2009 Half-Year Results. 3 August 2009

Transcription

1 2009 Half-Year Results 3 August 2009

2 John Nelson, Chairman 2

3 Agenda Introduction John Richards Financial Results Simon Melliss France Christophe Clamageran UK David Atkins Summary and Conclusion John Richards 3

4 Results 30 June June 2008 Adjusted profit before tax 65.6m 60.5m Adjusted earnings per share 11.0p 13.8p (1) Interim dividend per share 6.95p 12.60p 30 June Dec 2008 Adjusted NAV per share (2) Gearing 81% 118% Notes: 1) Restated for rights issue. 2) Pro forma following the rights issue. 4

5 Half-Year Highlights Financial position significantly strengthened Robust income with growth potential Overhead costs reduced Encouraging letting progress in a tough market Development pipeline progressing 5

6 Financial Results Simon Melliss, Finance Director 6

7 Net Rental Income million Six months to 30 June Properties owned throughout Acquisitions Developments Properties sold Exchange translation and other - (7.8) Net rental income

8 Vacancy Rates % 30 June 2009 EPRA basis As previously reported 31 December 2008 UK Retail UK Offices French Retail Total

9 Income Statement million Six months to 30 June Loss before tax (818.5) (417.1) Adjustments: Revaluations Loss on disposals Other exceptional items Adjusted profit before tax Adjusted earnings per share 11.0p 13.8p (1) Interim dividend per share 6.95p 12.60p Note: Restated for rights issue. 9

10 Balance Sheet million 30 June Dec 2008 Property assets 4,717 6,457 Net debt (2,061) (3,333) Other net liabilities (48) (195) Sub-total 2,608 2,929 Deferred tax (61) (108) Shareholders equity 2,547 2,821 Adjusted net asset value per share (1) Gearing 81% 118% Note: 1) Pro forma adjusted for the rights issue. 10

11 NAV Analysis Shareholders funds (1) ( million) Adjusted NAV (1) ( per share) 31 December 2008 (2) 3, Revaluation (765) (1.09) Disposals (125) (0.18) Retained profit Dividends (44) (0.06) Exchange and other movements (120) (0.19) 30 June , Notes: 1) Excluding deferred tax and fair value of derivatives, calculated in accordance with EPRA best practice. 2) Equity shareholders funds and adjusted NAV per share at 31 December 2008 are the pro forma figures after taking account of the rights issue. 11

12 Capital Return Capital Return Contribution Total Group (14.1%) % French Shopping Centres French Retail Parks UK Offices UK Shopping Centres UK Retail Parks French Offices %

13 Investment Portfolio Yields UK France Shopping Centres 7.8% +0.8% 5.7% +0.6% Retail Parks 8.4% +0.9% 7.5% +1.1% Offices 7.7% +0.8% 6.0% +0.5% Total 7.9% +0.8% 5.8% +0.6% Note: True equivalent yields at 30 June 2009 and the change compared to 31 December

14 Financing Net debt 2.1 billion Gearing 81% Cash and undrawn committed facilities of 906 million 97% of gross debt unsecured Only 60 million borrowings mature before end 2011 Weighted average maturity of debt eight years 14

15 Debt Maturity Profile 600 million million repaid since 30 June Bank debt drawn Euro bonds Sterling bonds 15

16 Sound Financial Position Total gross debt 2.3 billion 3% 31% 31% 69% 97% 69% Bank debt Bonds Secured Unsecured Euro Sterling Gearing Interest cover Net debt/ebitda 30 June % 2.0 times 7.6 times 31 December % 1.7 times 12.9 times 16

17 Summary Sound balance sheet Virtually all borrowings unsecured No significant refinancing requirements before 2012 Substantial unutilised committed facilities 17

18 France Christophe Clamageran, Managing Director France 18

19 France: Yields and Finance Costs % 7.0 Spread between all-property initial yield and ten-year government debt % 7.0 Spread between all-property initial yield and five-year swaps The shaded areas show the range of average spreads over successive five year periods between 1998 and 2008 Source: IPD, PMA, CBRE 19

20 French Yield Outlook Long-term equivalent yields % Actual Market Forecasts Low level of transactions in 2009 Paris office yields increased significantly Shopping centre yields increased, but more resilient 5.5 Range The shaded area shows the range of five year average yields between 1993 and 2008 Source: IPD, PMA, CBRE 20

21 French Environment Unemployment rate Consumer confidence index Household consumption 12% % 11% % 10% - 9% - 8% % % 6% % Source : INSEE Source : INSEE Source : INSEE 21

22 French Retail Market Market Concentrated ownership and high barriers to entry Importance of strong relationship with tenants Significant geographical concentration Scarce investment opportunities Hammerson France Third largest operator in the shopping centre market Direct management of assets Concentrated in Île-de-France or in town centres Identified development opportunities in portfolio 22

23 Robustness of Cash Flow Favourable commercial environment Lease structure and key money reduces vacancy risk Indexation Restrictive planning environment Quality portfolio Large tenant base implying reduced default risk: about 800 tenants Over 80% of national brands Occupancy cost:sales ratio of 11% 80 million visitors a year 23

24 Increased Retail Rents 100 million Indexation Other Rents passing 30 June 2009 New lettings and renewals 4.2m (0.3)m 97.4m 90 Rents passing 31 Dec m Terminations and expiries (7.1)m 10.1m 80 Note: Movement in passing rents compared on a like-for-like basis 24

25 Office Market Summary Take up and supply in Île-de-France Rental values and vacancy rate in Île-de-France Prime yield Paris CBD % % % % million m² % 4.0% /m² 5.0% 4.0% (f) Take up Supply 3.0% /2009 Vacancy rate Average rent 3.0% /2009 Prime Yield Paris CBD (LHS) (RHS) Source : Immostat/DTZ/Hammerson Source : Immostat/DTZ Source : CBRE 25

26 Hammerson France Well Positioned Retail Fundamentals remain favourable Market with high entry barriers Hammerson France is well positioned Offices Very low exposure following disposals Abrupt market correction 26

27 UK David Atkins, Managing Director UK 27

28 UK: Yields and Finance Costs % % Spread between all-property equivalent yields and five-year swaps Spread between all-property equivalent yields and ten-year gilts The shaded areas show the range of average spreads over successive ten year periods between 1993 and 2008 Source: IPD, PMA, CBRE 28

29 Prime UK Yields To Reduce Long-term equivalent yields % 10.0 Actual Market Forecasts Improved sentiment, but transaction volumes remain low Yields stabilising for prime assets Range Rental values under pressure Timing and extent of recovery uncertain The shaded area shows the range of ten year average yields between 1993 and 2008 Source: IPD, PMA, CBRE 29

30 UK Consumer Environment Unemployment (thousand) Consumer Confidence Retail Sales (%) Claimant count unemployment Source: Thomson DataStream Consumer confidence Source: Thomson DataStream Non-food retail sales growth (12 month rolling annual average) Source: Thomson DataStream 30

31 Trading Performance Footfall and sales Over 160 million visitors per annum Footfall up 2.9% Sales down 2.2% Non-rental income Car parking income 3.4 million (+10%) Commercialisation 1.9 million (+15%) Trading Stronger sectors: young fashion, fashion accessories, gifts and catering Weaker sectors: department stores, menswear, toys and games Consolidation of spending 31

32 Active Asset Management Retail management strategy Aggressive leasing programme Targeted marketing and promotions On-site trading initiatives Cost and service charge management Effective credit control 32

33 Modest Reduction in Income 130 million Rents passing 31 Dec 2007 Terminations and expiries New lettings and renewals Rent reviews Other Rents passing 30 June m (1.1)m 124.0m (12.3)m 8.6m 121.1m Note: Movements in passing rents compared on a like-for-like basis. 33

34 Developments Cabot Circus, Bristol o o o 92% let 2% in solicitors hands Major new tenants signed: Hollister, Gant, Disney Highcross, Leicester o o o 89% let 7% in solicitors hands Major new tenants signed: Bestseller, Aldo, Faith, Boots Union Square, Aberdeen o o o o o 67% let and under offer Major new tenants signed: M&S, Apple, Cult, Republic On programme for Autumn opening Cost 205 million Value 77 million 34

35 Office Market Summary Take up and completions in City of London Rental values and vacancy rate in City of London Prime yield City vs. West End 7 20% 70 8% million ft² (f) Take up Completions 15% 10% 5% 0% /2009 Vacancy rate Headline rent /ft² 7% 6% 5% 4% 3% /2009 City West End Source: PMA Source: CBRE Source: PMA 35

36 London Offices Bishops Square disposal - Joint Venture with Oman Investment Fund 60 Threadneedle Street - 23% let and 44% in solicitors hands 125 Old Broad Street - 75% let St Alphage option agreement signed 36

37 UK Summary Retail Regionally dominant shopping centres Growth from retail park extensions Focus on income growth Low vacancy against national averages Offices Rents remain under pressure Good letting progress 37

38 Summary and Conclusion John Richards, Chief Executive 38

39 Portfolio Designed to Outperform Investment Comments Established investment portfolio: 3.8 billion Prime, modern portfolio Active management to drive income Well positioned to benefit from market recovery Recent developments: 0.7 billion Aggressive letting programme Strong recovery potential Future developments: 0.2 billion Strong relationships and reputation Advancing planning and design Will exploit when appropriate 39

40 High Quality Investment Portfolio 2% 1% 34% 36% 12% 15% UK Shopping Centres UK Retail Parks UK Offices France Retail France Offices Germany Principal sectors UK Offices UK Shopping Centres UK Retail Parks French Retail Group Passing rent 39m 108m 50m 97m 301m Reversionary/(over-rented) (14.5%) 6.2% 6.7% 7.0% 2.9% Occupancy rate 80% 93% 94% 98% 93% Average unexpired lease term 7.6 years 10.1 years 12.9 years 4.5 years 8.2 years 40

41 Contracted Growth from Developments 60 million UK shopping centres UK retail parks France retail UK Offices Notes: 1) Hammerson s share of income shown for joint ventures 41 2) The bar chart shows cash rent receivable and not income smoothing under IFRS

42 Development Pipeline Substantial pipeline of future opportunities Planning consent for WestQuay extension achieved Option agreement signed with Corporation of London for St Alphage House redevelopment Will exploit when appropriate 42

43 Conclusion Sound financial position Prime portfolio with robust income and growth potential Intensive asset management in a tough market Prime UK yields stabilising Well positioned to benefit from anticipated market recovery 43

44 Questions 44

45 Change in Net Debt million 3500 Net debt 31 Dec m ,333 m (118% gearing) Rights issue proceeds 572 m Disposals and associated debt 116 m Other movements Net debt 30 June ,061 m (81% gearing)

46 Top Ten Properties Property name Ownership Valuation 30/06/09 (1) Passing rent (2) m m O Parinor, Aulnay-sous-Bois Italie 2, Paris 13ème Brent Cross, London NW4 Highcross, Leicester Bullring, Birmingham Espace St. Quentin, St Quentin-en-Yvelines Cabot Circus, Bristol Les Trois Fontaines, Cergy Pontoise The Oracle, Reading WestQuay, Southampton 100% 100% 41% 60% 33% 100% 50% 100% 50% 50% Notes: 1) Hammerson s share of valuation and passing rent shown in respect of joint ventures 2) Passing rents are at the end of rent free periods and after deducting head and equity rents 46

47 Adjusted Earnings million Six months to 30 June Loss before tax Adjustments: Loss on sale of investment properties Loss on sale of subsidiary Revaluation losses on property portfolio Share of revaluation losses of property and derivatives in associate Asset impairment Change in fair value of derivatives Adjusted profit before tax Current tax and minority interests Adjusted earnings (818.5) (2.3) 63.3 (417.1) (4.1) (1.6) 58.9 Adjusted earnings per share 11.0p 13.8p (1) Interim dividend per share 6.95p 12.60p Note: 1) Restated for rights issue. 47

48 UK: Retail Lease Expiries million ERV uplift Passing Rent % of the UK total retail passing rent of m expiring before end million reversion on leases expiring before end

49 France: Retail Lease Expiries 15.0 million ERV uplift Passing Rent % of total France retail passing rent of 96.7m expiring between million reversion on leases expiring before end of

50 Contracted Income million Rents passing Offices - UK Shopping centres - UK Retail parks - UK Shopping centres - France Retail parks - France Total cash flow - accounting basis Note: Figures show Hammerson s share of the income for joint ventures. 50

51 Disclaimer This presentation contains certain statements that are neither reported financial results nor other historical information. These statements are forward-looking in nature and are subject to risks and uncertainties. Actual future results may differ materially from those expressed in or implied by these statements. Many of these risks and uncertainties relate to factors that are beyond Hammerson's ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behaviour of other market participants, the actions of governmental regulators and other risk factors such as the Company's ability to continue to obtain financing to meet its liquidity needs, changes in the political, social and regulatory framework in which the Company operates or in economic or technological trends or conditions, including inflation and consumer confidence, on a global, regional or national basis. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. Hammerson does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of these materials. Information contained in this presentation relating to the Company or its share price, or the yield on its shares, should not be relied upon as a guide to future performance. 51