Hammerson FY22 Results – What to Expect

Hammerson (LON: HMSO) is set to release its 2022 full-year results on Thursday, March 9, and with its shares up over 21% so far in 2023, investors will be hoping for another boost.

While the property developer focused on urban and retail space in the UK, Ireland, and France, has gained this year, it is still well below the highs from around 2014 and 2015, when it traded above the 60p mark for a brief period.

Its most recent rally, which started in October, was given a leg up following Hammerson's third-quarter trading statement in which it said year-to-date, like-for-like gross rental income increased by 11%, and net rental income had continued to benefit from a strong leasing performance, improved collections and resulting lower bad debt charges.

In addition, Hammerson revealed that it expected FY22 adjusted earnings to be not less than £100 million, while footfall continued to show an improving trend and was around 90% of 2019 levels, with France at approximately 95%, continuing to “exceed national indices.”

This was somewhat surprising given the struggle for brick-and-mortar retailers over the past few years, with the pandemic and lockdown restrictions having a devastating impact.

But it shows the resilience of the bounce back with people eager to shop in stores once again. This bodes well for Hammerson's 2022 results.

In a recent note, analysts at Liberum were bullish on the UK Real Estate Investment Trust space's outlook.

The firm upgraded Hammerson from Hold to Buy, telling investors that share prices in the UK Real Estate Investment Trust space now reflect property value's expected declines.

Liberum stated that with “peak interest rates in sight in 1H23,” they believe current pricing “offers an attractive entry point for REITs and an opportunity to re-enter quality segments at rebased levels.”

In January, Peel Hunt analyst Matthew Saperia also upgraded Hammerson, to Hold from Reduce, stating that the real estate sector is ordinarily quick to re-rate as values trough.

The analyst explained that despite another band of downgraded estimates, the sector sits on a discount of nearly 20% to its expected trough net asset value. In addition, Saperia noted that balance sheets are strong, with the average dividend yield at the time of 4.6%, still expected to grow over the coming years.

However, it's not all positive for Hammerson. According to TipRanks, out of four analysts covering Hammerson that it tracks, the average price target is 20.13p, suggesting a potential 32% downside from current levels.