In This Article:
-
Net Rental Income: Increased by 5.9%, driven by higher income from indexation and strong performance from hotel and student operations.
-
EPRA EPS: Decreased by 7.7% due to rising financing costs.
-
Property Sales: GBP61 million in H1, with GBP160 million planned for H2.
-
Valuations: Down 4.1% in local currency due to yield expansion.
-
Net Initial Yield: Increased from 4.5% in June 2022 to 5.7%.
-
EPRA NTA: Decreased by 10.1%.
-
Total Accounting Return: Minus 8%.
-
Cash Position: Nearly GBP70 million with GBP50 million of undrawn facilities.
-
Cost of Debt: Increased to 3.81%.
-
Leasing Activity: 58 leases signed at 5.9% above ERV, up 23% by value compared to the previous year.
-
Like-for-Like Contracted Rent Growth: 1.9% increase.
-
Underlying Vacancy Rate: Decreased to 10.8%.
-
Reported Vacancy Rate: Increased to 13.2% due to completed developments.
-
Interest Cover: Remained comfortable at two times.
-
Index-Linked Rent: Over 50% of rent is index-linked, contributing to rental income growth.
Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
CLS Holdings PLC (STU:838) experienced strong leasing momentum, with new leases signed at 5.9% above Estimated Rental Values (ERVs).
-
Net rental income increased by 5.9%, driven by higher income from indexation and strong performance from hotel and student operations.
-
The company successfully completed property sales worth GBP61 million in H1, with a further GBP160 million planned for H2.
-
CLS Holdings PLC maintained a strong balance sheet with over 80% of debt fixed or capped and an interest cost of 3.81%.
-
The company is making progress on its Net Zero Carbon pathway, with a 4.3% decrease in like-for-like energy consumption.
Negative Points
-
EPRA EPS decreased by 7.7% due to increasing financing costs, despite growth in net rents.
-
Valuations fell by 4.1% in local currency, driven by yield expansion, with declines across the UK, Germany, and France.
-
The total vacancy rate increased to 13.2% due to completed developments, despite a reduction in underlying vacancy.
-
EPRA NTA was down 10.1%, impacted by valuation declines and a strengthening of sterling against the euro.
-
The company faces higher financing costs, with interest costs increasing by 58 basis points compared to last year.
Q & A Highlights
Q: Could you provide details on the current asking price per square foot for the remaining space at Artesian and any insights on market rent and demand trends? A: The average rent for the building is GBP59 per square foot, with variations depending on the floor. The area has seen significant changes with limited new supply, leading to increased interest. We expect to achieve ERVs at this rate, and demand is picking up as we approach year-end. Jonas Fredrik Widlund, CEO