Shares in CLS Holdings (CLI) jumped nearly 4 per cent on the day the real estate group revealed this strong first-half performance. Pre-tax profit was boosted by a £45.2m valuation uplift in the property portfolio, in stark contrast to last year's £3.5m devaluation.
Net rental income rose nearly 17 per cent to £40.8m, supported by last year's £124m acquisition of the Neo portfolio. Gearing remains relatively high, although strong cash flow helped to trim net debt by £23m from end-December's £578m figure. More importantly, the differential between the 3.73 per cent average cost of debt and the core net initial yield on the property portfolio, of 6.8 per cent, is among the highest in the listed property sector. Moreover, strong investor demand in London prompted management to sell Cambridge House in Hammersmith for a net initial yield of 2.34 per cent, representing a 32 per cent uplift on end-December's valuation.
Trading in France, however, remained stagnant but activity in Germany was more robust, with vacancy rates there having fallen from 7.4 per cent 18 months ago to 1.5 per cent.
In place of a conventional dividend, there's a tender offer buy-back of one share for every 119 held, at 1,500p per share. This equates to a return of 12.6p a share.
Broker Liberum has upgraded its full-year forecast for net asset value to 1,509p a share.
| CLS HOLDINGS (CLI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,335p | MARKET VALUE: | £578m | |
| TOUCH: | 1,335-1,337p | 12-MONTH HIGH: | 1,499p | LOW: 1,130p |
| DIVIDEND YIELD: | nil | TRADING PROPS: | nil | |
| PREMIUM TO NAV: | 9% | |||
| INVESTMENT PROP: | £1.17bn | NET DEBT: | 109% | |
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 1,025 | 27.9 | 53 | nil |
| 2014 | 1,227 | 72.6 | 142 | nil |
| % change | +20 | +160 | +168 | - |
Ex-div: - Payment: - | ||||
