Half Year 2026 Hammerson PLC Earnings Call (Q&A) Transcript
Key Points
- Hammerson PLC (HMSNF) raised its FY26 EPRA earnings guidance to GBP132 million, a 27% year-on-year increase, driven by strong operational performance and the accretive acquisition of a 50% interest in Manchester Arndale.
- The company delivered robust first-half results with net rental income up 40% to GBP112 million and EPRA earnings up 33% to GBP64 million, supported by like-for-like NRI growth of 5%.
- Occupancy reached a seven-year high, with 234 leases signed at 52% ahead of previous passing rent and 9% ahead of ERV, demonstrating strong leasing momentum and brand demand.
- The Manchester Arndale acquisition is immediately earnings accretive, adding GBP17 million of topped-up net rental income at a 7.8% yield, with minimal NTA dilution and funded via a placing that reduces LTV to around 36%.
- The company issued new medium-term guidance of 6% to 8% annual growth in EPRA EPS and dividends, with a total accounting return of around 10%, reflecting confidence in sustainable shareholder returns.
- Strategic land disposals realized GBP75 million at a substantial premium to book value, and the Ironworks residential scheme at Dundrum is now 80% leased, highlighting successful capital recycling and development execution.
- Net debt to EBITDA improved but remains elevated at 8.1 times, and LTV is unchanged at 39%, indicating a still-leveraged balance sheet despite the equity raise.
- The portfolio valuation was flat in the first half, with a net revaluation deficit of 2p per share, reflecting yield stagnation due to Middle East uncertainty and timing differences between ERV recognition and capital expenditure.
- The company faces higher net finance costs, with interest payable up GBP2 million due to a new bond issue, and lower interest receivable as cash is recycled into JV acquisitions, partially offsetting NRI growth.
- The EPRA cost ratio improvement in the first half was partly due to one-off rates rebates that will not repeat, and the full-year ratio is expected to be below 30%, but the benefit is not sustainable.
- The Manchester Arndale acquisition involves joint ownership and management with M&G, meaning Hammerson PLC (HMSNF) does not have full control, which could limit operational flexibility and value creation.
- The medium-term growth guidance was reduced from 8% to 10% to 6% to 8% due to a higher base year, reflecting a more conservative outlook despite the strong first-half performance.
Thank you for joining us for Hammerson's 2026 half-year results. I'm Rob Wilkinson, CEO, and I'm joined by Himanshu Raja, our Chief Financial Officer. I'll begin with an overview of the half year and our progress against our three strategic priorities. Himanshu will then take you through the financials, and I'll come back briefly on the outlook before we take your questions.
In February, I set out clear priorities for Hammerson, and we've made good progress on all fronts in the first half. First, we've driven operational outperformance across our destinations in occupancy, footfall and sales.
Second, we've continued to maximize and crystallize the value of our strategic land. And third, we're increasing our scale through disciplined and accretive acquisitions, including, as announced this morning, a 50% interest in Manchester Arndale.
And on the back of all that, we're raising our FY26 earnings guidance to GBP132 million, which will be up 27% year on year, and we are setting out new medium-term guidance. The headline
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