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Raised 700m in the last bond to pay off 265m due in 2023 and 310m due next year. They managed to get a slight discount on what was due next year, paid 1.75% on what was a 2% bond.
They have 125m left from the recent bond raise plus something like 900m in cash.
Paying off the rest of next year bond (190m) still makes sense as it’s not like Hammerson could do something with the cash in such a short time scale so they’d have had to have had it sat around and paid 2% for an extra year while it earns nothing - £3.8m saved in other words.
@Latpulldown
I don’t share your enthusiasm for cineworld. Pre-covid, out of the big names I know, Odeon and Showcase were the better service. Odeon in particular have invested big into luxury/reclining and moved upmarket. Vue went to the cheap end and priced accordingly. Cineworld seem to be in the middle somewhere. The swivel seats they do I found to be rather uncomfortable the last time I went to one.
They had quite a lot of debt before this and were at a 14% short rate. I’m not a fan of shorters but that’s a lot of smoke.
Over the last year I believe they’ve diluted earnings by issuing shares/convertible bonds. Taken on a hefty amount more of debt at expensive rates - 7.5% the one most recently issued in April.
Management have pushed through excessive share awards for themselves that passed only due to the fact they are controlling shareholders.
Short term gamble on a re-opening boost maybe. But personally i’m staying far, far away.
RNS today where they are offering to pay off the upcoming bonds for the next couple years. And will be issuing new sustainability-linked bonds.
No info on what % the new bonds are at but there’s a lot of ESG funds around so they should get a cheap rate.
This is exactly what they should be doing and glad to see it happening. Would expect further bonds to be issued to pay of the more expensive debt soon after.
Share price could relatively easily be ‘manipulated’ into even the 20’s if the sharks (Goldmans etc) decided to short it heavily. However it would get increasingly expensive to do so as fewer shares became available. Not to mention someone with deep pockets like Lighthouse may well decide to take it as an opportunity to buy.
There was a slight reduction in short position today - 0.04% by Woodson capital. Total short now stands at 6.77%. Even that tiny reduction was a 650k trade- over 10% of the volume traded in a day.
It’s the volumes traded that swing a share price around over the short-term and existing shorters have a lot of volume they must buy at some point with not so much available.
Clintek, do you really thing a post on this board is going to impact the share price? Because I don’t.
Hammerson is rather more volatile than others due to it’s smaller float - Lighthouse and APG have almost half of the shares tied up. But volatility is only a risk if you are either trading on margin or in need of the invested funds short term.
I’m interested in the company’s actions, the cashflow and weighing up risks rationally. The share price follows in due course.
I would say Ephemerals posts are quite reasonable.
There are plenty of negatives that need to be given proper consideration. There is almost no doubt we will see a further write down on assets in the next update as the retail parks sale were sold at an 8% discount. That will for sure impact LTV’s. Loan ratio’s may have been what forced RRG hand into selling the retail parks so soon.
In the year end presentation it was said Hammerson needed to collect 80% for the year to be cash flow breakeven. They are nowhere near that presently.
Having kept an eye on the crowd checker feature and visited one flagship centre. The footfall numbers are poor.
I obviously think the positives outweigh the risks else i’d not be invested - A valuation upwards, when it turns around, would boost share price considerably and a rush into inflation protecting asset classes like real estate would help too. I agree with RRG’s analysis and actions, management have incentives in line with shareholders. Retail sales boost is expected so rents should follow. Share price is half NAV so still a solid margin of safety.
After recent sales they’ve brought net debt down to 1.8bn and have cash (900m approx) on hand to pay any upcoming maturities for a couple years. They should be using that current strength to issue new long term bonds. Kleppiere were able to get 600m on less than 1%. Hammerson are paying 6-7 on their most expensive debt and a weighted average of 3 so there is scope to save a chunk in interest rates.