Headline figures for the half year to June don’t really tell the whole story at CLS (CLI) because previous figures were boosted by the proceeds from the sale of Vauxhall Square. In fact, net rental income grew by nearly 9 per cent to £55m and, together with an albeit smaller valuation uplift, this helped to push adjusted net asset value (NAV) ahead by 10 per cent to 294.7p per share compared with a year earlier.
Focusing on office properties, CLS has around a third of its portfolio in Germany and 16 per cent in France, with over half of rental income coming from government departments and major corporations. Efficient capital recycling saw disposals of £26.2m and £69.3m of acquisitions, the largest purchase being Harman House in Uxbridge for £51.3m. Demand for office space in the UK meant that of the 62,129 sq ft of lease expiries, more than 59,000 sq ft was re-let, and on average new lettings and rent reviews were achieved at a 6.3 per cent premium to December 2017 estimated rental values (ERV).
Rents were also higher in Germany, with renewals secured at an average 8.3 per cent above ERV, while stiffer competition in the investment market meant that there were no acquisitions in the first half.
Analysts at Liberum are forecasting adjusted NAV of 309p per share at the December 2018 year end, from 286p a year earlier.
| CLS HOLDINGS (CLI) | ||||
| ORD PRICE: | 234.5p | MARKET VALUE: | £ 955m | |
| TOUCH: | 229.5-234.5p | 12-MONTH HIGH: | 255p | LOW: 198p |
| DIVIDEND YIELD: | 2.8% | TRADING PROPERTIES: | £22.3m | |
| DISCOUNT TO NAV: | 10% | NET DEBT: | 72% | |
| INVESTMENT PROPERTIES: | £1.83bn | |||
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 237 | 119 | 24.5 | 2.1 |
| 2018 | 260 | 65 | 14.9 | 2.2 |
| % change | +10 | -46 | -39 | +7 |
| Ex-div: | 23 Aug | |||
| Payment: | 28 Sep |
