Hammerson share price: Group points to post-referendum uncertainty

Hammerson (LON:HMSO) has updated investors on its half-year performance this morning.

**Highlights from the company statement:**
David Atkins, Chief Executive of Hammerson, said: “I am pleased to deliver another set of solid results for this half year with good operational metrics and EPS growth. Looking forward, we have confidence in the resilience of our business model, which will underpin our ability to deliver robust income returns during and beyond this period of political and economic uncertainty in the UK.

We believe our European diversity, best in class retail portfolio and low capital commitments positions us to produce consistent operational results, as we have done in recent years. During 2016, we successfully delivered our market-leading platform in Dublin, accelerated momentum in signing new leases and executed our disposal programme to support our financial flexibility.
Our assets in Europe continue to perform strongly and in the UK, notwithstanding the market uncertainty, we have been reassured by the level of leasing and investment activity post the EU Referendum, both in our portfolio and across the wider property market, highlighting continued appetite for high-quality retail property.”
MARKET BACKDROP
The majority vote to end the UK’s membership of the European Union in the Referendum held on 23 June 2016 has created a period of political and economic uncertainty that may impact the property investment and letting markets. This uncertainty could continue whilst the UK renegotiates its trading position and other relationships with the EU and other countries.
Given the short period of time since the Referendum it is difficult to extrapolate trends in the UK property investment and letting markets or in consumer trends. However it is reassuring that a number of UK real estate companies, including Hammerson, have reported no immediate lapse in commercial discussions with tenants or investment counterparties. The pattern of consumer expenditure and footfall in our UK centres since the Referendum has been consistent with trends seen since the beginning of 2016.
It is also encouraging to note the current factors which could provide support to property valuations including the record-high spread of property yields over long-term interest rates, lower leverage across the real estate sector and well-capitalised lending institutions. In particular, the on-going European Central Bank programme of quantitative easing clearly highlights the relative attractiveness of property and has led to upward pressure on capital values.
PROFIT FOR THE PERIOD
The Group’s profit for the period, attributable to equity shareholders, under IFRS was £162.5 million, £163.6 million lower than the same period in 2015. This includes income from operations and financing costs as well as one-off gains/losses realised on the sale of properties and unrealised property valuation changes. As with other property companies, and in line with EPRA guidance, we review the Group’s profit on an adjusted basis, which best reflects underlying earnings, and the table below reconciles IFRS profit to adjusted profit for the period.
As of 07:07 BST, Monday, 25 July, Hammerson plc share price is 546.00p.

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