Annual Financial Report
April 24 2009 - 11:29AM
UK Regulatory
TIDMCLI
Immediate Release: Friday 24th April 2009
CLS Holdings plc
(the `Company' and the `Group')
Annual Report and Accounts posted to Shareholders
The Company announces that it is today posting to shareholders its Annual
Report & Accounts for the year ended 31 December 2008, together with the Notice
of Annual General Meeting and Form of Proxy. Copies of these documents will
shortly be available on the Company's website, www.clsholdings.com
Pursuant to Listing Rule 9.6.3, two copies of each of the above have been
forwarded to the UK Listing Authority and will shortly be available for
inspection at the UK Listing Authority's Document Viewing Facility, which is
situated at:
Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS
Tel No: (0)20 7066 1000
The Appendix to this announcement, which is supplement to our preliminary
statement of our financial results made on 25 March 2009 (the "Final Results
Announcement"), should be read together. It contains further information
required pursuant to DTR 6.3.5 (2) that is in addition to the information
communicated in the Final Results Announcement.
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Appendix
The principal risks and uncertainties facing the business are contained in the
Directors' Report on page 25 of the Annual Report & Accounts for the year ended
31 December 2008 ("Annual Report") and are repeated below.
Risks & Uncertainties
The Company considers there are a number of potential risks and uncertainties
which could have a material impact on the Group's performance and could cause
the actual results to differ materially from expected and historical results.
Management and mitigation of these risks is the responsibility of the Board.
Risk Mitigation
Property investment risks
Underperformance of investment portfolio The senior management has detailed
impacting on financial performance due knowledge of core markets and
to: Cyclical downturn in property market experience gained through many
market cycles. This experience is
Inappropriate buy/sell/hold decisions supplemented by external advisors
and financial models used in the
capital allocation decision
Changes in supply and/or tenant demand The Group's average property
affecting rents and vacancies portfolio is diversified across
four countries. Average time
remaining on current leases is 8.1
years and the Groups largest
tenant concentration is with the
Government sector which comprises
39.8 per cent. The largest single
non government tenant represents
3.1 per cent. of gross rent and is
a major international bank.
Poor asset management Property teams review the current
status of all properties weekly
and provide a written report to
senior management on KPIs
including vacancies, lease expiry
profiles and progress on rent
reviews which are actively managed
to mitigate risk.
Funding risks
The risk that financing or refinancing The Group has a dedicated Treasury
will not be obtained at an acceptable department and relationships are
price maintained with approximately 20
banks across the countries in
which we operate thus reducing
credit risk and increasing
opportunities to obtain the best
deal. The Group's exposure to
changes in prevailing market rates
is largely hedged on existing debt
but there is an exposure on
re-financing of existing debt
although this is mitigated by the
lack of concentration in
maturities. For new property
acquisitions the current and
expected future cost of debt is
considered in the initial decision
to buy.
Foreign currency exposure Property investments are partially
funded in matching currency. The
difference between the value of
the property and the amount of the
financing is generally unhedged
but is monitored on an ongoing
basis.
Taxation risks
The risk that there will be increases in The Group monitors legislative
tax rates or changes to the basis of proposals and both retains and
taxation including corporation tax, VAT consults external advisors as
and stamp duty land tax. required to understand and, if
possible, mitigate the effects of
any such change.
Going Concern
The risk that given the economic The current economic conditions
uncertainties the Group will not have have created a number of
adequate working capital to remain a uncertainties as set out above.
going concern for the next 12 months The Group's business activities,
together with the factors likely
to affect its future development
and performance are set out in the
Business Review on pages 7 to 10
of the Annual Report. The
financial position of the Group,
its liquidity position and
borrowing facilities are described
on pages 11 to 18 and in Note 3.3
of the accounts in the Annual
Report.
The Directors regularly
stress-test the business model to
ensure that the Group has adequate
working capital and have reviewed
the current and projected
financial position of the Group,
taking into account the repayment
profile of the Group's loan
portfolio (as set out in Note 27
to the financial statements in the
Annual Report), and making
reasonable assumptions about
future trading performance. After
making detailed enquiries, and
based upon current information
available to them, the Directors
have a reasonable expectation that
the Company and the Group have
adequate resources to continue in
operational existence for the
foreseeable future.
Accordingly, they continue to
adopt the going concern basis in
preparing the annual report and
accounts.
Directors' responsibility statement
We confirm to the best of our knowledge:
* the financial statements, prepared in accordance with International Financial
Reporting Standards as adopted by the EU, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Company and
the undertakings included in the consolidation as a whole; and
* the Chairman's Statement, Business Review and Financial Review, together with
the table of risks and uncertainties which are incorporated into the Directors
Report, includes a fair review of the development and performance of the
business and the position of the Company and the undertakings included in the
consolidation taken as a whole, together with a description of the principal
risks and uncertainties they face.
Enquiries:
Sten Mortstedt, Executive Chairman, CLS Holdings plc +44 (0) 20 7582 7766
Henry Klotz, Chief Executive Officer, CLS Holdings plc +44 (0) 20 7582 7766
Jonathan Gray, NCB Corporate Finance + 44 (0) 20 7071 5200
Adam Reynolds, Hansard Group +44 (0) 20 7245 1100
David Fuller,
Deputy Company Secretary
CLS Holdings plc
+44 (0) 20 7582 7766
END
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