REG - Hammerson PLC - Final Results
26/02/2025 07:15
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RNS Number : 4569Y Hammerson PLC 26 February 2025
26 February 2025
PRESS RELEASE
HAMMERSON plc - FULL YEAR 2024 RESULTS
2024: A transformative year, repositioned to drive growth
Hammerson is the largest UK-listed, pure-play owner and manager of prime
retail and leisure anchored city destinations across the UK, France and
Ireland.
We own, manage and invest in landmark city destinations integrating retail,
leisure and community hubs to meet evolving customer and occupier needs while
delivering sustainable long-term growth for our stakeholders. Our 10 city
locations rank in the top 20 of all retail venues across our geographies and
in the top 1% where retail spend is concentrated. Our catchment reach of 40
million people attracts 170 million visitors per annum, generating £3 billion
of sales for our brand partners.
Rita-Rose Gagné, Chief Executive of Hammerson, commented:
"Following a transformative and successful year for Hammerson, we enter 2025
as a repositioned business. In landing the pivotal sale of Value Retail and
completing our non-core disposals, we have generated £1.5bn of cash proceeds
over the last four years, materially strengthening our capital structure, and
enabling investment for growth in our high-quality portfolio.
We have strategically realigned the business to benefit from structural market
trends. First, cities are engines of economic growth, and we have concentrated
our portfolio on exceptional assets in some of Europe's fastest growing and
most vibrant cities. Second, the flight to quality where occupiers want fewer
and more productive stores in only these locations, enables us to attract
leading global and local brand partners. Third, the physical experience has
become more relevant for consumers and our brand partners, with at least 80%
of all retail transactions touching a store.
Investment in our destinations and our unique and specialist platform provides
data-driven insights to curate the right product, placemaking and mix of
brands. This platform is scalable and agile, driving tangible benefits with
higher occupancy, leasing, footfall and sales above national benchmarks,
whilst growing our catchment and market share. There is more to come.
We are confident in our strategy and optimistic about the opportunity ahead
for Hammerson. We continue to maintain a tight operational grip and are poised
to deliver significant revenue and underlying earnings growth, with the full
impact of our ongoing investments and acquisitions yet to be realised."
Highlights
Another record year of leasing, 56% ahead previous passing rents and 13% over ERV
- Occupancy improved to over 95%, with few leasable units in most
locations, driving rental tension across our portfolio
- 262 leases signed on 1m ft(2) of space generating annual headline rent
of £41m (£24m at share), another record performance on a like-for-like basis
- 956 principal leases secured since FY20, totalling £156m of annual
rent at 100% at an average of 32% ahead of previous passing rent and 4% above
ERV - c.50% of space let on new terms since FY20 and £1.1bn of rent
contracted to first break. All geographies in positive reversion, with further
opportunities ahead of us
- Occupier demand is robust with £8.6m of headline income already
exchanged in 2025, 10% above previous passing rent and 11% ahead of ERV - good
visibility and a strong pipeline for the remainder of 2025, underpinning our
confidence in the outlook
Our destinations are thriving with footfall and sales ahead of national benchmarks
- Black Friday, Christmas Eve and New Year's Eve all saw year-on-year
increases of 10-12% for all our flagship destinations - Westquay had 112,000
visitors on the Saturday of Black Friday weekend, its highest number since
November 2017
- We had good footfall momentum in the final quarter, reflecting new
openings and seasonal events, with UK footfall up 17% quarter-on-quarter,
Ireland 16% and France 5%
- We hosted 170m visitors at our destinations (+600k). Excluding assets
in repositioning, footfall was up 2% (+2.5m) year-on-year across the Group(1),
with the UK up 2%, France up 4% and Ireland up 1%. All ahead of national
benchmarks
- Sales up 5%(1,2) in the UK and 3% in France, with brand partners
benefiting from our combined investments, new concepts and upsized stores
- Anchor brand partners consistently report that their new store formats
trade in the top five sales performers across their UK and European portfolios
Investment and capital recycling to drive future growth and value creation
- Investment in Bullring and Dundrum generated £184m of rent
contracted to first break (including £87m in 2024), and a total of more than
£250m since FY20 benefiting from halo effect of repositioning
- The repositioning of Cabot Circus and The Oracle in 2024 has
already secured £52m of rent contracted to first break. Our investments will
see marquee openings in 2025 such as M&S and Odeon at Cabot Circus, and
Hollywood Bowl and TK Maxx at The Oracle
- Total property returns were +2.1%, with flagship destinations
+2.9%
- Valuations increasingly reflecting successful investment with the
UK up 4.2% and France up 1.5%, driven by higher contracted rental income,
related ERV growth and some yield compression. Valuations in Ireland were down
13% due to outward yield shift, although yields stabilised in Q4
- Having crystallised €705m (£595m) of cash proceeds from Value
Retail in September at an exit yield of 3.4%, we rapidly recycled £135m to
gain 100% control of Westquay at a significantly more attractive yield - we
continue to see opportunities for JV consolidation and several discussions are
ongoing
Our relentless focus on efficiency and investment in data has delivered a
further 16% cost reduction
- Gross administration costs down 16% year-on-year, ahead of
guidance of 10%; a total reduction of 36% since FY20
- Our investments in data and analytics enable us to better
understand our catchments and to continually evolve and curate our estates to
meet changing consumer and occupier needs to maximise the value of our
physical and media assets. We are accelerating the roll out of AI tools in
2025
- Today, we have a specialist, data-driven and efficient platform
that is scalable and delivering operational gearing as we grow rental income
and AUM
FY24 financial summary
- Reported like-for-like GRI up 1.6% year-on-year; reported
like-for-like NRI -0.5% reflecting ongoing extensive repositioning in the UK
- Underlying(1) like for like GRI +3.0%, with up to 7% growth from
assets benefitting from recent investments, underlying like-for-like NRI +0.2%
- Adjusted earnings of £99m (FY23: £116m), reflecting impact of
disposals. Adjusted EPS 19.9p (FY23: 23.4p)
- IFRS loss of £526m (FY23: (£51m loss), reflecting £497m Value
Retail impairment and H124 revaluation loss
- One of the strongest balance sheets in the sector, with net debt
down 40% year-on-year to £799m. Resulting Net debt:EBITDA of 5.8x (FY23:
8.0x) and LTV of 30% (FY23: 34%), reflected in credit improvements from
Moody's and Fitch in the second half
- Closing portfolio value of £2.7bn, AUM £4bn. EPRA NTA per share
370p (HY24: 382p)
Dividend
- Recommended final dividend of 8.07p per share for 2024 in line
with the Board's new policy of 80-85% of Adjusted earnings. The full year
dividend is 15.63p, up 4%. The dividend recommendation will be released as a
separate announcement
FY25 outlook
We had a strong finish to 2024 in terms of footfall, sales, leasing and
redeployment of capital, which has continued into 2025. We will see marquee
openings in Cabot Circus and The Oracle as we bring major new uses to each of
these assets, matching our experiences and building momentum at Bullring and
Dundrum. We have already secured £8.6m of leases in 2025, the pipeline is
robust, and discussions are progressing on other acquisitions.
The organic growth from investments will flow to the bottom line benefiting
from the operational gearing from our specialist data-driven platform.
We have strong momentum. Notwithstanding the uncertainty in the macroeconomic
environment, our portfolio is well positioned to drive rental growth and
earnings from the high demand for scarce, relevant space where brands are
consolidating.
1 Excluding Cabot Circus and The Oracle where 30-40% of the space is
being repurposed
2 Source: Lloyds Bank data
Results presentation today:
Hammerson will hold a virtual presentation for analysts and investors to
present its financial results for the twelve months ended 31 December 2024,
followed by a Q&A session.
Date & time: Wednesday 26 February at 09.00 am (GMT)
Webcast link: https://www.netroadshow.com/events/login?show=d4a1736f&confId=77522
(https://url.uk.m.mimecastprotect.com/s/1RNsCPr1Mi3XN9HzfGTxJNHY?domain=netroadshow.com)
Conference call: Quote Hammerson when prompted by the operator, access code 157450
Please join the call five minutes before the booked start time to allow the
operator to transfer you into the call by the scheduled start time
France: +33 9 7073 3958
Ireland: +353 1 691 7842
Netherlands: +31 85 888 7233
South Africa: +27 87 550 8441
UK: +44 20 3936 2999
USA: +1 646 233 4753
The presentation and press release will be available at:
https://www.hammerson.com/investors/reports-results- presentations on the
morning of results.
Enquiries:
Rita-Rose Gagné, Chief Executive Officer Tel: +44 (0)20 7887 1000
Himanshu Raja, Chief Financial Officer Tel: +44 (0)20 7887 1000
Investors:
Josh Warren, Director of Strategy, Commercial Finance and IR Tel: +44 (0)20 7887 1053 josh.warren@hammerson.com (mailto:josh.warren@hammerson.com)
Media:
Oliver Hughes, Ollie Hoare and Charles Hirst, MHP Tel: +44 (0)20 3128 8100 Hammerson@mhpgroup.com (mailto:Hammerson@mhpgroup.com)
Tom Gough, Communications Consultant Tel: +44 (0)20 7887 1092 Tom.gough@hammerson.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
Year ended 31 December 2024 2023 Note/Ref(1)
Income
Gross rental income(2) £189m £208m 2
Adjusted net rental income(2) £146m £168m 2
Adjusted net finance costs(2) £(32)m £(46)m 2
Adjusted earnings(3) £99m £116m 2
Net revaluation losses (2) £(91)m £(119)m 2
Loss for the period (IFRS) £(526)m £(51)m 2
Adjusted earnings per share(3 5) 19.9p 23.4p 11B
Basic loss per share(5) (106.0)p (10.3)p 11B
Final dividend per share (cash)(5) 8.07p 7.80p 20
Dividend per share for the year (cash) (5) 15.63p 15.00p 20
Operational
Like-for-like gross rental income change(2) 1.6% 5.5% Table 3
Like-for-like net rental income change(2) (0.5)% 3.6% Table 4
Occupancy - flagships(2) 95.1% 94.6% Table 6
Leasing value (@ 100%) £41m £46m n/a
Leasing v ERV (principal leases)(2) +13% +12% n/a
Leasing v Passing rent (principal leases)(2) +56% +37% n/a
Passing rent(2) £182m £188m Table 5
Like-for-like passing rent change - flagships(2) 1.5% 2.5% Financial Review
ERV(2) £189m £193m Table 5
Like-for-like ERV change - flagships(2) 1.8% 1.7% Financial Review
Capital and financing
Valuation(2) £2,659m £2,776m 3B
Total accounting return(3) (24.2)% (2.1)% Table 21
Total property return(2) 2.1% 1.6% Table 9
Capital return(2) (3.4)% (4.1)% Table 9
Net debt(2) £799m £1,326m Table 12
Gearing(2) 45% 55% Table 16
Net debt:EBITDA(2) 5.8x 8.0x Table 14
Loan to value(2) 30% 34% Table 17
Loan to value ‒ full proportional consolidation (2 4) 30% 44% Table 17
Interest cover(2) 5.03x 3.91x Table 15
Liquidity £1,417m £1,225m Financial Review
Net assets £1,821m £2,463m Balance sheet
EPRA net tangible assets (NTA) per share(5) £3.70 £5.08 11C
1 Note/Ref refers to notes in the financial statements, or tables in
Additional Information or other sections of this release.
2 Figures presented on a proportionally consolidated basis. See
'Presentation of financial information' section of the Financial Review for
explanation.
3 These results include discussion of alternative performance measures
(APMs) which include those described as Adjusted, EPRA and Headline. These are
described below in the Financial Review and reconciliations for earnings and
net assets measures to their IFRS equivalents are set out in note 10 to the
financial statements.
4 For 2023 included the Group's share of Value Retail's net debt and
property portfolio, following the sale of the Group's interest this metric is
the same as Loan to value.
5 2023 figure restated to reflect the 1 for 10 share consolidation
undertaken during 2024.
Chief Executive's Review
Strategic overview
2024 was a transformative and successful year for Hammerson. We enter 2025 as
a repositioned business. In the last four years we have strategically reshaped
the portfolio to landmark city destinations. In the process, we generated
£1.5bn of cash disposal proceeds, including the transformational disposal of
Value Retail which closed in September, materially strengthening the capital
structure and providing capital to reinvest for growth. We started recycling
swiftly, completing the acquisition of our JV partner's 50% stake in Westquay
at higher yields, and continuing to simplify the portfolio.
Since I arrived in November 2020, the priority has been to realign the
portfolio, the platform and the balance sheet to take advantage of a number of
evolving market dynamics and emerging lifestyle changes. First, cities are the
engines of economic growth. Our reshaped portfolio now comprises only the
best assets in some of Europe's fastest-growing, youngest and most affluent
cities. Second, the flight to quality where brands want fewer, better and more
productive stores in only these locations, enabling us to attract the very
best global and local brand partners across retail and experiential
propositions for our customers. Third, the physical experience has become more
relevant for consumers and our brand partners, with at least 80% of all retail
transactions touching a store.
Today, Hammerson is the leading specialist owner and manager of ten landmark
city destinations and 80 acres of strategic land in the UK, France and
Ireland. Our flagship destinations all rank in the top 20 of all retail venues
in their respective geographies and in the top 1% where retail spend is
concentrated. They attract 170m visitors a year and are located in affluent
and growing catchments. Our five locations in the UK reach over 30% of the
population. Our assets in Paris and Marseille cover 20% of France, whilst we
reach 80% of Ireland's population from our three destinations in Dublin.
These destinations are vital to the social and economic fabric of their
communities. They are treated as social infrastructure, and this sets them far
apart from the obsolete shopping malls that do not possess the scale or
inherent brand value of our landmark destinations. Our brand partners continue
to redefine the role of their physical space. Their stores remain dominant in
unified commerce for point of sale and are increasingly used as fulfilment
hubs, experience and service centres, and marketing platforms.
As specialists, and with our reach, we have a unique expertise in operating
city destinations. We have built increased capability to leverage our data and
insights, investing in AI technology, which gives us a differentiated position
to curate the right mix and product offering in our destinations. We
anticipate evolving customer and occupier needs beyond traditional retail to
multi-use 24/7 buzzing lifestyle city hubs, integrating shopping, leisure and
dining, events, wellness, culture, services, office and residential.
This is all driving tangible benefits with higher occupancy, leasing, footfall
and sales above national benchmarks. Rents are affordable with OCRs in the mid
teens. We are growing our catchment and market share, and ultimately growing
rental income and value. Our flagship portfolio is now reversionary; values
are starting to follow with ERVs growing across the portfolio, with some yield
compression in the UK at the end of the year.
The major building blocks of the turnaround are complete. The Company is
simplified, the portfolio rebased. Our priority is to deliver our ongoing
asset repositioning, sustainable and stable organic growth, and pursue
inorganic opportunities to scale the business.
These strong foundations mean that our portfolio is well positioned to drive
rental growth, earnings and AUM.
I am confident that we will deliver growth in rental income and underlying
earnings in 2025, with further growth to come in 2026 and beyond as we see the
benefits of our ongoing disciplined investments fully flow through.
2024 highlights
We have grown occupancy, from its Covid-19 low at HY21 of 91% to over 95%
today, with several assets close to full. This is a level where rental tension
is tangible with only a few available leasable units in most assets. We signed
262 leases on 1m ft(2) of space, generating annual headline rent of £41m (at
100%), another record performance up 2% like-for-like. These deals were signed
at 56% above previous passing rent and 13% ahead of ERV on a net effective
basis at our share.
These long-term deals represent secure and visible cash flows of £255m of
rent contracted to first break at 100%. They provide an additional £8m of
passing rent to our flagship rent roll in this past year, up 2% like-for-like
to £174m as we turned around 10% of the portfolio.
Since FY20, we have secured 956 principal leases totalling £156m of annual
rent at 100% at an average of 32% ahead of previous passing rent and 4% above
ERV. That translates to c.50% of space on new terms and £1.1bn of rent
contracted to first break. We are still working some old leases and structures
out of the portfolio, some of which are over-rented. However, I am pleased to
say that due to our proactive work, all territories are now reversionary. We
therefore see further upside as we continue to turn the portfolio.
Demand remains unabated with £8.6m at 100% already exchanged in 2025, 10%
above previous passing and 11% ahead of ERV. We have good visibility and a
robust pipeline for the remainder of 2025.
Our destinations enjoyed another year of footfall growth above national
averages. Some of the best year-on-year performances are coming from assets
where we have largely completed our repositioning such as Bullring (+3%) and
Westquay (+4%) in the UK, and Les 3 Fontaines (+6%) in France. Cabot Circus
(-7%) and The Oracle (-6%) have shown resilience considering 30-40% of the
space in each asset was being repurposed over 2024.
Looking at the 2024 performance through the year, I was particularly pleased
with the surge in footfall quarter-on-quarter of 15% in Q4, significantly
ahead of the typical seasonal pick-up and our own expectations. Black Friday,
Christmas Eve and New Year's Eve all saw year-on-year footfall increases of
10-12% for our flagship destinations.
Sales performance was also strong with over £3bn of spend in our destinations
in 2024. Sales were up 5% in the UK, excluding assets in repositioning, and 3%
in France. Anchor brand partners report that their new concepts and stores in
our destinations have consistently traded in the top five performers across
their UK and European portfolios. In a similar pattern to footfall, some of
the best performances reflected new openings and offerings in 2023 and 2024.
Bullring in particular had a standout year with sales up 11%, making it the
strongest performer in its peer group according to Lloyds Bank data.
On the back of our recent repositioning successes at Bullring and Dundrum,
investment in 2024 was focused on Cabot Circus and The Oracle. At Cabot
Circus, we signed £5m of long-term deals, representing £43m of rent
contracted to first break, occupancy improved from 93% to 97%, including
M&S which has been already handed over in the second half of the year. We
anticipate a similar pattern at The Oracle in 2025.
We completed our non-core disposal programme in the first half with the sale
of Union Square, Aberdeen. In the second half, we exited our interest in Value
Retail for cash proceeds of €705m (£595m), representing a 24% discount to
GAV but an attractive exit multiple of 24x EV/EBITDA and a 3.4% exit cash
yield. Proceeds are earmarked for acquisitions, share buybacks and debt
reduction. Of the £350m of proceeds allocated for acquisitions, we were able
to rapidly deploy £135m to gain 100% control of Westquay at a high
single-digit yield. Several discussions on other assets are underway.
Over the last four years, we have overhauled our platform. In 2024, we
completed the outsourcing of our day-to-day property management of our assets
to proven partners of scale in all territories. This allows our specialist
teams to focus on strategic value-add initiatives with new and improved
digital and AI-enhanced tools. This is driving better data-led decision making
and improving productivity whilst facilitating greater collaboration across
functions, and externally with brand partners, agents, customers and
suppliers.
Our relentless focus on productivity and costs delivered a 16% year-on-year
reduction in gross administration costs, once again exceeding guidance of 10%,
bringing a total reduction of 36% (£24m) since FY20.
Net headcount is down 76% since FY20 to 125, which has enabled us to invest in
new skills and capabilities in customer insights, placemaking, digital
marketing and engagement.
After four years of heavy lifting, today we have a differentiated proposition:
a specialist, data-driven and efficient platform that is scalable and
delivering operational gearing as we grow rental income and AUM. We are doing
this by delivering a differentiated and distinctive product to our
stakeholders.
As we raise the bar on our execution with our enhanced platform, 2025 is about
delivering growth at pace.
Financial review
Adjusted earnings were £99m (FY23: £116m), or 19.9p per share (FY23: 23.4p),
reflecting the impact of disposals, including the Group's interest in Value
Retail. Overall, the Group recorded an IFRS loss of £526m (FY23: £51m loss)
largely reflecting the £497m impairment relating to the disposal of Value
Retail and its in year revaluation loss, and the net revaluation losses across
the retained portfolio.
Like-for-like gross rental income was up 1.6% year-on-year, and like-for-like
net rental income was -0.5% reflecting ongoing extensive repositioning at
Cabot Circus and The Oracle in the UK. Excluding these assets, like-for-like
GRI was up 3%, with some assets exhibiting growth of up to 7%, whilst
like-for-like NRI was +0.2%. NRI growth ranged from 2-9% for assets further
ahead on their reinvestment journey.
At 31 December 2024, net debt was down 40% to £799m (FY23: £1,326m) and is
down 64% since FY20. During 2024, we improved our credit ratings from Moody's
and Fitch. Net debt:EBITDA improved to 5.8x from 8.0x at FY23, and LTV from
34% to 30%. Hammerson now has one of the strongest balance sheets in the
sector. We remain committed to maintaining a resilient and sustainable capital
structure with an investment grade credit rating.
Flagship values in the UK were up 4.2% like-for-like driven by higher
contracted rental income and related ERV growth. There was modest yield
compression overall including a 10bps improvement at Westquay following
acquisition. French flagship values were also up 1.5% and, as with the UK,
this reflected the positive progress on leasing and related ERVs, with yields
broadly stable.
Ireland flagship values were down 13% due to 90bps of yield expansion,
reflecting valuer's interpretation of a distressed debt sale in the market. We
own the top asset in Ireland and were pleased to see stabilisation in Q4.
Moreover, in all geographies, current valuations now reflect recent
transactions.
Operational and strategic review
Our strategy recognises the unique position that we have to leverage our
experience and capabilities. Our purpose is to create and manage vibrant 24/7,
multi-use, urban 'living spaces' that realise value for all our stakeholders,
connects our communities and delivers a positive impact for generations to
come.
Our aim is simple - to deliver sustainable and relevant growth in assets under
management, income and earnings, thereby enhancing returns to shareholders. We
are investing for organic growth and value creation in our core assets,
creating option value from our strategic land, and supplementing this with
acquisitions. Our asset and customer focus is underpinned by our scalable,
agile and data-driven platform, Hammerson's strong capital structure and by
our commitment to ESG.
We have a clear medium term financial framework to deliver CAGRs: 4-6% gross
rental income growth; 6-8% earnings per share growth; c.10% TAR (assuming
stable yields).
Investing for growth and value creation
Our investment strategy is focused on driving organic growth in our existing
portfolio, laying the foundations and creating option value from our strategic
land, and exploring further opportunities for inorganic growth.
Organic growth
To drive organic growth in our existing flagship portfolio, we continue to
invest in our assets to improve the mix of brands and uses to both acknowledge
global market trends and cater to the specific needs of the communities and
catchments in which we operate. We achieve this either through targeted
leasing with trusted partners and/or through asset enhancement and
repositioning.
We are uniquely placed to repurpose obsolete department store space into
leisure and modern retail, responding to brand demand for more productive
flagship space. Where we invest, we seek out brand partners with the same
level of commitment, and we estimate our occupiers have invested at least
£325m into their space over the last three years. This is a very strong
endorsement of our destinations.
Our investments to date have attracted leading global and local brand
partners, brought a mix of new retail, food and beverage and experiential
propositions, driving lower vacancy, higher quality footfall, greater sales
density, and ultimately creating tangible rental tension and increasing the
value of our space. All of the above is reflected in our consistently strong
leasing performance, with more than £1.1bn of rent at 100% contracted to
first break since FY20.
Bullring and Dundrum: reaping the benefits of our repositioning
We continue to build on our success at Dundrum and Bullring.
At Dundrum, we invested €31m at 100% from 2019 to 2023 to re-anchor the
destination around Brown Thomas and Penneys, also attracting key domestic and
international brands including Dunnes Stores and Nike, the latter a first to
Ireland concept. This initial investment generated €70m of rent contracted
to first break and an IRR of over 20%.
Our success resulted in more demand, attracting new brands and concepts at
Dundrum in 2024. In total, we contracted over €45m of rent to first break in
2024. As we move into 2025, we will see the openings of Reiss, and upsized
offers from JD Sports and Pull & Bear. Further diversifying the offer,
Lane 7 bowling opened in January 2025, having already partnered with us at
Bullring. There is a promising pipeline for 2025, including the completion of
our 122-unit Ironworks residential project, a first for a retail-anchored
destination in Ireland. We signed and handed over 15 residential social
housing units with the local authority in November 2024.
At Bullring, we invested £26m at 100% from 2021 to 2023, predominantly to
replace the former Debenhams unit with a broader mix of flagship retail and
leisure with M&S, Zara and TOCA Social, but also replacing the former
Arcadia units with Bershka and Pull & Bear. We generated £39m of
contracted rent to first break and an IRR of over 40%, well ahead of our
conservative underwrite.
2024 saw Bullring enter a new leasing phase with 34 principal deals
representing £50m of contracted rent signed to first break. Following a
longstanding strategic relationship in France, Sephora opened its first
regional store in the UK featuring their largest facade in Europe, with
discussions ongoing at other destinations. Other key new lettings included
Space NK and a partnership between Adidas and Aston Villa Football Club.
The opening of Sephora in November in particular is proof positive of the
power of our physical and media assets. We delivered a 'total domination'
paid-for marketing package, with the Sephora brand taking over Bullring for a
duration of six weeks. Ahead of the opening, we had customers camping out
overnight. The store saw over 140,000 passers-by in the first two days, and
eight thousand visitors per day in the first week. Footfall was up 29%
week-on-week.
Looking ahead to 2025, there's a lot going on at Bullring, with competitive
tension for the remaining space, enhancement of the public realm, entrances,
digital screens and wayfinding. In the medium term, there is a compelling
residential redevelopment opportunity of over 700 apartments at the
underutilised Edgbaston Street car park.
Cabot Circus and The Oracle: repositioning in progress
The success of our investments at Dundrum and Bullring underpins our
confidence in our current repositionings at Cabot Circus and The Oracle.
2024 was a significant year of reinvestment at Cabot Circus with £8m at 100%
deployed, bringing best-in-class partners to expand and embed Cabot Circus as
the top tier retail, F&B, leisure and lifestyle destination in the city
centre of Bristol and the wider affluent South West catchment.
Central to this project was re-anchoring at the heart of the scheme of our
retail and leisure offering. We secured vacant possession from House of Fraser
and Showcase Cinemas. A new 127,000 ft(2) M&S and a refreshed 53,000 ft(2)
offer from Odeon will open in 2025. These anchor investments underscored the
enduring strength of our asset and the wider catchment, and we were able to
attract existing and new retail and leisure brand partners into Cabot Circus.
Stradivarius opened to complete a full suite of Inditex brands, and we renewed
35,000 ft(2) of scarce space with Next, comfortably ahead of previous passing
rent and ERV, and removing an onerous variable rent structure. 2025 will see
the opening of King Pins bowling, while Treetop Golf and Six by Nico in the
Quakers Friars area have already opened.
In the medium term, the repositioning of the Quakers Friars area also affords
the opportunity to increase the mix of uses, including cultural and
healthcare, at attractive returns. We are in planning for this area, which
could see the transformation begin in the second half of 2025.
The Oracle is currently in an earlier stage of its repositioning journey. We
have commenced a works programme to repurpose the 'obsolete' House of Fraser
store, enhance the unique riverside experience and F&B offering, and
improve circulation with new entrances and wayfinding. In total, around 40% of
the asset or 320,000 ft(2) is in scope, making this our most significant
transformation project to date.
Two-thirds of the former House of Fraser space is already let to Hollywood
Bowl and TK Maxx. The former is bringing their latest and most high-end offer
and boosting leisure exposure on the Riverside and will boost the late night
economy. TK Maxx is closing its nearby location, further concentrating the
prime retail pitch into The Oracle, driving long-term demand and rental
levels. We handed over both units in February 2025 and look forward to their
openings later this year. We are in advanced discussions for the remaining one
third. Alongside, we signed a five year renewal in January 2025 with the
existing Riverside cinema operator in line with previous passing rent and well
ahead of ERV.
For the medium term, we await final planning for a c.220 unit residential
scheme in the former Debenhams unit, which would bring a new use and customer
and densify the estate. There remains further residential opportunities,
including the Riverside cinema block in time.
High occupancy and impressive leasing across remaining flagships
2024 saw a number of key leases and openings at Brent Cross and Westquay.
At Brent Cross, Social Sports brought padel tennis to the underutilised
Southern Lands outside the asset, and we signed key renewals with Vodafone and
Halifax. We agreed a significant upsize for JD Sports opening in 2025. We will
also see the opening of our new multi-operator 'District' food market hall,
importing a successful concept from our French destinations.
At Westquay, important signings and openings in 2024 included Garmin's first
UK store, Charles Tyrwhitt, Flying Tiger and Hobbs. All opened in November,
helping drive footfall to 112,000 visitors on the Saturday of the Black Friday
weekend, Westquay's busiest single day since 2017. We are proud to have 100%
ownership as long-term stewards of this dominant destination on the South
Coast.
In France, it was another big year of leasing at Les Terrasses du Port. At the
end of 2023 we faced a ten year leasing wall, which today is 95% complete. We
exceeded our own expectations, securing £41m of contracted rent to first
break, 3% ahead of previous passing rent and 5% ahead of ERV.
In 2024, we signed a further 34 long-term deals, representing £50m of
contracted rent to first break. Inditex as a key brand partner was a key part
of this story, upsizing its Pull & Bear offering, which opened in the
second half, with Stradivarius opening in 2025. Other brand renewals and
lettings included Sephora, The North Face, Skechers, and Eclipso, a new
virtual reality-oriented leisure hub.
Footfall and sales increased by 1% and 2% respectively as Les Terrasses du
Port continues to differentiate itself at the very top of French destinations,
attracting an affluent and high spending customer. Occupancy stands at 97%.
2024 was another busy year at Les 3 Fontaines with the important openings of
New Yorker, Snipes and Celio, with new leisure hub Smile World coming in the
first half of 2025. This drove footfall up 6%, whilst sales were up 3%.
The focus in the second half was to maintain occupancy with temporary deals
whilst we put final planning and permissions with local authorities in place
for the remaining undeveloped space at the corner of the extension. Leasing
negotiations are advanced with two marquee global operators. We remain excited
by the potential next phase at Les 3 Fontaines and expect to provide more
detail at the half year.
Enlivening our destinations with placemaking and events
Across the portfolio, we continue to evolve our offering, to increase the
richness of the retail and leisure mix, with greater emphasis on placemaking
and commercialisation. This not only serves to enliven space and enhance the
experience and environment for customers and brand partners, but also
contributes meaningfully in its own right in terms of incremental footfall,
income, and engagement across all channels.
2024 was a standout year for premium brand partnerships and events, showcasing
over 200 different brands across our destinations. Over the year, we also
hosted seasonal and bespoke events at our assets tailored to local catchments
and communities, driving incremental revenue, footfall and engagement. We have
1.2m social media followers, a 16% increase year-on-year. Alongside our usual
delivery of seasonal retail F&B, leisure and promotional activity:
- In the first half we were delighted to welcome the Olympic Flame to
Les Terrasses du Port, boosting same day footfall by 40% year-on-year, while
Les 3 Fontaines hosted a sports village during the Olympic Games.
- Meanwhile, in the UK, we were chosen for three out of nine Team GB Fan
Zones in Bullring, Cabot Circus and Westquay, which drew in a combined 12.5m
visitors over 12 weeks.
- Les Terrasses du Port also hosted a series of 'Sunset Live' music and
radio shows on its seafront terrace, helping to drive August footfall up 3%
year-on-year. Its attraction to premium brands was further evidenced by
showcasing roadshows for Dior and Dyson.
- Dizzee Rascal album launches at Bullring and Cabot Circus, which drove
20% increases in footfall and car parking income versus the same day
year-on-year.
- Successful immersive advertising campaigns included the launch of
Paddington in Peru (Bullring), Netflix Squid Games (Bullring) and Moana 2
Aquarium takeover (Dundrum), plus big brand stunt campaign for Specsavers
(featuring a car in Dundrum Mill Pond).
- Dundrum hosted its third annual supercar weekend in August which drove
footfall to 115,000 for the weekend and over 60,000 on Sunday, marking the
busiest day of the year.
- The Sound of Musicals thrilled crowds at the unique Westquay Esplanade
events space during the October half-term week, drawing 65,000 attendees and
helping to drive a 3% increase in half-term footfall and 7% increase in car
park income - F&B occupiers also saw weekly sales uplifts of 20-60%.
- Cabot Circus hosted 'Wallace and Gromit: A Cracking Christmas
Experience' in the Friary Building, continuing our cultural partnership with
Bristol-based Aardman Animations. Over 27 days, 9,000 attendees enjoyed the
experience with footfall at Quakers Friars +5% year-on-year and revenue of
£80,000 generated from ticket sales and merchandise.
- Other holiday seasonal brand activity included the return of the
annual Après Ski Bar at Bullring, complementing the city's famous German
Christmas Market; ice rinks at Westquay, Dundrum and Swords Pavilions; The
Yankee Candle Festive Experience Bus visiting Bullring and Cabot Circus; a
festive immersive 'grotto' hosted by Blank Street, and the iconic Coca-Cola
festive truck back at Bullring. All these events create a buzz across our
destinations.
Inorganic growth: Westquay acquired with more to come
We continue to see opportunities for JV consolidation, with a number of
discussions ongoing.
Having earmarked an initial £350m from the proceeds of the disposal of our
interest in Value Retail for acquisitions, in 2024 we gained 100% control of
Westquay for £135m at an attractive high single-digit yield.
Today, we manage c.£4bn of AUM in a mixture of wholly owned and joint
ownership assets. Our specialist, data-driven platform puts us in a unique
position to better underwrite the risk/return profile of the deployment of our
capital, as long-term stewards of these destinations.
We also continue to scan the horizon for any outstanding opportunities in top
tier cities consistent with our landmark destinations strategy and disciplined
approach to capital allocation.
Strategic land: laying the foundations for the future
We have a substantial future opportunity for redevelopment and development
across the portfolio and 80 acres of strategic land. For now, we remain
focused on the repositioning of our core assets - Cabot Circus including
Quaker's Friars, The Oracle, Cergy - and the priority redevelopments at our
assets, such as The Ironworks in Dundrum.
These projects are strategically located on existing assets. They introduce
new uses including residential to the mix and densify our destinations whilst
offering attractive risk-adjusted returns and new and more diverse income
streams.
As of today, our ongoing and near-term repositioning projects represent around
£100m of GDV at our share, with estimated fully-funded capex spend of c.£55m
over the next two years.
Near-term redevelopment projects include the completion of the Ironworks at
Dundrum and workspace at Grand Central. These projects have a GDV of around a
further £175m at our share. Only the Ironworks is committed to with a
remaining spend of £10m at our share.
Medium term opportunities including further c.200-unit residential projects at
The Oracle and Dundrum, and the >700-unit opportunity at Edgbaston Street
car park comprise around £470m of potential GDV at our share. In the
longer-term, there is around £4.4bn of potential GDV from both projects on
existing assets such as Brent Cross Southern lands, and standalone
opportunities such as Martineau Galleries in Birmingham.
We continue to advance capital light development milestones, such as planning
consents and land assembly to create land value, whilst retaining optionality
for further capital sourcing and/or investment to exceed our return targets.
Across all our redevelopment and development projects, we will continue to
analyse potential alternatives for delivery, depending on market
circumstances, physical situation and the context and scale of each
opportunity. This could include developing ourselves, as is the case with the
Ironworks at Dundrum, working with specialist residential development and/or
operating partners which can add value, or potential site sales in cases where
we have added value and have liquidity at the right price. Importantly, there
is no funding commitment decision required before 2027.
We are hopeful that new central government's focus on the planning and policy
environment will increase the viability and potential for these projects,
whilst we continue to evaluate investment in these projects against other
opportunities as well as other ways to advance development.
Agile platform delivering operating leverage
2024 saw the completion of our new operating model. On-site property
management and associated accounting services in the UK, France and Dundrum
have been consolidated with proven scale strategic partners.
Today, our platform is 'future-fit' - we are a more agile, collaborative,
data-driven and market-facing organisation. We seek to continually anticipate
and respond to global and local customer and brand partner demands.
At the same time, we are committed to a high performance, high engagement
culture with an emphasis on strategic value creation focused on asset
management and delivery, placemaking and the repositioning of our assets. In
that regard, it was pleasing to see another reduction in employee attrition.
In 2024, we embedded significant improvements to our leasing tools, platform
and ways of working, allowing faster deal flows, better data and greater
transparency, with average deal speed now around three times faster than in
2022. We aim to do better.
At the same time, we retendered and rationalised our leasing agents,
solidifying key relationships whilst also unlocking growth from specialty
leasing and new brand partners outside our existing occupier universe. These
changes are driving the elevation in brand mix and bringing in new uses,
increasing occupancy, rental tension and ultimately increasing current and new
income streams.
Alongside better digital tools and software, we have also invested in AI
analytics tools at both Group and asset level. This gives us a market-leading
capability to better understand our customers, the value of our space,
strengthen our bargaining power and inform our decisions. There is also the
potential to generate additional revenue opportunities to grow our top line.
We are accelerating our roll out of AI tools in 2025, which is now becoming a
major source of competitive advantage. We are excited by the possibilities in
front of us.
Bullring has been at the forefront of our investment in this area. For
example, we now know that in the final quarter of 2024 alone our brand
partners there benefited from 466m brand impressions, and our digital screen
impressions reached 139m.
We can now also closely analyse individual events. For example, when the
YouTube collective, Sidemen, opened at Bullring in October, we were able to
specifically track the addition of 80,000 visitors over that weekend to a
previously vacant location, or around 13% of that week's footfall. Our media
screens saw a 49% uplift in audience levels, and we could tell it was a
younger audience with over 80% of these visitors under 40.
Our platform is now future-fit, lean and scalable, which will enable us to
drive further operating leverage as we grow AUM and income, and therefore
earnings.
Sustainable and resilient capital structure
We materially strengthened our balance sheet in 2024, concluding the £500m
disposal programme in the first half, and exiting our interest in Value Retail
in the second half for cash proceeds of €705m (£595m). This takes total
proceeds since FY20 to £1.5bn. Reflecting this improvement, Hammerson secured
an upgrade from Moody's in August to Baa2, whilst Fitch revised Hammerson's
outlook from stable to positive.
In the first half of the year, we repaid £109m of private placement senior
notes, and extended the maturity of our undrawn RCF from 2026 to 2027. The
refinancing of our only secured debt, in the Dundrum JV, was completed in
August with a new €350m facility (our 50% share €175m) which expires in
September 2031, at an all-in cost of 5.4%, with a combination of existing and
new lenders. The loan is non-recourse to the Group.
In October, we completed the well timed and heavily oversubscribed issue of a
12-year £400m bond, with a coupon of 5.875%, whilst at the same time
completing tenders for £412m of bonds, comprising £168m of 6% 2026 bonds and
£243m of 7.25% 2028 bonds. The exercise was largely leverage neutral but
generated an annualised net interest benefit of £3.6m, reducing our weighted
average gross interest rate and extending our weighted average debt maturity.
With net debt of £799m, liquidity of £1.4bn, net debt:EBITDA of 5.8x, LTV of
30% and weighted average debt maturity of 4.7 years as at 31 December 2024, we
have one of the strongest balance sheets in the sector.
Our capital allocation framework is consistent. We will maintain a stable and
resilient capital structure, with an investment grade credit rating, to
maintain access to capital markets.
The strength of our balance sheet provides certainty and security to all
stakeholders whilst allowing us to prioritise investment for growth and value
creation, and enhance distributions to shareholders.
ESG
We made further progress with our ESG strategy in 2024 and achieved an 8.3%
like-for-like reduction in emissions compared with 2023. The reduction was
driven by the benefits from our Net Zero Asset Plans which we begun delivering
in 2023. We have now reached a 43% reduction compared to our 2019 Baseline and
remain committed to achieving Net Zero by 2030. We do this by tackling
environmental and building efficiency.
Also, in 2024, we increased our scope and range of social initiatives, a key
highlight was our Giving Back Day in June which, for the first time, included
both colleagues and partners across all our destinations. In total, our social
value investment was £3.5m, a 40% increase on 2023, reflecting our focus on
placemaking and activities directly benefiting our local communities.
We continue to enhance our governance activities, with improvement in a number
of our external benchmarks and received a score of 100% for GRESB Public
Disclosure. We are also in the process of preparing for the new reporting
requirements under both CSRD and EU Taxonomy, under which the Group will
report in 2025.
Conclusion
We had a strong finish to 2024 in terms of footfall, sales, leasing and
redeployment of capital, which has continued into FY25. We have already
secured £8.6m of leases in 2025, the pipeline is robust, and discussions are
progressing on other acquisitions. We will also see marquee openings in Cabot
Circus and The Oracle as we bring major new uses to each of these assets,
delivering uplifts in performance matching our experiences and building
momentum at Bullring and Dundrum.
Our specialist data-driven platform and disciplined investments will further
drive organic growth, benefiting from operating leverage which will flow
through to the bottom line.
Notwithstanding the uncertainty in the macroeconomic environment, our
portfolio is well positioned to drive rental and earnings growth from the high
demand for scarce, relevant space where brands are consolidating.
I would like to thank all Hammerson colleagues for their commitment, ambition
and resilience, the Board for their collaborative and rigorous approach, and
shareholders for their continued support.
Rita-Rose Gagné
Chief Executive
Financial Review
Overview
2024 has been a decisive year for the Group. We enter 2025 as a reshaped
business with a transformed capital structure. In September 2024, we completed
the transformational sale of Value Retail for cash proceeds of €705m
(£595m) reflecting a 3.4% exit cash yield and an EBITDA multiple of 24x.
Since FY20 we have generated £1.5bn of disposal proceeds. We have already
begun redeploying capital with the acquisition, in November, of the 50% JV
stake in Westquay, Southampton for £135m.
2024 Adjusted earnings were £99m, 15% lower than 2023 due to the impact of
disposals. The IFRS loss was £526m (2023: £51m loss), reflecting £497m
Value Retail impairment and H124 revaluation loss.
The Directors have recommended a final dividend of 8.07p per share. This
brings the full year dividend to 15.63p per share, a 4.2% increase on 2023.
Net assets at 31 December 2024 were £1,821m (2023: £2,463m), the reduction
reflecting the sale of Value Retail. EPRA NTA per share was 370p (2023: 508p).
Net debt was £527m (40%) lower at £799m reflecting the net impact of
disposals and reinvestment. Our credit metrics also improved with Net
debt:EBITDA of 5.8x and LTV of 30%.
We secured improved credit ratings from Moody's and Fitch. With the strength
of the Group's position, we issued £400m 5.875% bonds and repurchased £412m
of bonds (7.1% average interest rate). We also signed a €350m (Group's 50%
share €175m) secured loan to refinance the maturing loan in the Dundrum JV.
Presentation of financial information
IFRS vs Management reporting
The Group's property portfolio comprises properties that are either wholly
owned or co-owned with third parties. While the Group prepares its financial
statements under IFRS, the Group evaluates the performance of its business for
internal management reporting on a 'proportionally consolidated' basis which
aggregates the following:
- properties, or entities, which are wholly owned or held in joint
operations (see notes 1B and 12A to the financial statements for details) and
hence where the results and net assets are directly included, on a
line-by-line basis, in the IFRS financial statements. These are labelled as
'Reported Group'.
- the Group's share of properties, or entities, which are co-owned
within joint ventures or associates that are under the Group's day-to-day
management. Under IFRS each are included in separate line items in the income
statement ('Share of results of joint ventures'/'Share of results of
associates') and balance sheet ('Investment in joint ventures'/'Investment in
associates'). The Group's share of results and net assets are labelled 'Share
of Property interests'. Note, that for 2024 this only relates to the Group's
share of joint ventures as the Group sold its sole associate which it managed,
Italie Deux, in March 2023. The Group's other associate, Value Retail was
separately reported (see below).
The combination of properties within the Reported Group and Share of Property
interests is labelled as the 'Group portfolio'.
Prior to its disposal in September 2024, management did not proportionally
consolidate the Group's investment in Value Retail. While the Group exercised
significant influence, and accounted for the investment as an associated
undertaking, Value Retail was not under the Group's management, was
independently financed and had differing operating metrics to the Group's
property portfolio. Accordingly, for both IFRS and management accounting
purposes the results and financial assets and liabilities were accounted for
separately, and it was excluded from the Group's proportionally consolidated
key metrics such as net debt or like-for-like rental income growth.
If, in addition to IFRS figures, information is disclosed under management's
reporting basis in the Group's financial statements it is clearly labelled as
being 'proportionally consolidated'. Further supporting analysis and
reconciliations between management and IFRS bases are also included in this
Financial Review and in the Additional Information section.
Value Retail impairment and disposal
On 22 July 2024, the Group announced it had entered into a binding sale
agreement for the disposal of its entire interests in Value Retail to L
Catterton for cash proceeds of €705m (£595m), or £584m after transaction
costs. This was a transformational sale for the Group, completed at an
attractive price, representing a 3.4% exit cash yield and an EBITDA multiple
of 24x.
At the 30 June 2024 interim balance sheet date the Directors concluded that,
given the significant progress made towards agreeing and signing the sale
agreement, that a sale was 'highly probable' and hence the Group's interests
were judged to have met the criteria outlined in IFRS 5 to be reclassified to
being 'held for sale' within current assets.
On reclassification to 'held for sale', in accordance with IFRS 5, the Group's
interests were remeasured to the lower of the carrying amount and estimated
fair value less sale costs at completion, which was expected in the second
half of the year. The fair value was based on the contracted sale proceeds,
less estimated transaction costs, and the remeasurement resulted in a £483m
impairment loss being recognised in the first half of the year. Also, upon
reclassification, equity accounting ceased.
The sale completed on 18 September 2024, and over the period between 30 June
and completion the impairment was reduced by £11m, reflecting changes in
foreign exchange, distributions and the removal of an allowance for potential
tax associated with the disposal. Further details are in note 9 to the
financial statements.
In addition, the operations of Value Retail represent a separate major line of
the business and therefore has been treated as a discontinued operation. The
results for the current and prior financial periods have been separately
disclosed from the continuing segments of the business.
Derecognition of Highcross and O'Parinor
As explained in last year's Financial Review, during 2023, following the
actions of the secured lenders on Highcross and O'Parinor, the Group no longer
had joint control over these two joint ventures and derecognised its share of
assets and liabilities. These two joint ventures had a total of £125m of
borrowings secured against their individual property interests, which were
both non-recourse to the Group.
For Highcross, there was no loss on derecognition as the joint venture
investment had previously been fully impaired. For O'Parinor, the
derecognition resulted in a £22m impairment charge recognised in 2023.
In February 2024, the lender on O'Parinor subsequently sold the property held
by the joint venture. The Group did not receive any recovery of its fully
impaired joint venture investment. As part of the disposal process, the Group
sold ancillary wholly-owned units at the asset for £6m, which was in line
with the December 2023 book value.
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. Key EPRA measures
include EPRA earnings and three EPRA net asset metrics. In September 2024,
EPRA issued updated EPRA earnings guidelines within its BPR. These included
the addition of two new adjustment categories relating to funding structures
and non-operating and exceptional items. In relation to EPRA earnings, the
Group will adopt these new guidelines for its next reporting period, beginning
1 January 2025. Details on the EPRA BPR can be found on www.epra.com and the
Group's EPRA metrics are shown in Table 1 of the Additional Information.
In addition to presenting the Group's results on an IFRS and EPRA basis, we
also present the results on a 'Headline' and 'Adjusted' basis. The former
measure is calculated in accordance with the requirements of the Johannesburg
Stock Exchange listing requirements. The 'Adjusted' basis reflects the
underlying operations of the business and is calculated on a proportionally
consolidated basis.
The Adjusted basis also excludes capital and non-recurring items such as
revaluation movements, gains or losses on the disposal of properties or
investments, as well as other items which the Directors do not consider to be
part of the day-to-day operations of the business. Such items are in the main
reflective of those excluded for EPRA earnings, but additionally exclude a
small number of 'Company only' adjusting items which are deemed not to be
reflective of the normal routine operating activities of the Group and have
been applied consistently in both accounting periods. We believe that
disclosing such non-IFRS measures enables evaluation of the impact of such
items on results to facilitate a fuller understanding of performance from
period to period.
For 2024, EPRA earnings were £86.1m (2023: £102.8m). The Group had three
'Company only' adjusting items to EPRA earnings totalling £12.9m (2023:
£13.5m) as follows:
- the inclusion of a credit of £7.5m reflecting the Group's share of
Value Retail's Adjusted earnings over the period from reclassification to an
asset held for sale on 30 June 2024 to the date of disposal on 18 September
2024. The adjustment, which is not recognised under IFRS, as equity accounting
ceased on reclassification to held for sale, has been calculated on a
consistent basis to when the investment in Value Retail was accounted for as
an associate. See note 9 to the financial statements for further details.
- the exclusion of a £4.9m charge (2023: £13.2m) in respect of
business transformation costs as the Group continues its implementation of
strategic change and refining its operating model. For 2024, this charge
principally comprises digital transformation costs.
- the exclusion of a £0.5m one-off charge associated with fees incurred
on winding up the Group's principal defined benefit pension scheme.
A reconciliation from loss for the year under IFRS to Adjusted, EPRA and
Headline earnings is set out in note 10A to the financial statements.
Other APMs used by the Group cover key operational, balance sheet and credit
related metrics, including like-for-like analysis, cost ratios, total
accounting return, net debt and associated credit metrics: Net debt:EBITDA,
gearing, loan to value and interest cover. Reconciliations of these APMs to
the IFRS figures in the financial statements are included in the Additional
Information section.
Income statement
The table below sets out the reconciliation of the Group's Adjusted earnings
of £99.0m (2023: £116.3m) to the IFRS loss for the year of £526.3m (2023:
£51.4m loss). It also splits the Group's results between those from wholly
owned properties or entities, or in joint operations, labelled the 'Reported
Group', and the Group's share on a proportionally consolidated basis of its
joint ventures and associates which are under the Group's management and
labelled 'Share of Property interests'.
In 2024, the Group's IFRS loss increased by £474.9m predominately due to the
impairment of the Group's investment in Value Retail associated with its
disposal in September 2024.
On an Adjusted basis, earnings decreased by £17.3m to £99.0m (2023:
£116.3m). Gross rental income was £19.4m lower, principally due to disposals
over the previous 24 months. Gross administration costs were £8.0m, or 16%,
lower reflecting reduced headcount and corporate costs.
The Group's share of Value Retail Adjusted earnings reduced by £12.9m due to
the sale of the investment in September 2024. This was offset by £13.6m lower
Adjusted net finance costs, reflecting reduced debt levels and increased
income from cash deposits and derivatives benefiting from the higher interest
rate environment.
Further analysis of the Group's results is set out in note 2A to the financial
statements and details on reconciling items between Adjusted earnings and IFRS
loss are in note 10A to the financial statements.
Analysis of Adjusted earnings and IFRS loss for the year
Proportionally consolidated, including continuing and discontinued operations Note(1) Reported Group Share of Property interests 2024 Reported Group Share of Property interests 2023 Change
£m £m Total £m £m Total £m
£m £m
Adjusted earnings analysis:
Gross rental income 4 81.8 107.2 189.0 92.8 115.6 208.4 (19.4)
Net service charge expenses and cost of sales 5 (20.9) (22.1) (43.0) (17.0) (23.9) (40.9) (2.1)
Net rental income 60.9 85.1 146.0 75.8 91.7 167.5 (21.5)
Gross administration expenses 5A (43.5) - (43.5) (51.1) (0.4) (51.5) 8.0
Other income 4 10.7 0.3 11.0 14.9 - 14.9 (3.9)
Profit from operating activities 28.1 85.4 113.5 39.6 91.3 130.9 (17.4)
Value Retail earnings 9 19.2 - 19.2 32.1 - 32.1 (12.9)
Income from other investments 1.1 - 1.1 - - - 1.1
Operating profit 48.4 85.4 133.8 71.7 91.3 163.0 (29.2)
Net finance costs 6 (28.7) (3.6) (32.3) (41.1) (4.8) (45.9) 13.6
Tax charge 7 (2.5) - (2.5) (0.7) (0.1) (0.8) (1.7)
Adjusted earnings 17.2 81.8 99.0 29.9 86.4 116.3 (17.3)
Reconciliation to IFRS Loss for the year:
Revaluation losses - Group portfolio 12 (20.6) (70.8) (91.4) (45.2) (73.9) (119.1) 27.7
Revaluation losses - Value Retail 9 (24.9) - (24.9) (7.7) - (7.7) (17.2)
(Loss)/profit on sale of properties/joint ventures 8 (9.2) - (9.2) 1.3 (19.1) (17.8) 8.6
Impairment of joint venture 8 - - - (22.2) - (22.2) 22.2
Impairment of Value Retail 9 (471.9) - (471.9) - - - (471.9)
(Premium)/Discount on redemption of bonds 6 (25.5) - (25.5) 4.3 - 4.3 (29.8)
Business transformation costs 5A (4.9) - (4.9) (13.2) - (13.2) 8.3
Other 10A 4.7 (2.2) 2.5 9.9 (1.9) 8.0 (5.5)
IFRS Loss for the year (535.1) 8.8 (526.3) (42.9) (8.5) (51.4) (474.9)
(Loss)/earnings per share pence pence pence
Basic 11B (106.0) (10.3) (95.7)
Adjusted 11B 19.9 23.4 (3.5)
1 Note references are to notes to the financial statements.
Rental income
Analysis of rental income
Proportionally consolidated Gross rental income Change in like-for-like Adjusted Change in like-for-like
£m
net rental income
£m
Year ended 31 December 2023 208.4 167.5
Like-for-like income change:
- UK (0.1) (0.1)% (0.2) (0.5)%
- France 4.0 7.8% 1.8 4.2%
- Ireland (1.3) (3.4)% (2.3) (6.3)%
Group like-for-like income change 2.6 1.6% (0.7) (0.5)%
Disposals (21.3) (15.9)
Acquisitions 2.5 1.7
Developments and other (0.5) (4.2)
Foreign exchange (2.7) (2.4)
Year ended 31 December 2024 189.0 146.0
Gross rental income
Like-for-like gross rental income increased by £2.6m, or 1.6% in 2024. As
anticipated at the time of the 2023 results announcement, UK GRI was adversely
impacted by the significant repositioning works ongoing at Cabot Circus and
The Oracle. Excluding these assets, GRI growth for the Group was 3.0%, or for
the remaining UK flagship assets was 3.1%, with the strongest growth at
Westquay at 5.8%. In France, GRI was £4m, or 7.8% higher, with growth from
indexation and lease renewals at Les Terrasses du Port. In Ireland, GRI was
3.4% lower, with a reduction in base rent in 2024 associated with occupier mix
changes at Dundrum and the renewal of an over-rented anchor store at Ilac.
Disposals reduced income by £21.3m, principally Union Square in 2024 and
Italie Deux and O'Parinor in 2023. This was partly offset by £2.5m of income
from the acquisition of our JV partners' 50% interest in Westquay in November
2024.
Finally, year-on-year GRI was adversely impacted by foreign exchange movements
totalling £2.7m and lower income from our Developments and other portfolio of
£0.5m.
Adjusted net rental income
Group like-for-like adjusted net rental income was £0.7m, or -0.5% lower. As
with like-for-like GRI, NRI was impacted by repositioning works. Excluding
Cabot Circus and The Oracle, the rest of the portfolio grew by 0.2%, or 1.4%
for the UK. In France, like-for-like NRI was 4.2% higher. This was driven by
the strong GRI performance, partly offset by the impact of occupier failure in
the first half of the year, predominately at Les 3 Fontaines. Ireland NRI was
-6.3%, due to the lower GRI and a strong comparative in 2023 which benefited
from bad debt reversals as collection rates improved.
For FY24, the flagship like-for-like NRI:GRI ratio was 82%, with UK at 78%,
France at 82% and Ireland, the highest, at 88%. This ratio will improve as
repositioning works are completed and further leasing increases occupancy.
Disposals reduced adjusted NRI by £15.9m, partly offset by £1.7m of income
in the final quarter of the year from the 50% acquisition of Westquay.
NRI from our Developments and other portfolio was £4.2m lower. Key factors
were reduced income from Martineau Galleries as we actively position the
project for future development and a rent settlement received in 2023 in
relation to the Les 3 Fontaines extension project. Adverse foreign exchange
also reduced NRI by £2.4m.
Further analysis of gross and net rental income by segment is provided in note
3 to the financial statements and Tables 3 and 4 of the Additional
Information.
Passing rent
At 31 December 2024, the Group's passing rent totalled £182.4m (2023:
£187.8m), the reduction due principally to the disposal of Union Square in
March.
On a like-for-like basis, flagship passing rent was up 1.5%. In the UK and
France passing rent grew by 1.3% and 4.2% respectively. In Ireland, consistent
with the GRI performance, passing rent fell by 1.6%.
Administration expenses
Proportionally consolidated 2024 2023
£m
£m
Employee costs 28.7 35.3
Other corporate costs 14.8 16.2
Adjusted gross administration costs 43.5 51.5
Property fee income (6.3) (8.4)
Joint venture and associate management fee income (4.7) (6.5)
Other income (11.0) (14.9)
Adjusted net administration expenses 32.5 36.6
Business transformation costs 4.9 13.2
Total net administration expenses 37.4 49.8
During 2024, Adjusted gross administration expenses decreased by £8.0m, or
16% compared to 2023. This reflected the Group's continued focus on cost
reduction.
This reduction was comfortably ahead of our 10% target. Since FY20 we have
reduced gross administration costs by £24.3m, or 36%.
The most significant elements of the cost reduction in the year were:
- Employee costs which were £6.6m (19%) lower reflecting the
organisational restructuring and simplification of the Group's operating
model.
- Average headcount, excluding employees recharged to occupiers, reduced
from 175 in 2023 to 134 in 2024.
- Other corporate costs, comprising mainly professional fees, premises
and IT-related costs, fell by £1.4m (9%). The two most significant areas of
savings were premises costs of £0.9m, with the French team moving to smaller
offices; and a decrease of £0.4m in corporate insurances, with the most
significant reduction being in Directors' and Officers' insurance premiums
reflecting the Group's strengthened financial position.
Business transformation costs of £4.9m in 2024 comprised mainly IT-related
costs for contractors and consultants to deliver the Group's digitalisation
and automation programme. These activities were one of the key workstreams of
the Group's strategic and operational review undertaken in 2021 and hence do
not reflect underlying trading and have been excluded from the Group's
Adjusted earnings. This transformation programme is due to complete in 2025.
Other income, from property management fees and joint venture management fees
was £3.9m lower in 2024. This reduction was due to lost fee income from
disposals, particularly in France, over the last two years.
Loss on sale of properties
In the first half of the year, we realised cash proceeds of £117m from
property disposals, with £111m raised from the sale of Union Square, Aberdeen
and £6m raised from the disposal of ancillary units at O'Parinor. These two
disposals were at an average 8% discount (based on cash proceeds) to 31
December 2023 book value. After taking account of selling costs, the total
loss from disposals for the year was £9m (2022: £18m loss).
The sale of Union Square completed the Group's £500m non-core disposal
programme started in 2022. In total since FY20, including Value Retail, we
have raised cash proceeds from disposals of £1.5bn to reshape the portfolio
and strengthen the balance sheet.
Share of results of joint ventures
A listing of our interests in joint ventures is included in note 13A to the
financial statements. On an IFRS basis, the Group's share of results in 2024
was £8.8m (2023: £9.4m).
On an Adjusted basis, our share of results from joint ventures was £81.8m
(2023: £86.4m). The £4.6m year-on-year reduction was principally due to the
disposal of the Group's investments in Croydon and the derecognition of
O'Parinor both in 2023.
Given that four out of five of our UK flagship destinations and Dundrum, the
largest asset of our Ireland flagships, are held in joint ventures, the
financial and operating performance of these assets is consistent with the
proportionally consolidated performance explained in this Financial Review and
shown in the Additional Information.
Value Retail ‒ Discontinued operations
As explained in the Presentation of Financial Information section in the
Financial Review below, due to the disposal in September 2024 of the Group's
investment in Value Retail for cash proceeds of €705m (£595m), the Group's
share of results for Value Retail for both 2024 and 2023 have been
re-presented as 'Discontinued operations'.
On an IFRS basis, the loss from discontinued operations was £481.5m in 2024
(2023: £14.8m profit). This loss principally reflected the net £472m
impairment charge recognised against the carrying value of Value Retail when
it was reclassified to an 'asset held for sale' in June 2024. In addition, the
Group's share of Value Retail's property portfolio suffered a revaluation loss
of £25m in the first half of the year.
On an Adjusted basis, our share of Value Retail's results up until the date of
sale was £19.2m, £12.9m lower than in 2023.
Net finance costs
2024 2023
Proportionally consolidated Reported Group Share of Property interests Total Reported Group Share of Property interests Total
£m
£m
£m
£m
£m £m
Adjusted finance income 40.0 4.8 44.8 30.9 4.1 35.0
Adjusted finance costs (68.7) (8.4) (77.1) (72.0) (8.9) (80.9)
Adjusted net finance costs (28.7) (3.6) (32.3) (41.1) (4.8) (45.9)
(Premium)/Discount on redemption of bonds (25.5) - (25.5) 4.3 - 4.3
Change in fair value of derivatives (1.2) (2.2) (3.4) 0.7 (1.8) (1.1)
IFRS net finance costs (55.4) (5.8) (61.2) (36.1) (6.6) (42.7)
Adjusted net finance costs were £32.3m, a decrease of £13.6m, or 30%,
compared with 2023. The decrease was driven by the benefits of deleveraging
since the start of 2023, early repayment of debt utilising proceeds from
disposals, and higher interest income from cash deposits and derivatives
benefiting from the higher interest rate environment.
In October 2024, we issued a £400m 5.875% bond maturing in 2036. The proceeds
were used to repurchase, via a tender offer, £411.6m of the Group's bonds,
comprising £168.4m of 6.0% bonds maturing in 2026 and £243.2m of 7.25% bonds
maturing in 2028. This combined refinancing activity reduced net finance costs
by £3.6m per annum and increased the Group's weighted average debt maturity
by 2.3 years, such that it was 4.7 years at 31 December 2024.
The repurchase resulted in a redemption premium of £25.5m which, as per EPRA
guidelines, has been excluded from the Group's Adjusted earnings.
Tax
Due to the Group having tax exempt status in its operating countries the tax
charge, on a proportionally consolidated basis, remained low at £2.5m (2023:
£0.8m). The £1.7m year-on-year increase was due to the Group's high level of
interest income on heightened cash reserves, which could not be fully
sheltered from tax under the REIT rules.
The tax charge reflects that the Group benefits from being a UK REIT and
French SIIC with its Irish assets being held in a QIAIF. The Group is
committed to remaining in these tax exempt regimes and further details on
these regimes are given in note 7 to the financial statements. In order to
satisfy the REIT conditions, the Company is required, on an annual basis, to
pass certain business tests. The Group is expected to meet all requirements
for maintaining its REIT status for the year ended 31 December 2024.
Dividends
Following the disposal of Value Retail, the Board announced a new policy to
increase the Group's payout ratio for Adjusted earnings from 60-70% to a new
sustainable dividend policy of 80-85%.
In line with this new policy, the Board is recommending a final 2024 cash
dividend of 8.07p per share. Subject to approval by shareholders at the 2025
AGM, the final dividend is payable as an ordinary dividend on 3 June 2025 to
shareholders on the register on 25 April 2025.
When combined with the interim cash dividend of 7.56p per share paid in
September as a PID, the total 2024 dividend per share is 15.63p, a 0.63p
(4.2%) increase on 2023.
Share buyback
Following the sale of Value Retail, the Company announced the commencement, on
16 October 2024, of a share buyback programme of up to £140m.
In 2024, 7.0m shares were repurchased and cancelled under the programme for
total consideration of £20.9m.
Net assets
A detailed analysis of the balance sheet on a proportionally consolidated
basis is set out in note 2B to the financial statements with a summary
reconciling to EPRA NTA set out in the table below:
2024 2023
Summary net assets, proportionally consolidated Reported Group Share of Property interests EPRA EPRA NTA Reported Group Share of Property interests EPRA EPRA NTA
£m
£m
adjustments
£m
£m
£m adjustments
£m
£m £m
Investment properties 1,487 1,172 - 2,659 1,396 1,380 - 2,776
Investment in joint ventures 1,088 (1,088) - - 1,193 (1,193) - -
Investment in associates - Value Retail - - - - 1,115 - 79 1,194
Trade receivables 33 18 - 51 28 15 - 43
Net debt(1) (734) (65) 4 (795) (1,163) (163) - (1,326)
Other net liabilities (53) (37) - (90) (106) (39) - (145)
Net assets 1,821 - 4 1,825 2,463 - 79 2,542
EPRA NTA per share(2) £3.70 £5.08
1 See Table 12 in Additional Information for further details.
2 EPRA adjustments in accordance with EPRA best practice, principally in
relation to deferred tax and fair value of derivatives, as shown in note 10B
to the financial statements. 2023 EPRA NTA per share restated for 1 for 10
share consolidation.
During 2024, IFRS net assets reduced by £642m to £1,821m (2023: £2,463m).
Net assets, calculated on an EPRA Net Tangible Assets (NTA) basis, were
£1,825m, or £3.70 per share, a reduction of £1.38 compared to 31 December
2023 and is equivalent to a total accounting return of -24.2% (see Table 21 in
Additional Information). The key components of the movement in Reported Group
net assets and EPRA NTA are shown in the table below:
Movement in net assets
Proportionally consolidated IFRS EPRA EPRA NTA EPRA NTA per share
net assets
adjustments £m £
£m
£m
1 January 2024 2,463 79 2,542 5.08
Property revaluation - Group portfolio (91) - (91) (0.18)
Adjusted earnings 99 - 99 0.20
Value Retail - Impairment losses on disposal of Value Retail (472) (79) (551) (1.11)
- Revaluation losses (25) - (25) (0.05)
Loss on sale of properties (9) - (9) (0.02)
Premium on redemption of bonds (26) - (26) (0.05)
Dividends (77) - (77) (0.15)
Share buyback (21) - (21) 0.01(1)
Foreign exchange and other movements (20) 4 (16) (0.03)
31 December 2024 1,821 4 1,825 3.70
1 Reflects accretion associated with the Group's share buyback programme
launched in October 2024.
Property portfolio analysis
Movements in property valuation
Proportionally consolidated UK France Ireland Flagships destinations Developments and other Group portfolio
£m
£m £m £m £m £m
At 1 January 2024 863 1,003 630 2,496 280 2,776
Foreign exchange losses - (47) (27) (74) (5) (79)
Acquisitions 141 - - 141 - 141
Disposals (122) (6) - (128) - (128)
Yield 4 - (80) (76) - (76)
Income 13 4 (3) 14 1 15
Development and other costs - - - - (30) (30)
Revaluation gains/(losses) 17 4 (83) (62) (29) (91)
Capital expenditure 16 10 2 28 12 40
At 31 December 2024 915 964 522 2,401 258 2,659
At 31 December 2024, the Group's portfolio was valued at £2,659m (2023:
£2,776m). The acquisition of Westquay for £141m, including costs, was offset
by the impact from disposals of £128m, principally Union Square, and foreign
exchange translation losses of £79m. On a like-for-like basis, UK values were
up 4.2%, France was 1.5% higher, while Ireland values were 13.3% lower.
Further valuation analysis is included in Table 9 of the Additional
Information.
Revaluation gains/(losses)
UK flagships reported a £17m gain. Yields were broadly flat, although
Westquay saw a 10bp inward movement post acquisition, equivalent to £4m. The
strong leasing performance saw ERVs marked up and produced a £13m gain.
In France, we achieved a revaluation gain of £4m, all from increased ERVs as
yields were unchanged. Ireland reported a £83m revaluation loss, with £80m
due to outward yield shift of 90bps. The valuers cited the sale of
Blanchardstown as the key transaction providing the evidence for higher
yields.
The Developments and other portfolio recorded a £29m revaluation loss. Grand
Central suffered the most significant reduction of £11m associated with an
allowance for future repair works at the asset. Martineau Galleries in
Birmingham recorded a £6m writedown as the valuers updated forecast yields
for the future office element of the scheme. The remainder of the loss was due
to subdued land prices and additional project costs being factored into
residual appraisals.
In total, we recognised a portfolio revaluation loss of £91m in 2024.
Capital expenditure
Capital expenditure totalled £40m in 2024, of which £28m was on the Flagship
portfolio reflecting repositioning and reconfiguration works. In the UK, we
are repositioning Cabot Circus with the former House of Fraser department
store let to M&S and the vacant cinema being reconfigured into a new
right-sized Odeon cinema with the remaining space reconfigured for exciting
new leisure offers. At The Oracle, the former House of Fraser store is being
split into three new units. Two of these units have been let to Hollywood Bowl
and TK Maxx and we are in advanced discussions on the final unit.
£10m was invested in our two French destinations to support the strong
leasing performance and refresh Les Terrasses du Port, which celebrated its
10th anniversary in May. £12m was invested in our Developments and other
portfolio, the majority (£9m) was spent on the on-site development of the
Ironworks residential scheme at Dundrum which topped-out in October ahead of
its official sales launch later in 2025. The remaining expenditure was focused
on initiatives to progress masterplanning and planning permissions on projects
integral to our destinations. Table 10 in Additional information analyses the
spend between the creation of additional area and that relating to the
enhancement of existing space.
External valuers
During 2024, the Group's external valuations continue to be conducted by CBRE
Limited ('CBRE'), Cushman and Wakefield DTL Limited ('C&W') and Jones Lang
LaSalle Limited ('JLL'), providing diversification of valuation expertise
across the Group. At
31 December 2024 the majority of our UK flagship destinations have been valued
by JLL and CBRE, the French portfolio by JLL, and the Irish portfolio and
Brent Cross have been valued by C&W. This is unchanged from 31 December
2023.
The Board has decided to change valuers for a number of the Group's properties
with effect from 1 January 2025. These changes ensure compliance with RICS new
mandatory rotation rules and demonstrate good governance.
In 2024, the Group's investment markets continued to polarise. Key areas of
differentiation were asset quality in terms of occupier and customer demand,
and future capital expenditure requirements.
There have been an increased number of shopping centre transactions over the
course of the year. The valuers cited key deals influencing their yield
judgements as the bids on St. James Quarter, Edinburgh; the 50% transaction of
Centre MK, Milton Keynes; Landsecs' acquisition of Liverpool ONE; URW's sale
of a minority stake in Forum des Halles in Paris; and the Goldman Sachs' sale
of Blanchardstown, Dublin.
Like-for-like ERV(1)
Flagship destinations 2024 2023
%
%
UK 2.3 1.8
France 1.9 2.5
Ireland 0.8 0.2
1.8 1.7
1 Calculated on a constant currency basis for properties owned
throughout the relevant reporting period.
Like-for-like ERVs grew by 1.8% during 2024 with the UK achieving the highest
uplift at 2.3%. There was strong alignment between ERV growth and investment
in the form of recent or ongoing repurposing and repositioning, with the
strongest growth at Bullring and Cabot Circus. In 2024, we signed 127
permanent leases across the UK portfolio at an average net effective rent 20%
above prevailing ERVs.
ERVs in France grew by 1.9%, driven by indexation and leasing demand at both
of our two wholly owned assets. At Les Terrasses du Port we have completed 95%
of the lease renewals which fell due in May 2024, the 10th anniversary of the
destination opening. The new deals have been signed at an average of 5% above
ERV and 3% above the previous passing rent.
In Ireland, ERVs were up 0.8%. The lower vacancy levels in the Irish portfolio
can mean that it is more challenging to provide multiple sources of evidence
for the valuers to mark up ERVs. Nonetheless, we signed 37 permanent leases at
an average net effective rent 9% above prevailing ERVs. We also have a strong
leasing pipeline, particularly at Dundrum which has benefited from recent
investment, the most significant project being the opening of Brown Thomas in
the former House of Fraser unit in February 2023.
Property returns analysis
The Group portfolio generated a total property return of 2.1%, comprising an
income return of 5.7% partly offset by a capital return of -3.4%. The split by
portfolio is shown in the table below.
2024
Proportionally consolidated UK France Ireland Flagship Developments and other Group portfolio
%
%
%
destinations
%
%
%
Income return 7.9 4.5 6.0 6.0 2.9 5.7
Capital return 0.8 0.5 (13.4) (3.0) (7.0) (3.4)
Total return 8.7 5.1 (8.1) 2.9 (4.3) 2.1
Shareholder returns analysis
Total shareholder return over period Total shareholder return Total shareholder return Benchmark(2)
%
Cash basis(1 Scrip basis(1
) % ) %
One year 3.9 n/a (15.8)
Four years 25.8 64.5 (27.0)
1 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.
2 Benchmark is the FTSE EPRA/NAREIT UK index.
The Group's total shareholder return in 2024 was 3.9%, outperforming the FTSE
EPRA/NAREIT UK index which fell by -15.8%. Over four years, the Group also
strongly outperformed the benchmark of -27.0% with absolute total shareholder
returns of 25.8% and 64.5% on a cash and scrip basis, respectively.
Investment in joint ventures and associates
Details of the Group's joint ventures are shown in note 13 to the financial
statements. The Group's only associate, Value Retail, was sold in September
2024.
During the year, our investment in joint ventures decreased by £105m to
£1,088m (2023: £1,193m). The Group's acquisition of the 50% joint venture
stake in Westquay in November reduced the investment by £142m. Revaluation
losses were £71m, principally relating to Dundrum, Dublin which suffered a
90bp outward yield shift in 2024. Cash distributions to the Group were £38m.
These reductions were then partly offset by the Group's share of Adjusted
earnings of £82m and capital investment of £85m, in relation to the
refinancing of the Dundrum secured loan.
Trade receivables
Collection rates remained high over the course of the year such that 97% of
the rental income due in 2024 (as at
20 February 2025) has been collected.
On a proportionally consolidated basis, net trade receivables at 31 December
2024 were £51m (2023: £41m), reflecting gross trade receivables of £67m
(2023: £60m) against which a provision of £16m (2023: £19m) has been
applied.
Pensions
In June 2024, the Group's UK defined benefit scheme (the 'Scheme') was wound
up. This followed the purchase of a bulk annuity policy ('buy-in') in December
2022 with Just Retirement Limited to fully insure all future payments to
members of the Scheme.
The Trustees of the Scheme triggered the winding-up of the Scheme in December
2023 allowing the Company to terminate its liability to make further
contributions to the Scheme. In the first half of 2024, the Trustees completed
the assignment of the bulk annuity policy to individual Scheme members and
transferred the administration to Just Retirement Limited.
The winding up process resulted in a cost of £0.5m, which, given the one-off
nature of this action has been excluded from the Group's Adjusted earnings.
Financing overview
Financing and cash flow
Key financial metrics
Proportionally consolidated unless otherwise stated Calculation 2024 2023
(References to Additional Information)
Net debt Table 12 £799m £1,326m
Liquidity £1,417m £1,225m
Weighted average interest rate - net debt 2.0% 2.4%
Weighted average interest rate - gross debt 3.5% 3.3%
Weighted average maturity of debt 4.7 years 2.5 years
FX hedging 90% 91%
Net debt:EBITDA Table 14 5.8x 8.0x
Loan to value Table 17 30% 34%
Loan to value - Full proportional consolidation (of Value Retail)1 Table 17 30% 44%
Fixed rate debt as a proportion of total debt 100% 84%
Metrics with associated financial covenants Covenant
Interest cover ≥ 1.25x Table 15 5.03x 3.91x
Gearing - Bonds maturing in 2025, 2027 and 2036 ≤ 175% Table 16 45% 55%
- Bonds maturing in 2026 and 2028, senior notes and revolving credit facilities ≤ 150% Table 16 45% 55%
Unencumbered asset ratio - Senior notes only ≥ 1.5x Table 19 3.23x 2.04x
Secured debt/equity shareholders' funds - All bonds, senior notes and ≤50% 8% 11%
revolving credit facilities
1 Up until the sale of Value Retail in September 2024, the 'loan'
included the Group's share of Value Retail's net debt and 'value' included the
Group's share of Value Retail's values. At 31 December 2024, this metric is
the same as Loan to Value.
In 2024, net debt reduced by 40% to £799m at 31 December 2024 driven by
disposal proceeds, the most significant being from the transformational sale
of Value Retail for €705m (£595m). This strengthened the Group's financial
position and we achieved improved credit ratings from Moody's and Fitch. At 31
December 2024, net debt:EBITDA was 5.8x (2023: 8.0x) and LTV was 30% (2023:
34%).
At 31 December 2024, net debt comprised loans of £1,615m, less the fair value
of currency swaps of £2m and cash and cash equivalents of £814m, of which
£738m is held by the Reported Group. Liquidity totalled £1,417m (2023:
£1,225m) comprising cash and unutilised committed credit facilities.
Key financing activity in the year included:
- in January, we repaid £109m of maturing senior notes from existing
cash balances.
- in March, we obtained lender consent to extend £463m of the Group's
revolving credit facilities by one year such that they now mature in 2027.
- in April, we entered into £338m of interest rate swaps to lock in
finance income at an average rate of 4.7% on cash deposits matching the value
of bonds maturing in October 2025.
- in August, we arranged a €350m (Group's 50% share €175m) secured
loan to refinance the maturing loan held by the Dundrum joint venture. The new
loan matures in 2031 with an all-in cost of 5.4% and is non-recourse to the
Group.
- in October, we issued £400m of 5.875% bonds maturing in 2036. The
issue commanded strong demand, with a peak order book in excess of £2.6bn,
equivalent to seven times the final issue. The new issue proceeds were used to
repurchase, via tender, £411.6m of the Group's bonds at an average interest
rate of 7.1%. The repurchased bonds comprised £168.4m of 6% bonds maturing in
2026 and £243.2m of 7.25% bonds maturing in 2028. The combined refinancing
resulted in an net interest saving of £3.6m p.a. and increased the Group's
average debt maturity by 2.3 years, such that it was 4.7 years at 31 December
2024.
Financing strategy
The Group is committed to maintaining a sustainable and resilient capital
structure with an Investment Grade credit rating. Our financing strategy is to
borrow predominantly on an unsecured basis to maintain flexibility. Secured
loans are occasionally used, principally in conjunction with joint venture
partners. We ensure that all secured debt is non-recourse to the rest of the
Group.
The Group's debt is arranged to maintain access to short-term liquidity and
long-term financing. Short-term liquidity is principally through syndicated
revolving credit facilities. Long-term debt comprises the Group's fixed rate
unsecured bonds and private placement senior notes. Acquisitions may initially
be financed using short-term funds before being refinanced with longer-term
funding depending on the Group's financing position in terms of maturities,
future commitments or disposals, and market conditions.
Derivative financial instruments are used to manage exposure to fluctuations
in foreign currency exchange rates and interest rates but are not employed for
speculative purposes.
The Board regularly reviews the Group's financing strategy and approves
financing guidelines against which it monitors the Group's financial
structure. Where there is any non-compliance with the guidelines, this should
not be for an extended period.
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 2024, the value of euro-denominated
liabilities as a proportion of the value of euro-denominated assets was 90%
(2023: 91%).
Interest on euro-denominated debt also acts as a partial hedge against
exchange differences arising on net income from our overseas operations.
Sterling strengthened against the euro during the year by 5%.
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 2024, the Group had significant
headroom against these metrics.
In addition, Dundrum's secured debt facility contains specific covenants on
loan to value and interest cover. Again, at 31 December 2024, there was
significant headroom and there is no recourse to the Group.
Credit ratings
Following the disposal of Value Retail in September 2024, Moody's upgraded the
Group's investment grade long-term debt rating from Baa3 to Baa2. Fitch
improved the outlook on their BBB issuer default rating (senior unsecured debt
rating at BBB+) from stable to positive.
Cash flow and net debt
Proportionally consolidated net debt
Movement in proportionally consolidated net debt, £m
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On a proportionally consolidated basis, net debt decreased by 40% to £799m
(2023: £1,326m).
The Value Retail disposal raised £584m of net proceeds, with other disposals,
principally Union Square, raising a further £117m. Cash generated from
operations of £102m comprised profit from operating activities of £109m less
a net £7m reduction in working capital and other non-cash items. We also
received £19m of distributions from Value Retail in the year.
These cash inflows were partly offset by £141m for the acquisition of the 50%
stake in Westquay, £83m of cash dividends paid in the year, £47m of capital
expenditure and £65m relating to a £26m premium paid on the redemption of
£412m bonds and £39m of net interest payments.
Debt and facility profile
Maturity profile of loans and facilities
Proportionally consolidated at 31 December 2024, £m
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(http://www.rns-pdf.londonstockexchange.com/rns/4569Y_2-2025-2-25.pdf)
The Group's weighted average maturity of debt is 4.7 years (2023: 2.5 years).
As at 31 December 2024, the unsecured bonds maturing in 2025 and 2026 and
senior notes maturing in 2026, totalling £438.8m, are fully covered by
existing cash within the Group.
Maturity analysis of loans and reconciliation to net debt
Loan Maturity(1) 2024 2023
£m
£m
Sterling bonds 2025-2036 828.7 840.6
Sustainability-linked euro bond 2027 574.1 600.8
Unamortised facility fees 2026-2027 (1.8) (2.2)
Senior notes (private placements) 2026-2031 73.2 185.3
Total loans - Reported Group 1,474.2 1,624.5
Secured borrowing(2) 2031 141.2 260.0
Total loans - proportionally consolidated 1,615.4 1,884.5
Cash and cash equivalents (814.2) (569.6)
Fair value of currency swaps (2.2) 11.4
Net debt - proportionally consolidated 799.0 1,326.3
1 Maturity for loans at 31 December 2024.
2 Secured loan held by Dundrum joint venture.
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.
Following a detailed review of the Group's principal risks in the year, the
Board concluded upon nine risks, a reduction from the previously reported
fourteen. The nine principal risks are listed below with details set out for
each risk. These reflect where the Group is strategically and the external
factors which may affect them. Full disclosure of the risks, including the
factors which mitigate them, is set out within the Risk and Uncertainties
section of the Annual Report 2024.
Principal risk Residual Explanation
risk level
Macroeconomic & geopolitical High Adverse changes to the geopolitical landscape and macroeconomic environment in
which the Group operates have the potential to hinder the ability to deliver
the strategy and financial performance.
Occupational markets Medium The Group fails to anticipate and address structural market changes and target
optimal property sectors. This could impair leasing performance, result in a
sub-optimal occupier mix and thus impact the ability to attract customers, and
grow footfall, spend and income at the Group's destinations.
Investment market, valuations and capital allocation Medium Investor demand in our property markets is reduced due to macroeconomic and/or
property market factors including increased borrowing costs, economic
downturn, and consumer and occupier confidence. This could adversely impact
property valuations and risk hindering the liquidity of the Group's portfolio
which in turn would reduce the availability of funds for reinvestment in core
assets and/or refinancing of debt. There is also a risk that the Group
allocate capital sub-optimally, including in JV partnerships that are not
fully aligned with our strategy, resulting in reduced returns, weaker investor
sentiment and capital performance.
Climate change Medium Climate risks, particularly the reduction in carbon emissions and compliance
with ESG regulations, are not appropriately managed and communicated. This is
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
targets are not met. Also, extreme weather events may impact our properties.
Legal, regulatory and tax Medium The failure to comply with laws and regulations applicable to the Group and/or
increased tax levies. These laws and regulations, including tax, cover the
Group's role as a multi-jurisdiction listed company; an owner and operator of
property; an employer; and as a developer. Failure to comply could result in
the Group suffering reputational damage, financial penalties/loss and/or other
sanctions. Changes or new requirements may place administrative and cost
burdens on the Group and divert resources away from strategic objectives.
Operational resilience Medium The Group's ability to protect its reputation, income and capital values could
be damaged by a failure to manage several key operational risks including but
not limited to: poor performance of key suppliers or third parties, health and
safety issues including a pandemic, civil unrest including acts of terrorism,
cyber-attack or other IT disruption.
Capital structure Medium Lack of access to capital on attractive terms could lead to the Group having
insufficient capital or liquidity to enable the delivery of the Group's
strategic objectives.
Property development and repurposing Medium Property development and the repurposing of our assets are inherently risky
due to the complexity, management intensity and uncertain outcomes, and
exposure to the volatile costs of materials and labour and sub-contractor
resilience, particularly for major schemes with multiple phases and long
delivery timescales. Unsuccessful projects can result in adverse financial and
reputational outcomes.
People Medium A failure to retain or recruit key management and other colleagues to build
skilled, high performing, and diverse teams could adversely impact operational
and corporate performance, culture and ultimately the delivery of the Group's
strategy. As the Group evolves its strategy it must continue to motivate and
retain people, ensure it offers the right colleague proposition and attract
new skills in an ever-changing market.
Consolidated income statement
Year ended 31 December 2024
Notes 2024 2023(1)
£m £m
Revenue 2A,4 121.1 134.3
Profit from operating activities(2) 2A 23.2 26.2
Net revaluation losses on properties 2A (20.6) (45.2)
Other net gains 2A 0.6 1.2
Share of results of joint ventures 13B 8.8 9.4
Impairment of joint ventures 8B - (22.2)
Share of results of associates 14B - 1.2
Income from other investments 1.1 -
Operating gain/(loss) 13.1 (29.4)
Finance income 6 40.0 35.2
Finance costs 6 (95.4) (71.3)
Loss before tax (42.3) (65.5)
Tax charge 7 (2.5) (0.7)
Loss from continuing operations (44.8) (66.2)
(Loss)/Profit from discontinued operations 9B (481.5) 14.8
Loss for the year (526.3) (51.4)
Basic and diluted (loss)/earnings per share(3)
Continuing operations 11B (9.0)p (13.3)p
Discontinued operations 11B (97.0)p 3.0p
Total (106.0)p (10.3)p
1 The Group's share of Value Retail's results reported for the year
ended 31 December 2023 have been re-presented as discontinued operations in
line with the requirements of IFRS 5 "Non-current assets held for sale and
discontinued operations". See note 9 for further details.
2 Includes a net charge of £2.8m (2023: £1.4m) relating to provisions
for impairment of trade (tenant) receivables as set out in note 15.
3 (Loss)/Earnings per share figures for the year ended 31 December 2023
have been restated to reflect the 1 for 10 share consolidation completed in
September 2024, see note 11 for further details.
Consolidated statement of comprehensive income
Year ended 31 December 2024
2024 2023
£m £m
Loss for the year (526.3) (51.4)
Other comprehensive income/(expenses):
Recycled through the profit or loss on disposal of overseas property interests
and associate
Exchange gain previously recognised in the translation reserve (49.6) (100.3)
Exchange loss previously recognised in the net investment hedge reserve 39.7 80.2
Net exchange loss relating to equity shareholders(1) (9.9) (20.1)
Items that may subsequently be recycled through profit or loss
Foreign exchange translation differences (74.7) (35.2)
Foreign exchange translation differences of discontinued operations 0.2 (14.1)
Gain on net investment hedge 70.7 39.3
Net gain on cash flow hedge - 0.2
Share of other comprehensive losses of discontinued operations (4.4) (8.8)
(8.2) (18.6)
Items that will not subsequently be recycled through profit or loss
Net actuarial losses on pension schemes (0.5) (1.4)
Other comprehensive loss for the year (18.6) (40.1)
Total comprehensive loss from continuing operations (59.2) (83.4)
Total comprehensive loss from discontinued operations (485.7) (8.1)
Total comprehensive loss for the year (544.9) (91.5)
1 For the year ended 31 December 2024 this related to the sale of the
Group's investment in Value Retail which is treated as a discontinued
operation as described in note 9. For the year ended 31 December 2023 this
related to the sales of Italie Deux and Italik and the derecognition of the
O'Parinor joint venture as described in note 8B.
Consolidated balance sheet
As at 31 December 2024
Note 2024 2023
£m
£m
Non-current assets
Investment properties 12 1,487.0 1,396.2
Interests in leasehold properties 34.8 32.7
Right-of-use assets 7.5 3.9
Plant and equipment 0.4 0.9
Investment in joint ventures 13C 1,088.2 1,193.2
Investment in associate 14C - 1,115.0
Other investments 9.2 8.8
Trade and other receivables 0.2 1.9
Restricted monetary assets 16 21.4 21.4
2,648.7 3,774.0
Current assets
Trade and other receivables 87.6 74.1
Derivative financial instruments 2.2 5.2
Restricted monetary assets - 2.2
Cash and cash equivalents 737.9 472.3
827.7 553.8
Total assets 3,476.4 4,327.8
Current liabilities
Trade and other payables (109.3) (129.8)
Obligations under head leases (0.1) (0.1)
Loans 17A (337.8) (108.6)
Tax (2.8) (0.3)
Derivative financial instruments (0.1) (2.3)
(450.1) (241.1)
Non-current liabilities
Trade and other payables (28.7) (55.5)
Obligations under head leases (39.7) (37.3)
Loans 17A (1,136.4) (1,515.9)
Deferred tax (0.4) (0.4)
Derivative financial instruments - (15.0)
(1,205.2) (1,624.1)
Total liabilities (1,655.3) (1,865.2)
Net assets 1,821.1 2,462.6
Equity
Share capital 19A 24.6 250.1
Share premium - 1,563.7
Capital redemption reserve 19A 225.5 -
Other reserves 91.8 105.5
Retained earnings 1,486.9 549.7
Investment in own shares (7.7) (6.4)
Equity shareholders' funds 1,821.1 2,462.6
EPRA net tangible asset value per share(1) 11C £3.70 £5.08
1 EPRA net tangible asset value per share at 31 December 2023 has been
restated to reflect the 1 for 10 share consolidation completed in September
2024, see note 11 for further details.
These financial statements were approved by the Board on 25 February 2025 and
signed on its behalf by:
Rita-Rose Gagné Himanshu Raja
Chief Executive Chief Financial Officer
Consolidated statement of changes in equity
Year ended 31 December 2024
Share Share premium Capital Other Retained earnings Investment Equity share-holders' funds
capital(1)
£m
redemption
reserves(3)
£m
in own
£m
£m
reserve(2)
£m
shares(1)
£m
£m
At 1 January 2023 250.1 1,563.7 - 135.4 646.0 (8.8) 2,586.4
Recycled exchange gains on disposal of overseas property interests - - - (20.1) - - (20.1)
Foreign exchange translation differences(4) - - - (49.3) - - (49.3)
Gain on net investment hedge - - - 39.3 - - 39.3
Loss on cash flow hedge - - - (3.4) - - (3.4)
Loss on cash flow hedge recycled to net finance costs - - - 3.6 - - 3.6
Share of other comprehensive loss of associates (5) - - - - (8.8) - (8.8)
Net actuarial losses on pension schemes - - - - (1.4) - (1.4)
Loss for the year - - - - (51.4) - (51.4)
Total comprehensive loss - - - (29.9) (61.6) - (91.5)
Share-based employee remuneration - - - - 3.6 - 3.6
Cost of shares awarded to employees - - - - (2.4) 2.4 -
Dividends - - - - (35.9) - (35.9)
At 31 December 2023 250.1 1,563.7 - 105.5 549.7 (6.4) 2,462.6
Recycled net exchange gains on disposal of overseas associate - - - (9.9) - - (9.9)
Foreign exchange translation differences(4) - - - (74.5) - - (74.5)
Gain on net investment hedge - - - 70.7 - - 70.7
Gain on cash flow hedge - - - 2.2 - - 2.2
Gain on cash flow hedge recycled to net finance costs - - - (2.2) - - (2.2)
Share of other comprehensive loss of associates(5) - - - - (4.4) - (4.4)
Net actuarial losses on pension schemes - - - - (0.5) - (0.5)
Loss for the year - - - - (526.3) - (526.3)
Total comprehensive loss - - - (13.7) (531.2) - (544.9)
Share capital consolidation(6) (225.1) - 225.1 - - - -
Share premium cancellation(7) - (1,563.7) - - 1,563.7 - -
Share buyback and cancellation(8) (0.4) - 0.4 - (20.9) - (20.9)
Share-based employee remuneration - - - - 4.3 - 4.3
Purchase of own shares and treasury shares - - - - - (3.4) (3.4)
Cost of shares awarded to employees - - - - (2.1) 2.1 -
Dividends - - - - (76.6) - (76.6)
As at 31 December 2024 24.6 - 225.5 91.8 1,486.9 (7.7) 1,821.1
1 Share capital includes shares held in treasury and shares held in
an employee share trust, which are held at cost and excluded from equity
shareholders' funds through 'Investment in own shares' with further
information set out in note 21A.
2 The capital redemption reserve comprises the nominal value of
shares cancelled by way of the Company's 1 for 10 share capital consolidation
in September 2024 (see footnote 6) and shares purchased and cancelled under
the Group's share buyback programme which commenced in October 2024 (see
footnote 8). This reserve is non-distributable.
3 Other reserves comprises Translation, Net investment hedge and
Cash flow hedge reserves as set out in note 21B.
4 Relates to continuing and discontinued operations.
5 Relates to discontinued operations.
6 Following shareholder approval at a General meeting on 12
September 2024, the Company completed a 1 for 10 share consolidation on
30 September 2024 whereby each of its ordinary shares were subdivided into 9
deferred shares and one ordinary share, following which the deferred shares
were cancelled. See note 21 for further details.
7 Following shareholder approval at a General meeting on 12
September 2024 and subsequent sanctioning by the High Court of England and
Wales on 8 October 2024, the Company cancelled its share premium account. The
effect of this Capital Reduction was to increase the distributable reserves of
the Company through a transfer to retained earnings.
8 On 16 October 2024, the Company announced the commencement of a
share buyback programme of up to £140m. In 2024, 7.0m shares were repurchased
and cancelled under the programme for total consideration of £20.9m.
Consolidated cash flow statement
Year ended 31 December 2024
Note 2024 2023
£m
£m
Profit from operating activities 2A 23.2 26.2
Net movements in working capital and restricted monetary assets 21A (6.6) (4.7)
Non-cash items 21A 5.3 2.8
Cash generated from operations 21.9 24.3
Interest received 49.0 39.1
Interest paid (including bond issue fees) (86.5) (80.8)
Bond early termination fees (25.5) -
Debt and loan facility issuance and extension fees (2.7) (1.0)
Tax received/(paid) 0.2 (0.9)
Distributions and other receivables from joint ventures 48.1 57.6
Cash flows from operating activities 4.5 38.3
Investing activities
Property acquisition (140.8) -
Equity investment in joint venture (85.1) -
Capital expenditure (13.7) (18.7)
Sale of properties (including trading properties in 2023) 117.4 49.0
Sale of investments in joint ventures - 69.0
Sale of investments in associate (held as asset held for sale) 583.6 96.7
Advances to joint ventures 13D (6.9) (8.3)
Distributions and capital returns received from associates 9D 19.4 73.6
Distributions from other investments 1.1 -
Cash flows from investing activities 475.0 261.3
Financing activities
Purchase of own shares (3.4) -
Share buyback and cancellation (20.9) -
Proceeds from new borrowings 394.7 96.0
Repayments of borrowings (499.6) (111.1)
Equity dividends paid 20 (82.6) (29.9)
Cash flows from financing activities (211.8) (45.0)
Increase in cash and cash equivalents 267.7 254.6
Opening cash and cash equivalents 21B 472.3 218.8
Exchange translation movement 21B (2.1) (1.1)
Closing cash and cash equivalents 21B 737.9 472.3
The cash flows above relate to continuing and discontinued operations. See
note 9 for further information on discontinued operations.
Notes to the Consolidated Financial Statements
For the year ended 31 December 2024
1. Basis of preparation, consolidation and material accounting policies
A. GENERAL INFORMATION
Hammerson plc is a UK public company limited by shares incorporated under the
Companies Act and is registered in England and Wales. The address of the
Company's registered office is Marble Arch House, 66 Seymour Street, London
W1H 5BX.
The Group's principal activities are as an owner, operator and developer of
sustainable prime urban real estate. The Group owns and invests in flagship
destinations, developments and other properties in the United Kingdom, France
and Ireland. The Group also had an investment in Value Retail, which operates
various premium outlet Villages across western Europe, and this investment was
sold in September 2024. The Group's material accounting policies are described
below.
B. BASIS OF PREPARATION AND CONSOLIDATION
Basis of preparation
The financial information set out in this announcement does not constitute the
consolidated statutory accounts for the years ended 31 December 2024 and 2023
but is derived from those accounts. Statutory accounts for 2023 have been
delivered to the Registrar of Companies and those for 2024 (approved by the
Board on 25 February 2025) will be delivered following the Company's annual
general meeting. The external auditor has reported on both set of accounts and
their reports were unqualified and did not contain statements under Section
498(2) or (3) of the Companies Act 2006.
The financial information set out in this announcement is based on the
consolidated financial statements. These have been prepared in accordance with
UK-adopted International Accounting Standards (IAS) and the requirements of
the Companies Act 2006 as applicable to companies reporting under those
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. UK adopted International Accounting Standards differs in
certain respects from International Financial Reporting Standards as adopted
by the EU. The differences have no material impact on the Financial Statements
for the periods presented, which therefore also comply with International
Reporting Standards as adopted by the EU.
The financial information is in accordance with the accounting policies set
out in the 2023 financial statements and have been applied consistently.
While the financial information included in these condensed financial
statements has been prepared as explained above, this announcement does not
itself contain sufficient information to comply with IASs and IFRSs. The
Company expects to publish full financial statements that comply with IASs and
IFRSs in March 2025.
With the exception of IFRS 18 - Presentation and Disclosure in Financial
Statements, 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 are not
expected to have a material, impact on the Group's results or net assets. IFRS
18 applies for accounting periods beginning on, or after, 1 January 2027 and
will apply to comparative information.
Basis of consolidation
Subsidiaries
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its subsidiaries). Control
is achieved where the Company has the power over the investee, is exposed, or
has rights, to variable return from its involvement with the investee and has
the ability to use its power to affect its returns.
Subsidiaries are fully consolidated from the date on which control is
achieved, which is usually from the date of acquisition. They are
de-consolidated from the date control ceases.
All intragroup transactions, balances, income and expenses are eliminated on
consolidation. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Group.
Joint arrangements (joint operations and joint ventures) and associates
The accounting treatment for joint arrangements and associates requires an
assessment to determine the degree of control or influence that the Group may
exercise over them and the form of that control.
The Group's interest in joint arrangements is classified as either:
- a joint operation: not operated through an entity but by joint
controlling parties which have rights to the assets and obligations for the
liabilities; or
- a joint venture: whereby the joint controlling parties have rights to
the net assets of the arrangement.
The Group's interests in its joint arrangements are commonly driven by the
terms of partnership agreements, which ensure that control is shared between
the partners.
Associates are those entities over which the Group is in a position to
exercise significant influence, but not control or jointly control.
The Group's share of results, assets and liabilities held within joint
operations is fully consolidated into the Group financial statements along
with subsidiaries.
The results, assets and liabilities of joint ventures and associates are
accounted for using the equity method. Investments in joint ventures and
associates are carried in the consolidated balance sheet at cost as adjusted
for post acquisition changes in the Group's share of the net assets of the
joint venture or associate, less any impairment. Loans to joint ventures and
associates are aggregated into the Group's investment in the consolidated
balance sheet. The Group eliminates upstream and downstream transactions with
its joint ventures, including interest and management fees.
Any losses of joint ventures or associates are initially recognised against
the equity investment. However, if in excess of the Group's equity interest,
losses are recognised only to the extent that the Group has incurred legal or
constructive obligations or made payments on behalf of the other entity.
If the value of the Group's equity investment is nil, the share of losses is
recognised against other long term interests or if such interests are not
available, losses are simply restricted to leave the Group's equity investment
remaining at nil.
Distributions and other income received from joint ventures are included
within cash flows from operating activities owing to their association with
the underlying profits of the joint venture whereas all other cash flows are
recognised as investing activities. Distributions from associates are included
in investing activities. Distributions reduce the carrying value of the
Group's investments in joint ventures and associates.
C. ALTERNATIVE PERFORMANCE MEASURES (APMs)
The Group uses a number of APMs, being financial measures not specified under
IFRS, to monitor the performance of the business. Many of these measures are
based on the EPRA Best Practice Recommendations (BPR) reporting framework
which aims to improve the transparency, comparability and relevance of the
published results of listed European real estate companies, with key EPRA
measures being EPRA earnings and three EPRA net asset metrics. Details on the
EPRA BPR can be found on www.epra.com and the Group's EPRA metrics are shown
in Table 1 of the Additional Information. In September 2024, EPRA issued
updated EPRA earnings guidelines within its BPR. These included the addition
of two new adjustment categories relating to funding structures and
non-operating and exceptional items. In relation to EPRA earnings, the Group
will adopt these new guidelines for its next reporting period, beginning 1
January 2025.
In addition to presenting the Group's results on an IFRS and EPRA basis, the
Group also presents the results on a 'Headline' and 'Adjusted' basis. The
former measure is calculated in accordance with the requirements of the
Johannesburg Stock Exchange listing requirements and the 'Adjusted' basis
reflects the underlying operations of the business and is calculated on a
proportionally consolidated basis.
The Adjusted basis also excludes capital and non-recurring items such as
revaluation movements, gains or losses on the disposal of properties or
investments, as well as other items which are not considered to be part of the
day-to-day operations of the business. Such items are in the main reflective
of those excluded for EPRA earnings, but additionally exclude a small number
of 'Company only' adjusting items which are deemed not to be reflective of the
normal routine operating activities of the Group and have been applied
consistently in both accounting periods. The Directors 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. The inclusion of these 'Company only' adjustment means that this basis
may not be directly comparable to similar measures adopted by peers.
A reconciliation between earnings and net asset measures reported under IFRS
and the above alternative measures is set out in note 10.
Other APMs used by the Group cover key operational, balance sheet and credit
related metrics, including like-for-like analysis, cost ratios, total
accounting return, net debt and associated credit metrics: net debt:EBITDA,
gearing, loan to value and interest cover.
Reconciliations of these APMs to the IFRS figures in the financial statements
are included in the Additional Information section.
D. GOING CONCERN
Introduction
In order to prepare the financial statements for the year ended 31 December
2024 on a going concern basis the Directors have undertaken a detailed
assessment of the Group's principal risks and current and projected financial
position over the period to 30 June 2026 ('the going concern period'). This
period has been selected as it coincides with the first six monthly covenant
test date for the Group's unsecured debt facilities, falling due after the
minimum 12 months going concern period.
Financial position
The financial position of the Group, including details of its financing and
capital structure, is set out in the Financial Review above. The Group's
position materially improved in 2024: net debt declined 40% to £799m, with
Net debt:EBITDA improving from 8.0x to 5.8x, and loan to value from 34% to
30%. Liquidity was £1,417m, with £439m of debt maturing over the going
concern period.
At 31 December 2024, the Group's key unsecured debt covenants had significant
headroom. Gearing and the Unencumbered Asset Ratio had headroom to valuation
falls of 48% and 54% respectively, while the Interest Cover Ratio had headroom
to NRI reductions of 75%.
Assessment
In making the going concern assessment, the Directors have considered the
Group's principal risks (see above), including climate change, and their
impact on financial performance.
The Directors have assessed a Base going concern scenario derived from the
Group's 2025 Business Plan, which was approved by the Board in December 2024.
They also reviewed reverse stress tests ('stress tests') to assess the Group's
ability to cope with adverse changes to key variables in the Base scenario
impacting covenant metrics. The assessment included the preparation of a Base
scenario which contained earnings, balance sheet, cash flow, liquidity and
credit metric projections.
Acknowledging the three macroeconomies that the Group operates in, each with
their own distinct risks, the Base scenario projections assume continued
improvements in the Group's operating performance in the near term, reflecting
enduring demand from customers and brand partners for the best destinations as
evidenced by growing footfall and strong leasing in 2024.
Consistent with the Group's strong financial position and operating
performance, the Base scenario projections forecast that the Group will
maintain significant covenant headroom and liquidity over the going concern
period.
The stress tests were undertaken on the Base scenario to assess the maximum
level that valuations and net rental income could fall over the going concern
period before the Group reaches its key unsecured debt covenant thresholds.
The stress test calculations adopted valuation yields and ERVs as at 31
December 2024 and also factored in:
- the secured loan at Dundrum (Group's 50% share £141m), which was
refinanced in August 2024, is non-recourse to the Group and has its own debt
covenants; and
- £73m of senior notes which mature over the period to 2031 and which
are subject to an additional unencumbered asset ratio covenant.
Conclusion
Having reviewed the Base scenario projections, the results of the stress
tests, current external forecasts, recent precedents and plausible future
adverse impacts to valuations and net rental income, the Directors are
satisfied that the Group has sufficient covenant headroom and significant
liquidity over the going concern period. Based on these considerations,
together with available market information and the Directors' experience of
the Group's portfolio and markets, the Directors have therefore concluded that
it is appropriate to prepare the financial statements on a going concern
basis.
Foreign currency
Exchange rates
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 2024 31 December 2023
Quarter 1 €1.168 €1.133
Quarter 2 €1.172 €1.150
Quarter 3 €1.184 €1.163
Quarter 4 €1.202 €1.154
Consolidated balance sheet
31 December 2024 31 December 2023
Year end rate €1.210 € 1.153
2. Proportionally consolidated information
As described in the Financial Review and note 3, for managing reporting
purposes the Group evaluates the performance of its business on a
proportionally consolidated basis by aggregating its properties or entities
which are wholly owned or in joint operations ('Reported Group') with the
Group's proportionate share of joint ventures (see note 13) and associates
(see note 14) which are under the Group's management ('Share of Property
interests').
A. PROFIT/(LOSS) FOR THE YEAR
Adjusted earnings, which are 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 the Group's loss for the year under IFRS to Adjusted
earnings.
2024
Proportionally consolidated
Note Reported Group Share of Property interests Sub-total Capital and Adjusted
before adjustments
other adjustments(1)
£m £m
£m
£m £m
Revenue 4 121.1 126.3 247.4 - 247.4
Gross rental income(2) 3A, 4 81.8 107.2 189.0 - 189.0
Service charge income 4 28.6 19.4 48.0 - 48.0
110.4 126.6 237.0 - 237.0
Service charge expenses (32.6) (21.9) (54.5) - (54.5)
Cost of sales 5A (16.9) (19.6) (36.5) - (36.5)
Net rental income 60.9 85.1 146.0 - 146.0
Gross administration costs 5A (48.4) - (48.4) 4.9 (43.5)
Other income 4 10.7 0.3 11.0 - 11.0
Net administration expenses (37.7) 0.3 (37.4) 4.9 (32.5)
Profit from operating activities 23.2 85.4 108.6 4.9 113.5
Net revaluation losses on properties 12 (20.6) (70.8) (91.4) 91.4 -
Disposals
- Loss on sale of properties 8A (9.2) - (9.2) 9.2 -
- Recycled exchange gains on disposal of overseas interests 9.9 - 9.9 (9.9) -
Costs associated with pension scheme wind-up (0.5) - (0.5) 0.5 -
Change in fair value of other investments 0.4 - 0.4 (0.4) -
Other net gains 0.6 - 0.6 (0.6) -
Share of results of joint ventures 13B 8.8 (8.8) - - -
Income from other investments 1.1 - 1.1 - 1.1
Operating profit 13.1 5.8 18.9 95.7 114.6
Net finance costs 6 (55.4) (5.8) (61.2) 28.9 (32.3)
(Loss)/Profit before tax (42.3) - (42.3) 124.6 82.3
Tax charge 7A (2.5) - (2.5) - (2.5)
(Loss)/Profit from continuing operations (44.8) - (44.8) 124.6 79.8
(Loss)/Profit from discontinued operations(3) 9B (481.5) - (481.5) 500.7 19.2
(Loss)/Profit for the year (526.3) - (526.3) 625.3 99.0
1 Adjusting items, described above as 'Capital and other adjustments',
are set out in note 10A.
2 Proportionally consolidated figure includes £10.1m (2023: £13.6m) of
variable rents calculated by reference to occupiers' turnover.
3 Discontinued operations reflect Value Retail, see note 9 for further
details.
2023
Proportionally consolidated
Note Reported Group Share of Property interests Sub-total Capital and Adjusted
before adjustments
£m £m
other adjustments(1) £m
£m
£m
Revenue 4 134.3 132.4 266.7 - 266.7
Gross rental income(2) 3A, 4 92.8 115.6 208.4 - 208.4
Service charge income 4 26.6 17.1 43.7 - 43.7
119.4 132.7 252.1 - 252.1
Service charge expenses (29.1) (20.4) (49.5) - (49.5)
Cost of sales 5A (14.7) (20.7) (35.4) 0.3 (35.1)
Net rental income 75.6 91.6 167.2 0.3 167.5
Gross administration costs 5A (64.3) (0.4) (64.7) 13.2 (51.5)
Other income 4 14.9 - 14.9 - 14.9
Net administration expenses (49.4) (0.4) (49.8) 13.2 (36.6)
Profit from operating activities 26.2 91.2 117.4 13.5 130.9
Net revaluation losses on properties 12 (45.2) (73.9) (119.1) 119.1 -
Disposals
- Profit/(loss) on sale of properties 8A 1.3 (19.1) (17.8) 17.8 -
- Recycled exchange gains on disposal of overseas interests 20.1 - 20.1 (20.1) -
Change in fair value of other investments (1.1) - (1.1) 1.1 -
Loss on sale of joint ventures and associates (19.1) 19.1 - - -
Other net gains 1.2 - 1.2 (1.2) -
Share of results of joint ventures 13B 9.4 (9.4) - - -
Impairment of joint venture 8B (22.2) - (22.2) 22.2 -
Share of results of associates 14B 1.2 (1.2) - - -
Operating (loss)/profit (29.4) 6.7 (22.7) 153.6 130.9
Net finance costs 6 (36.1) (6.6) (42.7) (3.2) (45.9)
(Loss)/Profit before tax (65.5) 0.1 (65.4) 150.4 85.0
Tax charge 7A (0.7) (0.1) (0.8) - (0.8)
(Loss)/Profit from continuing operations (66.2) - (66.2) 150.4 84.2
Profit from discontinued operations(3) 9B 14.8 - 14.8 17.3 32.1
(Loss)/Profit for the year (51.4) - (51.4) 167.7 116.3
For footnotes see note 2A.
B. BALANCE SHEET
The following table sets out the Group's proportionally consolidated balance
sheet, showing the aggregation of the assets and liabilities of entities which
are wholly owned or in joint operations ('Reported Group') with the Group's
ownership share of those in joint ventures or associates which are under the
Group's management ('Share of Property interests').
2024 2023
Proportionally consolidated Note Reported Share of Total Reported Share of Total
Property interests
Property interests
Group
£m £m Group
£m £m
£m £m
Non-current assets
Investment properties 12 1,487.0 1,172.0 2,659.0 1,396.2 1,379.9 2,776.1
Interests in leasehold properties 34.8 13.3 48.1 32.7 15.4 48.1
Right-of-use assets 7.5 - 7.5 3.9 - 3.9
Plant and equipment 0.4 - 0.4 0.9 - 0.9
Investment in joint ventures 13C 1,088.2 (1,088.2) - 1,193.2 (1,193.2) -
Investment in associates 14C - - - 1,115.0 - 1,115.0
Other investments 9.2 - 9.2 8.8 - 8.8
Trade and other receivables 0.2 1.2 1.4 1.9 1.3 3.2
Restricted monetary assets 16 21.4 - 21.4 21.4 - 21.4
2,648.7 98.3 2,747.0 3,774.0 203.4 3,977.4
Current assets
Trade and other receivables 87.6 22.9 110.5 74.1 22.0 96.1
Derivative financial instruments 2.2 - 2.2 5.2 1.4 6.6
Restricted monetary assets 16 - - - 2.2 0.2 2.4
Cash and cash equivalents 737.9 76.3 814.2 472.3 97.3 569.6
827.7 99.2 926.9 553.8 120.9 674.7
Total assets 3,476.4 197.5 3,673.9 4,327.8 324.3 4,652.1
Current liabilities
Trade and other payables (109.3) (39.7) (149.0) (129.8) (46.0) (175.8)
Obligations under head leases (0.1) - (0.1) (0.1) - (0.1)
Loans 17A (337.8) - (337.8) (108.6) (260.0) (368.6)
Tax (2.8) - (2.8) (0.3) - (0.3)
Derivative financial instruments (0.1) - (0.1) (2.3) - (2.3)
(450.1) (39.7) (489.8) (241.1) (306.0) (547.1)
Non-current liabilities
Trade and other payables (28.7) (1.9) (30.6) (55.5) (2.4) (57.9)
Obligations under head leases (39.7) (13.7) (53.4) (37.3) (15.8) (53.1)
Loans 17A (1,136.4) (141.2) (1,277.6) (1,515.9) - (1,515.9)
Deferred tax (0.4) (0.1) (0.5) (0.4) (0.1) (0.5)
Derivative financial instruments - (0.9) (0.9) (15.0) - (15.0)
(1,205.2) (157.8) (1,363.0) (1,624.1) (18.3) (1,642.4)
Total liabilities (1,655.3) (197.5) (1,852.8) (1,865.2) (324.3) (2,189.5)
Net assets 1,821.1 - 1,821.1 2,462.6 - 2,462.6
EPRA NTA adjustments 10B 4.3 79.4
EPRA NTA 11C 1,825.4 2,542.0
EPRA NTA per share 11C £3.70 £5.08
3. Segmental analysis
The Group's reportable segments are determined by the internal performance
reported to the Chief Operating Decision Makers which has been determined to
be the Group Executive Committee. Such reporting is both by sector and
geographic location as these demonstrate different characteristics and risks,
are managed by separate teams and are the basis on which resources are
allocated.
As described in the Financial Review, the Group evaluates the performance of
its portfolio by aggregating its wholly owned properties and joint operations
in the 'Reported Group' with its ownership share of joint ventures and
associates which are under the Group's management ('Share of Property
interests') on a proportionally consolidated line-by-line basis. The Group
does not proportionally consolidate the Group's investment in Value Retail as,
prior to its disposal in September 2024, it was not under the Group's
management, and instead monitored 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
As explained in note 9, following the reclassification of the Group's
investment in Value Retail and subsequent disposal in September 2024, this
segment has been re-presented as a discontinued operation and has been
excluded from the "Investment properties by segment" table below.
Total assets are not monitored by segment and resource allocation is based on
the distribution of property assets between segments.
A. INCOME AND PROFIT BY SEGMENT
Gross rental income Adjusted net rental income
2024 2023 2024 2023
£m £m £m £m
Flagship destinations
UK 80.0 92.8 61.6 72.9
France 55.3 58.6 43.6 49.4
Ireland 37.7 40.0 32.8 36.3
173.0 191.4 138.0 158.6
Developments and other 16.0 17.0 8.0 8.9
Group portfolio - proportionally consolidated 189.0 208.4 146.0 167.5
Less Share of Property interests - continuing operations (107.2) (115.6) (85.1) (91.7)
Reported Group - continuing operations 81.8 92.8 60.9 75.8
B. INVESTMENT PROPERTIES BY SEGMENT
2024 2023
Note Property valuation Capital expenditure Net revaluation losses(1) Property valuation(2) Capital expenditure(2) Net revaluation
£m £m £m £m £m losses(1 2)
£m
Flagship destinations
UK 915.3 15.9 16.8 863.1 13.9 (21.8)
France 964.1 10.1 4.5 1,003.3 14.3 (15.2)
Ireland 522.0 2.3 (82.6) 629.7 5.4 (37.5)
2,401.4 28.3 (61.3) 2,496.1 33.6 (74.5)
Developments and other 257.6 11.7 (30.1) 280.0 13.3 (44.6)
Group portfolio - proportionally consolidated 2,659.0 40.0 (91.4) 2,776.1 46.9 (119.1)
Less Share of Property interests(3) 13C (1,172.0) (24.9) 70.8 (1,379.9) (27.3) 73.9
Reported Group 12 1,487.0 15.1 (20.6) 1,396.2 19.6 (45.2)
1 Continuing operations.
2 2023 figures have been re-presented to exclude the Group's share of
Value Retail following its disposal in September 2024 and its re-presentation
as a discontinued operation.
3 The property valuation of Share of Property interest comprises UK
Flagship destinations of £630.1m (2023: £741.8m) and Ireland flagship
destinations of £412.7m (2023: £485.2m) and Developments and other
properties of £129.2m (2023: £152.9m).
4. Revenue
Note 2024 2023
£m £m
Base rent 63.9 69.6
Turnover rent 3.0 4.7
Car park income(1) 9.3 10.9
Lease incentive recognition 2.8 3.2
Other rental income 2.8 4.4
Gross rental income 2 81.8 92.8
Service charge income(1) 2 28.6 26.6
Other income
- Property fee income(1) 6.3 8.4
- Joint venture and associate management fees(1) 4.4 6.5
10.7 14.9
Total - continuing operations 121.1 134.3
1 Revenue for these categories amount to £48.6m (2023: £52.4m) and are
recognised under IFRS 15 'Revenue from Contracts with Customers'. All other
revenue is recognised in accordance with IFRS 16 'Leases'.
5. Costs
Profit from operating activities is stated after charging:
Cost of sales 2024 2023
£m £m
Ground rents payable 1.1 1.1
Inclusive lease costs recovered through rent 2.4 2.8
Other property outgoings(1) 13.4 10.8
16.9 14.7
Gross administration costs Note 2024 2023
£m £m
Employee costs 5B 27.8 35.2
Depreciation 1.4 3.0
Other administration costs(2) 14.3 12.9
Business transformation costs 10A 4.9 13.2
48.4 64.3
1 Includes charges and credits in respect of expected credit losses as
set out in note 15.
2 Comprises predominantly professional fees (mainly audit, valuation and
legal), corporate office costs and insurances, and IT related costs.
6. Net finance costs
2024 2023
£m £m
Discount on redemption of bonds - 4.3
Interest receivable on derivatives 11.3 12.8
Bank and other interest receivable 28.7 18.1
Finance income 40.0 35.2
Interest on bank loans and overdrafts (4.1) (4.5)
Interest on bonds and related charges (59.6) (59.2)
Interest on senior notes and related charges (2.6) (5.4)
Interest on obligations under head leases and other lease obligations (2.2) (2.2)
Other interest payable (0.2) (0.7)
Gross interest costs (68.7) (72.0)
Premium on redemption of bonds (25.5) -
Fair value (losses)/gains on derivatives (1.2) 0.7
Finance costs (95.4) (71.3)
Net finance costs - continuing operations (55.4) (36.1)
7. Tax charge
2024 2023
£m £m
UK current tax 2.4 -
Foreign current tax 0.1 0.7
Tax charge - continuing operations 2.5 0.7
The Group's tax charge on its underlying property rental business remains low
because it has tax exempt status in its principal operating countries.
The Group has been a REIT in the UK since 2007 and a SIIC in France since
2004. These tax regimes exempt the Group's property income and gains from
corporate taxes, provided a number of conditions in relation to the Group's
activities are met. These conditions include, but are not limited to,
distributing at least 90% of the Group's UK tax exempt profits as property
income distributions (PID) with equivalent tests of 95% on French tax exempt
property profits and 70% of tax exempt property gains.
Based on preliminary calculations, the Group has met the REIT and SIIC
conditions for 2024. The residual profit in the UK and France, which is not
exempt under the REIT and SIIC rules respectively, is 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 for the foreseeable future.
The Group operates in a number of jurisdictions and is subject to periodic
reviews and challenges by local tax authorities on a range of tax matters
during its normal course of business. Tax impacts can be uncertain until a
conclusion is reached with the relevant tax authority or through a legal
process. The Group uses in-house expertise when assessing uncertain tax
positions and seeks the advice of external professional advisors where
appropriate. The Group believes that its tax liability accruals are adequate
for all open tax years based on its assessment of many factors, including tax
laws and prior experience.
8. Property disposals and impairment on derecognition of joint ventures
A. DISPOSALS
Year ended 31 December 2024
On 15 March 2024, the Group raised cash proceeds of £111m from the disposal
of its 100% interest in Union Square, Aberdeen which was 8% below its 31
December 2023 book value. Also, in March 2024, the Group completed the sale of
the ancillary wholly owned property at O'Parinor for £6m, this sale was in
line with the 31 December 2023 book value.
These disposals, in addition to some small changes in selling costs associated
with properties sold in previous years, raised £117.4m in net proceeds and
resulted in a total net loss on disposal of £9.2m.
Year ended 31 December 2023
On 31 March 2023, the Group raised cash proceeds of €164m (£144m) from the
disposal of its 25% associate stake in Italie Deux in Paris and the wholly
owned Italik extension. 75% of the Italik extension had been classified as a
trading property up to the point of disposal.
On 21 April 2023, the Group completed the sale of its 50% joint venture
investment in Centrale and Whitgift in Croydon for cash proceeds of £70m.
Also during the year the Group raised further cash proceeds of £2m from the
sale of ancillary non-core land.
In total these disposals resulted in an overall loss on sale of £17.8m. This
reflects a profit on disposal of £1.3m in the Reported Group, offset by a
loss of £19.1m associated with the sale of joint ventures (Share of Property
Interests) as reported in note 2.
B. IMPAIRMENT ON DERECOGNITION OF JOINT VENTURES
Year ended 31 December 2023
At 31 December 2022, the Group's Highcross and O'Parinor joint ventures, in
which the Group had 50% and 25% interests respectively had £125m of debt
secured against the property interests which were non-recourse to the Group.
In both cases the loans were in breach of certain conditions and the Group had
been working constructively with the respective lenders on options to realise
"best value" for all stakeholders.
On 9 February 2023, a receiver was appointed to administer Highcross for the
benefit of the creditors and, as a result of no longer having joint control
the Group derecognised its share of assets and liabilities, including the
property value and £80m of debt. There was no loss on derecognition as the
Group's joint venture investment in Highcross had been fully impaired at 31
December 2021, from which date the Group had ceased recognising the results of
this joint venture in the consolidated income statement.
On 30 June 2023, the lenders for O'Parinor took control of the joint venture.
At that point the Group fully impaired its joint venture investment by £22.2m
and derecognised its share of assets and liabilities, including the property
value of £61m and £45m of secured borrowings.
9. Discontinued operations and assets and liabilities classified as held for
sale
A. VALUE RETAIL DISPOSAL
On 22 July 2024, the Group announced it had entered into a binding sale
agreement for the disposal of its entire interests in Value Retail for cash
proceeds of €705m (£595m). The disposal completed on 18 September 2024.
The Group had historically accounted for its Value Retail interests as an
associated undertaking. However, at the time of preparing the 2024 condensed
interim financial statements, the Directors concluded that at 30 June 2024,
given the significant progress made towards agreeing and signing a sale
agreement, that a sale was "highly probable" and hence the Group's interests
were judged to have met the criteria outlined in IFRS 5 to be reclassified to
being "held for sale" within current assets.
On reclassification to an asset "held for sale" at 30 June 2024, in accordance
with IFRS 5, the Group's interests were re-measured to the lower of the
carrying amount and estimated fair value less sale costs at completion. The
fair value was based on the contracted sale proceeds less estimated
transaction costs, including tax, of £15m, and the remeasurement resulted in
the recognition of a £483.0m impairment loss in the condensed interim
financial statements. The fair value represents a Level 2 measurement basis as
defined in IFRS 13 (see note 18).
Following reclassification to an asset "held for sale", the Group ceased to
equity account for the investment and reassessed the impairment loss at the
date the disposal completed on 18 September resulting in a £11.1m reduction
of the impairment. The movement in impairment post reclassification was
principally due to foreign exchange translation differences between the
exchange rate prevailing on 30 June 2024 and 18 September 2024 of £3m;
distributions of £8m in relation to the Group's period of ownership; and the
removal of an allowance of £4.5m for potential tax associated with the sale
which had been included in the estimated transaction costs when assessing the
impairment at 30 June 2024.
In addition, the sale of Value Retail represents a separate major line of the
business and hence has been treated as a discontinued operation and the
results for the current and prior financial periods have been separately
disclosed from the continuing segments of the business.
B. (loss)/profit FROM DISCONTINUED OPERATIONS (VALUE RETAIL)
Year ended Year ended
31 December 2024
31 December 2023
£m
£m
100% Group share 100% Group share
Gross rental income 235.8 80.8 482.7 162.4
Net rental income 163.4 58.2 330.6 114.5
Administration expenses (85.4) (28.1) (156.9) (51.4)
Profit from operating activities 78.0 30.1 173.7 63.1
Revaluation (losses)/gains on properties (61.2) (24.9) 15.8 (7.7)
Impairment recognised on reclassification to held for sale - (483.0) - -
Reduction in impairment after reclassification to held for sale - 11.1 - -
- (471.9) - -
Operating profit/(loss) 16.8 (466.7) 189.5 55.4
Interest costs (52.9) (19.4) (97.0) (35.2)
Fair value losses on derivatives (8.3) (2.4) (47.5) (11.1)
Fair value gains on participative loans - other movements - 2.4 - 6.5
Fair value gains on participative loans - revaluation movement - 2.2 - 9.1
Net finance costs (61.2) (17.2) (144.5) (30.7)
(Loss)/Profit before tax (44.4) (483.9) 45.0 24.7
Current tax charge (7.6) (1.7) (12.9) (2.5)
Deferred tax credit/(charge) 15.2 4.1 (28.9) (7.4)
(Loss)/Profit for the year (36.8) (481.5) 3.2 14.8
Adjustments for adjusted earnings (note 10A) 500.7 17.3
Adjusted earnings(1) 19.2 32.1
1 Adjusted earnings include £7.5m relating to the period between
reclassification to held for sale and disposal. See note 10A for further
details.
Figures above reflect the Group's share of Value Retail's results, except the
impairment associated with the reclassification to held for sale which relates
to the Reported Group. The figures for 2024 reflect the first half of 2024
during which the Group's investment in Value Retail was classified as an
associate but on 30 June 2024 was reclassified as an asset held for sale and
equity accounting ceased.
C. SUMMARY OF ASSETS AND LIABILITIES ASSOCIATED WITH ASSETS HELD FOR SALE AT
30 JUNE 2024
Reported Investments Total
Group(1) in associates(2) £m
£m £m
Non-current assets
Investment properties - 1,753.9 1,753.9
Other non-current assets 1.7 96.2 97.9
1.7 1,850.1 1,851.8
Current assets
Cash and cash equivalents - 61.7 61.7
Other current assets - 33.7 33.7
- 95.4 95.4
Total assets 1.7 1,945.5 1,947.2
Current liabilities
Loans - (192.9) (192.9)
Other payables - (54.7) (54.7)
- (247.6) (247.6)
Non-current liabilities
Loans - (557.2) (557.2)
Participative loan - (97.6) (97.6)
Other payables, including deferred tax (22.7) (166.5) (189.2)
(22.7) (821.3) (844.0)
Total liabilities (22.7) (1,068.9) (1,091.6)
Net assets (21.0) 876.6 855.6
Reverse participative loans - 210.4 210.4
Net asset value pre-impairment (21.0) 1,087.0 1,066.0
Impairment recognised on reclassification to held for sale (483.0)
Net assets held for sale 583.0
1 The Reported Group included a €2.0m (£1.7m) loan to an intermediate
holding company of Value Retail and £22.7m of distributions received in
advance from Value Retail, both items were included in the sale.
2 At Group share.
The impairment loss of £483.0m was calculated based on cash proceeds in the
sale agreement, less expected transaction costs, including tax, of £15m,
compared to the value of the net assets shown above, including the investment
properties which were remeasured to fair value at the date of
reclassification.
In addition, the cumulative other comprehensive income in relation to foreign
exchange and hedge reserve movements relating to the Group's investment in
Value Retail of £49.6m have been recycled to the income statement on
completion of the disposal.
D. CASH FLOWS
Year ended Year ended
31 December 2024
31 December 2023
£m
£m
Distributions and capital returns received from associates 19.4 73.6
Cash inflows from investing activities 19.4 73.6
There were no other cash flows from operating or financing activities in the
current or prior financial years.
10. Performance measures - (loss)/earnings and net assets
As explained above in the Financial Review, the Group uses a number of
alternative performance measures ('APMs'), being financial measures not
specified under IFRS, to monitor the performance of the business. In addition
to the IFRS figures, we present EPRA, Headline and Adjusted earnings and three
EPRA net asset measures. The reconciliation of each of these measures to IFRS
is presented below:
A. ALTERNATIVE EARNINGS MEASURES
2024 2023
£m £m
Loss for the year - IFRS (526.3) (51.4)
Adjustments:
Net revaluation losses on property portfolio (excluding Value Retail) 91.4 119.1
Disposals:
- Loss/(Profit) on sale of properties(1) 9.2 (1.3)
- Loss on sale of joint ventures and associates(1) - 19.1
- Recycled exchange gains on disposal of overseas property interests(2) (9.9) (20.1)
Joint venture related:
- Impairment of joint venture(3) - 22.2
Value Retail related (discontinued operations):
- Revaluation losses 24.9 7.7
- Deferred tax (4.1) 7.4
- Change in fair value of financial asset 0.3 0.2
- Net impairment charge(4) 471.9 -
Sub-total: Adjustments for Headline earnings 583.7 154.3
Value Retail related (discontinued operations):
- Change in fair value of derivatives(5) 2.4 11.1
- Change in fair value of participative loans(5) (2.2) (9.1)
Included in net finance costs:
- Premium/(Discount) on redemption of bonds(6) 25.5 (4.3)
- Change in fair value of derivatives(6) 3.4 1.1
Change in fair value of other investments(7) (0.4) 1.1
Sub-total: Adjustments for EPRA earnings 612.4 154.2
Included in profit from operating activities:
- Costs associated with pension scheme wind-up(8) 0.5 -
- Business transformation costs(9) 4.9 13.2
- Change in provision for amounts not yet recognised in the income - 0.3
statement(10)
- Income from assets held for sale (discontinued operations)(11) 7.5 -
Total: Adjustments for Adjusted earnings 625.3 167.7
Headline earnings 57.4 102.9
EPRA earnings(12) 86.1 102.8
Adjusted earnings 99.0 116.3
1 See note 8 for further details.
2 Exchange gains previously recognised in equity until disposal, in
relation to the sale of Value Retail in 2024 and Italie Deux and O'Parinor in
2023.
3 In 2023 relates to the impairment resulting from the derecognition of
the O'Parinor joint venture, see note 8 for details.
4 Impairment charge on reclassification of Group's interests in Value
Retail. Includes £483m charge recognised upon reclassification at 30 June
2024, less £11.1m reduction post reclassification. See note 9 for details.
5 The change in fair value of derivatives and participative loans are
excluded from EPRA and Adjusted earnings as the gains and losses are
unrealised and reflect mark-to-market movements in the year which will unwind
assuming the instruments are held to maturity.
6 Financing items comprise:
2024 2023
Reported Group Share of Property interests Total Reported Group Share of Property interests Total
£m £m £m £m £m £m
Premium/(Discount) on redemption of bonds 25.5 - 25.5 (4.3) - (4.3)
Change in fair value of derivatives(6) 1.2 2.2 3.4 (0.7) 1.8 1.1
26.7 2.2 28.9 (5.0) 1.8 (3.2)
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.
7 Relates to the fair value movement based on the fair value of the
underlying net assets of the Group's 7.3% investment in VIA Outlets
Zweibrucken B.V.
8 In the first half of 2024 the Group wound up its principal defined
benefit scheme and incurred fees of £0.5m on this one-off activity which
management have determined do not represent the underlying activities of the
Group.
9 Business transformation costs comprise:
2024 2023
£m £m
Employee severance (0.3) 6.3
IT transformation costs 4.6 4.5
Other costs (principally premises related costs) 0.6 2.4
4.9 13.2
Such costs relate to the strategic and operational review undertaken to
determine the Group's strategy which was announced during 2021. The related
costs are incremental and do not form part of underlying trading. These costs
have been incurred since the announcement of the strategy and the final
transformation activities will take place in 2025.
10 Reflects a charge in 2023 (2024: £nil) 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
consolidated 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 the following
accounting period, the adjustment eradicates this distortion. The charge of
£0.3m is split £0.2m for the Reported Group and £0.1m for Share of Property
interests.
11 Reflects the Group's share of adjusted earnings from its investment in
Value Retail over the period from reclassification to an asset held for sale
on 30 June 2024 to the date of disposal on 18 September 2024. The adjustment
has been calculated on a consistent basis as when the investment in Value
Retail had been classified as an associate. See note 9 for further details.
12 As explained in note 1, in September 2024, EPRA issued updated EPRA
earnings guidelines within its Best Practice Recommendations framework. These
included the addition of two new adjustment categories relating to funding
structures and non-operating and exceptional items. In relation to EPRA
earnings, the Group will adopt these new guidelines for its next reporting
period, beginning 1 January 2025.
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.
2024
Reported Group Share of Property interests Value Retail Total
£m £m £m £m
Reported balance sheet net assets (equity shareholders' funds) 1,821.1 - - 1,821.1
Change to reflect fair value of borrowings(1) 22.8 (3.4) - 19.4
EPRA NDV 1,840.5
Deduct change to reflect fair value of borrowings(1) (22.8) 3.4 - (19.4)
Deferred tax - 50% share(2) 0.2 0.1 - 0.3
Fair value of currency swaps as a result of interest rates(3) 3.0 - - 3.0
Fair value of interest rate swaps 0.1 0.9 - 1.0
EPRA NTA 1,825.4
Deferred tax - remaining 50% share(2) 0.2 - - 0.2
Purchasers' costs(4) 165.6 - - 165.6
EPRA NRV 1,991.2
2023
Reported Group Share of Property interests Value Retail Total
£m £m £m £m
Reported balance sheet net assets (equity shareholders' funds) 2,462.6 - - 2,462.6
Change in fair value of borrowings(1) 36.7 (0.2) - 36.5
EPRA NDV 2,499.1
Deduct change in fair value of borrowings(1) (36.7) 0.2 - (36.5)
Deferred tax - 50% share(2) 0.2 0.1 100.7 101.0
Fair value of currency swaps as a result of interest rates(3) 1.0 - - 1.0
Fair value of interest rate swaps 0.7 (1.3) (22.0) (22.6)
EPRA NTA 2,542.0
Deferred tax - remaining 50% share(2) 0.2 - 100.7 100.9
Purchasers' costs(4) 302.9 - - 302.9
EPRA NRV 2,945.8
1 Applicable for EPRA NDV calculation only and hence the adjustment is
reversed for EPRA NTA and EPRA NRV, see note 18.
2 As per the EPRA guidance we have chosen to exclude 50% of deferred tax
for EPRA NTA purposes.
3 Excludes impact of foreign exchange.
4 Represents property transfer taxes and fees payable should the Group's
entire property portfolio be acquired at year end market rates. 2024 excludes
Value Retail, per footnote 1 above, and 2023 includes Value Retail.
11. (Loss)/earnings per share and net asset value per share
The calculations of the (loss)/earnings per share (EPS) measures set out below
are based on (loss)/profit for the year calculated on IFRS, Headline, EPRA and
Adjusted bases as shown in note 10A and the weighted average number of shares
in issue during the year. Headline, EPRA and Adjusted earnings per share and
EPRA Net assets per share measures are all Alternative Performance Measures
('APMs'). See above in the Financial Review for more details on the Group's
approach to APMs.
Headline EPS 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 EPS.
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, or under IFRS
if the Group records a loss for the year.
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
at the year end.
A. NUMBER OF ORDINARY SHARES FOR PER SHARE CALCULATIONS
31 December 2024 31 December 2023(1)
million million
Weighted average number of shares
For purposes of basic and diluted IFRS EPS(2) 496.7 497.1
Effect of potentially dilutive shares (share options) 1.7 1.1
For purposes of diluted Headline, EPRA and Adjusted EPS 498.4 498.2
As at As at
31 December
31 December
2024
2023
Shares in issue (for purposes of net asset per share calculations) 493.2 500.2
1 The number of shares at 31 December 2023 has been restated to reflect
the 1 for 10 share consolidation undertaken during 2024. See note 19 for
further details.
2 As the Group reported an IFRS loss for the year in both 2024 and 2023,
dilutive shares are excluded in calculating diluted IFRS EPS.
B. (LOSS)/EARNINGS PER SHARE
(Loss)/Earnings (Loss)/Earnings per share
Basic Diluted
Note Year ended Year ended Year ended Year ended Year ended Year ended
31 December 2024
31 December 2023
31 December 2024
31 December 2023(1)
31 December 2024
31 December 2023(1)
£m £m pence pence pence pence
Continuing operations (44.8) (66.2) (9.0) (13.3) (9.0) (13.3)
Discontinued operations (481.5) 14.8 (97.0) 3.0 (97.0) 3.0
IFRS (526.3) (51.4) (106.0) (10.3) (106.0) (10.3)
Headline 10A 57.4 102.9 11.6 20.7 11.5 20.7
EPRA 10A 86.1 102.8 17.3 20.7 17.3 20.6
Adjusted 10A 99.0 116.3 19.9 23.4 19.9 23.3
1 Restated to reflect the 1 for 10 share consolidation
undertaken during 2024. See note 19 for further details.
C. Net Asset Value per share
Net asset value Net asset value per share
Note 31 December 2024 31 December 2023 31 December 2024 31 December 2023(1)
£m £m £ £
EPRA NDV 10B 1,840.5 2,499.1 3.73 5.00
EPRA NTA 10B 1,825.4 2,542.0 3.70 5.08
EPRA NRV 10B 1,991.2 2,945.8 4.04 5.89
1 Restated to reflect the 1 for 10 share consolidation undertaken during
2024. See note 19 for further details.
12. Properties
2024 2023
Investment Investment Trading Total
properties
£m properties properties £m
£m £m
At 1 January 1,396.2 1,461.0 36.2 1,497.2
Net revaluation losses (20.6) (45.2) - (45.2)
Transfer from investment in joint ventures(1) 140.9 - - -
Acquisitions(1) 140.1 - - -
Capital expenditure 15.1 19.6 - 19.6
Disposals (see note 8) (127.8) (11.9) (36.2) (48.1)
Exchange adjustment (56.9) (27.3) - (27.3)
At 31 December 1,487.0 1,396.2 - 1,396.2
2024 2023
Freehold Long Total Freehold Long Total
£m leasehold £m £m leasehold £m
£m £m
Valuation analysis by tenure 682.8 804.2 1,487.0 734.0 662.2 1,396.2
1 Relates to the Group's acquisition of the remaining 50% interest in
Westquay. See note 13 for further details.
Properties are stated at fair value, valued by professionally qualified
external valuers in accordance with RICS Valuation - Global Standards as
follows:
Valuer Properties
CBRE UK flagships, Developments and other properties
Jones Lang LaSalle UK flagships, France flagships, Developments and other properties
Cushman and Wakefield Brent Cross, Ireland flagships, Development and other properties
Due to the estimation and judgement required in the valuations which are
derived from data that is not publicly available, these valuations are
classified as Level 3 in the IFRS 13 fair value hierarchy. A reconciliation of
the Group portfolio valuation to Reported Group is shown in note 3B. A listing
of the Group's key properties is included below.
A. Joint operations
Investment properties include a 50% interest in the Ilac Centre, Dublin and a
50% interest in Pavilions, Swords totalling £120.7m (2023: £144.5m). These
properties are jointly controlled in co-ownership with Irish Life Assurance
plc.
13. Investment in joint ventures
The Group's investments in joint ventures form part of the Share of Property
interests to arrive at management's analysis of the Group on a proportionally
consolidated basis as explained in note 3 and set out in note 2.
The Group and its partners invest principally by way of equity investment.
However, where applicable, non-equity (loan) balances have been included
within non-current other payables as a liability of the joint venture. Joint
ventures comprise prime urban real estate consisting of Flagship destinations
and Developments and other properties.
A. Investments at 31 December 2024
Joint venture Partner Principal property Share
United Kingdom
Bishopsgate Goodsyard Regeneration Limited Ballymore Properties The Goodsyard 50%
Brent Cross Partnership Aberdeen Standard Investments Brent Cross 41%
Bristol Alliance Limited Partnership AXA Real Estate Cabot Circus 50%
Grand Central Limited Partnership CPP Investments Grand Central 50%
The Bull Ring Limited Partnership CPP Investments Bullring 50%
The Oracle Limited Partnership ADIA The Oracle 50%
Ireland
Dundrum Retail Limited Partnership/Dundrum Car Park Limited Partnership PIMCO Dundrum 50%
Dundrum Retail Limited Partnership/Dundrum Car Park Limited Partnership PIMCO Dundrum 50%
Dundrum Village Limited Partnership PIMCO Dundrum Phase II 50%
The results of interests in joint ventures are included up to the point of
acquisition, when control is achieved, or the investment is sold, except for
where disposals are reclassified to an assets held for sale whereby they are
excluded from the date of reclassification.
Up until 7 November 2024, the Group owned a 50% interest in The West Quay
Limited Partnership, which owns Westquay, Southampton, and equity accounted
for its interest. On 7 November 2024, the Group acquired its partner's, GIC,
50% stake in the partnership. and from that date, the Group's interest was no
longer equity accounted and was consolidated as a subsidiary in the Reported
Group. As the property was the predominant asset in The West Quay Limited
Partnership, and relied on the Group for asset management services, as per
IFRS 3 the acquisition is deemed to be an asset acquisition rather than a
business combination.
During 2023, and as explained in note 8, the Group disposed of its 50%
interest in Croydon and also derecognised its 50% investment in Highcross and
25% investment in O'Parinor.
Figures in the tables on the following pages include, where applicable,
adjustments to align to the Group's accounting policies and exclude balances
which are eliminated on consolidation. Given their relative size, The
Goodsyard, Grand Central (for 2024 only), Croydon (up to its disposal in April
2023), Highcross (up to date of derecognition in February 2023) and O'Parinor
(up to date of derecognition in June 2023) are aggregated and included in
'Other'.
B. RESULTS
2024
100% share
Brent Cabot Circus Bullring The Oracle Westquay Dundrum Other Total Group share
Cross
£m £m £m £m £m £m £m £m
£m
Gross rental income 29.9 28.2 48.9 22.5 25.5 56.3 8.7 220.0 107.2
Net rental income 26.4 20.6 40.8 16.7 18.4 48.3 4.0 175.2 85.1
Administration (expenses)/income (0.1) - - - - 0.9 (0.1) 0.7 0.3
Profit from operating activities 26.3 20.6 40.8 16.7 18.4 49.2 3.9 175.9 85.4
Revaluation (losses)/gains on properties (6.9) 0.2 28.3 4.8 (2.6) (140.8) (25.9) (142.9) (70.8)
Operating profit/(loss) 19.4 20.8 69.1 21.5 15.8 (91.6) (22.0) 33.0 14.6
Finance income 0.5 0.7 0.7 0.5 0.8 6.1 0.4 9.7 4.8
Finance costs (0.4) (0.8) - - (0.4) (19.7) (0.1) (21.4) (10.6)
Profit/(loss) before tax 19.5 20.7 69.8 22.0 16.2 (105.2) (21.7) 21.3 8.8
Tax charge - - - (0.1) - - - (0.1) -
Profit/(loss) for the year 19.5 20.7 69.8 21.9 16.2 (105.2) (21.7) 21.2 8.8
Share of distributions received by the Group 10.1 1.0 12.9 2.0 2.6 - - 28.6 28.6
C. ASSETS AND LIABILITIES
2024
100% share
Brent Cross Cabot Circus Bullring The Oracle Westquay Dundrum Other Total Group share
£m £m £m £m £m £m £m £m £m
Non-current assets
Investment properties 384.5 245.2 610.0 200.5 - 846.7 129.5 2,416.4 1,172.0
Other non-current assets 12.9 13.6 0.3 - - 1.9 2.6 31.3 14.5
397.4 258.8 610.3 200.5 - 848.6 132.1 2,447.7 1,186.5
Current assets
Cash and cash equivalents 18.7 26.0 30.0 15.9 - 48.2 17.3 156.1 76.3
Other current assets 6.2 10.6 19.4 5.9 - 4.9 5.2 52.2 22.9
24.9 36.6 49.4 21.8 - 53.1 22.5 208.3 99.2
Current liabilities
Other payables (15.1) (16.8) (26.6) (10.7) - (10.9) (7.2) (87.3) (39.7)
(15.1) (16.8) (26.6) (10.7) - (10.9) (7.2) (87.3) (39.7)
Non-current liabilities
Obligations under head leases (12.8) (14.1) - - - - (2.8) (29.7) (13.7)
Loans - secured - - - - - (282.5) - (282.5) (141.2)
Other payables
- due to Group companies - - - - - - (54.1) (54.1) -
- other parties and other (1.0) (0.5) (0.8) (0.3) - (2.7) (54.7) (60.0) (2.9)
(13.8) (14.6) (0.8) (0.3) - (285.2) (111.6) (426.3) (157.8)
Net assets 393.4 264.0 632.3 211.3 - 605.6 35.8 2,142.4 1,088.2
2023
100% share
Brent Cross Cabot Circus Bullring Grand Central The Oracle Westquay Dundrum Other Total Group
£m £m £m £m £m £m £m £m £m share
£m
Gross rental income 28.6 29.4 48.5 8.0 23.5 28.9 59.2 25.5 243.6 114.4
Net rental income 24.1 22.8 39.7 4.4 14.7 23.2 52.6 18.1 195.2 90.4
Administration expenses (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.3) (0.1) (0.9) (0.4)
Profit from operating activities 24.0 22.7 39.6 4.3 14.6 23.1 52.3 18.0 194.3 90.0
Revaluation (losses)/gains on properties (9.6) (6.1) 21.3 (13.8) (22.3) (2.8) (74.4) (55.6) (149.5) (73.9)
Operating profit/(loss) 14.4 16.6 60.9 (9.5) (7.7) 20.3 (22.1) (37.6) 44.8 16.1
Finance income 0.4 0.4 0.5 - 0.2 0.7 4.6 2.9 9.7 4.1
Finance costs (0.4) (0.7) - (0.1) - (0.4) (17.1) (7.5) (26.1) (10.7)
Profit/(loss) before tax 14.4 16.3 61.4 (9.6) (7.5) 20.6 (34.6) (42.2) 28.4 9.5
Tax charge - - - - (0.1) - - - (0.1) (0.1)
Profit/(loss) for the year(1) 14.4 16.3 61.4 (9.6) (7.6) 20.6 (34.6) (42.2) 28.3 9.4
Share of distributions received by the Group 9.8 7.5 10.0 14.9 2.0 - 3.5 14.9 47.7 47.7
C. Assets and liabilities
2023
100% share
Brent Cabot Circus Bullring Grand Central The Oracle Westquay Dundrum Other Total Group share
Cross
£m £m £m £m £m £m £m £m £m
£m
Non-current assets
Investment properties 388.0 234.9 575.0 67.0 184.1 283.5 1,011.0 156.0 2,832.5 1,379.9
Other non-current assets 12.8 13.6 0.3 2.6 - 4.2 2.2 2.6 35.7 16.7
400.8 248.5 575.3 69.6 184.1 287.7 1,013.2 158.6 2,868.2 1,396.6
Current assets
Cash and cash equivalents 16.9 18.8 28.8 9.0 14.8 31.3 77.8 9.6 198.0 97.3
Other current assets 5.4 6.0 7.5 9.9 4.3 7.9 8.0 10.0 49.1 23.6
22.3 24.8 36.3 18.9 19.1 39.2 85.8 19.6 247.1 120.9
Current liabilities
Loans - secured - - - - - - (520.0) - (520.0) (260.0)
Other payables (14.9) (13.1) (22.0) (10.8) (8.9) (17.0) (9.1) (11.3) (96.3) (46.0)
(14.9) (13.1) (22.0) (10.8) (8.9) (17.0) (529.1) (11.3) (616.3) (306.0)
Non-current liabilities
Obligations under head leases (12.8) (14.1) - (2.8) - (4.2) - (2.8) (33.9) (15.8)
Other payables
- due to Group companies(2) - - - - - (348.2) - (49.3) (397.5) -
- other parties and other (0.9) (0.2) (0.6) (0.4) (0.4) (348.9) (1.0) (49.9) (401.9) (2.5)
(13.7) (14.3) (0.6) (3.2) (0.4) (701.3) (1.0) (102.0) (833.3) (18.3)
Net assets/(liabilities)(2) 394.5 245.9 589.0 74.5 193.9 (391.4) 568.9 64.9 1,665.7 1,193.2
1 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 was excluded from all income
statement metrics including revaluation losses. The effect of this is that the
Group's share of results was £nil and the cumulative losses restricted shown
on the balance sheet therefore represents the Group's share of losses which
exceed the Group's investment of £nil.
2 At 31 December 2023, the Group's long term loan due from Westquay of
£348.2m was impaired by its share of the net liabilities of Westquay of
£195.7m. The Group's total loans due from joint ventures at this date are
shown net of this impairment.
D. Reconciliation of movements in investment in joint ventures
2024 2023
£m £m
At 1 January 1,193.2 1,342.4
Share of results of joint ventures 8.8 9.4
Additional capital investment(1) 85.1 -
Advances 6.9 8.3
Cash distributions (including interest)(2) (37.5) (55.0)
Other receivables (12.5) (6.8)
Derecognition of joint venture(3) (142.4) (98.9)
Exchange and other movements (13.4) (6.2)
At 31 December 1,088.2 1,193.2
1 Reflects capital investment to Dundrum joint venture associated with
refinancing of secured loan signed in 2024.
2 Comprises distributions of £28.6m (2023: £47.7m) and interest
previously accrued of £8.9m (2023: £7.3m).
3 2024 reflects Westquay acquisition. 2023 includes disposal of Croydon
joint venture. See note 13A for further details.
14. Investment in associates
A. Percentage share AND OTHER INFORMATION
Principal property 2024 2023
Share Share
Value Retail Various Villages across Europe - 40%
As explained in note 9, the Group's investment in Value Retail was
reclassified as an "asset held for sale" with effect from 30 June 2024 and
the Group's share of results from Value Retail in both the current and prior
years were re-presented to discontinued operations. Subsequently, on 22 July
2024 the Group announced that it had entered into a binding agreement for the
sale of its entire interests in Value Retail, which completed on 18 September
2024.
The Group's other associate, a 25% stake in Italie Deux, Paris was sold in
March 2023. The results of this investment, up until its disposal, formed part
of the Share of Property interests to arrive at management's analysis of the
Group on a proportionally consolidated basis as explained in note 3 and set
out in note 2.
B. Results
2024 2023
Italie Deux
100% Group 100% Group
share
share
share share
£m £m
£m £m
Gross and net rental income - - 4.8 1.2
Profit for the year - - 4.6 1.2
Adjusted earnings - 1.2
C. Assets and liabilities
2024 2023
Value Retail
100% Group 100% Group
share
share
share share
£m £m
£m £m
Non-current assets
Investment properties - - 5,142.1 1,885.7
Other non-current assets - - 321.3 93.0
- - 5,463.4 1,978.7
Current assets
Cash and cash equivalents - - 193.8 64.4
Other current assets - - 116.0 43.2
- - 309.8 107.6
Total assets - - 5,773.2 2,086.3
Current liabilities
Loans - - (159.3) (87.8)
Other payables - - (143.2) (103.2)
- - (302.5) (191.0)
Non-current liabilities
Loans - - (1,973.1) (706.1)
Participative loans - - (398.5) (98.5)
Other payables, including deferred tax - - (665.7) (188.1)
- - (3,037.3) (992.7)
Total liabilities - - (3,339.8) (1,183.7)
Net assets - - 2,433.4 902.6
Reverse participative loans - - 398.5 212.4
- - 2,831.9 1,115.0
D. Reconciliation of movements in investment in associates
2024 2023
Value Value Italie Total
Retail
Retail Deux £m
£m
£m £m
At 1 January 1,115.0 1,189.4 107.7 1,297.1
Share of results of associates(1) (9.6) 14.8 1.2 16.0
Distributions (14.2) (66.3) - (66.3)
Share of other comprehensive loss of associate(2) (4.4) (8.8) - (8.8)
Disposals - - (108.6) (108.6)
Exchange and other movements 0.2 (14.1) (0.3) (14.4)
Transfer to assets held for sale (see note 9C) (1,087.0) - - -
At 31 December(3) - 1,115.0 - 1,115.0
1 Share of results for Value Retail classified as discontinued
operations, see note 9 for details.
2 Relates to the change in fair value of derivative financial
instruments in an effective hedge relationship within Value Retail.
3 For 2023 includes accumulated impairment to the investment in Value
Retail of £94.3m which was recognised in the year ended 31 December 2020 and
was equivalent to the notional goodwill on the investment.
15. Trade and other receivables
A. Trade (tenant) receivables - Ageing analysis and provisioning
2024 2023
Gross trade receivables Provision Net trade receivables Gross trade receivables Provision Net trade receivables
£m £m £m £m £m £m
Not yet due 16.4 (0.8) 15.6 11.9 (1.2) 10.7
0-3 months overdue 7.1 (0.6) 6.5 5.5 (1.0) 4.5
3-12 months overdue 6.5 (2.8) 3.7 8.1 (2.6) 5.5
More than 12 months overdue 16.7 (9.1) 7.6 16.1 (9.2) 6.9
46.7 (13.3) 33.4 41.6 (14.0) 27.6
B. Trade (tenant) receivables - Segmental analysis and provisioning
2024 2023
Proportionally consolidated Gross trade receivables Provision Net trade receivables Gross trade receivables Provision Net trade receivables
£m £m £m £m £m £m
UK 32.1 (5.6) 26.5 25.7 (6.1) 19.6
France 29.9 (9.0) 20.9 29.5 (10.7) 18.8
Ireland 5.0 (1.0) 4.0 4.6 (1.8) 2.8
Group portfolio 67.0 (15.6) 51.4 59.8 (18.6) 41.2
Less Share of Property interests (20.3) 2.3 (18.0) (18.2) 4.6 (13.6)
Reported Group 46.7 (13.3) 33.4 41.6 (14.0) 27.6
16. Restricted monetary assets
2024 2023
Current Non-current Current Non-current
£m £m £m £m
Cash held in respect of occupiers and co-owners(1) - - 2.2 -
Cash held in escrow(2) - 21.4 - 21.4
- 21.4 2.2 21.4
1 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.
2 Comprises funds placed in escrow in 2020 by Hammerson plc 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.
17. Loans
A. Loan profile
Maturity(1) 2024 2023
£m £m
Unsecured
£338.3m 3.5% sterling bonds due 2025 n/a - 337.3
Senior notes due 2026 2026 57.9 60.7
£43.2m (2023: £211.6m) 6% sterling bonds due 2026(2) 2026 43.1 211.1
€700.0m 1.75% euro bonds due 2027(3) 2027 574.1 600.8
Senior notes due 2028 2028 10.5 11.0
£56.8m (2023: £300.0m) 7.25% sterling bonds due 2028(2) 2028 55.7 292.2
Senior notes due 2031 2031 4.8 5.0
£400m 5.875% sterling bonds due 2036(2) 2036 392.1 -
Unamortised facility fees 2025-27 (1.8) (2.2)
Total falling due after more than one year 1,136.4 1,515.9
£338.3m 3.5% sterling bonds due 2025 2025 337.8 -
Senior notes due 2024 n/a - 108.6
Total 1,474.2 1,624.5
1 Maturity at 31 December 2024.
2 On 8 October 2024 the Group issued £400m 5.875% bonds due in 2036.
The bonds were issued at a discount of £5.3m and therefore have an effective
interest rate of 6.1%. The proceeds, along with additional cash, were used to
redeem £168.4m of the bonds due in 2026 and £243.2m of the bonds due in
2028, by way of a tender. The tendered bonds were redeemed at a premium, and
after associated costs, the Group recognised a premium on the redemption of
the bonds of £25.5m which is shown in finance costs in note 6. This loss has
been excluded from the Group's Adjusted earnings as shown in note 10A.
3 The coupon is linked to two sustainability performance targets, both
of which will be tested in December 2025 against a 2019 benchmark. If the
targets are not met, a total of 37.5 basis points per annum, or €2.625m
(£2.2m) per target, will be payable in addition to the final year's coupon.
The Group has made certain assumptions which support not increasing the
effective interest rate, as a result of the possibility of failing to meet the
targets. Planned future initiatives which will assist the Group in achieving
the targets include the introduction of energy efficient projects, the
generation of additional on or offsite energy and driving compliance with
relevant energy performance legislation. While the Group continues to expect
to meet both targets the additional coupon has been treated as a contingent
liability.
B. UNDRAWN committed facilities
The Group has the following revolving credit facilities (RCF), which are all
in sterling unless otherwise indicated, expiring as follows:
Expiry(1) 2024 2023
£m £m
£150m RCF signed June 2021 n/a - 50.0
JPY7.7bn RCF signed June 2021(2) 2026 39.4 43.2
£150m RCF signed June 2021(2) 2026 100.0 100.0
£463m RCF signed April 2022(2) 2026 - 463.0
£463m RCF signed April 2022(3) 2027 463.0 -
Total 602.4 656.2
1 Expiry at 31 December 2024.
2 In the 2023 financial statements the £150m RCF signed June 2021 and
the £463m RCF signed April 2022 were amalgamated. These separate RCFs have
been split out in these financial statements to provide additional disclosure
concerning their expiry date.
3 In April 2024, the Group exercised its option to extend the maturity
of the £463m 2022 RCFs by one year from 2026 to 2027.
C. Maturity analysis of undrawn committed facilities
Expiry 2024 2023
£m £m
Within one year - 50.0
Within one to two years 139.4 -
Within two to five years 463.0 606.2
602.4 656.2
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, market risk (comprising interest rate and foreign currency
risk), credit risk and capital risk.
The Group's treasury function, which operates under treasury policies approved
by the Board, maintains internal guidelines for interest cover, gearing,
unencumbered assets and other credit ratios and both the current and projected
financial position against these guidelines are 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 Underlying net asset values of the interests in the Village/centre
19. Share capital
2024 2023
Number £m Number £m
Called up, allotted and fully paid
Ordinary shares of 5p each 493,198,448 24.6 5,002,265,607 250.1
On 30 September 2024, the Company completed a 1 for 10 share consolidation
whereby each ordinary share was subdivided into 1 ordinary share and 9
deferred shares following which the deferred shares were cancelled. As a
result the nominal value of ordinary share capital reduced by £225.1m and
this amount was transferred to the capital redemption reserve. For the
purposes of the Group's per share metrics in note 11, given this event, the
Company's number of shares at 31 December 2023 has been restated from
5,002,265,607 to 500,226,561.
On 16 October 2024, the Company announced the commencement of a share buyback
programme of up to £140m. In 2024, 7.0m ordinary shares were bought back
under the programme, at an average purchase price of £2.97 per share, and
immediately cancelled. The nominal value of the shares cancelled of £0.4m was
transferred to the capital redemption reserve and the purchase price of the
shares including stamp duty and other costs totalling £20.9m was recognised
in retained earnings.
Share capital includes 1,300,825 shares (2023: 7,691,247 shares) held in
treasury and 1,438,095 shares (2023: 15,850,507 shares) held in an employee
share trust. The shares held in treasury and the employee share trust were
subject to the share consolidation as described above. On a post-consolidated
share basis during the year 531,701 (2023: nil) shares were purchased in
treasury, 728,801 (2023: 500) shares were purchased for the employee share
trust and 875,756 (2023: 961,170) shares were issued to employees.
20. Dividends
Cash 2024 2023
dividend per share(1) £m £m
2023 interim dividend 7.20p - 35.9
2023 final dividend 7.80p 39.0 -
2024 interim dividend 7.56p 37.6 -
76.6 35.9
Cash flow analysis:
Dividends paid(2) 76.6 29.9
Withholding tax - 2023 interim dividend(2) 6.0 -
82.6 29.9
Total dividends per share paid in the year 15.36p 7.20p
1 The dividend per share have been restated to reflect the 1 for 10
share consolidation as explained in note 19.
2 Dividends paid as a Property Income Distribution (PID) are subject to
withholding tax which is paid approximately two months after the dividend
itself is paid.
A final 2024 dividend of 8.07p per share payable in cash, was recommended by
the Board on 25 February 2025 and, subject to approval by shareholders at the
2025 AGM, is payable on 3 June 2025 on 3 June to shareholders on the register
at the close of business on 25 April 2025. The dividend will be paid entirely
as a non-PID, and treated as an ordinary company dividend.
21. Notes to the cash flow statement
A. Analysis of items included in operating cash flows
2024 2023
£m £m
Net movements in working capital and restricted monetary assets
Movements in working capital:
- (Increase)/decrease in receivables (20.3) 8.8
- Increase/(decrease) in payables 11.6 (19.8)
(8.7) (11.0)
Decrease in restricted monetary assets 2.1 6.3
Total - continuing operations (6.6) (4.7)
2024 2023
£m £m
Non-cash items
Increase in accrued rents receivable (2.5) (3.2)
Increase in loss allowance provisions(1) 2.9 1.0
Amortisation of lease incentives and other costs 0.2 0.6
Depreciation (note 5) 1.4 3.0
Other non-cash items including share-based payment charge 3.3 1.4
5.3 2.8
1 Comprises movement in provisions against trade (tenant) receivables and
unamortised tenant incentives.
B. Analysis of movements in net debt
2024 2023
Cash and cash equivalents Borrowings Net debt Cash and cash equivalents Borrowings Net debt
£m £m £m £m £m £m
At 1 January 472.3 (1,635.9) (1,163.6) 218.8 (1,677.0) (1,458.2)
Cash flow 267.7 104.9 372.6 254.6 (15.1) 239.5
Change in fair value of currency swaps - (2.1) (2.1) - (1.9) (1.9)
Exchange and other non-cash movements (2.1) 61.1 59.0 (1.1) 58.1 57.0
At 31 December 737.9 (1,472.0) (734.1) 472.3 (1,635.9) (1,163.6)
Borrowings at 31 December 2024 reflects loans of £1,474.2m (2023: £1,624.5m)
and fair value of currency swaps of £(2.2)m (2023: £11.4m).
22. Contingent liabilities and commitments
A. Contingent liabilities
2024 2023
£m £m
Reported Group:
- guarantees given 3.7 23.1
- claims arising in the normal course of business 15.7 15.6
Share of Property interests - claims arising in the normal course of business 5.8 12.4
Proportionally consolidated 25.2 51.1
In addition, the Group operates in a number of jurisdictions and is subject to
periodic challenges by local tax authorities on a range of tax matters during
the normal course of business. The tax impact can be uncertain until a
conclusion is reached with the relevant tax authority or through a legal
process. The Group addresses this by closely monitoring these potential
instances, seeking independent advice and maintaining transparency with the
authorities it deals with as and when any enquiries are made. As a result, the
Group has identified a potential tax exposure attributable to the ongoing
applicability of tax treatments adopted in respect of certain tax structures
within the Group, and is in correspondence with the relevant authorities. The
range of potential outcomes is a possible outflow of minimum £nil and maximum
£131m (2023: minimum £nil and maximum £122m). The Directors have not
provided for this amount because they do not believe an outflow is probable.
B. Capital commitments on investment properties
2024 2023
£m £m
Reported Group 1.9 0.4
Share of Property interests 43.8 45.5
45.7 45.9
Additional information-unaudited
Table Table
Summary EPRA performance measures 1 Financing analysis
Net debt 12
Portfolio analysis Movement in net debt 13
Rental income 2 Net debt : EBITDA 14
Gross rental income 3 Interest cover 15
Net rental income 4 Gearing 16
Other rental data 5 Loan to value 17
Vacancy 6 EPRA loan to value 18
Lease expiries and breaks 7 Unencumbered asset ratio 19
Top ten tenants 8
Valuation analysis 9 Other key metrics
Capital expenditure (including acquisitions) 10 Cost ratio 20
Net initial yield 11 Total accounting return 21
Hammerson is a member of the European Public Real Estate Association (EPRA)
and has representatives who actively participate in a number of EPRA
committees and initiatives. This includes working with peer group companies,
real estate investors and analysts and the large audit firms, to improve the
transparency, comparability and relevance of the published results of listed
real estate companies in Europe.
As with other real estate companies, we have adopted the EPRA Best Practice
Recommendations (BPR) and were again awarded a Gold Award for compliance with
the EPRA BPR for our 2023 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.
In September 2024, EPRA issued updated EPRA earnings guidelines within its
BPR. These included the addition of two new adjustment categories relating to
funding structures and non-operating and exceptional items. In relation to
EPRA earnings, the Group will adopt these new guidelines for its next
reporting period, beginning 1 January 2025.
Summary EPRA performance measures
Table 1
Performance measure Note/ 2024 2023
Table(1)
Earnings 10A £86.1m £102.8m
Earnings per share (EPS) 11B 17.3p 2.1p
Cost ratio (including vacancy costs) Table 20 39.8% 41.2%
2024 2023
Net Disposal Value (NDV) per share(2) 11C £3.73 £5.00
Net Tangible Assets value (NTA) per share(2) 11C £3.70 £5.08
Net Reinstatement Value (NRV) per share(2) 11C £4.04 £5.89
Net Initial Yield (NIY) Table 11 5.9% 5.9%
Topped-up Net Initial Yield Table 11 6.2% 6.3%
Vacancy rate Table 6 5.3% 5.8%
Loan to value Table 18 31.9% 48.1%
1 Note references are to notes in the financial statements and
Table references are to tables in the Additional Information section.
2 2023 per share figures restated to reflect the 1 for 10 share
consolidation undertaken during 2024. See note 19 of the financial statements
for further details.
Portfolio analysis
The information presented in this section is on a management reporting basis
i.e. proportionally consolidated.
Where applicable, the information presented within the 'Development and other'
segment only reflects available data in relation to the investment properties
within this segment. See the Key Properties section for the principal
properties in this segment.
Rental income
Table 2
Proportionally consolidated Reported Share of 2024 Reported Share of 2023
Group
Property
Group
Property
interests £m
interests £m
£m
£m
£m £m
Base rent 63.9 75.6 139.5 69.6 83.7 153.3
Turnover rent 3.0 7.1 10.1 4.7 8.9 13.6
Car park income 9.3 16.7 26.0 10.9 17.2 28.1
Commercialisation income 1.7 4.7 6.4 2.5 3.8 6.3
Surrender premiums 0.1 2.4 2.5 0.1 0.3 0.4
Lease incentive recognition 2.8 - 2.8 3.2 1.1 4.3
Other rental income 1.0 0.7 1.7 1.8 0.6 2.4
Gross rental income 81.8 107.2 189.0 92.8 115.6 208.4
Net service charge expense (4.0) (2.5) (6.5) (2.5) (3.3) (5.8)
Ground rents payable (1.1) (0.8) (1.9) (1.1) (0.7) (1.8)
Inclusive lease costs recovered through rent (2.4) (1.7) (4.1) (2.4) (4.0) (6.4)
Other property outgoings (13.4) (17.1) (30.5) (11.0) (15.9) (26.9)
Cost of sales (16.9) (19.6) (36.5) (14.5) (20.6) (35.1)
Adjusted net rental income 60.9 85.1 146.0 75.8 91.7 167.5
Gross rental income
Table 3
2024
Proportionally consolidated Properties Change in Disposals Acquisitions Developments Total
owned like-for-like £m £m and other £m
throughout GRI £m
2023/24 %
£m
UK 74.4 (0.1) 3.1 2.5 - 80.0
France 55.2 7.8 0.1 - - 55.3
Ireland 37.7 (3.4) - - - 37.7
Flagship destinations 167.3 1.6 3.2 2.5 - 173.0
Developments and other - - - - 16.0 16.0
Total 167.3 1.6 3.2 2.5 16.0 189.0
2023
Proportionally consolidated Properties Exchange Disposals Acquisitions Developments Total
owned £m £m £m and other £m
throughout £m
2023/24
£m
UK 74.5 - 18.3 - - 92.8
France 51.2 1.6 4.6 - 1.2 58.6
Ireland 39.0 1.0 - - - 40.0
Flagship destinations 164.7 2.6 22.9 - 1.2 191.4
Developments and other - 0.1 1.6 - 15.3 17.0
Total 164.7 2.7 24.5 - 16.5 208.4
Gross rental income at Cabot Circus and The Oracle, where significant
repositioning works are ongoing, totalled £22.5m (2023: £24.1m). Excluding
these two destinations increases the change in like-for-like GRI from 1.6% to
3.0%.
Net rental income
Table 4
2024
Proportionally consolidated Properties Change in Disposals Acquisitions Developments Adjusted Change in provision NRI
owned throughout 2023/24 like-for-like NRI £m £m and other NRI £m £m
£m % £m £m
UK 58.0 (0.5) 3.0 1.7 (1.1) 61.6 - 61.6
France 45.3 4.2 0.1 - (1.8) 43.6 - 43.6
Ireland 33.1 (6.3) - - (0.3) 32.8 - 32.8
Flagship destinations 136.4 (0.5) 3.1 1.7 (3.2) 138.0 - 138.0
Developments and other - - - - 8.0 8.0 - 8.0
Total 136.4 (0.5) 3.1 1.7 4.8 146.0 - 146.0
2023
Proportionally consolidated Properties Exchange Disposals Acquisitions Developments Adjusted Change in provision NRI
owned throughout 2023/24 £m £m £m and other NRI £m £m
£m £m £m
UK 58.2 - 15.2 - (0.6) 72.8 (0.3) 72.5
France 43.5 1.3 3.9 - 0.7 49.4 - 49.1
Ireland 35.4 1.0 - - - 36.4 - 36.4
Flagship destinations 137.1 2.3 19.1 - 0.1 158.6 (0.3) 158.3
Developments and other - 0.1 (0.1) - 8.9 8.9 - 9.0
Total 137.1 2.4 19.0 - 9.0 167.5 (0.3) 167.3
The portfolio value on which like-for-like NRI growth is based was £2,259.0m
(2023: £2,368.2m).
Net rental income at Cabot Circus and The Oracle, where significant
repositioning works are ongoing, totalled £16.1m (2023: £17.0m). Excluding
these two destinations increases the change in like-for-like NRI from -0.5% to
0.2%.
Other rental data
Table 5
2024 At 31 December 2024
Proportionally consolidated Gross rental Adjusted Vacancy Average Passing Estimated Passing Reversion/
income net rental income rate(1) passing rent(3) rental rent for (over- rented)(6)
£m £m % rent(2) £m value(4) reversion(5) %
£/m(2) £m £m
UK 80.0 61.6 4.3 420 85.7 83.0 83.0 0.1
France 55.3 43.6 6.8 455 51.8 58.9 53.0 11.1
Ireland 37.7 32.8 2.7 470 36.6 37.7 35.1 7.2
Flagship destinations 173.0 138.0 4.9 440 174.1 179.6 171.1 5.0
Developments and other 16.0 8.0 13.1 185 8.3 9.4 8.8 7.2
Total 189.0 146.0 5.3 405 182.4 189.0 179.9 5.1
2023 At 31 December 2023
Proportionally consolidated Gross renter Adjusted Vacancy Average Passing Estimated Passing Reversion/
income net rental income rate(1) passing rent(3) rental rent for (over- rented)(6)
£m £m % rent(2) £m value(4) reversion(5) %
£/m(2) £m £m
UK 92.8 72.9 4.9 400 87.3 82.3 83.7 (1.8)
France 58.6 49.4 6.9 450 53.0 61.3 54.2 13.2
Ireland 40.0 36.3 3.8 480 39.0 39.5 37.1 6.4
Flagship destinations 191.4 158.6 5.4 430 179.3 183.1 175.0 4.6
Developments and other 17.0 8.9 13.6 190 8.5 10.0 9.2 8.9
Total 208.4 167.5 5.8 400 187.8 193.1 184.2 4.8
1 See Table 6 for analysis of vacancy.
2 Average passing rent at the year end before deducting head rents and
excluding passing rent from anchor units, car parks and commercialisation.
3 Passing rent is 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
£12.6m (2022: £14.2m).
4 The estimated rental value (ERV) at the year end calculated by the
Group's valuers and included within the unobservable inputs to the portfolio
valuations as defined by IFRS 13. At 31 December 2024, includes ERV for vacant
space of £8.9m (2023: £9.9m) as per Table 5 and ERV for space undergoing
reconfiguration of £2.7m (2023: £2.6m) of which UK £1.9m and Ireland
£0.8m).
5 Passing rent for reversion is passing rent adjusted for tenant
incentives and inclusive costs, to give a better comparison with ERV which is
on a net effective basis.
6 The reversion/(over-rented) figures show a direct comparison between
the valuers' ERV and passing rent for reversion, with both sets of figures
being on a net effective basis. The reversion/(over-renting) figures therefore
show the future change in the Group's rental income from the settlement of
rent reviews or a combination of letting:
- units at prevailing ERVs at the next lease event i.e. break or expiry
(see Table 7)
- vacant units (see Table 6)
- units undergoing reconfiguration (see note 4 above)
Vacancy
Table 6
2024 2023
Proportionally consolidated ERV of Total Vacancy ERV of Total Vacancy
vacant ERV for rate vacant ERV for rate
Space vacancy(1) % space vacancy(1) %
£m £m £m £m
UK 2.9 67.5 4.3 3.2 65.9 4.9
France 4.0 58.2 6.8 4.2 60.6 6.9
Ireland 0.9 33.0 2.7 1.3 35.2 3.8
Flagship destinations 7.7 158.7 4.9 8.7 161.7 5.4
Developments and other 1.1 8.5 13.1 1.2 8.5 13.6
Group portfolio 8.9 167.2 5.3 9.9 170.2 5.8
1 Total ERV for vacancy shown above differs from Table 4 due to the
exclusion of car park ERV and head rents payable as these both distort the
vacancy metric.
Lease expiries and breaks at 31 December 2024
Table 7
Rental income based on passing ERV of leases that expire/break in Weighted average unexpired
rent of leases that expire/break in lease term
Proportionally consolidated Holding over 2025 2026 2027 Total Holding over 2025 2026 2027 Total to break years to expiry years
£m £m £m £m £m £m £m £m £m £m
UK 6.9 2.2 9.5 8.5 27.1 7.7 2.4 10.1 8.6 28.8 4.7 6.3
France 2.6 1.7 1.3 1.2 6.8 2.4 3.3 1.4 1.5 8.6 2.9 6.6
Ireland 2.7 0.4 1.5 1.1 5.7 2.8 0.4 1.6 1.2 6.0 5.3 6.7
Flagship destinations 12.2 4.3 12.3 10.8 39.6 12.9 6.1 13.1 11.3 43.4 4.2 6.5
Developments and other 1.4 0.1 0.3 0.5 2.3 1.7 0.1 0.3 0.5 2.6 7.1 8.4
Group portfolio 13.6 4.4 12.6 11.3 41.9 14.6 6.2 13.4 11.8 46.0 4.4 6.6
The table above compares passing rent (as per Table 5) on a headline basis for
those units with leases expiring or subject to a occupier break in each year
compared to the ERV of those units determined by the Group's valuers on a net
effective basis (as per Table 5).
Top ten tenants at 31 December 2024 (ranked by passing rent)
Table 8
Proportionally consolidated Passing rent % of total
£m passing rent
Inditex 10.2 5.7
H&M 3.9 2.1
Next 3.5 1.9
JD Sports 3.3 1.8
Marks & Spencer 3.2 1.8
Watches of Switzerland 3.2 1.7
CK Hutchison (Superdrug) 2.7 1.5
Boots 1.9 1.0
River Island 1.7 0.9
Printemps 1.7 0.9
35.3 19.3
Valuation analysis
Table 9
2024
Proportionally consolidated Properties Revaluation gains/(losses) Income Capital Total Initial Nominal
at valuation in the year return return return yield equivalent
£m £m % % % % yield(1)
%
UK 915.3 16.8 7.9 0.8 8.7 7.2 7.8
France 964.1 4.5 4.5 0.5 5.1 4.3 5.1
Ireland 522.0 (82.6) 6.0 (13.4) (8.1) 6.2 6.7
Flagship destinations 2,401.4 (61.3) 6.0 (3.0) 2.9 5.9 6.5
Developments and other 257.6 (30.1) 2.9 (7.0) (4.3) 8.7 9.7
Total 2,659.0 (91.4) 5.7 (3.4) 2.1 5.9 6.6
2023
Properties Revaluation losses Income Capital Total Initial Nominal
at valuation in the year return(2) return(2 3) return(2 3) yield equivalent
£m £m % % % % yield(1)
%
UK 863.1 (21.8) 8.7 (2.4) 6.1 7.8 8.1
France 1,003.3 (15.2) 4.6 (4.3) 0.1 4.4 5.1
Ireland 629.7 (37.5) 5.7 (5.6) (0.2) 5.4 5.8
Flagship destinations 2,496.1 (74.5) 6.3 (4.0) 2.0 5.8 6.3
Developments and other 280.0 (44.6) 2.7 (6.2) (3.6) 8.2 9.6
Total 2,776.1 (119.1) 5.9 (4.1) 1.6 5.9 6.4
1 Nominal equivalent yields are included within the unobservable inputs
to the portfolio valuations as defined by IFRS 13. The nominal equivalent
yield for the Reported Group was 5.9% (2023: 5.7%).
2 Returns in 2023 included 100% of Italik, 75% of which was classified
as a trading property until its sale in March 2023.
3 Capital and Total return figures in 2023 included the losses on
disposal and impairment charges on derecognised assets (Highcross and
O'Parinor).
Capital expenditure (including acquisitions)
Table 10
2024 2023
Proportionally consolidated Reported Share of Proportionally Reported Share of Proportionally
Group Property consolidated Group Property consolidated
£m interests £m £m interests £m
£m £m
Acquisitions 140.9 - 140.9 - - -
Developments 3.2 10.4 13.6 3 10 13
Capital expenditure - creating area 0.5 0.5 1.0 1 - 1
Capital expenditure - no additional area 6.3 7.8 14.1 12 13 25
Tenant incentives 5.1 6.2 11.3 4 4 8
Total 156.0 24.9 180.9 20 27 47
Conversion from accruals to cash basis (1.5) 8.4 6.9 (1) (3) (4)
Total on cash basis 154.5 33.3 187.8 19 24 43
Net initial yield
Table 11
Proportionally consolidated Note/ 2024 2023
£m
£m
Table
Reported Group (wholly owned and joint operations) 3B 1,487.0 1,396.2
Share of Property interests 3B 1,172.0 1,379.9
Portfolio valuation on a proportionally consolidated basis 3B 2,659.0 2,776.1
Less: Developments(1) (188.4) (192.3)
Completed investment portfolio 2,470.6 2,583.8
Purchasers' costs(2) 161.5 171.9
Grossed up completed investment portfolio A 2,632.1 2,755.7
Annualised cash passing rental income 179.3 182.4
Non-recoverable costs (18.6) (15.5)
Rents payable (4.4) (4.1)
Annualised net rent B 156.3 162.8
Add:
Notional rent on expiration of rent-free periods and other lease incentives(3) 5.5 7.8
Future rent on signed leases 2.0 1.7
Topped-up annualised net rent C 163.8 172.3
Add back: Non-recoverable costs 18.6 15.5
Passing rent Table 5 182.4 187.8
EPRA Net initial yield B/A Table 9 5.9% 5.9%
EPRA 'Topped-up' net initial yield C/A 6.2% 6.3%
1 Included within the Developments and other portfolio.
2 Purchasers' costs equate to 6.5% (2023: 6.7%) of the value of the
completed investment portfolio.
3 For leases in rent free period, the weighted average remaining
rent-free period is 0.4 years (2023: 0.5 years).
FINANCING ANALYSIS
Net debt
Table 12
2024 2023
Proportionally consolidated Reported Share of Property interests Total Reported Share of Property interests Total
Group £m £m Group £m £m
£m £m
Cash and cash equivalents 737.9 76.3 814.2 472.3 97.3 569.6
Loans (1,474.2) (141.2) (1,615.4) (1,624.5) (260.0) (1,884.5)
Fair value of currency swaps 2.2 - 2.2 (11.4) - (11.4)
Net debt (734.1) (64.9) (799.0) (1,163.6) (162.7) (1,326.3)
Movement in net debt
Table 13
Proportionally consolidated Note/ 2024 2023
Table
£m £m
Opening net debt Table 12 (1,326.3) (1,732.1)
Profit from operating activities 2 108.6 117.4
(Increase)/decrease in receivables and restricted monetary assets (12.6) 16.4
Increase/(decrease) in payables 4.2 (31.0)
Adjustment for non-cash items 2.1 0.7
Cash generated from operations 102.3 103.5
Interest received 53.6 43.6
Interest paid (93.0) (93.5)
Distributions from Value Retail 19.4 73.6
Tax repaid/(paid) 0.1 (0.4)
Cash flows from operating activities 82.4 126.8
Investing activities
Acquisition (140.8) -
Capital expenditure (47.0) (42.9)
Derecognition of JV cash - (15.6)
Derecognition of JV secured debt - 125.0
Cash held within sold or derecognised entities - (8.4)
Distribution from other investment 1.1 -
Sale of Value Retail 583.6 -
Sale of properties 117.4 216.4
Cash flows from investing activities 514.3 274.5
Financing activities
(Premium)/Discount on redemption of bonds (25.5) 4.3
Debt and loan facility issuance and extension fees - (0.6)
Purchase of own shares (3.4) -
Proceeds from awards of own shares - 0.1
Shares repurchased (20.9) -
Equity dividends paid (82.6) (30.0)
Cash flows from financing activities (132.4) (26.2)
Exchange translation movement 63.0 30.7
Closing net debt Table 12 (799.0) (1,326.3)
Net debt : EBITDA
Table 14
Proportionally consolidated, including discontinued operations Note/ 2024 2023
Table £m £m
Net debt A Table 12 799.0 1,326.3
Adjusted operating profit (including share of Value Retail's adjusted 2 133.8 163.0
earnings)
Amortisation of tenant incentives and other items within net rental income (2.6) (3.6)
Share-based remuneration 4.3 3.6
Depreciation 1.4 3.0
EBITDA B 136.9 166.0
Net debt : EBITDA A/B 5.8x 8.0x
Interest cover
Table 15
Proportionally consolidated Note 2024 2023
£m £m
Adjusted net rental income 2 146.0 167.5
Less net rental income in associates: Italie Deux 14B - (1.1)
A 146.0 166.4
Adjusted net finance costs 2 32.3 45.9
Less interest on lease obligations and pensions (3.3) (3.3)
B 29.0 42.6
Interest cover A/B 5.03x 3.91x
Gearing
Table 16
Proportionally consolidated Table 2024 2023
£m £m
Net debt Table 12 799.0 1,326.3
Unamortised borrowing costs 19.1 18.4
Net debt for gearing A 818.1 1,344.7
Equity shareholders' funds - 'Consolidated net tangible worth' B 1,821.1 2,462.6
Gearing A/B 44.9% 54.6%
Loan to value
Table 17
Proportionally consolidated Note/ 2024 2023
Table £m £m
Net debt - 'Loan' A Table 12 799.0 1,326.3
Property portfolio B 3B 2,659.0 2,776.1
Investment in Value Retail 14C - 1,115.0
'Value' C 2,659.0 3,891.1
Loan to value A/C 30.0% 34.1%
Net debt - Value Retail D - 729.6
Property portfolio - Value Retail E 14C - 1,885.7
Loan to value - Full proportional consolidation of Value Retail(1) (A+D)/(B+E) 30.0% 44.1%
Net payables - Proportionally consolidated 48.0 110.9
Net payables - Value Retail - 76.4
Net payables - Group F 48.0 187.3
Loan to value - EPRA (A+D+F)/(B+E) Table 18 31.9% 48.1%
1 Following the sale of the Group's interests in Value Retail in September
2024 this ratio is the same as Loan to value.
EPRA loan to value
Table 18
2024
Proportionally consolidated Reported Group Share of joint ventures Share of associates Non-controlling interests Total
£m £m £m £m £m
Include:
Loans 1,474.2 141.2 - - 1,615.4
Foreign currency derivatives (2.2) - - - (2.2)
Net payables(1) 29.2 18.8 - - 48.0
Exclude:
Cash and cash equivalents (737.9) (76.3) - - (814.2)
Net debt A 763.3 83.7 - - 847.0
Include:
Investment properties at fair value 1,487.0 1,172.0 - - 2,659.0
Total property value B 1,487.0 1,172.0 - - 2,659.0
EPRA Loan to value A/B 31.9%
2023
Reported Group Share of joint ventures Share of associates Non-controlling interests Total
£m £m £m £m £m
Include:
Loans 1,624.5 260.0 793.9 - 2,678.4
Foreign currency derivatives 11.4 - - - 11.4
Net payables(1) 87.5 23.9 76.4 - 187.8
Exclude:
Cash and cash equivalents (472.3) (97.3) (64.4) - (634.0)
Net debt A 1,251.1 186.6 805.9 - 2,243.6
Include:
Investment properties at fair value 1,396.2 1,379.9 1,885.7 - 4,661.8
Total property value B 1,396.2 1,379.9 1,885.7 - 4,661.8
EPRA Loan to value A/B 48.1%
Rows with zero balances have intentionally been excluded from the EPRA
specified format in the above tables.
1 Net payables includes the following balance sheet accounts for both
current and non-current balances: interests in leasehold properties,
right-of-use assets, trade and other receivables, restricted monetary assets,
trade and other payables, obligations under head leases, tax (excluding
deferred tax) and the fair value of interest rate swaps.
Unencumbered asset ratio
Table 19
Proportionally consolidated Note/ 2024 2023
Table £m £m
Property portfolio 3B 2,659.0 2,776.1
Less encumbered assets(1) (406.0) (487.7)
Total unencumbered assets A 2,253.0 2,288.4
Net debt Table 12 799.0 1,326.3
Adjustments:
- Cash held within investments in encumbered joint ventures(1) 24.6 39.4
- Unamortised borrowing costs 19.1 18.4
- Encumbered loans(1) (144.6) (260.2)
Total unsecured debt B 698.1 1,123.9
Unencumbered asset ratio A/B 3.23x 2.04x
1 Encumbered assets, cash and loans relate solely to Dundrum.
OTHER KEY METRICS
Cost ratio
Table 20
Proportionally consolidated 2024 2023
£m £m
Adjusted gross administration costs 43.5 51.5
Business transformation costs (see note 10A) A 4.9 13.2
Gross administration costs 48.4 64.7
Property fee income (6.3) (8.4)
Management fee receivable (4.4) (6.5)
Property outgoings 39.2 39.1
Less inclusive lease costs recovered through rent (4.1) (6.4)
Total operating costs for cost ratio B 72.8 82.5
Less vacancy costs (10.5) (8.6)
Total operating costs excluding vacancy costs for cost ratio C 62.3 73.9
Gross rental income 189.0 208.4
Ground rents payable (1.9) (1.8)
Less inclusive lease costs recovered through rent (4.1) (6.4)
Gross rental income for cost ratio D 183.0 200.2
Cost ratio including vacancy costs (excluding business transformation costs) (B-A)/D 37.1% 34.6%
EPRA Cost ratio including vacancy costs B/D 39.8% 41.2%
EPRA Cost ratio excluding vacancy costs C/D 34.0% 36.9%
The Group's business model for development 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 for wholly owned properties is capitalised subject to
meeting certain criteria related to the degree of time spent on specific
projects. Employee costs of £0.6m (2023: £0.1m) were capitalised as
development costs in the year and are not included within Gross administration
costs above.
Total accounting return
Table 21
2024 2023
NTA NTA per NTA NTA per
£m share £m share
£(1) £(1)
EPRA NTA at 1 January A 2,542.0 5.08 2,633.7 5.27
EPRA NTA at 31 December 1,825.4 3.70 2,542.0 5.08
Reduction in NTA (716.6) (1.38) (91.7) (0.19)
Cash dividends in the year 76.6 0.15 35.9 0.07
B (640.0) (1.23) (55.8) (0.12)
Total accounting return B/A (24.2)% (2.1)%
1 NTA per share metrics have been restated to reflect the 1 for 10
share consolidation undertaken during 2024. See note 19 for further details.
KEY PROPERTIES
Key property listing at 31 December 2024
Table 22
Passing rent
Location Accounting classification where not wholly owned Ownership Area, m(2) No. of tenants 2024 2023(1)
£m £m
Flagship destinations
UK
Brent Cross London Joint venture 41% 105,500 115 12.8 12.8
Bullring(2) Birmingham Joint venture 50% 122,400 147 25.2 23.9
Cabot Circus(3) Bristol Joint venture 50% 108,000 106 10.9 10.7
The Oracle Reading Joint venture 50% 69,500 102 10.0 10.4
Westquay Southampton 100% 95,400 108 26.8 13.6
500,800 578 85.7 71.4
France
Les 3 Fontaines(4) Cergy 100% 72,600 189 22.7 21.9
Les Terrasses du Port Marseille 100% 62,800 160 29.1 30.3
135,400 349 51.8 52.2
Ireland
Dundrum Dublin Joint venture 50% 126,500 155 26.2 27.7
Ilac Centre Dublin Joint operation 50% 28,200 65 3.3 4.1
Pavilions Swords Joint operation 50% 44,400 98 7.1 7.2
199,100 318 36.6 39.0
Total flagships 835,300 1,245 174.1 162.6
Developments and other (key properties)
Bristol Broadmead(3) Bristol Joint venture 50% 33,400 65 2.4 2.9
Dublin Central Dublin 100% n/a n/a n/a n/a
Dundrum Phase II Dublin Joint venture 50% n/a n/a n/a n/a
Grand Central(2) Birmingham Joint venture 50% 39,500 54 4.1 3.7
Eastgate Leeds 100% n/a n/a n/a n/a
Martineau Galleries(2) Birmingham 100% 38,600 36 1.8 2.0
Pavilions land Swords 100% n/a n/a n/a n/a
The Goodsyard London Joint venture 50% n/a n/a n/a n/a
1 2023 passing rent reflects Westquay ownership at 50% and 2023 year end
exchange rate of £1:€1.153.
2 Collectively known as the Birmingham Estate.
3 Collectively known as the Bristol Estate.
4 Property includes areas held under co-ownership; figures above
reflect the Group's ownership interests only.
Responsibility statement
The Annual Report 2024 which will be issued in March 2025, contains a
responsibility statement in compliance with DTR 4.1.12 of the Disclosure
Guidance and Transparency Rules which sets out that as at the date of approval
on 25 February 2025, 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
25 February 2025
Glossary
2024 share consolidation The 10:1 share consolidation and re-designation of the Company's ordinary
shares that took effect on 30 September 2024, further information on which
was set out in the Company's Circular to Shareholders and Notice of Meeting
dated 8 August 2024.
Adjusted earnings Reported amounts excluding certain items in accordance with EPRA guidelines
and also certain Company specific items which the Directors believe are not
reflective of the normal day-to-day operating activities of the Group.
Annual Incentive Plan (AIP) Annual bonus plan for all employees, including Executive Directors.
AUM (Assets under management) The 100% value of the Group's properties under management.
Average cost of debt or weighted average interest rate (WAIR) The cost of finance expressed as a percentage of the weighted average debt
(can be calculated on both a net and gross debt basis) during the period.
Borrowings The aggregate of loans and the fair value of currency swaps but excluding the
fair value of the interest rate swaps, as this crystallises over the life of
the instruments rather than at maturity.
BREEAM An environmental rating assessed under the Building Research Establishment
Environmental Assessment Method.
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.
Corporate Sustainability Reporting Directive (CSRD) A new directive requiring large companies to disclose ESG information based on
the European Sustainability Reporting Standards (ESRS). The Group is expecting
to report under CSRD for the year ending 31 December 2025.
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
calculated by the Group's external valuers on a net effective basis.
ESG (Environmental, Social and Governance) A framework that helps stakeholders understand how an organisation is managing
risks and opportunities related to environmental, social, and governance
criteria. ESG takes the holistic view that sustainability extends beyond just
environmental issues.
EU Taxonomy A green classification system that translates the EU's climate and
environmental objectives into criteria for specific economic activities for
investment purposes. It establishes a list of environmentally sustainable
economic activities to facilitate sustainable investment and requires
mandatory disclosure obligations on some companies and investors, requiring
them to disclose their share of Taxonomy-aligned activities.
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 revolving credit and
facilities and private placement senior notes.
Gross property value or Gross asset value (GAV) Property value before deduction of purchasers' costs, as determined 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 divided by Adjusted net finance costs before
capitalised interest and interest charges on lease obligations and pensions.
All figures exclude associates.
Interest rate or currency swap (or derivatives) An agreement with another party to exchange an interest or currency rate
obligation for a pre-determined period.
Joint venture and associate management fees Fees charged to joint ventures and associates for accounting, secretarial,
asset and development management services.
Leasing Comprises new lettings and renewals. For temporary leases (period of less than
one year), leasing value reflects the rent secured for the period of the
lease, not an annualised figure.
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) A methodology for comparing key metrics, calculated to reflect properties
owned throughout both current and prior periods, and where applicable
calculated on a constant currency basis.
Like-for-like (LfL) GRI/NRI The percentage change in GRI/NRI for flagship properties owned throughout both
current and prior periods, calculated on a constant currency basis. Properties
undergoing a significant extension project are excluded from this calculation
during the period of the works. For interim reporting periods properties sold
between the balance sheet date and the date of the announcement are also
excluded from this metric.
Loan to value (LTV) Net debt expressed as a percentage of property portfolio value, calculated on
a proportionally consolidated basis. In addition, EPRA has a measure, 'EPRA
LTV' which adds net payables to net debt. Prior to the Group's sale of its
investment in Value Retail in September 2024, the Group also disclosed a full
proportional consolidation measure ('FPC LTV') which included the Group's
share of Value Retail's debt and property portfolio.
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 lease
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.
NTA (EPRA) EPRA Net Tangible Assets: An EPRA net asset per share measure calculated as
equity shareholders' funds with adjustments made for the fair values of
certain financial derivatives, deferred tax and any goodwill balances.
Occupancy rate The ERV of the area in a property or portfolio, excluding developments, which
is let, expressed as a percentage of the total ERV, excluding the ERV for car
parks, of that property or portfolio.
Occupational cost ratio (OCR) The proportion of an occupier'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 rent passing for
reversion.
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.
Pre-let A lease signed with an occupier prior to the completion of a development or
other major project.
Principal lease A lease signed with an occupier 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 share of properties co-owned with third parties where the Group
undertakes day-to-day management. This excludes Value Retail, up to the date
of its sale, which was not proportionally consolidated. See above in the
Financial Review for further details.
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 to the financial statements.
QIAIF Qualifying Investor Alternative Investment Fund. A regulated tax regime in the
Republic of Ireland which exempts participants from Irish tax on property
income and chargeable gains subject to certain requirements.
REIT Real Estate Investment Trust. A tax regime which in the UK exempts
participants from corporation tax both on UK rental income and gains arising
on UK investment property sales, subject to certain requirements.
Rent collection Rent collected as a percentage of rent due for a particular period after
taking account of any rent concessions granted for the relevant period.
Rents passing for reversion Passing rent adjusted for lease incentives and inclusive costs to be on a net
effective basis. This will increase or decrease due to changes to rents
passing at rent review or the next lease event (i.e. expiry or break), or by
leasing vacant space or space undergoing reconfiguration.
Reported Group The financial results as presented under IFRS.
Reversionary or under‑rented The amount, or percentage, by which the ERV exceeds the rent passing for
reversion.
RIDDOR A health and safety reporting obligation to report deaths, injuries, diseases
and 'dangerous occurrences' at work, including near misses, under the
Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013.
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.
Task Force on Climate-related Financial Disclosures (TCFD) An organisation established with the goal of developing a set of voluntary
climate-related financial risk disclosures to be adopted by companies to
inform investors and the public about the risks they face relating to climate
change.
Task Force on Climate-related Financial Disclosures (TNFD) An organisation established with the goal of developing a set of voluntary
nature-related financial risk disclosures to be adopted by companies to inform
investors and the public about the risks they face relating to climate change.
Temporary lease A lease with a period of one year or less, measured to the earlier of lease
expiry or occupier break.
Total accounting return (TAR) The growth in EPRA NTA per share plus dividends paid, expressed as a
percentage of EPRA NTA per share at the beginning of the period. The return
excludes the dilution impact from scrip dividends.
Total development cost All capital expenditure on a development or other major project, including
capitalised interest.
Total property return (TPR) (or total return) NRI, excluding the change in provision for amounts not yet recognised in the
income statement, and capital growth expressed as a percentage of the opening
book value of property adjusted for capital expenditure, calculated on a
monthly time-weighted and constant currency basis.
Total shareholder return (TSR) Dividends and capital growth in a Company's share price, expressed as a
percentage of the share price at the beginning of the period.
Transitional risk Business risk posed by regulatory and policy changes implemented to tackle
climate change.
Turnover rent Rental income which is linked to an occupier's revenues.
Vacancy rate The ERV of the area in a property, or portfolio, excluding developments, which
is currently available for letting, expressed as a percentage of the ERV of
that property or portfolio.
WAULB/WAULT Weighted average unexpired lease to break/term.
Yield on cost Passing rents expressed as a percentage of the total development cost of a
project or property.
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