(Alliance News) - FTSE 250-listed Hammerson PLC on Tuesday reported a sharply widened loss with net rental income falling and warned its dividend could be cut by almost half this year, after holding its payout for 2019.
In 2019, Hammerson's net rental income fell by 11% to GBP308.5 million from GBP347.5 million. Its pretax loss more than trebled to GBP573.8 million from GBP173.3 million in 2018.
EPRA net asset value per share was 19% lower year-on-year at GBP6.01 each from GBP7.38.
Occupancy was stable at 97% and its full-year payout was locked at 25.9 pence per share. Hammerson however said it could cut its dividend in 2020 by 46%
Hammerson said: "For 2020, the board has decided to take a prudent and disciplined approach to dividends, over and above that implied by the disposals programme, and therefore removing the link between earnings and dividend, whilst still enabling the company to meet real estate investment trust and SIIC tax obligations.
"Therefore, the board expects to recommend a 2020 full year dividend of 14.0 pence, a 46% cut from 2019. Dividends will be reset from this sustainable level from 2021 onwards dependent on future disposals, rental income, balance sheet strength and the broader market."
SIIC, or Societe d'investissement immobilier cotee, is a French REIT tax.
The company on Friday said it sold a portfolio of seven UK retail parks for GBP400 million.
Since the start of 2019, the Hammerson has now completed GBP975 million worth of disposals and its last remaining retail park is Brent South, London, which is also up for sale.
The company offered yet another repudiation of the ailing UK retail sector which has struggled with consumer uncertainty.
Hammerson said: "While retail sales in the UK have increased by 50% since 2008, retailer profits have fallen by more than 30%, driven by channel shift, growth in business rates and employment costs, and weak sterling. Oversized store estates are putting retail businesses under stress, while the shift to buying online in the UK continues.
Retail sales growth in its flagship UK sites in 2019 fell by 1.8%, footfall however was 0.6% higher.
In France, retail sales were 2.6% higher, with footfall up 1.9%.
Chief Executive David Atkins added: "We have taken decisive action over the past 12 months to reduce debt and significantly reshape the portfolio. Against a challenged retail and investment backdrop, we have exceeded our 2019 disposal target, exited the retail parks sector as we said we would and reduced debt by a third. This delivered nearly GBP1 billion of transactions in the process. With the outlook for the UK retail market remaining uncertain, we believe we should maintain our focus on reducing debt during 2020."
Hammerson's net debt at December 31 was 18% lower year-on-year at GBP2.8 billion.
Shares in the company closed 1.4% lower at 218.84 pence each in London on Monday. In Johannesburg early Wednesday, it was trading 1.1% lower at ZAR42.00.
By Eric Cunha; ericcunha@alliancenews.com
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Hammerson (HMSO)