Hammerson to exit retail parks after H1 profits plunge 80 percent

Property firm Hammerson Plc has decided to exit retail parks sector over the medium term with a disposal target of 1.1 billion pounds (1.4 billion dollars) by end of 2019, with 300 million pounds (393 million dollars) already achieved this year and an increased overall 2018 target of 600 million pounds (786 million dollars). The move comes after the company reported an 80 percent drop in pre-tax profits to 55.8 million pounds (73 million dollars) over the six months to June 30, 2018, compared to 289.7 million pounds (379.5 million dollars) in the previous year. On an adjusted basis, profits increased just 0.5 percent to 120 million pounds (157 million dollars). Net rental income fell 3 percent to 178.5 million pounds (234 million dollars), while revenues reduced to 152.5 million pounds (200 million dollars).

Commenting on the company’s performance, David Atkins, Chief Executive of Hammerson said in a statement: “Our reshaped strategy sees us taking decisive action to further reposition our portfolio. Through increasing the level of disposals, including exiting the retail parks sector, we will now focus solely on winning destinations of the highest quality: flagship retail destinations and premium outlets. These are the venues we believe will maintain relevance and outperform against the shifting retail backdrop.”

Measures that will be undertaken as a part of its strategy, the company said, include, greater geographical diversification with non-UK retail exposure increasing by 10 percent, shrinking department store space by a quarter and high street fashion by a fifth, replaced by differentiated brands, aspirational fashion, leisure, events and lifestyle spaces, deliver cost savings of at least 7 million pounds per annum through operational efficiencies and lower corporate costs associated with disposals and board and other management changes, Commencing a share buyback of up to 300 million pounds and due to increased risks in the current market environment, the start on site of the development at Brent Cross will be deferred.

Picture:Hammerson media gallery