Half-year results from CLS Holdings (CLI) demonstrated the positive attributes of a diversified investment portfolio (UK 63 per cent, Germany 20 per cent, France 17 per cent). Along with low debt costs and foreign exchange gains, this helped to lift adjusted net asset value by 10 per cent from a year earlier to 2,282p a share, while net rental income grew by nearly 3 per cent to £51.2m. The drop in headline profits reflected a smaller revaluation uplift of £2.4m compared with £53.9m a year earlier.
Half of UK rental income comes from government departments, which aren't going anywhere fast. New lettings and rent reviews in London were achieved at 5.9 per cent above estimated rental value (ERV), while activity in Germany remained strong, pushing the vacancy rate down to 2.1 per cent and delivering rents on new lettings and renewals 4.7 per cent above ERV.
In place of an ordinary dividend payout CLS is proposing to distribute £7.2m through a 1-in-95 shares buyback at 1,650p a share, a 22 per cent premium over the share price on the day, which together with a similar earlier scheme equates to a dividend yield of 3.2 per cent on the average share price in the first half.
Peel Hunt forecasts adjusted net asset value at the December 2016 year-end of 2,185p, from 2,083p a year earlier.
CLS HOLDINGS (CLI) | ||||
---|---|---|---|---|
ORD PRICE: | 1,350p | MARKET VALUE: | £556m | |
TOUCH: | 1,350-1,383p | 12-MONTH HIGH: | 2,022p | LOW: 1,125p |
DIVIDEND YIELD: | nil* | TRADING PROPERTIES: | £15.8m | |
DISCOUNT TO NAV: | 31% | |||
INVESTMENT PROPERTIES: | £1.45bn | NET DEBT: | 83% |
Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p*) |
---|---|---|---|---|
2015 | 1658 | 80.2 | 161 | nil |
2016 | 1952 | 33.1 | 71 | nil |
% change | +18 | -59 | -56 | - |
Ex-div:- Payment:- *See text for share buyback details |