CLS is far more opportunistically run than most property companies – which is hardly surprising since Swedish chairman Sten Mortstedt controls 61 per cent of the shares. He has made some excellent calls over the years, leading to impressive shareholder returns, and CLS's performance in 2011 was as resilient as ever.
The key growth driver was indexation – 65 per cent of CLS's rent-roll is tied to inflation. That pushed up like-for-like rents by 2.6 per cent and the portfolio value by 2.1 per cent, excluding currency effects. Adjusted net asset value (NAV), in turn, rose a modest 3 per cent to 983p, but that was after factoring in a 53p-a-share hit resulting from the cancellation of a large interest-rate hedge for £24.2m. However, the benefit of removing the hedge was to reduce the cost of debt from 4.3 per cent to 4.1 per cent. That's crucial because CLS's strategy is to play the arbitrage between cheap debt and high-yielding office blocks.
CLS HOLDINGS (CLI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 675p | MARKET VALUE: | £303m | |
| TOUCH: | 670-681p | 12M HIGH/LOW | 682p | 501p |
| DIVIDEND YIELD: | nil | TRADING PROP: | nil | |
| DISCOUNT TO NAV: | 17% | |||
| INVESTMENT PROP: | £902m | NET DEBT: | 132% | |
| Year to 31 Dec | Net asset value (p) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share* (p) |
|---|---|---|---|---|
| 2007 | 764 | -73.0 | -46.0 | nil |
| 2008 | 647 | -142.0 | -121.0 | nil |
| 2009 | 643 | 18.5 | 36.4 | nil |
| 2010 | 767 | 70.9 | 127.1 | nil |
| 2011 | 818 | 37.7 | 82.0 | nil |
| % change | +7 | -47 | -35 | – |
*Tender offer buy-backs in lieu of dividends | ||||
