Shopping centre investor Hammerson (HMSO) was down a fraction to 221.9p on a mixed set of full year results.

The owner of Birmingham's Bullring centre is desperately trying to reshape its portfolio as it contends with a structural decline in its market as more sales go from physical stores to online.

To that end the company has completed total disposals of £975m, including £542m generated in 2019 which was ahead of its £500m target. To date in 2020 Hammerson has sold off £433m worth of assets, including exchanging contracts on its retail parks portfolio for £400m.

It has also announced plans to slash its 2020 dividend from the 25.9p paid for 2019 to 14p.

While Hammerson’s share price performance over the last five years has been a bit of a disaster, down by more than two thirds, its rival Intu has fared a lot worse, losing 96% of its value. There are genuine fears over Intu’s future, thanks to a heavily strained balance sheet, and a key investor pulling out a potential emergency fundraise.

For 2019, Hammerson’s pre-tax losses widened to £573.4m from £175.1m year-on-year as revenue fell 15% to £190.3m.

Net rental income, on a like-for-like basis, dropped 6.7%, with tenant restructuring, in the form of company voluntary arrangements and administrations, the largest single factor reducing income, the company said.

Numis analyst Poonam Lodhia says: ‘In our view the lack of clarity on further disposals, further rental restructuring and rental deflation pose further downward pressure on earnings, which we believe has prompted management to “rebase the dividend to a sustainable level”.

‘While we think this is a sensible decision and a dividend cut was widely expected, in our view, the move from expectation to reality is likely to cause the shares to come under further pressure.’

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Issue Date: 25 Feb 2020