Hammerson’s loss improves as it narrows its focus

Hammerson, the UK-based owner of premium retail assets, narrowed its loss for the year as it sought to simplify and focus on its core portfolio on city centres over the last two years.

The company, valued at R28.8bn on the JSE, reported the loss attributable to shareholders narrowed 61.7% to £164.2m (R3.63bn) and the operating loss also improved by a similar margin to £101m in the 2022 financial year to end-December.

“We have focused on what we can control — sharper operations growing like-for-like gross rental income and reducing the cost base — delivering a significant increase in adjusted earnings,” CEO Rita-Rose Gagné said. “We have enlivened and reinvigorated our assets by introducing new occupiers, uses and concepts.”

The JSE-listed Hammerson owns a portfolio of assets in Europe, with a focus on flagship retail destinations and venues.

These results come amid macroeconomic uncertainty across the world and the UK, with a surge in domestic gas prices triggered by the war in Ukraine and political changes in the UK with different prime ministers coming and going. High inflation and interest rate hikes are also squeezing the disposable income of consumers.

“We do not yet know the full impact of the cost-of-living crisis, a period of higher inflation and interest rates, and continued supply chain disruption,” Gagné said.

But despite these challenges there was a recovery in footfall, with a rise of 39% year on year, and footfall ending the financial year at 90% compared to 2019, right before the outbreak of the Covid-19 pandemic. The gradual growth in footfall has continued so far in 2023, Hammerson said.

“Sales recovered strongly as consumers are shopping less frequently but visiting our destinations with more purpose, also avoiding increasingly expensive delivery and return costs charged by online retailers,” the company remarked.

“The improvement in store like-for-like performance also illustrates fewer better performing retailers reflective of our shift away from reliance on legacy fashion to a broader mix of best-in-class retail, food and social, services and leisure,” it added.

gousn@businesslive.co.za