Hammerson plc

Management did not report full half-year revenue or EPS on this call, but said the FY2026 underlying earnings guidance was increased from GBP 120 million to GBP 125 million, and to GBP 132 million including the acquisition of 50% of Arndale, which they said is up 27% year over year. The upgrade reflects just over GBP 2 million of settled rate rebates, stronger leasing and occupancy, and turnover-rent contributions from openings. On valuation, they said half-year values were flat, with yields held flat amid Middle East-related uncertainty, while ERV spreads were reported at 9% above ERV. Looking ahead, they expect similar 4%-5% like-for-like growth in 2027, with 2028 and beyond benefiting from inflation-plus growth; medium-term targets remain 6%-8% EPS and DPS CAGR and around 10% TAR over five years.

Rob Wilkinson framed the call around two positives: the stronger-than-expected operating performance and the strategic value of the Arndale acquisition. He said the prior auction process was not one Hammerson was comfortable with, but the company stayed in contact and was able to agree a bilateral off-market deal with the vendors. He also emphasized that the partnership with M&G is aligned and that the transaction improves flexibility without requiring immediate extra resource to manage the asset.

Himanshu Raja said the FY2026 guidance upgrade was driven by a small number of one-offs, notably just over GBP 2 million of longstanding rate rebate settlements, but more importantly by strong underlying leasing, higher occupancy, and service-charge and turnover-rent benefits. He said medium-term guidance is now measured off the 2025 base rather than the Value Retail-disposal-era base, yet the company still sees 6%-8% EPS and DPS CAGR and around 10% TAR over five years. He also pointed to around 4%-5% like-for-like growth in 2027, operational gearing from the portfolio, and the ability to fund the remaining Eurobond maturity next June through the EMTN program at the right time.

Analysts focused on what changed around Arndale versus the prior failed process, whether the reported net yield assumed CapEx, what drove the higher FY2026 guidance, why medium-term growth targets were effectively stepped down, and how the balance sheet and debt maturity profile would be managed. Management said Arndale moved from a formal auction with a physical due-diligence timeline they would not accept to an off-market bilateral deal, that there is no immediate urgent CapEx and planned spend is mostly accretive or ordinary-course, and that the asset is jointly managed with M&G under an aligned business plan. On the balance sheet and debt, they said the deal reduces LTV and adds about GBP 200 million of capacity, while the remaining Eurobond need will be refinanced when market timing is appropriate.