CLS Holdings (CLI) delivered a forecast-busting performance for the six months to June, pushing adjusted net asset value ahead by 9.3 per cent to 268.5p a share. Operating a diversified portfolio based in the UK, Germany and France continues to pay off.
In the UK, which comprises 58 per cent of the group portfolio, the valuation rose by 2.5 per cent reflecting increased rental income and marginal yield compression. The highlight came with the disposal of the Vauxhall Square site for £144m; that’s 39 per cent ahead of its December 2016 valuation. Crucially, the disposal removed any potential obligation to build 1.6m sq ft of mixed-use development that would have cost over £700m.
The German portfolio accounts for around a quarter of assets, and the valuation rose by 4.4 per cent in local currency terms, driven by rental growth, while in France (18 per cent of the portfolio) rents were flat, but yield compression pushed the valuation ahead by 4.8 per cent.
Net rental income was down slightly partly as a result of disposals and also the end of a single tenant lease in Germany which CLS is now developing on a multi-tenant basis, although around three-quarters still remains vacant.
Analysts at Peel Hunt are forecasting adjusted net asset value at the December 2017 year end of 261p (from 246p a year earlier).
CLS HOLDINGS (CLI) | ||||
ORD PRICE: | 215p | MARKET VALUE: | £876m | |
TOUCH: | 214.9-219.8p | 12-MONTH HIGH: | 222p | LOW: 135p |
DIVIDEND YIELD: | 2.8% | TRADING PROP: | £34.4m | |
DISCOUNT TO NAV: | 9% | |||
INVESTMENT PROP: | £1.5bn | NET DEBT: | 60% |
Half-year to 30 Jun | Net asset value (p*) | Pre-tax profit (£m) | Earnings per share (p*) | Dividend per share (p*) |
2016 | 195 | 33 | 7.1 | nil |
2017 | 237 | 119 | 24.5 | 2.05 |
% change | +21 | +261 | +245 | - |
Ex-div: | tba | |||
Payment: | tba | |||
*Adjusted for 1-for-10 share consolidation on 8 May 2017 |