Hammerson Share Chat (HMSO)

The low share price is a result of the company being seen as a risky investment, the risk being associated largely with its high level of indebtedness. This risk can be reduced, of course, if the company pays out its profits in the form of a scrip dividend.

All REITs must pay out all of their net profit so Hammerson will always pay a dividend as it is running quite profitably. It makes no difference at all whether the dividend is paid out in cash or by way of a scrip dividend, since the shareholder is able to sell the new scrip shares so as to have the dividend in cash, if he wishes. So, the form in which the dividend pays will have no affect on the share price at all. This is clear enough - in announcing that part of the profits will be paid out as a cash dividend, rather than as a scrip dividend, the share price has not altered at all, for the simple reason that the net position is exactly the same, in whatever form the dividend is paid. However, in the longer term, the company will become more attractive if the dividend is paid out in the form of a scrip dividend, since the indebtedness of the company will be reduced, making it a less risky investment.

For a long time now, the market has set the share price for Hammerson at one-half of its net asset value per share, so, with a NAV of 51p, the current share price of 25.5p seems in accordance with historic market sentiment. However, if the sale of the share in Bicester Village were to come off, then the share price would, of course, depart from this historic setting, since the company would then have a much lower indebtedness and most risk would disappear. There does not appear to be any news on this possible disposal, though.

This undervaluation is mostly due to how the dividend has been handled... About REITs, Investors can close an eye about growth but they are not going to blink about the dividend. Now we got a dividend at last, the sp should steadily increase. Plus the exciting prospect of additional good news should be coming -

Its still being priced like there was a pandemic on and malls were down to essential shops only.

Such a disconnect.

Interesting innovations at Brent Cross SC - Padel courts, Moorfields Eye Hospital consultants advising.

The CEO Rita-Rose Gagne has declared shopping trends are improving.

Indeed, it's been undervalued for a long while now, not helped by some of the boards decisions.

The news is very positive but very little uplift in SP..

Well, it might not have been explosive right now but the mid-term outlook looks quite good, which is what matters most (to me anyway).

Looks undervalued.

Get the value of the portfolio and subtract the debt and what is left is about x3 the present Market Cap

Imvho

A full year dividend of 1.5p per share represents a return of 6%, based on the current share price. That involves distributing only about two-thirds of the profits.

Going to be an interesting day tomorrow, hoping for some real positive news SP is way below where it should be

GLA

It's got so low it's turning into a buying opportunity

The SP drop was because HMSO said they were not going to do dividends. They did backtrack a little part way into the year, but only offered a tiny dividend which was nearly pointless.

This time last year these shares were worth 20% more than today at just over 30p,so even if they sell off some of their assets it won't make a great deal of difference to the share price.

It makes absolutely no difference to the shareholders whether the dividend is paid out in cash or by way of a scrip dividend. To comply with the rules relating to a REIT, the dividend does need to be paid out in one way or the other, but it makes absolutely no difference to the shareholders in what form they receive the dividend. Paying the dividend as a scrip dividend does enhance the cash position of the company, and is, in principle, more in the interests of the shareholders. So, let us hope for a prudent decision to pay out the dividend in the form of shares, rather than cash.

This sale is good news. The share price had, possibly, been marked up rather higher than this news really merited. It has settled back to a more realistic level now, at about 25.5p where it is likely to remain, with a little bit of a fluctuation when the figures which everyone expects are finally confirmed on Thursday. The sale of the interest in Bicester Village would be likely to lift the share price considerably, of course.

Bubble, your news were right

""""Hammerson today announces the exchange1 of an unconditional contract for the sale of Union Square, a 52,000m2 shopping centre in Aberdeen, to an affiliate² of Lone Star Real Estate Fund VI, L.P. for £111m cash consideration. Completion is expected to occur in Q1 2024."""

Is this the harbinger of great news on thursday?... A declaration on the divi and sp should jump into the 30s!

Lone Star Funds is in advanced talks to buy the Union Square shopping centre in Aberdeen from Hammerson, said two market sources.

The US private equity firm is offering around £110 million, a 12% yield, and has received financial backing from Natwest, the sources said, speaking on the condition of anonymity. If the deal goes through, it will mark a return to the retail sector for Lone Star. Five years ago, it handed back the keys on a portfolio of shopping centres, called Project Tiger, it had acquired from Rockspring in 2014 for £260 million using a £200 million Citi loan, as first reported by Debtwire at the time.

Well, big players have dropped HMS for its divi policy... I have long maintained that the current board is fantastic at running a company in itself, but they are sadly inept at dealing with the market side of it. They should appoint someone to the board with the specific high qualities of dealing with the market side.

You must not forget that in 2023 we were paid a dividend of 0.72p because some of the big institutions wanted the payment of dividends back.

Indeed. The annual results might bring small gains.

Only the dividend is holding this SP back now - unless ofc we get an announcement of the Village arm for a good price of around £bil.

Bubble

the share price is directly dependent on the divi. An attractive divi will make the sp soar

Still.

As an investor, i want to see a return if both ways, Shareprice and dividend.

It's been long enough now since covid for them to return the divis. When they announced around a year ago that they weren't going to offer one, the SP dropped massively from its gains

The “cash” option is offered only as a matter of form. No shareholder is expected to actually ele to to receive it. For those who require an income from their holding, the procedure is to wait until the scrip dividend has been issued and to then sell the shares. For the shareholders, the payment of the dividend by way of a scrip dividend is entirely neutral. For the company, it is very beneficial, since it amounts, in practical terms, to a rights issue. Essentially, those buying the scrip dividend shares are boosting the company’s cash position.

2p -scrip

02p - cash