Hammerson plc has today announced its reshaped strategy to elevate and accelerate performance with a higher quality portfolio of winning destinations, enhanced by greater levels of operational excellence and capital efficiency.
Enhanced quality through optimised portfolio
• New focus solely on two winning retail segments with enhanced LFL NRI growth prospects
- Flagship retail destinations
- Premium Outlets
• Exit retail parks sector over the medium term
• Disposal target of £1.1bn by end of 2019, with £300m already achieved this year and an increased overall 2018 target of £600m
• New City Quarters concept established to maximise value from the highly attractive land surrounding our shopping centres
Operational excellence and cost savings
• Step change in retailer line-up: shrinking department store space by a quarter and high street fashion by a fifth, replaced by differentiated brands, aspirational fashion, leisure, events and lifestyle spaces
• Devoting more resource to meet increased consumer demand for experience enhancing events and a sophisticated digital offer
• Deliver cost savings of at least £7m p.a. through operational efficiencies and lower corporate costs associated with disposals and Board and other management changes
David Atkins, Chief Executive of Hammerson, said, “Our reshaped strategy sees us taking decisive action to further reposition our portfolio. Through increasing the level of disposals, including exiting the retail parks sector, we will now focus solely on winning destinations of the highest quality: Flagship retail destinations and Premium Outlets. These are the venues we believe will maintain relevance and outperform against the shifting retail backdrop.
“Our customer and retailer offer will be amplified, and this includes a step change in our retailer line up. We will reduce the amount of floor space let to department stores and high street fashion as we actively focus on the latest consumer trends and take bolder steps to provide the best retail mix.'
The firm also released its half-year 2018 results for the six months ended 30 June
2018. Net rental income was down 3% from £178.5m to £184m. Adjusted profit stood at £120m from £119.4m, an uplift of 0.5%.
Atkins continued, “Our results today demonstrate the resilience of our business. We are taking tough decisions and have absolute conviction in our ability to deliver. By reprioritising our capital deployment and repositioning our portfolio, we will accelerate future shareholder value and returns.”