Abbey retail park owner to sell off £1bn of properties
Abbey Retail Park owner Hammerson has unveiled a sweeping strategy overhaul that will see it offload £1.1bn in assets and hand millions back to shareholders in a move meant to appease investors after profits plunged 80%.
The Newtownabbey retail park owner which also owns Birmingham's Bullring made the announcement alongside its half-year results, where it outlined plans to exit the retail parks sector and instead focus its attention on flagship retail destinations and premium outlets.
Hammerson said it was targeting £1.1bn in disposals by the end of 2019, having already offloaded £300m this year and increased its overall 2018 target to £600m. It will also hand up to £300m back to investors through a share buyback programme in an effort to share the proceeds.
The company is now targeting at least £7m in annual cost savings, which will be achieved through "operational efficiencies", aided by the disposal programme as well as management changes that include cutting the number of executive directors from four to two.
Chief investment officer Peter Cole and executive director Jean-Philippe Mouton will both step down from the board at the end of the year.
It comes as Hammerson reported a whopping 80% drop in pre-tax profits to £55.8m over the six months to June 30, compared with £289.7m a year earlier.
On an adjusted basis, profits rose a mere 0.5% to £120m.
The company said its UK shopping centres and retail parks were affected by the "turbulent retail market" and the recent raft of Voluntary Arrangements (CVAs), which have seen retailers demand lower rents or shut stores completely.
Hammerson said it was cutting the floor space let to department stores by a quarter, and high street fashion by a fifth, letting loose firms that have continued to struggle amid a slowdown in consumer spending.