recognised in the income statement b 2.4 8.1
Net rental income † 177.2 182.5
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions with further information provided in notes 1B and 6 to the
financial information.
a Like-for-like NRI for the managed portfolio is calculated based on
properties owned throughout both current and prior periods, calculated on a
constant currency basis such that the comparatives have been restated
accordingly.
b Relates to the change in provision for amounts not yet recognised in
the income statement for expected credit losses whereby the related income is
deferred on the balance sheet. The amount has been excluded from Adjusted net
rental income to eradicate the distortion of cost being recognised in one
accounting period and the related revenue being recognised in a different
accounting period as further described in note 10A to the financial
information.
Like-for-like NRI increased by £31.7m (29%) against 2021 reflecting strong
leasing performance, improved collections, increased variable turnover rent
and net income from car parks and commercialisation.
The drivers of the like-for-like increase were consistent across all of the
Group's geographies, offset by the loss of NRI from disposals in the UK in
2021 and 2022 being £20.3m of which £10.5m came from the sale of Victoria
and Silverburn in the first half of 2022 and £8.4m from the 2021 sale of UK
retail parks.
Further analysis of net rental income by segment is provided in Table 6 of the
Additional information.
Administration expenses
Proportionally consolidated 2022 2021
£m
£m
Employee costs - excluding variable costs 29.2 37.5
Variable employee costs 9.6 9.6
Other corporate costs 21.0 24.6
Gross administration costs 59.8 71.7
Property fee income (11.5) (13.2)
Joint venture and associate management fee income (5.5) (7.1)
Other income (17.0) (20.3)
Adjusted net administration expenses 42.8 51.4
Business transformation costs 5.1 8.6
Net administration expenses 47.9 60.0
During 2022, Adjusted net administration expenses decreased by £8.6m against
2021 reflecting the Group's continuing focus on cost reduction and principally
relates to:
• Employee costs following the reset of the organisation to an
asset-centric structure which occurred in the second half of 2021. Average
headcount during the year reduced from 494 to 370 with headcount at 31
December 2022 being 320.
• Other corporate costs (comprising mainly professional fees, office
rent and software licenses), where the most significant element was a decrease
of £2.7m in Directors and Officers insurance premiums reflecting the
strengthening of the Group's financial position. The remainder of the decrease
was predominantly in professional fees.
Business transformation costs comprised mainly fees for contractors and
consultants from the Group's digitalisation programme, which were not eligible
for capitalisation, and severance costs relating to the ongoing strategic
re-organisation initiated in the second half of 2021 (2021: comprised mainly
consultancy fees and severance costs).
Disposals and assets held for sale
During 2022, we raised gross proceeds of £195m, relating mainly to the
disposals of Silverburn and Victoria. Taken together with other smaller
disposals and adjustments to historical disposals, an overall profit from
disposals of £0.7m was generated..
Share of results of joint ventures and associates, including Value Retail
Reported Group
A full listing of our interests in joint ventures and associates is set out in
Table 22 of the Additional information. Our Reported share of results under
IFRS was a combined loss of £48.6m (2021: loss of £155.7m). This
year-on-year change was due to lower revaluation losses in 2022 compared with
2021.
Proportionally consolidated
On an Adjusted basis, because the Group's managed portfolio of joint ventures
and associates is proportionally consolidated, the Group's share of results of
joint ventures and associates comprises solely the Group's investment in Value
Retail which generated Adjusted earnings of £27.4m (2021: £15.9m). The
year-on-year improvement principally reflects higher GRI from increased sales
resulting from the easing of Covid-19 restrictions where lockdowns in 2021
meant that Villages were closed for part of the year.
Net finance costs
Reported Group
Reported Group net finance costs were £63.0m, a decrease of £34.9m compared
with 2021 attributable to higher interest income and lower debt and loan
facility cancellation costs.
Proportionally consolidated
2022 2021
£m
£m
Adjusted finance income 26.1 15.1
Finance costs
Gross interest costs (81.3) (92.2)
Interest capitalised 1.2 5.3
Adjusted finance costs (80.1) (86.9)
Adjusted net finance costs (54.0) (71.8)
Debt and loan facility cancellation costs (1.3) (22.0)
Change in fair value of derivatives (10.3) (9.8)
Net finance costs (65.6) (103.6)
Adjusted net finance costs were £54.0m, a decrease of £17.8m compared with
2021. The decrease was driven by the benefits of deleveraging since the
start of 2021, early repayment of debt utilising proceeds from disposals, the
related restructuring of hedging derivatives and higher interest income from
cash deposits. Key components comprised:
• a £6.8m reduction in finance costs driven by a reduction in
interest on cross currency swaps and a reduction as a result of repayment of
private placement notes and euro bonds
• £11.0m higher interest income resulting from both increased cash
balances in the year following disposals and a sharp rise in prevailing
interest rates in the second half of the year
Proportionally consolidated net finance costs decreased by £38.0m to £65.6m
compared to 2021, with £20.7m of the decrease relating to lower debt and loan
facility cancellation costs partly offset by changes in the fair value of
derivatives, both of which are treated as adjusting items and are described
further in note 10A to the financial information. The debt and loan facility
cancellations costs relate to unamortised facility fees in respect of
revolving credit facilities which were extinguished and replaced with a new
£463m facility as set out in the cash flow and net debt section below.
Tax
The Group's tax charge on a proportionally consolidated basis was £0.5m which
compares to £1.8m for 2021 with the reduction being due to certain changes
in the Irish capital structure.
The tax charge remains 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 8 to the financial information. In order to satisfy the REIT
conditions, the Company is required, on an annual basis, to pass certain
business tests. The Group has met all requirements for maintaining its REIT
status for the year ended 31 December 2022.
Dividends
The payments of cash and enhanced scrip dividends approved by shareholders and
made in 2022 have satisfied our REIT and SIIC distribution requirements. The
Board is not recommending a further payment in respect of 2022 but continues
to anticipate re-instating a cash dividend for 2023, expected to be at least
the minimum required to continue to meet our REIT/SIIC distribution
obligations.
The interim cash dividend and the enhanced scrip dividend alternative were
paid as a non-Property Income Distribution ('Non-PID') and treated as an
ordinary UK company dividend. As set out in note 19 to the financial
information, the interim dividend of £77.1m was settled during the year, of
which £1.4m was settled in cash.
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:
2022 2021
Summary net assets Share of Property interests EPRA EPRA NTA Share of Property interests EPRA EPRA NTA
£m
£m
Reported Group £m adjustments Reported Group £m adjustments
£m £m £m £m
Investment and trading properties 1,497 1,723 - 3,220 1,595 1,883 - 3,478
Investment in joint ventures 1,342 (1,342) - - 1,452 (1,452) - -
Investment in associates - Value Retail 1,189 - 52 1,241 1,141 - 95 1,236
108 (108) - - 106 (106) - -
- Italie Deux
Assets held for sale - - - - 71 (71) - -
Net trade receivables 24 20 - 44 28 18 - 46
Net debt † a (1,458) (274) (1) (1,733) (1,559) (240) 8 (1,791)
Other net liabilities † (116) (19) (3) (138) (87) (33) (9) (129)
Net assets 2,586 - 48 2,634 2,746 - 94 2,840
EPRA NTA per share b 53p 64p
† 2021 figures have been restated to reflect the IFRIC Decision on
Demand deposits where further information is provided in note 16 to the
financial information and Tables 13 and 14 of the Additional information.
a Comprises cash and cash equivalents, loans, fair value of currency
swaps and cash and cash equivalent held within assets held for sale.
b EPRA adjustments in accordance with EPRA best practice, principally in
relation to deferred tax, as shown in note 10B to the financial information.
During 2022, net assets decreased 6% to £2,586m (2021: £2,746m). Net assets,
calculated on an EPRA Net Tangible Assets (NTA) basis, were £2,634m, or 53
pence per share, a reduction of 11 pence compared to 31 December 2021
principally due to revaluation losses of £282m, partly offset by Adjusted
earnings of £105m, together with dilution from scrip dividends of 7.5p. This
is equivalent to a total accounting return of -6.8%. The key components of the
movement in Reported Group net assets and EPRA NTA are as follows:
Movement in net assets
Proportionally consolidated including Value Retail Reported EPRA EPRA NTA
£m
Group adjustments
£m
£m
1 January 2022 2,746 94 2,840
Property revaluation - Managed portfolio (221) - (221)
(61) - (61)
- Value Retail
Adjusted earnings 105 - 105
Change in deferred tax (9) 5 (4)
Dividends (13) - (13)
Foreign exchange and other movements 39 (51) (12)
31 December 2022 2,586 48 2,634
PROPERTY PORTFOLIO ANALYSIS
Investment markets
The improvement in the investment market seen in the first half of 2022
stalled in the second half due to rising interest rates, continuing high
inflation, soaring energy prices and the ongoing war in Ukraine.
In the UK, there were 58 shopping centre transactions totalling £1.9bn, the
majority of which were agreed in the first half of the year including
transactions involving non-managed stakes in prime shopping centres and larger
lot sizes, for example, CPP Investments' acquisition of Nuveen's one third
stake in Bullring. Investment volumes slowed in the second half of the year
with a number of larger schemes failing to transact due to lack of debt
finance. Second half investment activity was primarily at the
discount/convenience end with lot sizes between £10-£30m (Source: JLL).
Prime shopping centre yields moved out by 50 basis points in the last quarter
of 2022.
In France, retail investment activity reached €4.5bn with over 207
transactions and strong volume growth in large transactions with 13 deals
above €100m (Source: JLL). Prime shopping centre yields increased slightly
towards the end of the year.
In Ireland, there was limited retail investment activity with retail
representing just 8% (€0.4m) of total transactions and no transactions of
significance (Source: C&W).
Portfolio valuation
The Group's external valuations continue to be conducted by CBRE Limited
(CBRE), Cushman & Wakefield (C&W) and Jones Lang LaSalle Limited
(JLL), providing diversification of valuation expertise across the Group. At
31 December 2022 the majority of our UK flagship destinations have been valued
by JLL and CBRE, the French portfolio by JLL, and the Irish portfolio, Value
Retail and Brent Cross have been valued by C&W. This is unchanged from 31
December 2021.
At 31 December 2022, the Group's portfolio was valued at £5,107m, a decline
of £265m (4.9%) since 31 December 2021. This movement was primarily due to
revaluation losses of £282m and net disposals totalling £194m comprising
mainly Silverburn and Victoria, being partly offset by capital expenditure of
£79m and favourable foreign exchange gains of £157m. Movements in the
portfolio valuation are shown in the table below.
Movements in property valuation
Proportionally consolidated - including Value Retail Flagships Developments and other Managed portfolio Value Retail Group portfolio
£m £m £m £m £m
At 1 January 2022 2,784 694 3,478 1,894 5,372
Revaluation losses a (168) (53) (221) (61) (282)
Revaluation losses of impaired joint venture b - (26) (26) - (26)
Capital expenditure 51 22 73 6 79
Reclassifications 206 (206) - - -
Capitalised interest - 1 1 - 1
Disposals (187) (7) (194) - (194)
Foreign exchange 102 7 109 48 157
At 31 December 2022 a 2,788 432 3,220 1,887 5,107
a Valuations and revaluation losses are further analysed in Table 9 of
the Additional information.
b The Highcross joint venture is excluded owing to the Group's share of
net losses after revaluation being restricted to £nil as described in note 13
to the financial information .
During the year, capital expenditure on the managed portfolio was £73m and
related mainly to the Les 3 Fontaines extension at Cergy, which opened in
March 2022, cladding works at Bullring and works to repurpose the former House
of Fraser anchor unit at Dundrum, in addition to £15m spent at Whitgift on
acquiring long leasehold and freehold interests. Table 11 of the Additional
information analyses the spend between the creation of additional area and
that relating to the enhancement of existing space.
The Les 3 Fontaines extension expenditure was recorded in the Developments and
other portfolio prior to the extension being reclassified to the Flagship
portfolio upon opening.
Revaluation losses
Excluding Highcross, we recognised a total net revaluation loss of £282m
across the Group portfolio, comprising £221m in respect of the managed
portfolio and £61m in Value Retail. £271m of the revaluation loss occurred
in the second half of the year, the majority of which came from a market
driven yield shift of £154m in the second half of the year as a result of
higher interest rates which mostly occurred in the last quarter of 2022. The
balance was principally due to the valuers reducing selective ERVs across the
portfolio.
UK flagship destinations reported a revaluation deficit of £90m where half
was due to an outward yield shift of 50 basis points with the remainder due to
selected ERV reductions. In France, yields were more stable with a 10 basis
point outward movement, equivalent to a revaluation deficit of £12m with the
balance of £45m mainly due to ERV reductions. Ireland saw a positive movement
in ERV most notably at Dundrum, however this was more than offset by a 20
basis point outward yield shift which resulted in a net revaluation deficit of
£20m.
A deficit of £53m was recognised on the Developments and other portfolio of
which £11m related to Croydon associated with lower income and £13m related
to the future development schemes in Dublin due to inflationary concerns over
development costs.
Despite a continued strong post pandemic recovery in trading at Value Retail
in the year, the portfolio recorded an overall revaluation loss of £61m, of
which £53m related to Bicester Village, driven by outward yield shifts.
Further valuation analysis is included in Table 9 of the Additional
information.
Like-for-like ERV*
Flagship destinations 2022 2021
%
%
UK (3.8) (10.6)
France (1.6) (1.5)
Ireland 0.3 (3.0)
(2.2) (6.7)
* Calculated on a constant currency basis for properties owned throughout the
relevant reporting period.
Like-for-like ERVs fell 2.2% during 2022 with most of the decrease occurring
in the second half of the year following a broadly flat performance in H1
where the decrease was only 0.3%.
UK ERVs were 3.8% lower, reflecting the investment to attract 'best in class'
occupiers in certain of our managed portfolio, while ERVs in France were
marked down less at 1.6%.
In Ireland, ERVs were up 0.3%, with Dundrum Town Centre reporting a 0.4%
increase driven by the opening of Brown Thomas in the former House of Fraser
unit in February, with Penneys relocating into the remaining space in the
first half of 2023, offset by small decreases at the other destinations.
Property returns analysis
The Group's managed property portfolio generated a total property return of
-2.3%, comprising an income return of +5.4% offset by a capital return of
-7.3%. Incorporating the income and capital returns from the Value Retail
portfolio, this brought the Group's income return to +5.3% and the capital
return to -5.8%, to generate a total return of -0.7% (2021: -3.9%).
2022
Proportionally consolidated UK France Ireland Flagship Developments and other Managed portfolio Value Retail Group portfolio
% % % Destinations% % % % %
%
Income return 7.9 4.8 5.2 6.0 2.3 5.4 5.3 5.3
Capital return (9.4) (4.6) (3.0) (5.9) (14.8) (7.3) (3.1) (5.8)
Total return (2.1) - 2.1 (0.2) (12.8) (2.3) 2.0 (0.7)
2021
UK France Ireland Flagship Developments and other Managed portfolio Value Retail Group portfolio
% % % Destinations% % % % %
%
Income return † 6.5 3.6 4.2 5.0 2.9 4.7 2.7 4.0
Capital return † (16.3) (6.4) (7.8) (11.2) (9.1) (10.9) (0.6) (7.7)
Total return † (10.8) (3.1) (3.9) (6.8) (6.6) (6.7) 2.1 (3.9)
† 2021 figures have been restated to reflect the IFRIC Decision on
Deposits with further information provided in note 16 to the financial
information and Tables 13 and 14 of the Additional information.
Shareholder returns analysis
Return per annum over Total shareholder return Total shareholder return Benchmark
Cash basis Scrip basis
a a b
% % %
One year (26.2) (15.1) (34.3)
Three years (44.0) (37.7) (12.4)
Five years (35.2) (30.8) (6.7)
a Cash and scrip bases represent the return assuming investors opted for
either cash or scrip dividends with the assumption that those opting for scrip
dividends continued to hold the additional shares issued.
b Benchmark is the FTSE EPRA/NAREIT UK index.
Hammerson's total shareholder return over one year for 2022 was -15.1% on a
scrip basis (-26.2% on a cash basis), outperforming the FTSE EPRA/NAREIT UK
index of -34.3%. Over five years however the Group underperformed compared to
the benchmark of
-6.7% with shareholder returns of -35.2% and -30.8% on a cash and scrip basis,
respectively.
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 financial information.
Reported Group
Joint ventures
During the year, our investment in joint ventures decreased to £1,342m (2021:
£1,452m) where the most significant movements were the Group's share of net
rental income of £96m offset by revaluation losses of £132m and cash
distributions to the Group of £63m.
Associates
Our investment in associates increased to £1,297m (2021: £1,247m) of which
the Group's investment in Value Retail was £1,189m. Key movements were in
Value Retail where the Group's share of earnings were offset by revaluation
losses of £61m together with foreign exchange gains of £35m.
TRADE RECEIVABLES
During 2020 and 2021, the intermittent closures of the majority of
non-essential retail across all regions as a result of the Covid-19 pandemic,
coupled with the UK government's restrictions on landlords' ability to enforce
collections, adversely impacted collection rates and consequently, the level
of trade receivables was high. To address these challenges, the Group put in
place more rigorous procedures and clearer tracking of our trade receivables
combining involvement of our asset management, leasing and finance teams to
maintain clear focus on collections.
Over the course of the year, the underlying environment improved. This
included the lifting of UK government restrictions on collections (in two
phases in March and September 2022) and although restrictions differed in
France and Ireland, similar improvements were also seen. The combination of
these changes together with management's focus has meant that we have been
able to reduce the provisioning rates for some ageing categories of
receivable. However, with the backdrop of macroeconomic uncertainties, we
consider it premature to be extrapolating this as a trend across all
categories and accordingly our approach to provisioning remains cautious and
prudent.
Gross trade (tenant) receivables on a proportionally consolidated basis
totalled £74.1m (2021: £99.5m) against which a provision of £32.3m (2021:
£53.3m) has been applied. This provision represents 60% (2021: 76%) of trade
receivables of £53.9m (2021: £70.5m) after excluding tenant deposits,
guarantees and VAT, although this also includes a provision of £1.6m (2021:
£4.0m) in respect of income not yet recognised in the income statement owing
to a technical interpretation of IFRS 9 as explained in note 10A to the
financial information. Further analysis is set out below and in note 15 to the
financial information.
2022 2021
Gross trade receivables Trade receivables net of deposits, guarantees Provision Net trade receivables Gross trade receivables Trade receivables net of deposits, guarantees Provision Net trade receivables
£m and VAT £m £m £m and VAT £m £m
£m £m
UK 29.1 25.0 (12.5) 16.6 46.3 38.4 (27.2) 19.1
France 40.0 24.6 (17.2) 22.8 45.2 25.6 (21.7) 23.5
Ireland 5.0 4.3 (2.6) 2.4 8.0 6.5 (4.4) 3.6
Managed portfolio 74.1 53.9 (32.3) 41.8 99.5 70.5 (53.3) 46.2
Share of Property interests (33.1) (27.3) 14.7 (18.4) (44.6) (36.8) 25.9 (18.7)
Reported Group 41.0 26.6 (17.6) 23.4 54.9 33.7 (27.4) 27.5
PENSIONS
On 8 December 2022, the Company and the Trustees of the Group's principal
defined benefit pension scheme ('the Scheme') entered into a bulk purchase
annuity policy ('buy-in') contract with Just Retirement Limited for a premium
of £87.3m in respect of insuring all future payments to existing pensioners
of the Scheme at 9 December 2022. The pension buy-in transaction was funded
through the existing investment assets held by the Trustees on behalf of the
pension scheme and the impact of this transaction is reflected in the IAS 19
valuation.
This material balance sheet de-risking exercise is in line with the Group's
long-term strategy to reduce future volatility of the Group's balance sheet.
FINANCING AND CASH FLOW
Financing strategy
Our financing strategy is to borrow predominantly on an unsecured basis to
maintain flexibility. Secured borrowings 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 borrowings are arranged to maintain access to short term liquidity
and long term financing. Short term funding is principally through syndicated
revolving credit facilities. Long term debt comprises the Group's fixed rate
unsecured bonds and private placement notes. At 31 December 2022, the Group
also had secured borrowings in Value Retail and three of the Group's joint
ventures, although following the placing of Highcross into receivership in
February 2023, this has since reduced to two. 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 reviews regularly 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 but the Group always strives to maintain an
investment grade credit rating. The key financing metrics are set out below.
Key financial metrics
Proportionally consolidated unless otherwise stated Calculation 2022 2021
(References to Additional information)
Net debt † Table 13 £1,732m £1,799m
Liquidity † £996m £1,478m
Weighted average interest rate 2.4% 3.0%
Weighted average maturity of debt 3.4 years 4.1 years
FX hedging 91% 89%
Net debt : EBITDA † Table 16 10.4x 13.4x
Loan to value - Headline a Table 18 39% 39%
Loan to value - Full proportional consolidation of Value Retail † b Table 18 47% 46%
Metrics with associated financial covenants Covenant
Interest cover † ≥ 1.25x Table 17 3.24x 2.30x
Gearing - Selected bonds † c ≤ 175% Table 19 68% 66%
- Other borrowings and facilities † ≤ 150% Table 19 68% 66%
Unencumbered asset ratio † ≥ 1.5x Table 20 1.74x 1.84x
Secured borrowings/equity shareholders' funds ≤ 50% 15% 14%
Fixed rate debt as a proportion of total debt n/a 84% 85%
† 2021 figures have been restated to reflect the IFRIC Decision on
Deposits with further information provided in notes 1B and 16 to the financial
information and Tables 13 and 14 of the Additional information.
a Headline: Loan excludes Value Retail net debt and Value includes Value
Retail net assets.
b Full proportional consolidation of VR: Loan includes Value Retail net
debt and Value includes Value Retail property values.
c Applicable to bonds maturing in 2023, 2025 and 2027 (as set out in
note 17 to the financial information).
Credit ratings
In recognition of the Group's strengthened financial position, Moody's and
Fitch's senior unsecured investment grade credit ratings were re-affirmed
during the year as Baa3 and BBB+ respectively and outlooks from both rating
agencies were changed from negative to stable.
Leverage
At 31 December 2022, the Group's gearing was 68% (2021: 66%) and Headline loan
to value ratio was 39% (2021: 39%).
The Group's share of net debt in Value Retail totalled £675m (2021: £680m).
Fully proportionally consolidating Value Retail's net debt, the Group's loan
to value ratio was 47% (2021: 46%).
Calculations for loan to value and gearing are set out in Tables 18 and 19 of
the Additional information, respectively.
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 31 December 2022, the Group had significant
headroom against these metrics.
In addition, some joint ventures and associates have secured debt facilities
which include covenants specific to those properties, including covenants for
loan to value and interest cover, however, there is no recourse to the Group.
At 31 December 2021, certain covenants on the secured loan at the Highcross
joint venture were in breach and an impairment of the full equity value was
recognised at that time with the position remaining at 31 December 2022, but
as described in the overview above, going forward, Highcross will cease to be
incorporated into the financial statements following the appointment of a
receiver on
9 February 2023.
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 31 December 2022, the value of euro-denominated
liabilities as a proportion of the value of euro-denominated assets was 91%
compared with 89% at the beginning of the year. Interest on euro-denominated
debt also acts as a partial hedge against exchange differences arising on net
income from our overseas operations. Sterling weakened against the euro during
the year by 5%.
CASH FLOW AND NET DEBT
Proportionally consolidated net debt
Movement in proportionally consolidated net debt (£m)
http://www.rns-pdf.londonstockexchange.com/rns/3627S_1-2023-3-8.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/3627S_1-2023-3-8.pdf)
† Net debt at 1 January 2022 has been restated to reflect the IFRIC
Decision on Deposits with further information provided in notes 1B and 16 to
the financial information as well as Tables 13 and 14 of the Additional
information.
On a proportionally consolidated basis, net debt decreased by 4% to £1,732m
(2021: £1,799m). This comprised loans of £2,038m and the fair value of
currency swaps of £31m, less cash and cash equivalents of £336m, of which
£219m is held by the Reported Group. Disposals during the year generated
net cash proceeds of £192m. Cash generated from operations of £166m
comprised profit from operating activities of £129m and £37m of movements in
working capital and other non-cash items.
Refinancing
The Group completed significant refinancing during 2021, reinforcing the
Group's capital structure, including the refinancing of €1bn near term bond
maturities with a new €700m sustainability-linked bond and proceeds from
disposals. As at 31 December 2021, the Group had a number of Revolving
Credit Facilities (RCFs) in place with a total of £1,030m commitments
expiring between April 2022 and April 2024. During 2022, the following
activities were undertaken to refinance and extend these facilities:
• £820m of facilities, comprising a £420m RCF with commitments
expiring in 2023 and a £400m RCF with commitments expiring between 2023 to
2024 were refinanced with a new £463m RCF expiring in April 2025, which may
be extended to April 2027 at the latest, subject to both lender and borrower
consent. A further £10m of commitments expired in April 2022
• £100m and JPY7.7bn (£49m) of RCF commitments expiring in June
2024 were extended to a new expiry in June 2025. The remaining £50m of
commitments with an expiry of June 2024 remain unchanged
• €235.5m eurobonds due 2023 were repaid on 16 December 2022 using
available cash
Following these changes, committed facilities were reduced by £370m from
£1,030m at 31 December 2021 to £662m at
31 December 2022 with £2m utilised to support ancillary facilities. This will
result in an interest cost saving of £0.8m per annum in undrawn commitment
fees whilst maintaining a strong balance sheet and extending the maturities of
remaining commitments.
In addition, further to the £297m of private placement notes repaid in 2021,
notes totalling £42m were repaid early at par in April 2022, saving £0.9m of
interest on an annualised basis.
Liquidity
The Group's liquidity at 31 December 2022, calculated on a proportionally
consolidated basis comprising cash of £336m and unutilised committed
facilities of £660m, was £996m, £482m lower than at the beginning of the
year. This was primarily due to the £368m reduction in RCF committed
facilities, the €236m early repayment of the Group's 2023 euro bond being
partially offset by the retention of cash proceeds from disposals.
Debt and facility profile
Maturity profile of loans and facilities
Proportionally consolidated (£m)
http://www.rns-pdf.londonstockexchange.com/rns/3627S_2-2023-3-8.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/3627S_2-2023-3-8.pdf)
The Group's weighted average maturity is 3.4 years (2021: 4.1 years). The
maturity of 2024 private placements are covered by existing cash with the
Group having no further unsecured debt maturities until 2025.
Maturity analysis of loans
2022 2021
Loan Maturity £m £m
Sterling bonds 2025 - 2028 846.4 845.4
Sustainability linked euro bond 2027 612.3 578.3
Euro bonds 2023 a - 197.4
Bank loans and overdrafts 2023 b (3.1) (2.7)
Senior notes (US Private Placements) 2024 - 2031 190.8 216.4
Total loans - Reported Group 1,646.4 1,834.8
Share of Property interests 2023 - 2024 391.6 374.3
Total loans - proportionally consolidated 2,038.0 2,209.1
Cash and cash equivalents (336.5) (454.4)
Fair value of currency swaps 30.6 44.1
Net debt 1,732.1 1,798.8
a Redeemed in December 2022 using available cash resources, following
the exercise of an early redemption option.
b Debit balance comprises unamortised fees for RCFs against which no
funds had been drawn at the year ends.
Risks and uncertainties
The Board continually reviews and monitors the principal risks and
uncertainties which could have a material effect on the Group's results.
During the year, a thorough review exercise was undertaken which resulted in
the separation of three existing risks into six new risks as these were deemed
to be significantly material to the Group on a stand alone basis. The
updated principal risks and uncertainties for 2022 are listed below with
details of our assessment of the residual risk. Full disclosure of the risks,
including the factors which mitigate them, is set out within the Risk and
uncertainties section of the Annual Report 2022.
A. Macroeconomic Adverse changes to the macroeconomic environment in which we operate have the
potential to hinder our financial performance and our ability to deliver our
Residual risk: strategy.
High
B. Retail market (new) In the context of the ever evolving retail market place, the Group fails to
anticipate and address structural market changes. This will impair leasing
Residual risk: performance, result in a sub-optimal occupier mix and thus impact our ability
to attract visitors, maximise footfall/spend, and grow income at our
Medium properties.
C. Investment market and valuations (new) Investor appetite for retail assets is reduced due to macroeconomic or retail
market factors including increased borrowing costs, economic downturn,
Residual risk: consumer and occupier confidence. This will adversely impact property
valuations and also risk hindering the Group's in-flight disposal plans. This
Medium in turn would reduce the availability of funds for re-investment in our core
assets and/or refinancing debt.
D. Climate Climate risks, particularly the reduction in carbon emissions and compliance
with ESG regulations, are not appropriately managed and communicated. This is
Residual risk: likely to adversely impact valuations and investor sentiment and may result in
an increased final year bond coupon if the Group's sustainability linked bond
Medium targets are not met. Also, extreme weather events may impact our properties.
E. Tax (new) The Group suffers financial loss and reputational damage from a new or
increased tax levy or due to non-compliance with local tax legislation.
Residual risk: Medium
F. Legal and regulatory compliance (new) The failure to comply with existing laws and regulations relevant to the
Group, or to adapt to changes in these requirements in a timely fashion, could
Residual risk: Medium result in Group suffering reputational damage and/or financial penalties.
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.
G. Non-retail/multi-use markets The Group fails to target the optimal (non-retail) property sectors for future
developments or repurposing, or has insufficient access to capital and the
Residual risk: Medium skills required to deliver its urban estates vision. Occupier or investor
demand for non-retail sectors weakens or evolves such that the Group's
development and repurposing plans are sub-optimal.
H. Cyber security (new) The Group's information technology systems fail or are subject to an attack
which breaches their technological defences. A failure could lead to
Residual risk: Medium operational disruption, financial demands or reputational damage due to assets
being brought down and/or loss of commercially sensitive data.
I. Health and safety (new) There is a serious work related injury, death and/or ill health to our
colleagues, customers or contractors, and anyone else who visits our
Residual risk: Medium 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.
J. Capital structure 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
Residual risk: Medium objectives.
K. Partnerships 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
Residual risk: our strategy and reduces our control and therefore liquidity if partners are
not strategically aligned.
High
L. Property development Property development is inherently risky due to its complexity, management
intensity and uncertain outcomes, particularly for major schemes with multiple
Residual risk: Medium phases and long delivery timescales. Unsuccessful projects result in adverse
financial and reputational outcomes.
M. Transformation The Group fails to deliver its strategic objective of creating an agile
platform due to sub-optimal transformation projects. Other issues could arise
Residual risk: Medium due to transformation initiatives being delivered late, overbudget or causing
significant disruption to business-as-usual activity.
N. People A failure to retain or recruit key management and other colleagues to build
skilled and diverse teams could adversely impact operational and corporate
Residual risk: Medium 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.
Consolidated income statement
Year ended 31 December 2022
Note 2022 2021
(Restated)
£m £m
Revenue † 2,4 131.4 137.2
Profit from operating activities † a 2 29.7 8.0
Revaluation loss on properties † 2 (82.7) (169.6)
Other net gains 2 0.6 18.7
Share of results of joint ventures 13B (41.5) (171.3)
Impairment of joint ventures 10A - (11.5)
Share of results of associates 14B (7.1) 15.6
Operating loss (101.0) (310.1)
Finance income 7 26.1 15.1
Finance costs 7 (89.1) (113.0)
Loss before tax (164.0) (408.0)
Tax charge 8 (0.2) (1.3)
Loss from continuing operations (164.2) (409.3)
Loss from discontinued operations - (19.8)
Loss for the year attributable to equity shareholders (164.2) (429.1)
Basic and diluted loss per share b
Continuing operations 11B (3.3)p (8.3)p
Discontinued operations 11B - (0.4)p
Total (3.3)p (8.7)p
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions with further information provided in notes 1B and 6.
a Includes a charge of £4.0m (2021: £13.5m) and an equivalent credit of
£10.7m (2021: credit of £16.6m) relating to provisions for impairment of
trade (tenant) receivables as set out in note 15B.
b 2021 loss per share figures have been restated to incorporate the
bonus element of scrip dividends.
Consolidated statement of COMPREHENSIVE income
Year ended 31 December 2022
2022 2021
£m £m
Loss for the year from continuing operations (164.2) (409.3)
Loss for the year from discontinued operations - (19.8)
Loss for the year (164.2) (429.1)
Recycled through the profit or loss on disposal of overseas property interests
Exchange gain previously recognised in the translation reserve - (55.2)
Exchange loss previously recognised in the net investment hedge reserve - 44.2
Net exchange loss relating to equity shareholders a - (11.0)
Items that may subsequently be recycled through profit or loss
Foreign exchange translation differences 130.6 (139.7)
(Loss)/gain on net investment hedge (103.4) 112.2
Net loss on cash flow hedge (1.9) (1.7)
Share of other comprehensive gain of associates 23.8 1.3
48.6 (27.9)
Items that will not subsequently be recycled through the profit or loss
Net actuarial (losses)/gains on pension schemes (26.7) 18.9
Total other comprehensive income/(loss) b 21.9 (20.0)
Total comprehensive loss for the year (142.3) (449.1)
a 2021: Relates to the sale of the Group's 25% interest in Espace
Saint-Quentin and 10% interest in Nicetoile.
b All items within total other comprehensive income/(loss) relate to
continuing operations.
Consolidated balance sheet
As at 31 December 2022
Note 2022 2021
(Restated and re-presented)
£m £m
Non-current assets
Investment properties 12 1,461.0 1,561.4
Interests in leasehold properties 34.0 32.9
Right-of-use assets 9.5 3.8
Plant and equipment 1.4 1.4
Investment in joint ventures 13C 1,342.4 1,451.8
Investment in associates 14C 1,297.1 1,247.0
Other investments 9.8 9.5
Trade and other receivables 15A 3.2 19.5
Derivative financial instruments 7.0 18.6
Restricted monetary assets 16A 21.4 21.4
4,186.8 4,367.3
Current assets
Trading properties 12 36.2 34.3
Trade and other receivables 15B 85.9 84.8
Derivative financial instruments 0.1 7.3
Restricted monetary assets † 16A 8.6 33.7
Cash and cash equivalents † 16B 218.8 315.1
349.6 475.2
Assets held for sale 9 - 71.4
349.6 546.6
Total assets 4,536.4 4,913.9
Current liabilities
Trade and other payables (168.3) (179.4)
Obligations under head leases (0.2) -
Tax (0.5) (0.6)
Derivative financial instruments (16.1) -
(185.1) (180.0)
Non-current liabilities
Trade and other payables (56.3) (56.6)
Obligations under head leases (38.1) (36.4)
Loans 17A (1,646.4) (1,834.8)
Deferred tax (0.4) (0.4)
Derivative financial instruments (23.7) (59.7)
(1,764.9) (1,987.9)
Total liabilities (1,950.0) (2,167.9)
Net assets 2,586.4 2,746.0
Equity
Share capital 250.1 221.0
Share premium 1,563.7 1,593.2
Merger reserve - 374.1
Capital redemption reserve * - 207.6
Other reserves * 135.4 110.0
Retained earnings * 646.0 243.5
Investment in own shares (8.8) (3.5)
Equity shareholders' funds 2,586.4 2,745.9
Non-controlling interests - 0.1
Total equity 2,586.4 2,746.0
EPRA net tangible assets value per share 11C 53p 64p
† 2021 figures have been restated to reflect the IFRIC Decision on
Deposits with further information provided in notes 1B and 16.
* Certain reserves for 2021 marked * have been re-presented as set out
in the consolidated statement of changes in equity.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended 31 December 2022
Note Share capital Share premium Merger reserve Capital redemp- Other reserves Retained earnings Invest- Equity share- Non- con- Total equity
tion ment in own shares holders' funds trolling interests
reserve
a e b c a
£m £m £m £m £m £m £m £m £m £m
At 1 January 2022 221.0 1,593.2 374.1 207.6 110.0 243.5 (3.5) 2,745.9 0.1 2,746.0
Reclassification d - - - (9.4) - 9.4 - - - -
At 1 January 2022 - re-presented 221.0 1,593.2 374.1 198.2 110.0 252.9 (3.5) 2,745.9 0.1 2,746.0
Foreign exchange translation differences - - - - 130.7 - - 130.7 (0.1) 130.6
Loss on net investment hedge - - - - (103.4) - - (103.4) - (103.4)
Gain on cash flow hedge - - - - 6.3 - - 6.3 - 6.3
Gain on cash flow hedge recycled to net finance costs - - - - (8.2) - - (8.2) - (8.2)
Share of other comprehensive gain of associates - - - - 23.3 - 23.3 - 23.3
-
Net actuarial losses on pension schemes - - - - - (26.7) - (26.7) - (26.7)
Loss for the year - - - - - (164.2) - (164.2) - (164.2)
Total comprehensive income/(loss) - - - - 25.4 (167.6) - (142.2) (0.1) (142.3)
Transfer b, e - - (374.1) (198.2) - 572.3 - - - -
Share-based employee remuneration - - - - - 3.0 - 3.0 - 3.0
Cost of shares awarded to employees - - - - - (1.4) 1.4 - - -
Purchase of own shares - - - - - - (6.7) (6.7) - (6.7)
Dividends 19 - - - - - (140.3) - (140.3) - (140.3)
Scrip dividend related share issue 29.1 (29.1) - - - 127.1 - 127.1 - 127.1
Scrip dividend related share issue costs - (0.4) - - - - - (0.4) - (0.4)
At 31 December 2022 250.1 1,563.7 - - 135.4 646.0 (8.8) 2,586.4 - 2,586.4
a 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'.
b The capital redemption reserve comprised £14.3m relating to share
buybacks which arose over a number of years up to 2019 and £183.9m resulting
from the cancellation of the Company's shares as part of the reorganisation of
share capital in 2020. Following approval by the Court on 22 November 2022,
this reserve has been reclassified as available for distribution to
shareholders in accordance with ICAEW Technical Release 02/17BL section 2.8A
and as a result has been transferred to retained earnings.
c From 1 January 2022, 'Other reserves' now comprises Translation, Net
investment hedge and Cash flow hedge reserves.
d The share-based employee remuneration reserve was previously
segregated separately within 'Other reserves' and for the purposes of
presentation in this report, for the year ended 31 December 2021 has been
renamed 'Capital and share-based reserves'. This share-based employee
remuneration reserve has now been reclassified into retained earnings to
reflect that it forms part of this reserve. The remaining component of the
previously named 'Other reserves' was the capital redemption reserve and has
accordingly been renamed as such.
e The merger reserve arose in September 2014 from a placing of new
shares using a structure which resulted in merger relief being taken under
Section 612 of the Companies Act 2006. Following receipt of the proceeds in
2014 and the relevant criteria enabling use of the reserve having been
satisfied, the amounts in the merger reserve are deemed distributable and
accordingly the balance of this reserve has been transferred to retained
earnings.
CONSOLIDATED STATEMENT OF CHANGES IN EQUIty
Year ended 31 December 2021
Note Share capital Share premium Merger reserve Capital and share-based reserves Other reserves Retained earnings Invest- Equity Non- Total equity
ment in own shares share- con-
holders' funds trolling interests
d c a
£m £m £m £m £m £m £m £m £m £m
At 1 January 2021 202.9 1,611.9 374.1 207.1 150.2 663.0 (0.4) 3,208.8 0.1 3,208.9
Recycled exchange gain on disposal of overseas property interests - - - - (11.0) - - (11.0) - (11.0)
Foreign exchange translation differences - - - - (139.7) - - (139.7) - (139.7)
Gain on net investment hedge - - - - 112.2 - - 112.2 - 112.2
Loss on cash flow hedge - - - - (1.9) - - (1.9) - (1.9)
Loss on cash flow hedge recycled to net finance costs - - - - 0.2 - - 0.2 - 0.2
Share of other comprehensive gain of associates - - - - - 1.3 - 1.3 - 1.3
Net actuarial gains on pension schemes - - - - - 18.9 - 18.9 - 18.9
Loss for the year - - - - - (429.1) - (429.1) - (429.1)
Total comprehensive loss - - - - (40.2) (408.9) - (449.1) - (449.1)
Share-based employee remuneration - - - 3.3 - - - 3.3 - 3.3
Cost of shares awarded to employees - - - (0.4) - - 0.4 - - -
Transfer on award of own shares to employees - - - (2.4) - 2.4 - - - -
Purchase of own shares - - - - - - (3.5) (3.5) - (3.5)
Dividends 19 - - - - - (135.7) - (135.7) - (135.7)
Scrip dividend related share issue 18.1 (18.1) - - - 122.7 - 122.7 - 122.7
Scrip dividend related share issue costs - (0.6) - - - - - (0.6) - (0.6)
At 31 December 2021 221.0 1,593.2 374.1 207.6 110.0 243.5 (3.5) 2,745.9 0.1 2,746.0
Consolidated cash flow statement
Year ended 31 December 2022
Note 2022 2021
(Restated and re-presented)
£m £m
Profit from operating activities † 29.7 8.0
Net movements in working capital and restricted monetary assets † 20A 2.6 4.3
Non-cash items † 20A (0.8) (9.3)
Cash generated from operations † 31.5 3.0
Interest received 18.1 20.5
Interest paid (69.1) (101.4)
Redemption premiums and fees from early repayment of debt - (19.8)
Debt and loan facility issuance and extension fees (2.8) (5.2)
Premiums on hedging derivatives (3.9) (20.8)
Tax repaid/(paid) 0.3 (2.0)
Distributions and other receivables from joint ventures 89.5 45.7
Distributions from joint ventures reclassified as assets held for sale 6.0 -
Cash flows from operating activities † 69.6 (80.0)
Investing activities
Capital expenditure (36.4) (76.2)
Sale of properties 124.0 7.0
Sale of investments in joint ventures 67.9 48.5
Sale of investments in associates - 21.2
Advances to joint ventures (4.0) (14.0)
Distributions and capital returns received from associates 2.6 2.1
Cash flows from investing activities 154.1 (11.4)
Financing activities
Share issue expenses (0.5) (2.5)
Proceeds from award of own shares 0.1 0.1
Purchase of own shares (6.7) (3.5)
Proceeds from new Borrowings - 596.5
Repayment of Borrowings (302.4) (929.4)
Equity dividends paid 19 (13.2) (24.9)
Cash flows from financing activities (322.7) (363.7)
(Decrease)/increase in cash and cash equivalents
- continuing operations † (99.0) (455.1)
- discontinued operations * - 354.8
† (99.0) (100.3)
Opening cash and cash equivalents † 315.1 417.5
Exchange translation movement 2.7 (2.1)
Closing cash and cash equivalents † 218.8 315.1
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions with further information provided in notes 1B and 6 and the IFRIC
Decision on Deposits with further information provided in notes 1B and 16.
* Cash flows for the year ended 31 December 2021 were previously
presented to include discontinued operations allocated into each individual
line item. The figures above have been re-presented to show only cash flows
arising from continuing operations (consistent with the presentation used in
the consolidated income statement).
Notes to the CONSOLIDATED FINANCIAL INFORMATION
1. BASIS OF PREPARATION, CONSOLIDATION AND PRINCIPAL ACCOUNTING POLICIES
A: Basis of preparation and consolidation
Basis of preparation
The financial information, which comprises the consolidated income statement,
consolidated statement of comprehensive income, consolidated balance sheet,
consolidated statement of changes in equity, consolidated cash flow statement
and extracts from the notes to the consolidated financial statements for the
years ended 31 December 2022 and 31 December 2021, has been prepared in
accordance with the accounting policies set out in the full financial
statements and on a going concern basis.
The Financial information set out in this announcement does not constitute
statutory accounts within the meaning of Sections 434 to 436 of the Companies
Act 2006 and is an abridged version of the Group's financial statements for
the year ended
31 December 2022 which were approved by the Directors on 8 March 2023.
Statutory accounts for the year ended
31 December 2021 have been delivered to the Registrar of Companies, the
auditor has reported on those accounts, their report was unqualified and did
not contain statements under Section 498(2) or (3) of the Companies Act 2006.
Statutory accounts for the year ended 31 December 2022 will be delivered in
due course, the auditor has reported on those accounts, their opinion was
unqualified and did not contain statements under Section 498 of the Companies
Act 2006. The consolidated financial statements 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), as well as
SAICA Financial Reporting Guides as issued by the Accounting Practices
committee.
The accounting policies have been applied consistently year on year. The
financial information has been prepared using accounting policies and methods
of computation consistent with those applied in the financial statements for
the year ended 31 December 2021, with the exception of the changes arising
from new accounting pronouncements set out in 1B below.
B: New accounting pronouncements
New accounting standards, amendments to standards and IFRIC interpretations
which became applicable during the year or have been published but are not yet
effective, were either not relevant or had no, or no material impact on the
Group's results or net assets except for the following IFRIC agenda decisions
that were issued during the year which have resulted in accounting policy
changes as follows:
· In April 2022, the IFRIC issued an agenda decision in respect of
the presentation of 'Demand deposits with restrictions on use arising from a
contract with a third party' (the 'IFRIC Decision on Deposits'). The
conclusions were that restrictions on use which arise from a contract with a
third party do not alone change the nature of amounts being classified as cash
and cash equivalents. In light of this, a review has been undertaken of
amounts disclosed as 'restricted monetary assets'. It has been determined that
the use of certain tenant deposit and service charge amounts are restricted
only by a contract with a third party. As a result, in applying the agenda
decision, such amounts for 2021 have been restated to reflect this change with
analysis set out in note 16.
· In October 2022, the IFRIC finalised an agenda decision in
respect of 'Lessor forgiveness of lease payments (IFRS 9 and IFRS 16)' (the
'IFRIC Decision on Concessions'). This concluded that where forgiven amounts
are already past due and recognised as operating lease receivables, these
should be accounted for by charging to the income statement on the date that
the legal rights are conceded. Historically, the Group's treatment of such
concessions, which arose as a result of the Covid-19 pandemic, has been to
recognise these as lease modifications such that the impact was initially held
on the balance sheet and then spread forward into the income statement over
the lease term or period to first break. Incentives classified within
investment properties resulted in movements in tenant incentives which were
recognised with an equal and opposite offset in revaluation losses. As a
result of implementing the change, 2021 figures have been restated whereby
Reported Group revenue, gross rental income, net rental income and revaluation
losses are affected although operating profit and income statement figures
below are unaffected. The equivalent Adjusted figures are also affected
including those down to Adjusted earnings. A more detailed analysis of the
financial statement effects is set out in note 6.
Where figures have been restated, these are marked †.
C: Alternative Performance Measures (APMs)
The Group uses a number of performance measures which are non-IFRS. The key
measures comprise the following:
· Adjusted measures: Used by the Directors and management to
monitor business performance internally and exclude the same items as for EPRA
earnings, but also certain cash and non-cash items which they believe are not
reflective of the normal day-to-day operating activities of the Group.
Furthermore, the Group evaluates the performance of its portfolio 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 including, where applicable, discontinued operations. The
Directors believe that disclosing such non-IFRS measures enables a reader to
isolate and evaluate the impact of such items on results and allows for a
fuller understanding of performance from year to year. Adjusted performance
measures may not be directly comparable with other similarly titled measures
used by other companies.
· EPRA earnings and EPRA net assets: Calculated in accordance with
guidance issued by the European Public Real Estate Association recommended
bases.
· Headline earnings: Calculated in accordance with the requirements
of the Johannesburg Stock Exchange listing requirements.
A reconciliation between reported and the above alternative earnings and net
asset measures is set out in note 10.
D. Going concern
The Directors have considered the adoption of the going concern basis of
preparation for the financial statements. To support the assessment the
Directors have performed a detailed review of the current and projected
financial position of the Group over the period to 30 June 2024. 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 assessment period.
This review took account of the Group's risk environment as explained in Risks
and uncertainties and involved preparing two scenarios: a 'Base' scenario and
a 'Severe but plausible' scenario. The scenarios assessed the Group's income
statement, balance sheet, cash flow and liquidity positions and included
projections and stress tests for the financial covenants within the Group's
borrowing facilities and secured loans held within joint ventures and
associates.
Having undertaken the assessment described above, over the going concern
period, under both scenarios the Group is forecast to retain significant
liquidity and is able to meet its obligations as they fall due. The Directors
are therefore able to conclude that they have a reasonable expectation that
the Group has adequate resources to continue in operational existence and meet
its liabilities as they fall due for at least the next 12 months and have
accordingly prepared the financial statements on the 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 Year ended Year ended
31 December 2022 31 December 2021
Quarter 1 €1.195 €1.145
Quarter 2 €1.179 €1.160
Quarter 3 €1.168 €1.169
Quarter 4 €1.150 €1.179
Consolidated balance sheet:
31 December 2022 31 December 2021
Year end rate €1.128 €1.191
2. PROFIT/(LOSS) FOR THE YEAR
As described in note 3, the Group evaluates the performance of its portfolio
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 and including, where applicable, discontinued operations.
Discontinued operations for 2021 comprised UK retail parks.
Adjusted earnings, which is also calculated on a proportionally consolidated
basis, is the Group's primary profit measure and this is the basis of
information which is reported to the Board. The following table sets out a
reconciliation from Reported earnings to Adjusted earnings.
2022
Proportionally consolidated
Reported Group Share of Property interests Sub-total before adjustments Capital and other Adjusted
a
Note £m £m £m £m £m
Revenue 4 131.4 143.6 275.0 - 275.0
Gross rental income b 3A, 4 90.2 125.0 215.2 - 215.2
Service charge income 4 24.2 18.6 42.8 - 42.8
114.4 143.6 258.0 - 258.0
Service charge expenses (27.8) (22.5) (50.3) - (50.3)
Cost of sales 5A (9.3) (21.2) (30.5) (2.4) (32.9)
Net rental income 77.3 99.9 177.2 (2.4) 174.8
Gross administration costs 5A (64.6) (0.3) (64.9) 5.1 (59.8)
Other income 4 17.0 - 17.0 - 17.0
Net administration expenses (47.6) (0.3) (47.9) 5.1 (42.8)
Profit from operating activities 29.7 99.6 129.3 2.7 132.0
Revaluation losses on properties 12 (82.7) (138.3) (221.0) 221.0 -
Disposals and assets held for sale
- Profit/(loss) on sale of properties ( ) 9 0.7 (0.1) 0.6 (0.6) -
- Recycled exchange gains on disposal of overseas interests - - - - -
- Impairment on reclassification to assets held for sale - - - - -
- Income from assets held for sale ( ) 9,10A - (1.6) (1.6) 1.6 -
Joint venture related
- Impairment of receivables due to the Group - - - - -
Change in fair value of other investments (0.1) - (0.1) 0.1 -
Loss on sale of joint ventures and associates - - - - -
Other net gains/(losses) 0.6 (1.7) (1.1) 1.1 -
Share of results of joint ventures 13B (41.5) 41.5 - - -
Impairment of joint venture - - - - -
Share of results of associates 14B (7.1) 1.8 (5.3) 32.7 27.4
Operating (loss)/profit (101.0) 2.9 (98.1) 257.5 159.4
Net finance costs 7 (63.0) (2.6) (65.6) 11.6 (54.0)
(Loss)/profit before tax (164.0) 0.3 (163.7) 269.1 105.4
Tax charge 8 (0.2) (0.3) (0.5) - (0.5)
(Loss)/profit for the year attributable to equity shareholders (164.2) - (164.2) 269.1 104.9
a Adjusting items, described above as 'Capital and other', are set out
in note 10A.
b Proportionally consolidated figure includes £13.7m (2021: £8.2m) of
contingent rents calculated by reference to tenants' turnover.
2021
Proportionally consolidated
Reported Group Share of Property interests Discontinued operations Sub-total before adjustments Capital and other Adjusted
a
Note £m £m £m £m £m £m
Revenue † 4 137.2 172.8 12.3 322.3 - 322.3
Gross rental income †, b 3A, 4 90.3 149.1 11.0 250.4 - 250.4
Service charge income 4 26.6 23.6 1.3 51.5 - 51.5
† 116.9 172.7 12.3 301.9 - 301.9
Service charge expenses (29.5) (28.3) (2.1) (59.9) - (59.9)
Cost of sales † 5A (20.2) (38.9) (0.4) (59.5) (8.1) (67.6)
Net rental income † 67.2 105.5 9.8 182.5 (8.1) 174.4
Gross administration costs 5A (79.5) (0.7) (0.1) (80.3) 8.6 (71.7)
Other income 4 20.3 - - 20.3 - 20.3
Net administration expenses (59.2) (0.7) (0.1) (60.0) 8.6 (51.4)
Profit from operating activities † 8.0 104.8 9.7 122.5 0.5 123.0
Revaluation losses on properties † 12 (169.6) (274.5) - (444.1) 444.1 -
Disposals and assets held for sale
- Profit/(loss) on sale of properties † 9 9.8 (0.9) (29.3) (20.4) 20.4 -
- Recycled exchange gains on disposal of overseas interests 10A 11.0 - - 11.0 (11.0) -
- Impairment on reclassification to assets held for sale (0.9) - - (0.9) 0.9 -
- Income from assets held for sale - - - - - -
Joint venture related
- Impairment of receivables due to the Group (0.7) - - (0.7) 0.7 -
Change in fair value of other investments 0.4 - - 0.4 (0.4) -
Loss on sale of joint ventures and associates (0.9) 0.9 - - - -
Other net gains/(losses) 18.7 - (29.3) (10.6) 10.6 -
Share of results of joint ventures 13B (171.3) 171.3 - - - -
Impairment of joint ventures (11.5) - - (11.5) 11.5 -
Share of results of associates 14B 15.6 4.4 - 20.0 (4.1) 15.9
Operating (loss)/profit † (310.1) 6.0 (19.6) (323.7) 462.6 138.9
Net finance costs 7 (97.9) (5.7) - (103.6) 31.8 (71.8)
(Loss)/profit before tax † (408.0) 0.3 (19.6) (427.3) 494.4 67.1
Tax charge 8 (1.3) (0.3) (0.2) (1.8) 0.2 (1.6)
(Loss)/profit after tax † (409.3) - (19.8) (429.1) 494.6 65.5
Loss for the year from discontinued operations (19.8) - 19.8 - - -
(Loss)/profit for the year attributable to equity shareholders † (429.1) - - (429.1) 494.6 65.5
Attributable to:
Continuing operations † (409.3) - - (409.3) 466.5 57.2
Discontinued operations † (19.8) - - (19.8) 28.1 8.3
† (429.1) - - (429.1) 494.6 65.5
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions with further information provided in notes 1B and 6.
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 Chief Executive Officer and the Group Executive Committee (together,
the Chief Operating Decision Makers). 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.
The Group evaluates the performance of its portfolio by aggregating its 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 including, where applicable, discontinued operations. 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 as its share of results of associates as reported under
IFRS.
The Group's activities presented on a proportionally consolidated basis
including Share of Property interests are:
· Flagship destinations
· Developments and other
· UK retail parks (to date of disposal in 2021)
One of the Group's primary income measures was amended in the second half of
2021 from Net rental income to Adjusted net rental income which excludes the
'change in provision for amounts not yet recognised in the income statement'
as explained in note 10A. Comparative data is for this new measure where the
Group's primary income statement measures are therefore now:
· Gross rental income
· Adjusted net rental income
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 Adjusted net
rental income rental income
2022 2021 2022 2021
£m £m £m £m
Flagship destinations
UK † 90.5 119.3 74.3 83.6
France † 61.8 54.4 53.8 37.0
Ireland † 37.3 35.6 33.6 28.2
† 189.6 209.3 161.7 148.8
Developments and other † 25.6 30.1 13.1 17.2
Discontinued operations (UK retail parks) † - 11.0 - 8.4
Managed portfolio - proportionally consolidated † 215.2 250.4 174.8 174.4
Less Share of Property interests - continuing operations † (125.0) (149.1)
Less discontinued operations (UK retail parks) † - (11.0)
Reported Group † 90.2 90.3
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions with further information provided in notes 1B and 6.
B. Investment and development property assets by segment
2022 2021
Property valuation Capital expenditure Revaluation losses Property valuation Capital expenditure Revaluation
losses
Note £m £m £m £m £m £m
Flagship destinations
UK † 871.0 12.8 (90.2) 1,135.3 8.5 (247.5)
France † 1,241.0 33.3 (57.2) 989.7 22.7 (61.0)
Ireland † 676.4 4.9 (20.1) 659.3 4.4 (56.9)
† 2,788.4 51.0 (167.5) 2,784.3 35.6 (365.4)
Developments and other † 431.7 21.9 (53.5) 694.4 50.8 (78.7)
Discontinued operations (UK retail parks) † - - - - 0.3 -
Managed portfolio † 3,220.1 72.9 (221.0) 3,478.7 86.7 (444.1)
Value Retail 1,887.0 6.6 (60.7) 1,893.5 41.2 (12.0)
Group portfolio † 5,107.1 79.5 (281.7) 5,372.2 127.9 (456.1)
Less Value Retail ( ) ( ) ( ) (1,887.0) (6.6) 60.7 (1,893.5) (41.2) 12.0
Less Share of Property interests † a (1,722.9) (35.2) 138.3 (1,813.9) (13.1) 274.5
Less discontinued operations (UK retail parks) - - - - (0.3) -
Less trading properties † b (36.2) - - (34.3) (6.2) -
Less assets held for sale 9 - - - (69.1) - -
Reported Group † 1,461.0 37.7 (82.7) 1,561.4 67.1 (169.6)
† 2021 figures have been restated to reflect the IFRIC Decision
on Concessions with further information provided in notes 1B and 6.
a Property valuation comprises UK: £1,011.6m (2021: £1,121.0m);
France: £166.8m (2021: £165.9m) and Ireland: £544.5m (2021: £527.0m).
b In December 2019, the Group exchanged contracts for the forward sale
of Italik, subject to completion of the development which was opened in 2021,
resulting in the sale becoming unconditional although in accordance with a
contractually allowed option and subsequent agreement, the purchaser has
deferred completion to 2023. At 31 December 2022, the 75% of Italik contracted
for sale was included within trading properties at the agreed sale price less
forecast costs to complete.
4. REVENUE
2022 2021
Note £m £m
Base rent 68.2 62.1
Turnover rent 5.5 2.7
Car park income * 10.8 9.6
Lease incentive recognition † 2.7 11.3
Other rental income 3.0 4.6
Gross rental income † 2 90.2 90.3
Service charge income * 24.2 26.6
Other income
- Property fee income * 11.5 13.2
- Joint venture and associate management fees * 5.5 7.1
17.0 20.3
Revenue - continuing operations † 131.4 137.2
Revenue - discontinued operations † - 12.2
† 131.4 149.4
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions with further information provided in notes 1B and 6.
* Revenue for those categories marked * amounted to £52.0m (2021:
£56.5m) and is recognised under IFRS 15 'Revenue from Contracts with
Customers'. All other revenue is recognised in accordance with IFRS 16
'Leases'.
5. COSTS
A: Profit from operating activities is stated after charging:
2022 2021
Cost of sales £m £m
Ground and equity rents payable 0.7 1.1
Inclusive lease costs recovered through rent 3.1 2.7
Other property outgoings † a 6.4 18.0
Change in provision for amounts not yet recognised in the income statement (0.9) (1.6)
† 9.3 20.2
2022 2021
Gross administration costs Note £m £m
Employee costs 42.0 51.4
Depreciation of plant and equipment 1.0 1.1
Depreciation of right-of-use assets 3.1 3.3
Business transformation costs 9A 5.1 8.6
Other corporate costs b 13.4 15.1
64.6 79.5
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions with further information provided in notes 1B and 6.
a Includes charges and credits in respect of expected credit losses as
set out in note 15.
b Comprises predominantly professional fees (mainly valuation, legal and
audit), office rent and software licence fees.
6. RESTATEMENT OF 2021 IN RESPECT OF THE IFRIC DECISION ON CONCESSIONS
As described in note 1B, the IFRIC Decision on Concessions has resulted in a
restatement of 2021 results. IAS 8 'Accounting policies, changes in accounting
estimates and errors' requires that for current and prior periods, to the
extent practicable, the amount of adjustment relating to a restatement should
be disclosed for each financial line item affected. Whilst those financial
line items which have been restated are marked †, owing to the very
significant number of line items affected, it has not been considered
practicable to disclose the effects for each one because such presentation
would become misleading and thus conflict with the objective of financial
statements as set out in IAS 1 'Presentation of financial statements'.
Accordingly, only the adjustments which affect key financial line items are
presented below:
A: Key income statement items
Reported Group Adjusted
As originally reported Adjustment As restated As originally reported Adjustment As restated
£m £m £m £m £m £m
Revenue 134.8 2.4 137.2 313.4 8.8 322.2
Gross rental income 87.9 2.4 90.3 241.6 8.8 250.4
Cost of sales (13.7) (6.5) (20.2) (43.4) (24.2) (67.6)
Net rental income 71.3 (4.1) 67.2 189.8 (15.4) 174.4
Profit from operating activities 12.1 (4.1) 8.0 138.4 (15.4) 123.0
Revaluation losses on properties (173.7) 4.1 (169.6) - - -
Operating (loss)/profit (310.1) - (310.1) 154.3 (15.4) 138.9
(Loss)/profit for the year attributable to equity shareholders * (429.1) - (429.1) 80.9 (15.4) 65.5
* EPRA earnings and Headline earnings have been restated by the same
amount.
B: Income analysis by segment
Gross rental income Adjusted net rental income
As originally reported Adjustment As restated As originally reported Adjustment As restated
£m £m £m £m £m £m
Flagship destinations
UK 114.3 5.0 119.3 90.1 (6.5) 83.6
France 52.5 1.9 54.4 39.4 (2.4) 37.0
Ireland 34.5 1.1 35.6 32.4 (4.2) 28.2
201.3 8.0 209.3 161.9 (13.1) 148.8
Developments and other 29.6 0.5 30.1 17.5 (0.3) 17.2
Discontinued operations (UK retail parks) 10.7 0.3 11.0 10.4 (2.0) 8.4
Managed portfolio 241.6 8.8 250.4 189.8 (15.4) 174.4
Less Share of Property interests - continuing operations (143.0) (6.1) (149.1) (109.7) 9.3 (100.4)
Less discontinued operations (UK retail parks) (10.7) (0.3) (11.0) (10.4) 2.0 (8.4)
Reported Group 87.9 2.4 90.3 69.7 (4.1) 65.6
C: Income analysis of joint ventures and associates
Gross rental income Net rental income
As originally reported Adjustment As restated As originally reported Adjustment As restated
£m £m £m £m £m £m
Joint ventures 137.2 5.9 143.1 110.0 (9.2) 100.8
Associates 102.5 0.1 102.6 71.5 (0.1) 71.4
D: Balance sheet disclosures
Share of Property interests and discontinued operations
Reported Group
Investment properties Note As originally reported Adjustment As restated As originally reported Adjustment As restated
£m £m £m £m £m £m
Revaluation losses * 3/12 283.8 (9.3) 274.5 (173.7) 4.1 (169.6)
Capital expenditure * 3/12 (24.7) 11.3 (13.4) 71.2 (4.1) 67.1
Disposals * 3 2.3 (2.0) 0.3
* Figures for Share of Property interests and discontinued operations
are as set out in note 3 and Reported Group figures are set out in note 12 as
stated above.
E: Impact on 2022
Had the restatement not been applied, the income measures for 2022 set out
below would have differed by the following amounts.
Amount by which income would have been (lower)/higher Reported Group Adjusted
£m £m
Revenue (2.9) (8.7)
Gross rental income (2.9) (8.7)
Net rental income 0.5 (1.9)
Profit for the year attributable to equity shareholders - (1.9)
7. NET FINANCE COSTS
2022 2021
Note £m £m
Finance income
Bank and other interest receivable 26.1 15.1
Finance costs
Interest on bank loans and overdrafts (4.6) (5.8)
Interest on bonds and related charges (61.4) (62.0)
Interest on senior notes and related charges (6.0) (11.4)
Interest on obligations under head leases (2.1) (2.2)
Interest on other lease obligations (0.1) (0.1)
Other interest payable (0.4) (1.2)
Gross interest costs (74.6) (82.7)
Interest capitalised in respect of properties under development 1.2 5.3
(73.4) (77.4)
Debt and loan facility cancellation costs * 10A (1.3) (21.6)
Fair value losses on derivatives 10A (14.4) (14.0)
(89.1) (113.0)
Net finance costs (63.0) (97.9)
* Comprising redemption premiums and fees from early repayment of debt
or cancellation of facilities.
Further analysis on a proportionally consolidated basis is set out below:
2022
Proportionally consolidated
Reported Group Share of Property interests Sub-total before adjustments Capital and other Adjusted
Note £m £m £m £m £m
Finance income 26.1 - 26.1 - 26.1
Gross interest costs (74.6) (6.7) (81.3) - (81.3)
Interest capitalised in respect of properties under development 1.2 - 1.2 - 1.2
(73.4) (6.7) (80.1) - (80.1)
Debt and loan facility cancellation costs 10A (1.3) - (1.3) 1.3 -
Fair value (losses)/gains on derivatives 10A (14.4) 4.1 (10.3) 10.3 -
Finance costs (89.1) (2.6) (91.7) 11.6 (80.1)
Net finance costs (63.0) (2.6) (65.6) 11.6 (54.0)
2021
Proportionally consolidated
Reported Group Share of Property interests Sub-total before adjustments Capital and other Adjusted
Note £m £m £m £m £m
Finance income 15.1 - 15.1 - 15.1
Gross interest costs (82.7) (9.5) (92.2) - (92.2)
Interest capitalised in respect of properties under development 5.3 - 5.3 - 5.3
(77.4) (9.5) (86.9) - (86.9)
Debt and loan facility cancellation costs 10A (21.6) (0.4) (22.0) 22.0 -
Fair value (losses)/gains on derivatives 10A (14.0) 4.2 (9.8) 9.8 -
Finance costs (113.0) (5.7) (118.7) 31.8 (86.9)
Net finance costs (97.9) (5.7) (103.6) 31.8 (71.8)
8. TAX CHARGE
2022 2021
£m £m
Foreign current tax 0.2 1.3
Tax charge - continuing operations 0.2 1.3
Tax charge - discontinued operations * - 0.2
Tax charge - total 0.2 1.5
* Included within 'Capital and other' in note 2.
The Group's tax charge remains low because it has tax exempt status in its
principal operating countries.
In the UK, the Group has been a REIT 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. Based on preliminary
calculations, the Group has met the REIT and SIIC conditions for 2022. 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
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 accruals for tax liabilities are adequate for all open tax years
based on its assessment of many factors, including tax laws and prior
experience.
9. DISPOSALS AND ASSETS HELD FOR SALE
2022
The profit on sale of properties of £0.7m includes several post completion
adjustments arising mainly from historical disposals in prior periods and the
disposal of Victoria, which was sold on 25 February 2022, when the Group
exchanged and completed the sale for gross proceeds of £120m.
In addition, on 15 March 2022, the Group completed the sale of its joint
venture investment in Silverburn for gross proceeds of £140m (the Group's
share being £70m). The Group had exchanged contracts for this sale on 14
December 2021 such that this investment was classified as assets held for sale
at 31 December 2021 at £71.4m, which included investment properties of
£69.1m. A £nil gain/loss on disposal was recognised, however, income
generated during the year of £1.6m has been included in Adjusted earnings as
explained further in note 10A.
2021
On 5 February 2021, the Group sold its 41% joint venture interest in Brent
South Shopping Park for gross proceeds of £22m which formed part of the UK
retail parks disposals which were sold on 19 May 2021 and are treated as
discontinued operations.
On 1 April 2021, the Group sold its 25% interest in Espace Saint-Quentin for
gross proceeds of €31m (£26m) and its 10% interest in Nicetoile for €25m
(£21m) whereby results are included within Share of Property interests up to
the point of disposal.
As described above, the Group exchanged contracts for the sale of its joint
venture investment in Silverburn on 14 December 2021 and as a result was
classified as an asset held for sale.
10. KEY ALTERNATIVE PERFORMANCE MEASURES
Headline earnings has been calculated in accordance with the requirements of
the Johannesburg Stock Exchange listing requirements. EPRA earnings and EPRA
net assets are calculated in accordance with guidance issued by the European
Public Real Estate recommended bases. Reconciliations from Reported Group
(IFRS) earnings after tax and Net assets attributable to equity shareholders
to these measures are set out below.
A. Alternative earnings measures
2022 2021
£m £m
Reported Group
Loss after tax - continuing operations (164.2) (409.3)
Loss after tax - discontinued operations - (19.8)
Loss after tax for the year (164.2) (429.1)
Adjustments:
Revaluation losses on managed portfolio † 221.0 444.1
Disposals and assets held for sale
- (Profit)/loss on sale of properties † a (0.6) 20.4
- Recycled exchange gains on disposal of overseas property interests b - (11.0)
- Impairment recognised on reclassification to assets held for sale c - 0.9
Joint venture related
- Impairment of investment d - 11.5
- Impairment of receivables due to the Group d - 0.7
Associates (Value Retail):
- Revaluation losses k 60.7 12.0
- Deferred tax e, k 0.1 (1.2)
- Change in fair value of financial assets k (0.2) (0.1)
Sub-total: Adjustments for Headline earnings † 281.0 477.3
Associates (Value Retail):
- Change in fair value of derivatives f, k (18.1) (9.3)
- Change in fair value of participative loans f, k (9.8) (5.5)
Included in Financing:
- Debt and loan facility cancellation costs g 1.3 22.0
- Change in fair value of derivatives g 10.3 9.8
Change in fair value of other investments h 0.1 (0.4)
Tax charge on discontinued operations e - 0.2
Sub-total: Adjustments for EPRA earnings † 264.8 494.1
Included in profit from operating activities:
- Business transformation costs i 5.1 8.6
- Change in provision for amounts not yet recognised in the income j (2.4) (8.1)
statement
- Income from assets held for sale l 1.6 -
Total: Adjustments for Adjusted earnings † 269.1 494.6
Headline earnings † 116.8 48.2
EPRA earnings † 100.6 65.0
Adjusted earnings † 104.9 65.5
† 2021 figures have been restated to reflect the IFRIC Decision
on Concessions with further information provided in notes 1B and 6.
a Comprises several post completion adjustments on historical disposals
in prior periods and the loss on sale of Victoria (2021: comprised the loss on
sale of Brent South Shopping Park, the overseas property interests in Espace
Saint-Quentin and Nicetoile, the portfolio of seven retail parks and the sale
of six other non-core assets).
b Exchange gains previously recognised in equity until disposal .
c Relates to the sale of Silverburn which completed on 15 March 2022.
d Impairment of Highcross joint venture: at 31 December 2021, the
secured loan within the Highcross joint venture was in breach of its covenants
whereby the Directors of the joint venture have been in discussions with the
lenders to find a mutually acceptable solution. In the event that agreement is
not reached with the lenders, there is a risk that the lenders accelerate the
loan repayment, which would precipitate the loan falling due immediately, or
the lenders could seek to enforce their rights over the joint venture's
assets. Taking this into account, an impairment review concluded that both the
value in use and the fair value less cost of disposal were £nil.
Consequently, both the Group's investment in the joint venture as well as the
Group's receivable were fully impaired. As set out in
note 22, in February 2023, a receiver was appointed by the lenders to
administer the asset.
e In accordance with EPRA guidance, the tax effects of EPRA adjustments
(including those for disposals) is excluded .
f 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.
g Financing items comprise:
2022 2021
Reported Group Share of Property interests Total Reported Group Share of Property interests Total
£m £m £m £m £m £m
Fees on cancellation of facilities / redemption premiums and fees from early 1.3 - 1.3 21.6 0.4 22.0
repayment of debt
Change in fair value of derivatives f 14.4 (4.1) 10.3 14.0 (4.2) 9.8
15.7 (4.1) 11.6 35.6 (3.8) 31.8
The write off of up-front fees arising on early cancellation or early
repayment redemption premiums are considered outside of day-to-day financing
activities and are accordingly excluded from Adjusted earnings.
h Relates to the fair value movement in a small residual investment.
i Business transformation costs comprise:
2022 2021
£m £m
Employee severance 3.4 4.2
System based costs 1.7 -
Consultancy costs - 4.4
5.1 8.6
Such costs relate to the strategic and operational review undertaken by the
new management team and which is an integral part of the Group's new strategy
announced during 2021. The related costs are incremental and do not form part
of underlying trading and comprise mainly employee severance and system based
costs associated with digital transformation which do not qualify for
capitalisation. Whilst a significant proportion of the expected costs were
incurred in 2021 and 2022, further transformation activities will take place
in 2023 and beyond.
j The Group makes 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.
k Adjustments in respect of associates.
2022 2021
£m £m
Total in respect of associates (Value Retail) 32.7 (4.1)
l Income from assets held for sale relates to the Group's joint
venture investment in Silverburn, which was transferred to assets held for
sale as at 31 December 2021 and where the sale completed in March 2022. A
£nil gain/loss was generated on the sale which comprised certain additional
costs and accruals of £1.6m which were offset by net income generated in the
period up to the point of disposal (after taking account of distributions) of
£1.6m. The Group excludes losses on disposal from its EPRA and Adjusted
earnings, and because this offset of income generated in the period against
the loss causes the income to be excluded, the income is added back as an
adjusting item in order to reflect the fact that the property remained under
the Group's ownership and management up until completion of the disposal and
is therefore considered to form part of underlying earnings.
B. Alternative 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.
2022
Reported Group Share of Property interests Value Retail Total
£m £m £m £m
Reported balance sheet net assets (equity shareholders' funds) 2,586.4 - - 2,586.4
Change in fair value of borrowings a 216.2 (0.7) - 215.5
EPRA NDV 2,801.9
Deduct change in fair value of borrowings a (216.2) 0.7 - (215.5)
Deferred tax - 50% share b 0.2 0.1 99.4 99.7
Fair value of currency swaps as a result of interest rates c (0.9) - - (0.9)
Fair value of interest rate swaps 2.1 (6.3) (47.3) (51.5)
EPRA NTA 2,633.7
Deferred tax - remaining 50% share b 0.2 - 99.4 99.6
Purchasers' costs d 330.0 - - 330.0
EPRA NRV 3,063.3
2021
Reported Group Share of Property interests Value Retail Total
£m £m £m £m
Reported balance sheet net assets (equity shareholders' funds) 2,745.9 - - 2,745.9
Change in fair value of borrowings a (94.0) (1.4) - (95.4)
EPRA NDV 2,650.5
Deduct change in fair value of borrowings a 94.0 1.4 - 95.4
Deferred tax - 50% share b 0.2 - 94.0 94.2
Fair value of currency swaps as a result of interest rates c 7.5 - - 7.5
Fair value of interest rate swaps (10.3) 1.6 1.2 (7.5)
EPRA NTA 2,840.1
Deferred tax - remaining 50% share b 0.2 0.1 93.9 94.2
Purchasers' costs d 346.4 - - 346.4
EPRA NRV 3,280.7
a Applicable for EPRA NDV calculation only and hence the adjustment is
reversed for EPRA NTA and EPRA NRV.
b EPRA guidance stipulates exclusion of 50% of deferred tax for EPRA NTA
purposes .
c Excludes impact of foreign exchange .
d Represents property transfer taxes and fees payable should the Group's
entire property portfolio (including Value Retail) be acquired at year end
market rates .
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 profit after tax, Headline profit after tax, EPRA profit after
tax and Adjusted profit after tax attributable to owners of the parent and the
weighted average number of shares in issue during the year.
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. The
calculation of Headline, EPRA and Adjusted earnings which includes a
reconciliation to Reported IFRS earnings is set out in note 10A.
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 year. 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 year and
any unvested shares which have met, or are expected to meet, the performance
conditions at the end of the year. To the extent that there is no dilution,
this arises due to the anti-dilutive effect of all such shares.
Net assets per share comprise net assets calculated in accordance with EPRA
guidelines, as set out in note 10B, divided by the number of shares in issue.
A. Number of ordinary shares for per share calculations
2022 2021
million million
Shares in issue (for purposes of net asset per share calculations) 5,002.3 4,419.5
Weighted average number of shares for purposes of basic EPS 4,938.9 4,392.9
Adjustment a - 524.6
Weighted average number of shares for purposes of basic and diluted EPS - a, b 4,938.9 4,917.5
Reported Group
Effect of potentially dilutive shares (share options) - Headline, EPRA and 10.3 7.6
Adjusted
Weighted average number of shares for purposes of diluted EPS - Headline, EPRA a 4,949.2 4,925.1
and Adjusted
a 2021 weighted average number of shares have been restated to reflect
the adjustment required to incorporate the bonus element of scrip dividends
following confirmation of the level of take up.
b There were no potentially dilutive ordinary shares for the purposes of
calculating EPS for the Reported Group (2021: none)
B. (Loss)/earnings per share
(Loss)/earnings (Loss)/earnings per share
Basic Diluted
2022 2021 2022 2021 2022 2021
Note £m £m pence pence pence pence
Continuing operations (164.2) (409.3) (3.3)p (8.3)p (3.3)p (8.3)p
Discontinued operations - (19.8) - (0.4)p - (0.4)p
Reported Group (164.2) (429.1) (3.3)p (8.7)p (3.3)p (8.7)p
Headline † 10A 116.8 48.2 2.4p 1.0p 2.4p 1.0p
EPRA † 10A 100.6 65.0 2.0p 1.3p 2.0p 1.3p
Adjusted † 10A 104.9 65.5 2.1p 1.3p 2.1p 1.3p
† 2021 (loss)/earnings per share figures have been restated to
reflect the adjustment described above to the weighted average number of
shares. In addition, 2021 figures have been restated to reflect the IFRIC
Decision on Concessions with further information provided in notes 1B and 6.
Previously reported basic and diluted figures were: Reported Group: (9.8)p,
Headline: 1.4p, EPRA: 1.8p and Adjusted: 1.8p.
C. Net Asset Value per share
Net asset value Net asset value per share
2022 2021 2022 2021
Note £m £m pence pence
EPRA NDV 10B 2,801.9 2,650.5 56p 60p
EPRA NTA 10B 2,633.7 2,840.1 53p 64p
EPRA NRV 10B 3,063.3 3,280.7 61p 74p
12. PROPERTIES
2022 2021
Investment properties Trading properties Total Investment properties Trading Total
properties
£m £m £m £m £m £m
At 1 January 1,561.4 34.3 1,595.7 2,152.8 - 2,152.8
Revaluation losses † (82.7) - (82.7) (169.6) - (169.6)
Capital expenditure † 37.7 - 37.7 67.1 6.2 73.3
Capitalised interest 1.2 - 1.2 5.3 - 5.3
Disposals (125.3) - (125.3) (382.2) - (382.2)
Transfer to trading properties * - - - (28.7) 28.7 -
Exchange adjustment 68.7 1.9 70.6 (83.3) (0.6) (83.9)
At 31 December 1,461.0 36.2 1,497.2 1,561.4 34.3 1,595.7
† 2021 investment property figures have been restated to reflect the
IFRIC Decision on Concessions with further information provided in notes 1B
and 6.
* Relates to the forward sale of Italik as described in note 3B.
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 (JLL) UK flagships, Developments and other properties, French portfolio
Cushman and Wakefield (C&W) Brent Cross, Irish portfolio, Value Retail (not included in the table above)
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.
Joint operations
Investment properties included a 50% interest in the Ilac Centre and a 50%
interest in Pavilions, totalling £151.4m (2021: £149.8m). 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.
A. Percentage share
Joint venture Partner Principal property Share
United Kingdom
Bishopsgate Goodsyard Regeneration Limited Ballymore Properties Bishopsgate Goodsyard 50%
Brent Cross Partnership Aberdeen Standard Investments Brent Cross 41%
Bristol Alliance Limited Partnership AXA Real Estate Cabot Circus 50%
Croydon Limited Partnership/Whitgift Limited Partnership Unibail-Rodamco-Westfield Centrale/Whitgift 50%
Grand Central Limited Partnership CPP Investments Grand Central 50%
Highcross Leicester Limited Partnership Asian investor introduced by M&G Real Estate Highcross 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 Allianz Dundrum 50%
France
SCI RC Aulnay 1 and SCI RC Aulnay 2 Client of Rockspring Property Investment Managers O'Parinor 25%
The results of disposals of interests in joint ventures are included up to the
point of disposal except for where such disposals form part of assets held for
sale or discontinued operations whereby they are excluded for the whole year.
Disposals in the year are set out in note 9.
Figures in the following tables include, where applicable, adjustments to
align to the Group's accounting policies and exclude balances which are
eliminated on consolidation. Bishopsgate Goodsyard, Espace Saint-Quentin (up
to date of disposal in 2021) and O'Parinor are included in 'Other'.
B. Results
2022 2021
Group share £m £m
Gross rental income † 119.4 143.1
Net rental income † 95.5 100.8
Administration expenses (0.3) (0.7)
Profit from operating activities † 95.2 100.1
Revaluation losses on properties † (132.1) (265.4)
Adjustment for income from assets held for sale a (1.6) -
Operating loss (38.5) (165.3)
Finance income 0.3 4.2
Finance costs (3.0) (9.9)
Loss before tax (41.2) (171.0)
Tax charge (0.3) (0.3)
Loss for the year - continuing operations (41.5) (171.3)
Profit for the year - discontinued operations - 0.9
Loss for the year c (41.5) (170.4)
Share of distributions received by the Group 63.4 37.6
C. Assets and liabilities
2022 2021
Group share £m £m
Non-current assets
Investment properties 1,620.0 1,712.2
Other non-current assets 26.7 18.3
1,646.7 1,730.5
Current assets
Cash and cash equivalents † 110.9 128.7
Other current assets † b 61.3 60.0
172.2 188.7
Current liabilities
Loans - secured (126.1) (79.3)
Other payables (80.7) (72.2)
(206.8) (151.5)
Non-current liabilities
Loans - secured (265.5) (295.0)
Derivative financial instruments - (1.6)
Obligations under head leases (15.8) (15.8)
Other payables (6.3) (3.5)
(287.6) (315.9)
Cumulative losses restricted c 17.9 -
Net assets 1,342.4 1,451.8
† 2021 income statement figures have been restated to reflect the
IFRIC Decision on Concessions and balance sheet figures have been restated to
reflect the IFRIC Decision on Deposits where £15.0m has been reclassified
from restricted monetary assets (which formed part of Other current assets) to
cash and cash equivalents. Further information on both IFRIC decisions is set
out in note 1B.
a Comprises income in respect of Silverburn, as described in note 10A.
b Includes restricted monetary assets held in escrow for specified
development costs.
c Following the impairment of Highcross to £nil in 2021, the Group
ceased to equity account for its investment in this joint venture such that
although gross balance sheet items on a proportionally consolidated basis
remain included in the Group's figures, it is excluded from all income
statement metrics including revaluation losses. This amount therefore
represents the Group's share of losses which exceed the Group's investment of
£nil.
D. Reconciliation of movements in investment in joint ventures
2022 2021
£m £m
At 1 January 1,451.8 1,813.6
Share of results of joint ventures (41.5) (170.4)
Impairment of investment in joint ventures a - (11.5)
Advances 4.0 14.0
Cash distributions (including interest) b (84.0) (38.9)
Other receivables (5.3) (4.9)
Transfer to assets held for sale - (72.3)
Disposal - (53.9)
Exchange and other movements 17.4 (23.9)
At 31 December 1,342.4 1,451.8
a Comprised the full impairment of the Group's investment in Highcross
as described in note 10A.
b Comprises distributions of £63.4m (2021: £37.6m) and interest
previously accrued of £20.6m (2021: £1.3m).
14. INVESTMENT IN ASSOCIATES
A. Percentage share
2022 2021
Principal property Share Share
Value Retail Various Villages across Europe a 40% 40%
Italie Deux Italie Deux, France 25% 25%
Nicetoile Nicetoile, France b - 10%
a Interest is calculated based on the share of profits to which the
Group is entitled and excludes individual interests which are loss making.
b The Group disposed of its 10% interest in Nicetoile on 1 April 2021
for €25m (£21m).
Associates comprise prime urban real estate consisting of flagship
destinations and premium outlets across Europe. Analysis of the results and
assets and liabilities of the Group's investment in associates is set out
below and with the exception of Value Retail, these results 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.
B. Results
2022 2021
Group share £m £m
Gross rental income † 153.6 102.6
Net rental income † 105.7 71.4
Administration expenses (48.0) (33.8)
Profit from operating activities † 57.7 37.6
Revaluation losses on properties (66.9) (21.1)
Operating (loss)/profit † (9.2) 16.5
Interest costs (27.7) (18.7)
Fair value gains on derivatives 18.1 9.3
Fair value gains on participative loans 15.0 9.1
Net finance income/(costs) 5.4 (0.3)
(Loss)/profit before tax (3.8) 16.2
Current tax charge (3.2) (1.8)
Deferred tax (charge)/credit (0.1) 1.2
(Loss)/profit for the year (7.1) 15.6
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions with further information provided in note 1B.
C. Assets and liabilities
2022 2021
Group share £m £m
Non-current assets
Investment properties 1,989.9 1,995.2
Other non-current assets 114.2 63.3
2,104.1 2,058.5
Current assets
Cash and cash equivalents 93.6 83.0
Other current assets 40.7 32.8
134.3 115.8
Total assets 2,238.4 2,174.3
Current liabilities
Loans (108.1) (465.1)
Other payables (104.6) (92.8)
(212.7) (557.9)
Non-current liabilities
Loans (653.6) (292.2)
Participative loan (95.7) (86.0)
Other payables, including deferred tax (185.2) (176.0)
(934.5) (554.2)
Total liabilities (1,147.2) (1,112.1)
Net assets 1,091.2 1,062.2
Reverse participative loans 205.9 184.8
1,297.1 1,247.0
D. Reconciliation of movements in investment in associates
2022 2021
£m £m
At 1 January 1,247.0 1,298.4
Share of results of associates (7.1) 15.6
Capital return (2.0) (2.0)
Distributions (5.0) (2.5)
Share of other comprehensive gain of associate a 23.3 1.3
Disposals - (23.2)
Exchange and other movements 40.9 (40.6)
At 31 December b 1,297.1 1,247.0
a Relates to the change in fair value of derivative financial
instruments in an effective hedge relationship within Value Retail.
b Includes accumulated impairment to the investment in Value Retail of
£94.3m (2021: £94.3m) which was recognised in the year ended 31 December
2020 and is equivalent to the notional goodwill on this investment.
15. TRADE RECEIVABLES
Included in the current trade and other receivables balance of £85.9m (2021:
£84.8m) are the following amounts in respect of trade (tenant) receivables,
together with the respective provisions which have been calculated in
accordance with the expected credit loss methodology set out in IFRS 9:
A: Trade (tenant) receivables - Ageing analysis
2022 2021
Gross trade receivables Provision Net trade receivables Gross receivables Provision Net receivables
£m £m £m £m £m £m
Not yet due 3.2 (0.6) 2.6 5.6 (1.9) 3.7
0 - 3 months overdue 4.0 (0.8) 3.2 8.2 (3.6) 4.6
3 - 12 months overdue 8.1 (2.3) 5.8 13.9 (6.3) 7.6
More than 12 months overdue 25.7 (13.9) 11.8 27.2 (15.6) 11.6
41.0 (17.6) 23.4 54.9 (27.4) 27.5
B: Analysis of movements in provisions
2022 2021
£m £m
Loss allowance at 1 January 27.4 35.8
Additions to provisions charged to the income statement 4.0 13.5
Disposals * (1.3) (2.1)
Release of provisions (10.7) (16.6)
Utilisation (2.8) (2.1)
Exchange 1.0 (1.1)
Loss allowance at 31 December 17.6 27.4
* 2021: Related to UK retail parks
16. RESTRICTED MONETARY ASSETS AND CASH AND CASH EQUIVALENTS
A. Restricted monetary assets
2022 2021
Current Non-current Current Non-
current
£m £m £m £m
Cash held in respect of tenants and co-owners † a 8.6 - 13.7 -
Cash held in escrow b - 21.4 20.0 21.4
8.6 21.4 33.7 21.4
† 2021 current figures have been restated to reflect the IFRIC
Decision on Deposits where further information is provided in note 1B. The
effect is that £5.4m held by third party managing agents in respect of tenant
deposits and service charges have been reclassified to cash and cash
equivalents as these amounts are not restricted by law or regulation. The
previously reported figure for 2021 was £19.1m.
a Comprises amounts held to meet future services charge costs and
related expenditure such as marketing expenditure, where local laws or
regulations restrict the use of such cash.
b Comprises funds held to satisfy potential obligations under
indemnities granted in favour of Directors and officers to the extent that
such obligations are not already satisfied by the Company or covered by
Directors' and Officers' liability insurance. The funds will remain in trust
until the later of December 2026, or, if there are outstanding claims at that
date, the date on which all claims are resolved (2021: the current portion
related to a deposit received in respect of the sale of Silverburn prior to
completion on 15 March 2022, upon which the amounts were released from
escrow).
B. Cash and cash equivalents
Cash and cash equivalents includes £4.4m (2021: £5.4m) in respect of cash
held by third party managing agents which was previously disclosed as
restricted monetary assets as described in notes 16A and 1B and where the
previously reported 2021 cash and cash equivalents figure of £309.7m has
been restated.
17. LOANS
A. Loan profile
2022 2021
£m £m
Unsecured
£200.0m 7.25% sterling bonds due 2028 199.0 198.8
€700.0m 1.75% euro bonds due 2027 a 612.3 578.3
£300.0m 6% sterling bonds due 2026 299.1 298.8
£350.0m 3.5% sterling bonds due 2025 348.3 347.8
€235.5m 1.75% euro bonds due 2023 b - 197.4
Bank loans and overdrafts c (3.1) (2.7)
Senior notes due 2031 5.1 4.9
Senior notes due 2028 11.3 13.3
Senior notes due 2026 62.0 58.8
Senior notes due 2024 112.4 139.4
1,646.4 1,834.8
a 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 75 basis points per annum, representing a cost of
€5.25 million, 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 offsite energy and driving compliance with relevant energy
performance legislation. The Group continues to make steady progress against
both targets.
b On 16 December 2022, following the exercise of an early redemption
option, the Group redeemed all of the €235.5m 1.75% euro bonds due 2023
using available cash resources.
c Debit balance comprises unamortised fees for revolving credit
facilities against which no funds had been drawn at the year ends.
B. Undrawn committed facilities
The Group has the following revolving credit facilities (RCF), which are all
in sterling unless otherwise indicated, expiring as follows:
2022 2021
£m £m
2017 RCF expiring 2022 - 10.0
2017 RCF expiring 2023 a - 30.0
2016 RCF expiring 2023 a - 420.0
2017 RCF expiring 2024 a - 370.0
2021 RCF expiring 2024 b 150.0 150.0
2021 JPY7.7bn RCF expiring 2025 c 48.9 49.8
2022 RCF expiring 2025 a 463.0 -
d 661.9 1,029.8
a On 29 April 2022, the 2016 RCF expiring 2023 and the unexpired
elements of the 2017 RCF expiring in 2023 and 2024 were extinguished and
replaced with a new three year £463m RCF expiring April 2025, but containing
two one-year extension options. The existing two facilities were cancelled on
9 May 2022.
b Contained two one year extension options whereby during the year, the
first of these extension options was exercised such that £100m was extended
to June 2025 with the remaining £50m left to expire at its existing term in
June 2024.
c Contained two one year extension options whereby during the year,
the first of these extension options was exercised such that the full facility
was extended to June 2025.
d £2.1m (2021: £2.1m) of RCFs have been utilised (although not drawn)
to support ancillary facilities leaving £659.8m (2021: £1,027.7m) available
to the Group.
C. Maturity analysis of undrawn committed facilities
2022 2021
Expiry £m £m
Within one year - 10.0
Within one to two years 50.0 450.0
Within two to five years 611.9 569.8
661.9 1,029.8
18. 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 risk appetite of the
Group. The Group's activities expose it to certain financial risks comprising
liquidity risk, marker 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 associates Underlying net asset values of the interests in Villages/centre *
* Assets of Villages comprise mainly investment properties held at
professional valuation.
Fair value hierarchy analysis
2022 2021
Hierarchy Carrying amount Fair value Carrying amount Fair value
£m £m £m £m
Unsecured bonds Level 1 1,458.7 1,249.5 1,621.1 1,707.0
Senior notes Level 2 190.8 180.7 216.4 221.8
Unsecured bank loans and overdrafts Level 2 (3.1) - (2.7) -
Fair value of currency swaps Level 2 30.6 30.6 44.1 44.1
Borrowings 1,677.0 1,460.8 1,878.9 1,972.9
Fair value of interest rate swaps Level 2 2.1 2.1 (10.3) (10.3)
Participative loans to associates Level 3 205.9 205.9 184.8 184.8
Fair value of other investments Level 3 9.8 9.8 9.5 9.5
19. DIVIDENDS
Cash dividend per share Enhanced scrip alternative 2022 2021
per share £m £m
Prior periods
2020 final dividend - Cash a 0.2p - 11.7
- Enhanced scrip alternative b 2.0p - 51.0
2021 interim dividend - Cash 0.2p - 1.3
- Enhanced scrip alternative b 2.0p - 71.7
2021 final dividend - Cash a 0.2p 11.8 -
- Enhanced scrip alternative b 2.0p 51.4 -
2022 interim dividend - Cash 0.2p 1.4 -
- Enhanced scrip alternative b 2.0p 75.7 -
( ) ( ) ( ) ( ) 140.3 135.7
Cash flow analysis:
Cash dividend c 2.6 2.6
Withholding tax: a
- 2020 interim dividend - 11.9
- 2020 final dividend - 10.4
- 2021 final dividend 10.6 -
13.2 24.9
2022 2021
Total cash dividends per share in respect of the year 0.2p 0.4p
a Dividends paid as a PID are subject to withholding tax which is paid
approximately two months after dividend itself is paid.
b Calculated as the market value of shares issued to satisfy the
enhanced scrip dividend alternative.
c Comprises cash payments after deduction of withholding tax, where
applicable.
20. NOTES TO THE CASH FLOW STATEMENT
A. Analysis of items included in operating cash flows
2022 2021
£m £m
Net movements in working capital and restricted monetary assets
Movements in working capital:
- (Increase)/decrease in receivables (6.0) 27.3
- Decrease in payables (17.4) (6.9)
(23.4) 20.4
Decrease/(increase) in restricted monetary assets † 26.0 (16.1)
† 2.6 4.3
† 2021 figures have been restated to reflect the IFRIC Decision on
Deposits with further information provided in notes 1B and 16.
2022 2021
£m £m
Non-cash items
Increase in accrued rents receivable † (3.5) (11.6)
Decrease in loss allowance provisions * (2.6) (6.2)
Amortisation of lease incentives and other costs 1.2 5.9
Depreciation 4.1 4.4
Other non-cash items including share-based payment charge - (1.8)
† (0.8) (9.3)
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions with further information provided in notes 1B and 6.
* Comprises movement in provisions against trade (tenant) receivables
and unamortised tenant incentives.
B. Analysis of movements in net debt
2022 2021
Cash and cash equivalents Borrowings Net debt Cash and cash equivalents Borrowings Net debt
£m £m £m £m £m £m
At 1 January † 315.1 (1,878.9) (1,563.8) 417.5 (2,330.0) (1,912.5)
Cash flow † (99.0) 302.4 203.4 (100.3) 332.9 232.6
Change in fair value of currency swaps - 8.4 8.4 - (14.2) (14.2)
Exchange 2.7 (108.9) (106.2) (2.1) 132.4 130.3
At 31 December † 218.8 (1,677.0) (1,458.2) 315.1 (1,878.9) (1,563.8)
Amounts in respect of assets held for sale - - - 4.6 - 4.6
† 218.8 (1,677.0) (1,458.2) 319.7 (1,878.9) (1,559.2)
21. CONTINGENT LIABILITIES AND COMMITMENTS
A. Contingent liabilities
2022 2021
£m £m
The Group excluding joint ventures:
- guarantees given 45 52
- claims arising in the normal course of business 34 27
Group's share arising in joint ventures 7 14
86 93
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 the Group's tax
structures. The range of potential outcomes is a possible outflow of minimum
£nil and maximum £145m (2021: minimum £nil and maximum £143m). The
Directors have not provided for this amount because they do not believe an
outflow is probable.
B. Capital commitments on investment properties
2022 2021
£m £m
The Group excluding joint ventures - 19
Group's share arising in joint ventures 52 40
52 59
22. POST BALANCE SHEET EVENTS
In respect of the Highcross joint venture, on 9 February 2023, it was agreed
that it was in the best interests of the lenders in the longer term to appoint
a receiver to administer the asset for the benefit of the creditors.
ADDITIONAL INFORMATION - UnAudited
Table Table
Summary EPRA performance measures 1 Balance sheet information
Balance sheet 12
Portfolio analysis Net debt 13
Rental data 2 Movement in net debt 14
Gross rental income 3 Total accounting return 15
Vacancy 4 Financing metrics
Lease expiries and breaks 5 Net debt : EBITDA 16
Net rental income 6 Interest cover 17
Top ten tenants 7 Loan to value 18
Cost ratio 8 Gearing 19
Valuation analysis 9 Unencumbered asset ratio 20
Net initial yield 10 Group Share in Value Retail 21
Capital expenditure 11 Key properties 22
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 again awarded a Gold Award for compliance with
the EPRA BPR for our 2021 Annual Report. Further information on EPRA and the
EPRA BPR can be found on their website www.epra.com. Details of our key EPRA
metrics are shown in Table 1.
SUMMARY EPRA PERFORMANCE MEASURES
Table 1
Performance measure Note /
2022 2021 Table
Earnings † £100.6m £65.0m 10A
Earnings per share (EPS) † * 2.0p 1.3p 11B
Cost ratio (including vacancy costs) † 38.0% 52.5% Table 8
Cost ratio (excluding vacancy costs) † 32.0% 47.2% Table 8
2022 2021
Net Disposal Value (NDV) per share 56p 60p 11C
Net Tangible Assets value (NTA) per share 53p 64p 11C
Net Reinstatement Value (NRV) per share 61p 74p 11C
Net Initial Yield (NIY) 5.8% 5.6% Table 10
Topped-up Net Initial Yield 6.0% 5.8% Table 10
Vacancy rate 4.8% 5.7% Table 4
Loan to value † 50.5% 50.1% Table 18
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions with further information provided in notes 1B and 6 to the
financial information.
* 2021 restated to reflect the bonus element of scrip dividends.
PORTFOLIO ANALYSIS
As a result of its full impairment at 31 December 2021, the Group's investment
in Highcross is included in 'Developments and other' and for 2022 is included
in all metrics except for those included in the consolidated income statement
(gross rental income, net rental income and the revaluation losses in the
year). These reclassifications are reflected in the tables within this
Additional information.
Where applicable, the information presented within the 'Development and other'
segment only reflects available data in relation to the investment properties
within this segment.
Rental data
Table 2
2022
Proportionally consolidated Gross rental Adjusted net rental Average Rents Estimated rental value of vacant space Estimated Reversion/
income
income
rents
passing ( )
£m
rental value
(over-rented)
£m
£m
passing
£m
£m
%
£/m(2)
a b c c d
UK 90.5 74.3 420 84.0 2.3 77.6 (11.3)
France 61.8 53.8 430 65.9 3.2 71.3 3.1
Ireland 37.3 33.6 500 38.8 0.8 39.5 (0.3)
Flagship destinations 189.6 161.7 440 188.7 6.3 188.4 (3.6)
Developments and other 25.6 13.1 170 21.6 2.9 20.8 (17.7)
Managed portfolio 215.2 174.8 380 210.3 9.2 209.2 (5.0)
2021
UK † 119.3 83.6 400 104.5 5.1 102.0 (7.3)
France † 54.4 37.0 415 52.3 2.3 57.5 5.3
Ireland † 35.6 28.2 460 35.6 0.6 36.5 0.9
Flagship destinations † 209.3 148.8 415 192.4 8.0 196.0 (2.1)
Developments and other † 30.1 17.2 195 22.4 3.2 23.4 (9.5)
UK retail parks † 11.0 8.4 n/a n/a n/a n/a n/a
Managed portfolio † 250.4 174.4 370 214.8 11.2 219.4 (2.9)
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions with further information provided in notes 1B and 6 to the
financial information.
(a) Average rents passing at the year end before deducting head rents and
excluding rents passing from anchor units, car parks and commercialisation.
(b) Rents passing are the annual rental income receivable at the year end
from an investment property, after any rent-free periods and after deducting
head rents and car parking and commercialisation running costs totalling
£14.2m.
(c) The estimated rental value (ERV) at the year end calculated by the
Group's valuers. ERVs in the above table are included within the unobservable
inputs to the portfolio valuations as defined by IFRS 13.
(d) The total of rents passing and ERV of vacant space compared to ERV.
Gross rental income
Table 3
Proportionally consolidated 2022 2021
£m
£m
Base rent 159.2 158.6
Turnover rent 13.7 8.2
Car park income 27.9 22.3
Commercialisation income 9.5 10.3
Surrender premiums 0.8 20.1
Lease incentive recognition † 0.9 28.3
Other rental income 3.2 2.6
Gross rental income † 215.2 250.4
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions with further information provided in notes 1B and 6 to the
financial information.
Vacancy
Table 4
2022 2021
Proportionally consolidated ERV of vacant space Total ERV for vacancy Vacancy ERV of vacant space Total ERV for vacancy Vacancy
£m
£m
rate
£m
£m
rate
%
%
a a
UK 2.3 64.2 3.6 5.1 86.0 5.9
France b 3.2 72.5 4.4 2.3 59.1 4.0
Ireland 0.8 35.7 2.3 0.6 33.0 1.7
Flagship destinations b 6.3 172.4 3.7 8.0 178.1 4.5
Developments and other 2.9 17.9 16.0 3.2 20.4 15.7
Managed portfolio b 9.2 190.3 4.8 11.2 198.5 5.7
a Total ERV differs from Table 2 due to the exclusion of car park ERV
and head rents payable which distort the vacancy metric.
b Figures include Les 3 Fontaines, Cergy extension which opened in March
2022. Vacancy rates at 31 December 2022 excluding the extension were France:
2.8%; Flagship destinations: 3.0%; Managed portfolio: 4.3%.
Lease expiries and breaks
Table 5
Rental income based on passing rents that expire/break in ERV of leases that expire/break in* Weighted average unexpired
lease term
Proportionally consolidated Outstanding 2023 2024 2025 Total Outstanding 2023 2024 2025 Total to break years to expiry years
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
UK 3.8 12.8 13.7 8.2 38.5 3.6 11.6 10.8 6.7 32.7 5.9 7.7
France 3.5 5.9 10.1 2.6 22.1 3.1 5.9 9.5 3.0 21.5 1.9 4.8
Ireland 1.3 3.3 4.1 1.4 10.1 2.1 4.3 3.1 1.3 10.8 5.9 7.4
Flagship destinations 8.6 22.0 27.9 12.2 70.7 8.8 21.8 23.4 11.0 65.0 4.3 6.5
Developments and other 2.5 4.1 2.7 3.5 12.8 2.6 3.1 2.2 2.2 10.1 4.2 8.7
Managed portfolio 11.1 26.1 30.6 15.7 83.5 11.4 24.9 25.6 13.2 75.1 4.3 6.8
* Ignores the impact of rental growth and any rent-free periods.
Net rental income
Table 6
Like-for-like net rental income (NRI) is calculated as the percentage change
in NRI for investment properties owned throughout both the current and prior
year, after taking account of exchange translation movements. Properties
undergoing a significant extension project are excluded from this calculation
during the period of the works.
2022
Proportionally consolidated Properties Change in Disposals Developments Total Change in provision Total
owned throughout 2021/22
like-for-like NRI
£m
and other
£m
%
£m Adjusted NRI
£m
£m
NRI
£m
UK 70.8 31.3 3.5 - 74.3 1.7 76.0
France 36.3 35.4 - 17.5 53.8 - 53.8
Ireland 33.6 19.3 - - 33.6 0.2 33.8
Flagship destinations 140.7 29.2 3.5 17.5 161.7 1.9 163.6
Developments and other - n/a - 13.1 13.1 0.5 13.6
Managed portfolio * 140.7 29.2 3.5 30.6 174.8 2.4 177.2
2021
Proportionally consolidated Properties Exchange Disposals Developments Total Change in provision Total
owned throughout 2021/22
£m
and other
£m
£m
£m Adjusted NRI
£m
£m
NRI
£m
UK † 54.0 - 14.0 15.6 83.6 6.4 90.0
France † 26.8 (0.2) 0.8 9.6 37.0 - 37.0
Ireland † 28.2 - - - 28.2 - 28.2
Flagship destinations † 109.0 (0.2) 14.8 25.2 148.8 6.4 155.2
Developments and other † - - 0.6 16.6 17.2 0.3 17.5
UK retail parks † - - 8.4 - 8.4 1.4 9.8
Managed portfolio † * 109.0 (0.2) 23.8 41.8 174.4 8.1 182.5
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions with further information provided in notes 1B and 6 to the
financial information.
* Managed portfolio value on which like-for-like growth is based was
£2,244m (2021: £2,605m).
Top ten tenants
Table 7
Ranked by passing rent
Proportionally consolidated Passing rent % of total
£m
passing rent
Inditex 7.6 3.6
H&M 6.5 3.1
JD Sports 3.3 1.6
Next 3.1 1.5
River Island 2.8 1.4
Marks & Spencer 2.7 1.3
Boots 2.7 1.3
Watches of Switzerland Company 2.4 1.1
CK Hutchison Holdings 2.3 1.1
John Lewis Partnership 2.3 1.1
35.7 17.1
Cost ratio
Table 8
Proportionally consolidated 2022 2021
£m
£m
Gross administration costs † * 64.9 80.3
Property fee income (11.5) (13.2)
Management fee receivable (5.5) (7.1)
Property outgoings † 39.1 74.2
Less inclusive lease costs recovered through rent (9.1) (8.0)
Total operating costs A 77.9 126.2
Less vacancy costs (12.3) (12.6)
Total operating costs excluding vacancy costs B 65.6 113.6
Gross rental income † 215.2 250.4
Ground rents payable (1.3) (1.8)
Less inclusive lease costs recovered through rent (9.1) (8.0)
Gross rental income † C 204.8 240.6
Cost ratio including vacancy costs † A/C 38.0% 52.5%
Cost ratio excluding vacancy costs † B/C 32.0% 47.2%
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions with further information provided in notes 1B and 6 to the
financial information.
* Includes £5.1m (2021: £8.6m) of business transformation costs
which are excluded from Adjusted earnings as set out in note 10A to the
financial information. Excluding these costs, the 2022 EPRA cost ratio
including vacancy costs would reduce from 38.0% to 35.5%.
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 £0.8m (2021: £1.5m) were capitalised as
development costs and are not included within 'Gross administration costs'.
Valuation analysis
Table 9
2022
Proportionally consolidated - including Value Retail Properties Revaluation losses Income Capital Total Initial True Nominal
at valuation
in the year
return
return
return
yield
equivalent
equivalent
yield
yield
( ) £m % % % %
£m % a
%
UK 871.0 (90.2) 7.9 (9.4) (2.1) 7.7 8.4 8.0
France c 1,241.0 (57.2) 4.8 (4.6) - 4.4 5.2 5.0
Ireland 676.4 (20.1) 5.2 (3.0) 2.1 5.3 5.7 5.5
Flagship destinations 2,788.4 (167.5) 6.0 (5.9) (0.2) 5.7 6.3 6.1
Developments and other 431.7 (53.5) 2.3 (14.8) (12.8) 7.0 10.3 9.7
Managed portfolio 3,220.1 (221.0) 5.4 (7.3) (2.3) 5.8 6.6 6.3
Value Retail 1,887.0 (60.7) 5.3 (3.1) 2.0
Group portfolio e 5,107.1 (281.7) 5.3 (5.8) (0.7)
2021
Properties Revaluation (losses)/gains Income Capital Total Initial True Nominal
at valuation
in the period
return
return
return
yield
equivalent
equivalent
£m
£m
%
%
%
%
yield
yield
%
%
d
UK † b 1,135.3 (247.5) 6.5 (16.3) (10.8) 7.0 8.1 7.7
France † c 989.7 (61.0) 3.6 (6.4) (3.1) 4.4 5.2 5.0
Ireland † 659.3 (56.9) 4.2 (7.8) (3.9) 4.9 5.4 5.3
Flagship destinations † 2,784.3 (365.4) 5.0 (11.2) (6.8) 5.6 6.4 6.2
Developments and other † 694.4 (78.7) 2.9 (9.1) (6.6) 6.2 9.6 9.0
Managed portfolio † 3,478.7 (444.1) 4.7 (10.9) (6.7) 5.6 6.6 6.4
Value Retail 1,893.5 (12.0) 2.7 (0.6) 2.1
Group portfolio † e 5,372.2 (456.1) 4.0 (7.7) (3.9)
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions with further information provided in notes 1B and 6 to the
financial information.
a 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 5.7% (2021: 6.2%).
b Includes Silverburn which was classified as held for sale as at 31
December 2021.
c Includes Italik, 75% of which is classified as a trading property.
d 2021 returns include UK retail parks up to the point of their disposal
in that year.
e Analysis of capital expenditure is included in Table 11.
Net Initial Yield
Table 10
Investment portfolio
Proportionally consolidated Note 2022 2021
£m
£m
Wholly owned a 3B 1,461.0 1,561.4
Share of Property interests 3B 1,722.9 1,813.9
Trading properties 3B 36.2 34.3
Assets held for sale 3B - 69.1
Net investment portfolio valuation on a proportionally consolidated basis 3B 3,220.1 3,478.7
Less: Developments (249.0) (469.4)
Completed investment portfolio 2,971.1 3,009.3
Purchasers' costs b 197.2 209.8
Grossed up completed investment portfolio A 3,168.3 3,219.1
Annualised cash passing rental income 207.1 214.7
Non recoverable costs (21.1) (29.3)
Rents payable (3.8) (3.6)
Annualised net rent B 182.2 181.8
Add:
Notional rent expiration of rent-free periods and other lease incentives c 3.2 3.0
Future rent on signed leases 3.8 0.7
Topped-up annualised net rent C 189.2 185.5
Add back: Non recoverable costs 21.1 29.3
Passing rents 210.3 214.8
Net initial yield B/A 5.8% 5.6%
'Topped-up' net initial yield C/A 6.0% 5.8%
a Includes 100% of Italik, 75% of which is part of trading properties.
b Purchasers' costs equate to 6.7% (2021: 7.0%) of the value of the
completed investment portfolio.
c Weighted average remaining rent-free period is 0.7 years (2021: 0.6
years)
Capital expenditure
Table 11
2022 2021
Proportionally consolidated Note Reported Share of Proportionally Reported Share of Proportionally
Group
Property
consolidated
Group
Property
consolidated
£m
interests
£m
£m
interests
£m
£m
£m
Developments 5 10 15 49 2 51
Capital expenditure - creating area 14 - 14 11 - 11
Capital expenditure - no additional area 3 24 27 5 14 19
Tenant incentives † 16 1 17 2 4 6
Total † 3B 38 35 73 67 20 87
Conversion from accruals to cash basis (2) 5 3 - 10 10
Total on cash basis † 36 40 76 67 30 97
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions with further information provided in notes 1B and 6 to the
financial information.
BALANCE SHEET INFORMATION
Note 2 to the 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 financial information, the Group's interest in Value Retail is
not proportionally consolidated as it is not under the Group's management.
Balance sheet
Table 12
2022 2021
Note Reported Share of Proportionally Reported Share of Proportionally
Group
Property
consolidated
Group
Property
consolidated
£m
interests
£m
£m
interests
£m
£m
£m
Non-current assets
Investment properties 1,461.0 1,722.9 3,183.9 1,561.4 1,813.9 3,375.3
Interests in leasehold properties 34.0 15.4 49.4 32.9 15.4 48.3
Right-of-use assets 9.5 - 9.5 3.8 - 3.8
Plant and equipment 1.4 - 1.4 1.4 - 1.4
Investment in joint ventures 1,342.4 (1,342.4) - 1,451.8 (1,451.8) -
Investment in associates 1,297.1 (107.7) 1,189.4 1,247.0 (106.2) 1,140.8
Other investments 9.8 - 9.8 9.5 - 9.5
Trade and other receivables 3.2 5.0 8.2 19.5 2.9 22.4
Derivative financial instruments 7.0 6.3 13.3 18.6 - 18.6
Restricted monetary assets 21.4 - 21.4 21.4 - 21.4
4,186.8 299.5 4,486.3 4,367.3 274.2 4,641.5
Current assets
Trading properties 36.2 - 36.2 34.3 - 34.3
Trade and other receivables 85.9 43.4 129.3 84.8 32.3 117.1
Derivative financial instruments 0.1 - 0.1 7.3 - 7.3
Restricted monetary assets † 8.6 21.0 29.6 33.7 30.9 64.6
Cash and cash equivalents † 218.8 117.7 336.5 315.1 134.7 449.8
349.6 182.1 531.7 475.2 197.9 673.1
Assets held for sale - - - 71.4 - 71.4
349.6 182.1 531.7 546.6 197.9 744.5
Total assets 4,536.4 481.6 5,018.0 4,913.9 472.1 5,386.0
Current liabilities
Trade and other payables (168.5) (66.8) (235.3) (179.4) (75.9) (255.3)
Loans - (126.1) (126.1) - (79.3) (79.3)
Tax (0.5) (0.3) (0.8) (0.6) (0.2) (0.8)
Derivative financial instruments (16.1) - (16.1) - - -
(185.1) (193.2) (378.3) (180.0) (155.4) (335.4)
Non-current liabilities
Trade and other payables (56.3) (7.0) (63.3) (56.6) (4.2) (60.8)
Obligations under head leases (38.1) (15.8) (53.9) (36.4) (15.8) (52.2)
Loans (1,646.4) (265.5) (1,911.9) (1,834.8) (295.0) (2,129.8)
Deferred tax (0.4) (0.1) (0.5) (0.4) (0.1) (0.5)
Derivative financial instruments (23.7) - (23.7) (59.7) (1.6) (61.3)
(1,764.9) (288.4) (2,053.3) (1,987.9) (316.7) (2,304.6)
Total liabilities (1,950.0) (481.6) (2,431.6) (2,167.9) (472.1) (2,640.0)
Net assets 2,586.4 - 2,586.4 2,746.0 - 2,746.0
EPRA adjustments -excluding Value Retail 10B (4.8) (1.0)
10B 52.1 95.2
-Value Retail
47.3 94.2
Non-controlling interests - (0.1)
EPRA NTA 2,633.7 2,840.1
† 2021 figures have been restated to reflect the IFRIC Decision on
Deposits where further information is provided in note 1B to the financial
statements and for the Reported Group in note 16 to the financial statements.
For Share of Property interests, £15.0m was reclassified from restricted
monetary assets to cash and cash equivalents.
Net debt
Table 13
2022 2021
Proportionally consolidated Note Reported Share of Total Reported Share of Total
Group
Property
£m
Group
Property
£m
£m
interests
£m
interests
£m
£m
Cash and cash equivalents † a, b 218.8 117.7 336.5 319.7 134.7 454.4
Loans c (1,646.4) (391.6) (2,038.0) (1,834.8) (374.3) (2,209.1)
Fair value of currency swaps (30.6) - (30.6) (44.1) - (44.1)
Net debt † (1,458.2) (273.9) (1,732.1) (1,559.2) (239.6) (1,798.8)
† 2021 figures have been restated to reflect the issuance during the
year of the IFRIC Decision on Deposits with further information provided in
note 1B to the financial information and for the Reported Group in note 16 to
the financial information. Share of Property interests is as described in
Table 12.
a Cash and cash equivalents in 2021 included £4.6m relating to assets
held for sale.
b Cash and cash equivalents for Share of Property interests includes
£10.0m (2021: £15.0m) in respect of cash held by managing agents and cash
held in a float account for secured lenders, which was previously disclosed as
restricted monetary assets as described in 1B and where the previously
reported 2021 cash and cash equivalents figure of £119.7m has been restated.
c Loans for Share of Property interests comprises £126.1m of current
and £265.5m of non-current secured loans, respectively (2021: £79.3m and
£295.0m, respectively).
Movement in net debt
Table 14
Proportionally consolidated 2022 2021
£m
£m
Opening net debt † (1,798.8) (2,215.4)
Profit from operating activities † 129.3 122.5
Decrease in receivables and restricted monetary assets † 27.5 39.6
Increase/(decrease) in payables 8.2 (37.0)
Adjustment for non-cash items † 0.7 (5.5)
Cash generated from operations † 165.7 119.6
Interest received 16.8 19.0
Interest paid (73.5) (108.3)
Redemption premiums and fees from early repayment of debt - (19.8)
Debt and loan facility issuance and extension fees (2.8) -
Bond issue costs - (5.2)
Premiums on hedging activities (3.9) (20.8)
Tax repaid/(paid) 0.1 (2.2)
Cash flows from operating activities † 102.4 (17.7)
Capital expenditure (76.3) (97.1)
Sale of properties 191.9 425.2
Cash flows from investing activities 115.6 328.1
Share issue expenses (0.5) (2.2)
Purchase of own shares (6.7) (3.8)
Proceeds from awards of own shares 0.1 0.1
Equity dividends paid (13.2) (24.9)
Cash flows from financing activities (20.3) (30.8)
Exchange translation movement (131.0) 137.0
Closing net debt † (1,732.1) (1,798.8)
† 2021 figures have been restated to reflect the IFRIC Decision on
Deposits with further information provided in note 1B to the financial
information.
Total accounting return
Table 15
2022 2021
NTA NTA per share NTA NTA per share
£m pence £m pence
EPRA NTA at 1 January 2,840.1 64.3 3,316.9 81.8
Scrip dividend dilution in NTA per share in the year - (7.5) - (6.7)
EPRA NTA at 1 January rebased to reflect scrip dividends in the year A 2,840.1 56.8 3,316.9 75.1
EPRA NTA at 31 December 2,633.7 52.7 2,840.1 64.3
Movement in NTA (206.4) (4.1) (476.8) (10.8)
Cash dividends in the year 13.2 0.3 13.0 0.3
B (193.2) (3.8) (463.8) (10.5)
Total accounting return B/A (6.8)% (14.0)%
FINANCING METRICS
Net debt : EBITDA
Table 16
Proportionally consolidated Note 2022 2021
£m
£m
Adjusted operating profit † 2 159.4 138.9
Amortisation of tenant incentives and other items within net rental income † (0.1) (12.1)
Share-based remuneration 3.0 3.3
Depreciation 5A 4.1 4.4
EBITDA - rolling 12 month basis A † 166.4 134.5
Net debt B † Table 13 1,732.1 1,798.8
Net debt : EBITDA B/A † 10.4x 13.4x
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions where further information is provided in notes 1B and 6 to the
financial information and the IFRIC Decision on Deposits with further
information provided in note 1B to the financial information.
Interest cover
Table 17
Proportionally consolidated Note 2022 2021
£m
£m
Adjusted net rental income † 2 174.8 174.4
Less net rental income in associates: Nicetoile (2021 only) and Italie Deux † 14D (4.4) (4.7)
A † 170.4 169.7
Adjusted net finance costs 2 54.0 71.8
Less interest on lease obligations and pensions (2.6) (3.2)
Add capitalised interest 7 1.2 5.3
B 52.6 73.9
Interest cover A/B † 3.24x 2.30x
† 2021 figures have been restated to reflect the IFRIC Decision on
Concessions with further information provided in notes 1B and 6 and the IFRIC
Decision on Deposits where further information is provided in note 1B.
Loan to value
Table 18
Proportionally consolidated Note 2022 2021
£m
£m
Net debt - 'Loan' A † Table 13 1,732.1 1,798.8
Managed property portfolio B 3B 3,220.1 3,478.7
Investment in Value Retail 1,189.4 1,140.8
'Value' C 4,409.5 4,619.5
Loan to value - Headline A/C † 39.3% 38.9%
Net debt - Value Retail D Table 21 674.9 680.3
Property portfolio - Value Retail E Table 21 1,887.0 1,893.5
Loan to value - Full proportional consolidation of Value Retail (A+D)/(B+E) † 47.1% 46.1%
160.3 176.6
Net payables - Managed Portfolio
Net payables - Value Retail 14.2 13.0
Net payables - Group F 174.5 189.6
(A+D+F)/(B+E) 50.5% 50.1%
Loan to value - EPRA †
† 2021 figures have been restated to reflect the IFRIC Decision on
Deposits with further information provided in note 1B to the financial
information.
Gearing
Table 19
Proportionally consolidated Note 2022 2021
£m
£m
Net debt † Table 13 1,732.1 1,798.8
Add:
- Unamortised borrowing costs -- 15.9 18.9
- Cash held within investments in associates: Italie Deux 6.8 6.0
Net debt for gearing A † 1,754.8 1,823.7
Equity shareholders' funds - Consolidated net tangible worth B 2,586.4 2,745.9
Gearing A/B † 67.8% 66.4%
† 2021 figures have been restated to reflect the IFRIC Decision on
Deposits with further information provided in note 1B to the financial
information.
Unencumbered asset ratio
Table 20
Proportionally consolidated Note 2022 2021
£m
£m
Managed property portfolio 3B 3,220.1 3,478.7
Adjustments:
- Properties held in associates: Italie Deux (102.9) (101.7)
- Encumbered assets * (651.0) (651.9)
Total unencumbered assets A 2,466.2 2,725.1
Net debt - proportionally consolidated † Table 13 1,732.1 1,798.8
Adjustments:
- Cash held within investments in associates: Italie Deux 6.8 6.0
- Cash held within investments in encumbered joint ventures † 50.8 34.0
- Unamortised borrowing costs - Group 15.9 18.9
- Encumbered debt * (392.3) (375.7)
Total unsecured debt B † 1,413.3 1,482.0
Unencumbered asset ratio A/B † 1.74x 1.84x
† 2021 figures have been restated to reflect the IFRIC Decision on
Deposits with further information provided in note 1B to the financial
information.
* Encumbered assets and debt relate to Dundrum, Highcross and
O'Parinor.
GROUP SHARE IN VALUE RETAIL
Table 21
Income statement 2022 2021
£m
£m
Gross rental income 148.0 96.6
Net rental income 101.3 66.7
Revaluation losses on properties (60.7) (12.0)
Operating (loss)/profit (7.4) 20.9
(Loss)/profit for the year (5.3) 20.0
Adjusted earnings 27.4 15.9
Balance sheet
Investment properties 1,887.0 1,893.5
Total assets 2,125.7 2,063.4
Net debt (674.9) (680.3)
EPRA NTA 1,241.4 1,236.0
Group share
Investment in associates: Value Retail 1,189.4 1,140.8
KEY PROPERTIES
Table 22
Managed portfolio Location Accounting classification where not wholly-owned Ownership Area, m(2) No. of tenants Passing rent £m
Flagship destinations
UK
Brent Cross London Joint venture 41% 87,000 113 12.5
Bullring Birmingham Joint venture e 50% 98,220 151 21.0
Cabot Circus Bristol Joint venture f 50% 109,590 113 11.6
The Oracle Reading Joint venture 50% 72,100 100 10.1
Union Square Aberdeen 100% 51,800 73 15.1
Westquay Southampton Joint venture 50% 94,700 111 13.7
France
Italie Deux Paris Associate 25% 68,100 121 6.6
Les 3 Fontaines Cergy a, b 100% 85,100 206 23.5
Les Terrasses du Port Marseille 100% 62,800 155 29.8
O'Parinor Aulnay-sous-Bois Joint venture b, c 25% 68,200 161 6.0
Ireland
Dundrum Town Centre Dublin Joint venture 50% 128,700 152 27.2
Ilac Centre Dublin Joint operation 50% 27,900 66 4.0
Pavilions Swords Joint operation 50% 44,100 94 7.6
Developments and other (key properties)
Bristol Broadmead Bristol Joint venture f 50% 34,600 60 3.0
Centrale Croydon Joint venture 50% 64,300 42 2.2
Dublin Central Dublin 100% n/a n/a n/a
Dundrum Phase II Dublin Joint venture 50% n/a n/a n/a
Grand Central Birmingham Joint venture e 50% 37,600 54 4.7
Highcross Leicester Joint venture 50% 100,100 122 9.3
Eastgate Leeds 100% n/a n/a n/a
Martineau Galleries Birmingham e 100% 36,000 49 2.4
Pavilions land Swords 100% n/a n/a n/a
Bishopsgate Goodsyard London Joint venture 50% n/a n/a n/a
Whitgift Croydon Joint venture 50% 96,900 82 n/a
Ownership Area, m(2) No. of tenants Income
£m
Value Retail Associate d
Bicester Village Bicester 50% 28,000 160 69.8
La Roca Village Barcelona 41% 25,900 146 21.7
Las Rozas Village Madrid 38% 16,500 99 13.4
La Vallée Village Paris 26% 21,600 111 23.9
Maasmechelen Village Brussels 27% 20,200 105 5.9
Fidenza Village Milan 34% 21,100 117 6.6
Wertheim Village Frankfurt 45% 20,900 115 10.3
Ingolstadt Village Munich 15% 21,000 112 3.7
Kildare Village Dublin 41% 21,600 113 10.9
a Les 3 Fontaines, Cergy includes the new extension which was
reclassified from Developments and other to Flagship destinations upon opening
in March 2022.
b Held under co-ownership. Figures reflect Hammerson's ownership
interests.
c In addition, a small proportion is wholly owned.
d Income represents annualised base and turnover rent at Hammerson's
ownership share.
e Collectively known as the Birmingham Estate.
f Collectively known as the Bristol Estate.
Responsibility Statement
The Annual Report 2022 which will be issued in March 2023, contains a
responsibility statement in compliance with DTR 4.1.12 of the Listing Rules
which sets out that as at the date of approval on 8 March 2023, the Directors
confirm to the best of their knowledge:
· The Group financial statements, which have been prepared in
accordance with 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, give a true
and fair view of the assets, liabilities, financial position and loss of the
Group
· The Company financial statements, which have been prepared in
accordance with UK Accounting Standards, comprising FRS 101, give a true and
fair view of the assets, liabilities and financial position of the Company
· The Strategic Report includes a fair review of the development and
performance of the business and the position of the Group and Company,
together with a description of the principal risks and uncertainties that it
faces
The financial statements were approved by the Directors and signed on their
behalf by:
Rita-Rose Gagné Himanshu Raja
Director Director
8 March 2023
Glossary
Adjusted earnings Reported amounts excluding certain items in accordance with EPRA guidelines
and also certain cash and non-cash items which the Directors believe are not
reflective of the normal day-to-day operating activities of the Group.
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 currency swaps but excluding the fair value of the
interest rate swaps, as the fair value 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, calculated on a monthly time-weighted and constant currency
basis.
Cost ratio (or EPRA cost ratio) Total operating costs (being property outgoings, gross administration costs
less property fee income and management fees receivable) as a percentage of
gross rental income, after rents payable. Both property outgoings and gross
rental income are adjusted for costs associated with inclusive leases.
Compulsory Voluntary Arrangement (CVA) A legally binding agreement with creditors to restructure liabilities,
including future lease liabilities.
Dividend cover Adjusted earnings per share divided by dividend per share.
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 bank loans and facilities
and private placements.
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.
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 excluding associates, divided by Adjusted net
finance costs before capitalised interest and interest charges on lease
obligations and pensions.
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 Comprises new lettings and renewals.
Leasing vs Passing rent A comparison of Headline rent from new leases and renewals to the Passing rent
at the most recent balance sheet date.
Like-for-like (LFL) NRI The percentage change in net rental income 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: Headline, which includes the Group's investment in
Value Retail; Full proportional consolidation of Value Retail (FPC), which
incorporates the Group's share of Value Retail's net debt and property values;
and EPRA, which includes an adjustment for net payables.
MSCI Property market benchmark indices produced by Morgan Stanley Capital
International.
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
also excluded to calculate Adjusted NRI.
EPRA NTA 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.
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.
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.
Reported Group The financial results as presented under IFRS.
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.
SONIA Sterling Overnight Index Average.
Temporary lease A lease with a period of one year or less, measured to the earlier of lease
expiry or tenant break.
Tenant restructuring CVAs and administrations.
Total development cost All capital expenditure on a development or other major project, including
capitalised interest.
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 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.
The announcement above has also been released on the SENS system of the
Johannesburg Stock Exchange and on Euronext Dublin.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR BCGDXSBGDGXIRecent news on Hammerson
See all newsREG - Hammerson PLC - Transaction in Own Shares
AnnouncementREG - Hammerson PLC - Director/PDMR Shareholding
AnnouncementREG - Hammerson PLC - Transaction in Own Shares
AnnouncementREG - Hammerson PLC - Transaction in Own Shares
AnnouncementREG - Hammerson PLC - Director/PDMR Shareholding
Announcement