News Column

CLS Boosted By Valuation Gain In First Half As London Rents Rise

August 13, 2014

Anthony Tshibangu

LONDON (Alliance News) - Property investment company CLS Holdings PLC Wednesday reported an increase in profit for the first half, boosted by valuation gains.

The company posted pretax profit of GBP72.6 million for the six months ended June 30, up from GBP27.9 million a year earlier. The company made a GBP45.2 million revaluation gain during the period, compared with a GBP3.5 million loss a year earlier.

Group revenue rose to GBP49.8 million from GBP43.3 million, as net rental income increased to GBP40.8 million from GBP35.0 million a year earlier. CLS said this reflected the high level of investment it undertook in the second half of 2013 when it acquired the Neo portfolio Of 34 UK properties for GBP123.7 million.

CLS, which owns properties across the UK, France, Germany and Sweden, said its EPRA net asset per share rose 11% to 1,412.0 pence from 1,268.4 pence at the end of December. EPRA earnings per share rose 13% to 37.3 pence from 33.0 pence at the year-end. EPRA is the European Public Real Estate Association, the industry body for European REITs.

The portfolio was valued at GBP1.17 billion, compared with GBP1.13 billion at the end of December.

At an operating level, CLS sold Cambridge House in Hammersmith, London for GBP29.5 million, 23% above its 2013 external valuation.

The company said London rental values rose 8.7% during the period, and 50% of its rental income derives from governments, with a significant proportion coming from major corporations.

Financially, net debt reduced to GBP577.9 million from GBP601.1 million at the year-end, reflecting the cash generated from the disposal of Cambridge House.

Looking ahead, CLS said its outlook remains "attractive" as its high level of occupancy and continued low cost of debt underpins its ability to generate cash.

"With strong operations, a solid balance sheet and a high level of liquid resources, we remain in a good position to benefit from the opportunities and challenges which lay ahead," CLS said.

The stock was quoted up 4.0% at 1,337.00 pence Wednesday morning.

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Source: Alliance News

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