Interim Results - Part 2
Hammerson PLC
29 August 2001
PART 2
Property Portfolio Information
for the six months ended 30 June 2001
Net True Underlying Estimated
rental Properties equivalent valuation Vacancy Rents rental
income at valuation yield change rate passing value Revers-
ionary
£m £m % % % £m £m %
Notes (1) (2) (3) (4)
United
Kingdom
Retail:
London 21.6 815.0 6.6 (2.4) 1.6 47.0 55.4 11.3
&
South
Midlands 9.6 389.0 7.4 (1.3) 0.9 19.4 23.7 10.1
&
North
31.2 1,204.0 6.8 (2.1) 1.4 66.4 79.1 10.9
Office:
City 12.0 566.6 7.5 4.5 0.1 24.4 30.9 25.7
West End 10.2 324.4 7.8 3.7 1.6 17.8 25.2 36.7
Docklands 4.2 168.3 8.3 6.1 9.0 10.1 17.7 46.7
&
other
26.4 1,059.3 7.8 4.5 4.9 52.3 73.8 34.0
Total
United
Kingdom 57.6 2,263.3 7.2 0.9 2.9 118.7 152.9 20.9
Continental
Europe
Retail:
France 13.8 521.2 7.0 4.8 2.0 30.8 40.0 22.7
Germany 5.1 266.6 6.6 nil 4.8 13.9 16.3 12.9
18.9 787.8 6.9 3.1 3.2 44.7 56.3 19.7
Office:
France 4.7 215.4 7.1 0.4 0.0 7.9 10.2 28.4
Total 23.6 1,003.2 6.9 2.5 3.0 52.6 66.5 21.0
Continental
Europe
Group
Retail 50.1 1,991.8 6.8 (0.1) 2.3 111.1 135.4 14.4
Office 31.1 1,274.7 7.7 3.8 4.6 60.2 84.0 33.3
Total
Group 81.2 3,266.5 7.1 1.4 2.9 171.3 219.4 20.9
Notes
(1) True equivalent yield is based on rents passing and estimated
rental values at 30 June 2001. The calculation excludes properties
in the course of development.
(2) Rents passing at 30 June 2001 after deducting head and equity rents.
(3) Estimated rental value at 30 June 2001 including vacant space and
after deducting head and equity rents.
(4) The amount by which the estimated rental value exceeds the rents
passing at 30 June 2001 assuming vacant space is let at estimated
rental value.
Consolidated Profit and Loss Account
Year ended Six months Six months
ended ended
31 December 30 June 2001 30 June 2000
2000
Audited Unaudited Unaudited
£m Notes £m £m
141.1 Net rental income 1 81.2 69.3
(15.7) Administration (9.1) (7.9)
expenses
125.4 Operating profit 72.1 61.4
17.2 Exceptional items: Profit 2.9 9.4
on the sale of investment
properties
142.6 Profit on ordinary 75.0 70.8
activities before interest
(53.4) Cost of finance 2 (35.8) (23.3)
(net)
89.2 Profit on ordinary 39.2 47.5
activities before
taxation
(8.2) Taxation 3 (4.3) (4.6)
81.0 Profit on ordinary 34.9 42.9
activities after
taxation
(1.3) Equity minority (0.4) (0.6)
interests
79.7 Profit for the 34.5 42.3
period
(39.4) Dividends 4 (12.9) (12.5)
40.3 Retained profit 21.6 29.8
for the period
28.0p Earnings per share 5 12.3p 14.8p
27.8p Diluted earnings 5 12.3p 14.8p
per share
22.0p Adjusted earnings 5 11.3p 11.5p
per share
All results derive from continuing operations.
Consolidated Balance Sheet
31 December 30 June 2001 30 June 2000
2000 Restated*
Audited Unaudited Unaudited
£m Notes £m £m
Fixed assets
3,337.8 Land and 6 3,266.5 3,037.8
buildings
0.8 Fixtures, 0.8 0.6
fittings and
equipment
3,338.6 Tangible assets 3,267.3 3,038.4
15.2 Investments 7 16.6 14.7
3,353.8 3,283.9 3,053.1
Current assets
71.0 Debtors 8 80.8 81.3
150.4 Cash and short 9 232.6 297.2
term deposits
221.4 313.4 378.5
Creditors falling
due within one
year
(11.2) Borrowings 10 (0.2) (47.2)
(146.7) Other 11 (133.4) (177.9)
63.5 Net current 179.8 153.4
assets
3,417.3 Total assets less 3,463.7 3,206.5
current
liabilities
Creditors falling
due after more
than one year
(1,428.7) Borrowings, 10 (1,422.3) (1,363.0)
including
convertible bonds
(18.3) Other 11 (15.5) (13.0)
(33.0) Equity minority (33.0) (31.9)
interests
1,937.3 1,992.9 1,798.6
Capital and
reserves
70.3 Called up share 70.3 71.2
capital
529.2 Share premium 13 530.3 528.9
account
939.6 Revaluation 13 927.4 797.6
reserve
2.0 Capital 13 2.0 1.1
redemption
reserve
1.5 Other reserves 13 1.5 1.5
394.7 Profit and loss 13 461.4 398.3
account
1,937.3 Equity 1,992.9 1,798.6
shareholders'
funds
Net asset value
689p per share 5 708p 632p
667p Diluted net asset 5 685p 614p
value per share
* Comparative figures have been restated as explained in note 16, 'Other
Information'.
Statement of Total Recognised Gains and Losses
Year ended Six months ended Six months ended
31 December 30 June 2001 30 June 2000
2000 Restated*
Audited Unaudited Unaudited
£m £m £m
79.7 Profit for the 34.5 42.3
period
199.8 Unrealised surplus 44.7 53.9
on revaluation of
properties
1.6 Exchange (11.8) 3.9
translation
movements
281.1 Total recognised 67.4 100.1
gains and losses
for the period
Note of Historical Cost Profits and Losses
Year ended Six months ended Six months ended
31 December 30 June 2001 30 June 2000
2000
Audited Unaudited Unaudited
£m £m £m
89.2 Profit on ordinary 39.2 47.5
activities before
taxation
10.4 Realisation of 48.5 7.4
previous years'
revaluation gains
Historical cost
profit on ordinary
activities before
99.6 taxation 87.7 54.9
Historical cost
profit for the
period after
taxation,
equity minority
interests and
50.7 dividends 70.1 37.2
Reconciliation of Movements in Shareholders' Funds
Year ended Six months ended Six months ended
31 December 30 June 2001 30 June 2000
2000 Restated*
Audited Unaudited Unaudited
£m £m £m
40.3 Retained profit for 21.6 29.8
the period
201.4 Other recognised 32.9 57.8
gains and losses
(31.3) Purchase and - (15.6)
cancellation of own
shares
1.2 Issue of shares 1.1 0.9
211.6 Net increase in 55.6 72.9
shareholders' funds
1,725.7 Shareholders' funds 1,937.3 1,725.7
at 1 January
1,937.3 Closing 1,992.9 1,798.6
shareholders' funds
* Comparative figures have been restated as explained in note 16, 'Other
Information'.
Consolidated Cash Flow Statement
Year ended Six months Six months
31 ended ended
December 30 June 30 June
2000 2001 2000
Audited Unaudited Unaudited
£m Notes £m £m
127.8 Net cash flow from 14 65.1 61.1
operating activities
(59.0) Returns on investment and 14 (54.6) (35.7)
servicing of finance
21.9 Corporation tax received - 21.3
(369.6) Capital 14 81.6 (174.6)
proceeds/(expenditure)
(67.0) Acquisitions and 14 - (66.6)
disposals
(38.8) Equity dividends paid (26.9) (26.1)
(384.7) Cash inflow/(outflow) 65.2 (220.6)
4.0 (Increase)/Decrease in (91.5) (150.2)
short term deposits
388.1 Net cash inflow from 15 17.3 370.2
financing
7.4 (Decrease)/Increase in (9.0) (0.6)
cash in the period
Reconciliation of Net Cash Flow to Movement in Net Debt
Year ended Six months Six months
ended ended
31 December 30 June 2001 30 June 2000
2000
Audited Unaudited Unaudited
£m £m £m
7.4 (Decrease)/Increase in (9.0) (0.6)
cash in the period
(418.4) Increase in debt (16.2) (384.9)
(4.0) Increase/(Decrease) in 91.5 150.2
short term deposits
(415.0) Change in net debt 66.3 (235.3)
resulting from cash
flows
(10.6) Adoption of secured - (10.6)
bank debt on
acquisition of property
(5.4) Exchange adjustment 33.3 (8.6)
(431.0) Movement in net debt in 99.6 (254.5)
the period
(858.5) Net debt at 1 January (1,289.5) (858.5)
(1,289.5) Closing net debt (1,189.9) (1,113.0)
Notes to the Accounts
1 NET RENTAL INCOME
Year ended Six months ended Six months ended
31 December 2000 30 June 2001 30 June 2000
£m £m £m
98.8 United Kingdom 57.6 49.1
31.4 France 18.5 14.7
10.9 Germany 5.1 5.5
141.1 81.2 69.3
2 COST OF FINANCE (NET)
Year ended Six months Six months
ended ended
31 December 2000 30 June 2001 30 June 2000
£m £m £m
Interest payable on:
18.5 Bank loans and overdrafts 10.7 7.4
overdrafts
71.6 Other loans 37.6 35.1
90.1 Interest payable and 48.3 42.5
similar charges
Less:
Interest payable
21.0 capitalised 7.6 11.3
15.7 Interest receivable 4.9 7.9
53.4 35.8 23.3
3 TAXATION
The tax charge for the six months ended 30 June 2001 is based on the
projected effective tax rate for the full year. The charge reflects the
recovery of advance corporation tax previously written off and allowances for
capital expenditure. The charge includes overseas taxation of £0.1m (30 June
2000: £0.3m). No tax has been charged on the sale of investment properties in
the period.
4 DIVIDENDS
The directors have declared an interim dividend of 4.58 pence per share (30
June 2000: 4.40 pence per share) payable on 1 November 2001 to shareholders
on the register at the close of business on 28 September 2001.
Notes to the Accounts
5 EARNINGS PER SHARE AND NET ASSET VALUE PER SHARE
Basic earnings per share is calculated by dividing the profit for the
financial period of £34.5m by the weighted average number of shares in issue
during the six months ended 30 June 2001 of 280.7m and excludes those shares
held in the Hammerson Deferred Share Plan (note 7) which are treated as
cancelled. Diluted earnings per share assumes the exercise of conversion
rights relating to the convertible bonds and of options relating to shares,
and is calculated on the diluted profit for the period of £34.5m and the
diluted weighted average number of shares of 281.3m. Adjusted earnings per
share excludes exceptional items and is calculated on the adjusted profit for
the period of £31.6m and the weighted average number of shares in issue
during the period. Exceptional items increased earnings per share by 1.0
pence in the six months ended 30 June 2001.
The calculations for basic and diluted net asset value per share at 30 June
2001 are shown in the table below:
Net asset value per share Net asset
Shareholders' value per
funds Shares share
£m million pence
Basic 1,992.9 281.4 708
Company's own shares held for n/a (0.7) n/a
Deferred Share Plan
Unexercised share options 11.6 2.9 n/a
Unexercised convertible bonds 110.0 25.2 n/a
Diluted 2,114.5 308.8 685
6 LAND AND BUILDINGS
Fully developed Properties in the
Properties course of Total
development
Valuation Cost Valuation Cost Valuation Cost
£m £m £m £m £m £m
Movements
in the
period
Balance at 3,040.0 2,175.8 297.8 214.5 3,337.8 2,390.3
1 January
2001
Exchange (42.4) (32.4) (2.9) (2.8) (45.3) (35.2)
adjustment
Additions 77.4 77.4 48.6 48.6 126.0 126.0
at cost
Disposals (205.0) (156.5) - - (205.0) (156.5)
Development - - 7.6 7.6 7.6 7.6
outgoings
capitalised
Revaluation 26.8 - 18.6 - 45.4 -
surplus
Balance at 2,896.8 2,064.3 369.7 267.9 3,266.5 2,332.2
30 June
2001
All properties are stated at market value as at 30 June 2001, valued by
professionally qualified external valuers. With the exception of the
properties shown below they have been valued by Jones Lang LaSalle, Chartered
Surveyors. In the United Kingdom the valuation was performed jointly with
Donaldsons, Chartered Surveyors. The group's interests in the Birmingham
Alliance properties were valued by DTZ Debenham Tie Leung, Chartered
Surveyors and the group's interest in the Oracle Shopping Centre was valued
by Donaldsons. The valuations have been prepared in accordance with the
Appraisal and Valuation Manual of The Royal Institution of Chartered
Surveyors.
At 30 June 2001 the total amount of interest included in development
properties was £14.2m (31 December 2000: £6.6m).
Should the group's properties be sold at their valuation a tax liability of
approximately £138m (31 December 2000: £151m) would arise, equivalent to 45
pence per share (31 December 2000: 49 pence per share) on a diluted net asset
value per share basis. No provision for this contingent liability has been
made, as it is not expected that any liability will arise in the foreseeable
future.
Notes to the Accounts
7 INVESTMENTS
31 December 2000 30 June 2001 30 June 2000
£m £m £m
13.8 Value Retail Investors 13.9 13.3
Limited Partnerships
1.4 Ordinary shares of 2.6 1.4
Hammerson plc (Deferred
Share Plan)
- Other investments 0.1 -
15.2 16.6 14.7
The group has a 57.2% interest in Value Retail Investors Limited Partnership
I and a 31.4% interest in Value Retail Investors Limited Partnership II, both
of which have interests in a designer outlet centre in Bicester, in the
United Kingdom. The interests were acquired at a total cost of £10.9m and are
included at a total market value at 30 June 2001 of £13.9m, the property
elements of which have been reviewed by Donaldsons, Chartered Surveyors.
These investments have not been consolidated within the group accounts as the
group does not have a significant influence over the management of the
partnerships.
The Company's own shares were acquired by the Trustees of the Hammerson
Deferred Share Plan at a cost of £3.2m (nominal value £0.2m) and may be
awarded to participants in accordance with the terms of the Plan. The cost of
the shares is being amortised over the anticipated vesting periods, taking
account of the group's financial performance. The amortisation is included in
staff costs within administration expenses.
8 DEBTORS
31 December 2000 30 June 2001 30 June 2000
£m £m £m
Due within one year
20.4 Trade debtors 25.3 29.2
38.6 Other debtors 47.4 36.2
7.3 Corporation tax 3.5 11.7
4.7 Prepayments 4.6 4.2
71.0 80.8 81.3
9 CASH AND SHORT TERM DEPOSITS
31 December 2000 30 June 2001 30 June 2000
£m £m £m
19.5 Cash at bank 10.4 11.5
130.9 Short term deposits 222.2 285.7
150.4 232.6 297.2
Analysis by currency
144.2 Sterling 187.3 231.3
6.2 Euro currencies 45.3 65.9
150.4 232.6 297.2
At 30 June 2001 short term deposits mainly comprised deposits placed on money
markets with rates linked to LIBOR for maturities of not more than 2 months.
Notes to the Accounts
10 BORROWINGS
31 December 2000 30 June 2001 30 June 2000
£m £m £m
459.4 Bank loans and 109.3 427.3
overdrafts
861.6 Other loans: Unsecured 1,200.4 862.4
37.1 Secured 35.3 38.0
108.2 Convertible bonds 108.4 108.1
1,466.3 1,453.4 1,435.8
Exchange difference on
(26.4) currency swaps (30.9) (25.6)
1,439.9 1,422.5 1,410.2
On 2 February 2001 the Company issued a further £50m 6.875% Sterling bonds,
redeemable at par on 31 March 2020.
On 20 June 2001 the Company issued euro500m 6.25% Euro bonds, redeemable at
par on 20 June 2008.
Maturity
31 December Bank loans 30 June 30 June
2000 2001 2000
Total and Other Total Total
overdrafts loans
£m £m £m £m £m
908.0 After 5 years - 1,246.8 1,246.8 914.5
514.0 From 2-5 years 103.2 65.8 169.0 332.5
6.7 From 1-2 years 0.2 6.3 6.5 116.0
Due
after more
1,428.7 than 1 year 103.4 1,318.9 1,422.3 1,363.0
11.2 Due within 5.9 (5.7) 0.2 47.2
1 year
1,439.9 109.3 1,313.2 1,422.5 1,410.2
Analysis by currency
31 December 2000 30 June 2001 30 June 2000
£m £m £m
650.5 Sterling 697.3 648.7
789.4 Euro currencies 725.2 761.5
1,439.9 1,422.5 1,410.2
Undrawn committed facilities
31 December 2000 30 June 2001 30 June 2000
£m £m £m
65.2 Expiring after more 405.4 48.7
than two years
Notes to the Accounts
11 CREDITORS - OTHER
31 December 2000 30 June 2001 30 June 2000
£m £m £m
Falling due within one
year
39.5 Trade creditors 46.9 44.1
6.1 Taxation 6.6 5.5
63.8 Other creditors 59.4 78.2
10.4 Accruals 7.6 37.6
26.9 Dividends payable 12.9 12.5
146.7 133.4 177.9
Falling due after more
than one year
18.3 Other creditors 15.5 13.0
12 FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES
31 December 2000 30 June 2001 30 June 2000
Book Fair Book Fair Book Fair
value value value value value value
£m £m £m £m £m £m
Financial
liabilities
Overdrafts
(13.1) (13.1) and short (16.7) (16.7) (48.6) (48.6)
term
borrowings
(1,359.1) (1,404.0) Gross (1,346.6) (1,382.6) (1,293.5) (1,305.8)
long term
borrowings
(110.0) (121.3) Convertible (110.0) (121.6) (110.0) (121.0)
bonds
15.9 15.9 Unamortised 19.9 19.9 16.3 16.3
borrowing
costs
- (10.7) Interest - (11.9) - (11.1)
rate
swaps
26.4 29.4 Currency 30.9 38.1 25.6 32.1
swaps
(1,439.9) (1,503.8) Total (1,422.5) (1,474.8) (1,410.2) (1,438.1)
borrowings
Details of the group's cash and short term deposits are set out in note 9.
Their fair values equate to their book values.
The fair values of the group's long term borrowings and convertible bonds
have been estimated on the basis of quoted market prices.
The fair values of the group's outstanding interest rate and foreign currency
swaps have been estimated by calculating the present value of future cash
flows, using appropriate market discount rates. The adjustment on interest
rate swaps at 30 June 2001 of £11.9m includes £1.6m (31 December 2000: £0.1m)
relating to swaps maturing in less than one year.
The fair values of other long term creditors equate to their book values.
Short term debtors and creditors have been excluded from these disclosures as
permitted by Financial Reporting Standard 13.
At 30 June 2001 the fair value of financial liabilities exceeded their book
value by £52.3m (31 December 2000: £63.9m), equivalent to 17 pence per share
(31 December 2000: 21 pence per share) on a diluted net asset value per share
basis.
Notes to the Accounts
13 RESERVES
Share Capital Profit
premium Revaluation redemption Other and loss
account reserve reserve reserves account
£m £m £m £m £m
Balance 1 529.2 939.6 2.0 1.5 394.7
January 2001
Exchange - (8.4) - - (3.4)
adjustment
Premium on 1.1 - - - -
issue of
shares
Surplus - 44.7 - - -
arising on
revaluation
of
properties
Transfer to - (48.5) - - 48.5
profit and
loss account
on disposal
Retained - - - - 21.6
profit for
the year
Balance 30 530.3 927.4 2.0 1.5 461.4
June 2001
14 ANALYSIS OF CASH FLOWS
Year ended Six Six months
months ended
ended
31 December 30 June 30 June
2000 2001 2000
£m £m £m
Reconciliation of
operating profit to net
cash inflow from operating
activities
125.4 Operating profit 72.1 61.4
0.5 Depreciation and 1.0 0.5
amortisation
Increase in accrued rent
(6.1) receivable (1.5) (4.1)
(4.0) Increase in debtors (15.7) (14.7)
12.0 Increase in creditors 9.2 18.0
127.8 65.1 61.1
Returns on investment and
servicing of finance
15.5 Interest received 5.0 5.6
(74.0) Interest paid (59.6) (41.3)
(0.5) Dividends paid to - -
minorities
(59.0) (54.6) (35.7)
Capital
proceeds/(expenditure)
(444.4) Purchase and development (126.4) (224.9)
of property
74.8 Sale of property 208.0 50.3
(369.6) 81.6 (174.6)
Acquisitions and disposals
(0.2) Disposal of subsidiary - (0.2)
companies
(67.6) Purchase of subsidiary - (66.4)
companies
0.8 Cash acquired with - -
subsidiary company
(67.0) - (66.6)
15 ANALYSIS OF CASH FLOW FROM FINANCING
Year ended Six months Six months
ended ended
31 December 30 June 2001 30 June 2000
2000
£m £m £m
198.6 Issue of bonds 347.8 198.6
1.0 Issue of shares 1.1 0.9
(31.3) Purchase of own shares - (15.6)
for cancellation
248.4 (Decrease)/Increase in (323.8) 181.7
medium and long term
borrowings
(28.6) (Decrease)/Increase in (7.8) 4.6
short term borrowings
388.1 Net cash inflow from 17.3 370.2
financing
Notes to the Accounts
16 OTHER INFORMATION
The financial information contained in this report does not constitute
statutory accounts within the meaning of section 240 of the Companies Act
1985. The results for the year ended 31 December 2000 are an abridged version
of the full accounts for that year which received an unqualified report from
the auditors which did not contain a statement under s237(2) or (3) of the
Companies Act 1985. The full accounts for the year ended 31 December 2000
have been filed with the Registrar of Companies.
The unaudited financial information contained in this report has been
prepared on the basis of the accounting policies set out in the full accounts
for the year ended 31 December 2000.
For the year ended 31 December 2000, the group changed its accounting policy
so that all investment properties are included in the balance sheet at market
value. Previously, properties held for or in the course of development were
included in the balance sheet at the lower of cost and recoverable amount.
Comparative figures for 30 June 2000 have been restated in accordance with
the revised policy, the effect of which has been to increase land and
buildings and shareholders' funds by £58.0m at that date. Under the previous
accounting policy, land and buildings and shareholders' funds at 30 June 2001
would be reduced by £101.8m.
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