At a time when most property companies are reporting sharply increased pre-tax profits, Hammerson, Britain’s third largest, has announced a half-year drop of £1.6m, to £25.35m.
The dip is mostly owing to the lack of trading profits: £44,000 in the first six months of 1988 compared with £2.69m in the same period last year. Earnings per share are down to 10.52p from 11.27p, and the interim dividend stays unchanged at 3p. However, the board says that trading profits for the full year will equal 1987’s £5.1m.
Net rents have risen 4% to £43.2m (£41.5m), helped by beneficial currency movements. Hammerson stands out among UK property companies in having some 60% of its portfolio abroad, mainly in Canada, Australia and the United States. The strengthening of the Australian and Canadian dollars against sterling will also benefit Hammerson’s balance sheet. Analysts are predicting that net asset value per share, which was 650p at December 31 1987, will be 830p to 850p at the 1988 year-end.
Below the line, there is an extraordinary item of £14.1m (£7m), which includes profits from the sale of two London investments, St Vincent House and Berkshire House, a shopping and office centre in Bradford and BP House in Adelaide, Australia.
Relative to its size, Hammerson has a comparatively small development programme. During the period it completed several retail schemes, including Square One in Mississagua, Ontario, and Sceptre Court, its 90,000-sq ft office building in Tower Hill, EC3. Among current projects are three City office buildings, an extension of the Riverhead Centre in Grimsby, and a 550,000-sq ft office building at 420 Fifth Avenue in New York.
With its results, Hammerson announced that Sydney Mason is stepping down as joint managing director, but staying on as full-time chairman. This leaves John Parry as sole managing director.
