Hammerson, a leading mall operator in the UK, has reported a 14% rise in adjusted profit for the first half of the year. This growth can be attributed to the recovery of the retail sector following the easing of lockdown restrictions and cost-saving measures implemented by the company. Despite the positive news, Hammerson expressed concerns about the footfall in its malls, stating that it has not yet reached pre-pandemic levels.

One factor that has provided some relief for mall operators like Hammerson is the extension of the ban on commercial evictions by the British government until March 2022. This has helped alleviate the financial burden caused by the closure of non-essential retail stores during lockdowns. However, landlords have still faced challenges in renegotiating rental agreements and making concessions due to reduced demand and declining asset valuations.

The recent surge in COVID-19 cases has added to the uncertainty faced by Hammerson and other mall operators. Some areas, including France where Hammerson operates, have reintroduced restrictions in response to the increase in cases. This has further impacted footfall and consumer confidence.

Hammerson’s adjusted earnings for the first half of the year amounted to £20.1 million ($27.9 million), compared to £17.7 million in the same period last year. The company also saw a significant decrease in its IFRS loss, from £1.09 billion in the first half of 2020 to £376 million this year. These figures highlight the progress made by Hammerson in improving its financial performance.

CEO Rita-Rose Gagné emphasized the company’s commitment to reducing its debt and creating a more efficient organization through the disposal of non-core assets. The focus remains on deleveraging the balance sheet and adapting to the evolving retail landscape.

Hammerson also noted a decline in its half-year EPRA net tangible assets per share, an important industry metric, which decreased by 16% to 69p. Additionally, footfall in the company’s malls is currently averaging at 75% of the levels seen in 2019, indicating that a full recovery is still a work in progress.

In conclusion, although Hammerson has experienced a modest increase in profit, it continues to face challenges due to reduced footfall and ongoing uncertainties surrounding the pandemic. The company remains dedicated to strengthening its financial position and implementing strategies to thrive in the changing retail environment.

Useful links:
1. Financial Times: Hammerson reports 14% rise in adjusted profit
2. BBC News: Hammerson’s profit rises, but footfall concerns remain