TIDMCLI
RNS Number : 4893M
CLS Holdings PLC
17 August 2011
Release date: 17 August 2011
Embargoed until: 7:00am
CLS HOLDINGS PLC
("CLS", THE "COMPANY" OR THE "GROUP")
ANNOUNCES ITS HALF-YEARLY FINANCIAL REPORT FOR THE SIX MONTHS TO
30 JUNE 2011
A robust set of results demonstrating the success of CLS's
high-yielding portfolio and active property, financing and cash
management
CLS is a property investment company with a diverse portfolio of
GBP0.9 billion modern, well-let properties in London, France,
Germany and Sweden. CLS's properties have been selected for their
potential to add value and to generate high returns on capital
investment through active asset management.
FINANCIAL HIGHLIGHTS
-- Profit before tax up 32% to GBP37.1 million (2010: GBP28.1
million)
-- Profit after tax up 36% to GBP33.6 million (2010: GBP24.7
million)
-- Earnings per share up 35% to 69.9 pence (2010: 51.8
pence)
-- Proposed distribution up 10% to GBP4.4 million (2010: GBP4.0
million) by way of tender offer buy-back: 1 in 72 at 700 pence,
equivalent to 9.7 pence per share.
-- Net assets up 11% in last 6 months to GBP396.3 million (31
December 2010: GBP357.2 million) and up 28% in last 12 months (30
June 2010: GBP309.5 million)
-- Net assets per share up 13% to 869.1 pence (31 December 2010:
766.7 pence)
-- EPRA earnings per share up 103% to 37.4 pence (2010: 18.4
pence)
-- EPRA net assets per share up 10% to 1,047.7 pence (31
December 2010: 952.9 pence)
-- Portfolio valued at GBP924.8 million (31 December 2010:
GBP876.9 million), like-for-like revaluation up 4.6%, or 1.6% in
local currencies
-- Liquid resources available for new investments GBP228. 8
million
OPERATIONAL HIGHLIGHTS
-- A robust start to the year in challenging economic
conditions
-- Continued strong performance on lettings with vacancy level
down to 4.2% (31 December 2010: 4.3%)
-- Weighted average cost of debt of 4.5%, one of the lowest in
the sector
-- Net initial yield of 7.1%, 260 basis points above cost of
debt
-- GBP100 million of extra new debt raised
-- Issue of SEK 300 million unsecured bond in Sweden
-- Further progress made on redevelopments in Vauxhall
-- Appointment of Brigith Terry as an additional Independent
Non-Executive Director
Sten Mortstedt, Executive Chairman of CLS, commented:
"The Group has had an active and positive first half of 2011.
The results benefit from our diversity across four European
property markets, three currencies, and a broad and growing range
of funding structures and lending sources.
"There has been an acceleration of attractive opportunities
coming onto the market in each of our geographical areas; we are
actively pursuing a number of these and expect to be able to
announce further acquisitions over the next six months."
ENDS
Copies of the half-yearly financial report are available for
download from our website at www.clsholdings.com. Hard copies can
be requested via the website or by contacting the company (email:
enquiries@clsholdings.com or phone +44 (0)20 7582 7766).
Enquiries:
CLS Holdings plc +44 (0)20 7582 7766
www.clsholdings.com
Sten Mortstedt, Executive Chairman
Henry Klotz, Executive Vice Chairman
Richard Tice, Chief Executive Officer
Smithfield +44 (0)20 7360 4900
Alex Simmons
Brewin Dolphin Limited
Mark Brady +44 (0)845 213 4729
Miriam Greenwood
Liberum Capital Limited +44 (0)20 3100 2222
Chris Bowman
Tom Fyson
CLS Holdings plc
Half-Yearly Financial Report 2011
CORPORATE OVERVIEW
> Shareholders' funds of GBP396 million
> EPRA net assets of GBP481 million
> GBP925 million of office properties across London, France,
Germany and Sweden
> Top 3 property company total shareholder return performance
in the last 10 years
> Strong alignment of interest with shareholders: management
owns 54%
> Over GBP225 million of cash and liquid resources available
for new investment
> Cautiously entrepreneurial approach to future
opportunities
INVESTORS IN EUROPEAN COMMERCIAL PROPERTY
> CLS is a property investment company which has been listed
on the London Stock Exchange since 1994
> We own and manage a diverse portfolio of GBP0.9 billion of
modern, well-let office properties in London, France, Germany and
Sweden
> Our properties have been selected for their potential to
add value and to generate high returns on capital investment
HOW WE OPERATE
Our goal is to create long-term shareholder value by:
> Purchasing modern, high quality, well-let properties in
good locations in selected European cities
> Working closely with our tenants to provide high quality
accommodation at competitive rates
> Minimising vacant space within the portfolio
> Using in-house teams to manage, refurbish or redevelop
properties
> Creating value through new developments
> Responding quickly to changes in macro-economic
conditions
> Actively managing an appropriate level of liquid
resources
> Maintaining strong links with a wide variety of banks and
other sources of finance
FINANCIAL HIGHLIGHTS
> Profit before tax: up 32% to GBP37.1 million (2010: GBP28.1
million)
> Profit after tax: up 36% to GBP33.6 million (2010: GBP24.7
million)
> Earnings per share: up 35% to 69.9 pence (2010: 51.8
pence)
> Net assets: up 11% in the last six months to GBP396.3
million (31 December 2010: GBP357.2 million) and up 28% in the last
12 months (30 June 2010: GBP309.5 million)
> Net assets per share: up 13% to 869.1 pence (31 December
2010: 766.7 pence)
> EPRA earnings per share: up 103% to 37.4 pence (2010: 18.4
pence)
> EPRA net assets per share: up 10% to 1,047.7 pence (31
December 2010: 952.9 pence)
> Proposed distribution: up 10% to GBP4.4 million (2010:
GBP4.0 million) by way of tender offer buy-back: 1 in 72 at 700
pence, equivalent to 9.7 pence per share
> Excess of net initial yield over cost of debt: remains high
at 260 bps (31 December 2010: 290 bps)
> Recurring interest cover: up to 3.4 times (2010: 3.2
times)
> Increase in liquid resources of GBP100 million to GBP228.8
million (31 December 2010: GBP126.4 million)
Other key data
> Portfolio value GBP924.8 million: up 4.6% like-for-like in
six months; 1.6% in local currencies
> Proportion of government tenants: 40.5% (31 December 2010:
40.8%)
> Void rate: down to 4.2% (31 December 2010: 4.3%)
> Catena 29.9% shareholding premium of market value over book
value: GBP24.8 million; equates to 54 pence of unrecorded net
assets per share at 30 June 2011
> Rental income subject to indexation: 67% (31 December 2010:
66%)
> Weighted average cost of debt: remains low at 4.5% (31
December 2010: 4.3%)
> Loan to value ratio 64.5% (31 December 2010: 63.5%)
> Adjusted gearing 119% (31 December 2010: 122%)
> Adjusted solidity 39.8% (31 December 2010: 41.7%)
CHAIRMAN'S STATEMENT
There are significant added value opportunities, the vacancy
rate is low and the Group is well financed.
OVERVIEW
The Group has had an active and positive first half of 2011. The
results benefit from our diversity across four European property
markets, three currencies, and a broad and growing range of funding
structures and lending sources.
This time last year I wrote about the first half of 2010 being
subject to sovereign debt crises, concern over the stability of the
Eurozone, further bank stress testing, and anxiety over the
durability of the economic recovery. Today, with concerns arising
over Italy and Spain and challenges in the United States, the macro
economic and political picture appears to have deteriorated. It is
within this context that I am delighted to report that the Group
has been able to make real progress with both our property assets
and our financing arrangements.
The Group's core proposition remains solid: well-managed,
high-yielding property which is soundly financed to generate a
substantial surplus over a low cost of debt, backed by a strong
corporate balance sheet.
RESULTS AND FINANCING
Profit before tax for the six months to 30 June 2011 was 32%
higher than last year at GBP37.1 million (2010: GBP28.1 million),
and profit after tax was 36% up at GBP33.6 million (2010: GBP24.7
million), generating earnings per share of 69.9 pence (2010: 51.8
pence), an increase of 35%. EPRA earnings per share were 103%
higher at 37.4 pence (2010: 18.4 pence).
EPRA net assets per share at 30 June 2011 were 1,047.7 pence (31
December 2010: 952.9 pence), an increase of 10% since the year end,
and shareholders' funds increased by 11% to GBP396.3 million (31
December 2010: GBP357.2 million), and by 28% in twelve months (30
June 2010: GBP309.5 million).
The Group's net debt as a proportion of gross assets (less cash)
was down to 51.8% (31 December 2010: 52.5%). The overall property
loan to value was 64.5% (31 December 2010: 63.5%) and the average
cost of debt 4.5%. We enjoy good banking relationships with our 20
lenders and have a weighted average unexpired loan term of 4.6
years across all our debt.
In addition to these results we have successfully increased,
diversified and strengthened our financing arrangements. In May, we
raised the first CLS corporate bond, for SEK 300 million in Sweden.
This five year, unsecured bond, now listed on the NASDAQ OMX in
Stockholm, attracts a rate of 375 basis points above Stibor.
Secondly, in late June we signed new financing arrangements for
EUR128.6 million on the majority of our French portfolio, through
separate facilities with Saar LB (EUR100.6 million) and Societe
Generale (EUR28.0 million). Thirdly, we entered into a SEK 300
million revolving credit facility with Danske Bank for working
capital purposes. These achievements are particularly encouraging
in a financing market which remains difficult for most property
companies. It is a positive sign of how lenders view our strengths
and track record.
In the six months to 30 June 2011, largely through these
financings, the Group's liquid resources, consisting of cash and
corporate bonds, rose by over GBP100 million to GBP228.8 million,
which increased the strength of the balance sheet and the available
firepower for new investments.
PORTFOLIO
In the six months to 30 June 2011, the property portfolio gained
4.5% to GBP924.8 million on a like-for-like basis, of which 2.9%
was due to currency movements. In local currency terms the
portfolio rose in value by 1.6% - up 2.4% in London, 1.4% in
France, 0.7% in Germany and 0.3% in Sweden - primarily due to a
combination of asset management initiatives, new lettings and
rental indexation.
It is pleasing to be able to report a further reduction in the
vacancy level across the Group to 4.2% (31 December 2010: 4.3%),
which demonstrates our ability to find and retain tenants. Tenant
demand is steady and with little sign of new speculative office
developments in our markets; rental growth may emerge in certain
areas over the next 12 months. The tenant base remains strong: the
weighted average lease length is 8.0 years, or 7.0 years to first
break, government tenants represent 41% of rents and major
corporations a further 29%, and 67% of our rent is subject to
indexation.
We have been progressing two very interesting development
opportunities in Vauxhall, London during the period and further
details are provided in the Business Review. In addition we have
signed a pre-letting of an extra 2,000 sq m of offices to EON in
Landshut, Germany, construction of which will begin later this
year.
DISTRIBUTIONS
In April we distributed GBP7.1 million to shareholders through
our traditional method of a tender offer buy-back. We intend to
distribute a further GBP4.4 million to shareholders in September by
means of a buy-back of 1 in 72 shares at 700 pence per share, and a
circular setting out the terms will be issued to shareholders in
the next few days.
BOARD APPOINTMENT
I am pleased to announce that on 16 August, Brigith Terry was
appointed to the Board as an independent Non-Executive Director.
With her long career in European banking, I look forward to the
valuable additional expertise and wise counsel Brigith will bring
to the Group.
CONCLUSION
The macroeconomic and political future is very hard to predict,
with some clear risks present. However, we have seen encouraging
indicators of real growth, particularly in Germany and Sweden.
The Group remains well positioned for the future: there are
significant added value opportunities within the existing
portfolio, the vacancy rate is low, and the Group is well financed
with a low cost of debt and substantial resources available. There
has been an acceleration of attractive opportunities coming onto
the market in each of our geographical areas; we are actively
pursuing a number of these and expect to be able to announce
further acquisitions over the next six months.
Sten Mortstedt
Executive Chairman
17 August 2011
BUSINESS REVIEW
INVESTMENT PROPERTY
LONDON At 30 June 2011, the London portfolio of 126,000 sq m
represented 42% of the Group's property with a value of GBP387.3
million, an increase of 2.4% over the last six months.
The availability of credit to most property companies in the UK
has declined during 2011 and this has been partly responsible for a
widening of the gap between the value of well let properties on
long leases, or prime trophy London real estate, and the rest of
the market. There has also been a noticeable increase in properties
being offered to the market due to banks' requirements to reduce
their property exposure.
At 30 June, the net initial yield of our London portfolio on
contracted rent was 6.73%, reflecting that government tenants
account for 53% of the rent. The vacancy rate has been reduced from
4.7% to 4.2%, with new or renewed leases on 5,040 sq m and
vacancies on 1,272 sq m. Lettings at Quayside SW6, Cambridge House
W6 and Great West House, Brentford are worthy of note.
It has been a very active six months in our Vauxhall portfolio,
with significant advances to redevelopment options on two key
sites. First, in February we announced our medium-term plan for a
major new mixed-use scheme, Vauxhall Square, on our island site
between Bondway and Wandsworth Road. We are working up a planning
application, which we expect to submit before the year end, for
over 110,000 sq m of mixed uses including residential, offices,
retail, restaurant and bar, student housing and a multi-screen
cinema. Such a major scheme is, of course, reliant on many factors,
not least the requirements of the public authorities on
infrastructure and other section 106 contributions which can
determine whether or not a scheme is viable. Subject to resolving
this and the receipt of planning consent, this scheme could be
developed after vacant possession is achieved in late 2014.
Secondly, in July we announced our intention to submit a
planning application in the autumn for an 18,100 sq m mixed-use
scheme, Spring Mews, adjacent to our highly successful Spring
Gardens property. Spring Mews would comprise 408 student bedrooms,
a 120 bed hotel, 325 sq m of retail, 520 sq m of business units and
a replacement 560 sq m Community Centre. We are already in
discussions with potential tenants on the student housing and hotel
and, with the receipt of consent early next year, construction
could begin in the second half of 2012.
PORTFOLIO STATISTICS
Weighted
average
6 month unexpired
Contracted uplift Net Vacancy lease
At 30 June rent Valuation in local initial by term
2011 (GBPm) (GBPm) currency yield rent (years)
----------- ----------- ---------- --------- -------- -------- ----------
London 26.7 387.3 2.4% 6.7% 4.2% 9.8
France 20.0 267.0 1.4% 7.4% 3.5% 5.8
Germany 14.8 209.7 0.7% 7.0% 6.3% 9.2
Sweden 6.6 60.8 0.3% 8.6% 1.9% 5.0
----------- ----------- ----------
Total
portfolio 68.1 924.8 1.6% 7.1% 4.2% 8.0
----------- ----------- ----------
FRANCE The 96,400 sq m French portfolio increased in value
during the first six months of 2011 by 1.4% in local currency terms
to GBP267.0 million and now comprises 29% of the Group portfolio.
Following the growth in values in 2010 we have seen a mismatch
between prices offered by vendors and those bid by purchasers, and
this has slowed the investment volumes.
Vacancy rates in the main Paris and Lyon markets have fallen,
reflecting tenant demand for well-managed space and very low levels
of new construction. Our experience mirrors this as we have
successfully reduced our void rate to 3.5% from 3.6% during the
period. Leases were signed or renewed on 2,179 sq m whilst tenants
vacated 1,326 sq m. Lettings of particular note were at Sigma,
Petits Hotels and Jean Jaures in Paris following capital
expenditure on air conditioning and mechanical plant.
It is interesting to note that whilst the French portfolio has a
much lower weighted average lease length to first break of 3.2
years compared to the London and German portfolios at 9.3 years and
9.1 years, respectively, France has the lowest vacancy level of the
three and is currently the region with the greatest rental growth
prospects.
Considerable effort was spent on the successful refinancing of
much of the French portfolio. Bank debt in France is significantly
more available than in the UK.
GERMANY The period to 30 June 2011 saw growth, in local currency
terms, of 0.7% of the value of the 138,000 sq m German portfolio to
GBP209.7 million. This would have been higher but for the fact that
vacancy levels increased from 5.5% to 6.3%, mainly due to the
unexpected bankruptcy of one tenant which represented 1.3% of the
German portfolio.
The German economy continues to be the strongest in the
Eurozone, with GDP rising 2.7% in the year to 30 June 2011, and we
see clear signs of occupiers planning to invest for the future.
A major focus in the six months to June has been the successful
securing of planning consents on the two pre-lets announced in late
2010. With the extra extension of 2,000 sq m for EON in Landshut
which we announced in May 2011, we are on schedule to complete the
total EON 5,400 sq m pre-let building in late 2012, at which time
an additional total rent of EUR659,000 will be receivable on a 17
year lease.
SWEDEN The holdings in Sweden comprise two parts. First, the
wholly owned 45,500 sq m of offices called Vanerparken at
Vanersborg. This property was valued at GBP60.8 million, an
increase in local currency of 0.3% in the six months to June 2011.
Over 91% of the space is let to the local municipality and the void
rate is just 1.9%. We are nearing the completion of a major GBP2.2
million energy-saving investment project here which will yield
savings of some 80% in energy consumption and similar levels of
reduced CO(2) emissions, and will pay for itself within eight
years.
The second part of the Group's Swedish real estate exposure is
our 29.9% stake in Catena AB, the Stockholm-listed property
company. Having sold the majority of its portfolio in 2010, Catena
is concentrating on the development opportunity of its one
remaining site in Stockholm, where solid progress is being made
towards gaining planning consent in 2012 for a 150,000 sq m mixed
use scheme of 1,000 apartments and 50,000 sq m of commercial area.
Following receipt of a GBP19.9 million dividend from Catena, the
Catena share price at 30 June was SEK 111, which meant the market
value of our interest exceeded its book value by GBP24.8 million,
the equivalent of an additional 54 pence per share to CLS's net
asset value.
OTHER INVESTMENTS
The corporate bond portfolio remains a key part of the Group's
long-term investment strategy alongside the core ownership of
investment properties. Corporate bonds held at 30 June 2011 had a
value of GBP109.3 million with a yield of 8.5% on value, compared
to a historical cost of GBP102.0 million. The 38 bonds held are set
out in note 11 of the financial statements.
The Group owns a 48.3% investment, valued in the balance sheet
at GBP9.5 million, in Bulgarian Land Development Plc which is
working on its strategy of asset sales following achievement of the
individual asset's objectives.
In June the Group sold its interest in Wyatt Media Group AB to
Nyheter 24 Group in exchange for shares and bonds in the purchaser,
realising a gain on disposal of GBP1.2 million. The Group now owns
20% of Nyheter 24 Group, an on-line news media company based in
Stockholm, which is valued in the balance sheet at GBP2.0
million.
RESULTS FOR THE PERIOD
HEADLINES Profit after tax of GBP33.6 million (2010: GBP24.7
million) generated basic earnings per share of 69.9 pence (2010:
51.8 pence), and EPRA earnings per share of 37.4 pence (2010: 18.4
pence). Gross property assets at 30 June 2011 rose to GBP924.8
million (31 December 2010: GBP876.9 million); net assets per share
increased by 13.4% to 869.1 pence (31 December 2010: 766.7 pence)
and EPRA net assets per share by 9.9% to 1,047.7 pence (31 December
2010: 952.9 pence).
STATEMENT OF COMPREHENSIVE INCOME Rental income of GBP32.7
million was GBP2.0 million higher than the corresponding period in
2010; GBP1.4 million of this increase was due to the acquisitions
in the second half of 2010 of Apex Tower, New Malden, and 23/27 Rue
Pierre Valette, in the Malakoff suburb of Paris. The balance
comprised a 3.4% increase in like-for like income arising from new
lettings and rental indexation, a 0.8% increase from foreign
currency movements, and a 2.6% fall from lease expiries.
The 1.6% uplift in local currency of the investment property
portfolio generated a gain of GBP14.1 million (2010: GBP6.3
million). Last year's exceptional gain of GBP10.6 million on the
sale of corporate bonds was not repeated in 2011.
Finance expense in the six months ended 30 June 2011 of GBP13.5
million (2010: GBP20.4 million) was lower than last year due
primarily to the favourable movement in the fair value of interest
rate swaps and caps of GBP1.1 million against an unfavourable one
of GBP6.8 million in 2010. The increase in gross borrowings (see
below) added GBP0.8 million of interest costs in 2011; investing
some of their proceeds in corporate bonds added GBP1.3 million of
interest income. Refinancing much of the French portfolio
accelerated the amortisation of previous loan issue costs by GBP1.1
million. At 30 June 2010 the weighted average cost of debt was
4.5%.
Catena AB, in which the Group owns a 29.9% interest, sold the
majority of its business in late 2010, and in April 2011
distributed the proceeds, of which our share was a cash dividend of
GBP19.9 million. Our share of the profits of Catena's reduced
business was GBP2.6 million (2010: GBP5.2 million), representing
the majority of the Group's share of associates after tax of GBP2.1
million (2010: GBP4.6 million).
NET ASSETS PER SHARE EPRA net assets per share rose from 952.9
pence to 1,047.7 pence in the six months to 30 June 2011, an
increase of 94.8 pence per share, or 9.9%. The majority of this
increase came from profit after tax, which added 71.0 pence per
share. Marginally favourable foreign exchange rate movements added
a further 13.9 pence, the effect of the tender offer buy-back 4.9
pence per share, and valuation uplifts of corporate bonds and other
equities the majority of the balance of 5.0 pence per share.
CASH FLOW, NET DEBT AND GEARING Net cash flow from operating
activities of GBP14.0 million was at a similar level to the
corresponding period in 2010, underlining the Group's ability to
generate cash. Half of this was distributed to shareholders.
GBP79.3 million net of new loans were taken out in the six months
to 30 June 2011, and a dividend of GBP19.9 million was received
from Catena AB. GBP27.4 million net was invested in corporate bonds
and GBP7.0 million in capital expenditure. Overall, cash increased
by GBP71.2 million to GBP119.5 million.
In the six months to 30 June 2011, borrowings increased by
GBP96.6 million to GBP685.9 million (31 December 2010: GBP589.3
million), largely for three reasons: the issue of a SEK 300 million
five-year bond in Stockholm; the refinancing of EUR129 million of
debt in France; and a new short-term facility. Net borrowings
increased by only GBP25.4 million to GBP566.4 million (31 December
2010: GBP541.0 million) as cash balances rose from GBP48.3 million
in December to GBP119.5 million at the end of June. The Group's
weighted average loan to value was 64.5% (2010: 63.5%). Balance
sheet gearing was down to 144% (2010: 152%) and adjusted gearing,
excluding deferred tax, was 119% (2010: 122%).
Between 1 July 2011 and 31 December 2012, GBP107.3 million of
medium-term debt falls due for refinancing, mostly in London. Of
this, an GBP80 million facility attached to Spring Gardens SE 11,
expires in July 2012. This property is let to the Home Office until
2026 on index-linked leases with no break options, and we have
already begun to explore refinancing avenues for this asset.
SHARE CAPITAL In April 991,239 shares were cancelled under the
tender offer buy-back of 1 in 47 shares at 725 pence per share. At
30 June 2011, there were 45,597,005 shares in issue, and 4,793,000
Treasury Shares held by the Company.
PRINCIPAL RISKS AND UNCERTAINTIES
There are a number of potential risks and uncertainties which
could have a material impact on the Group's performance over the
remaining six months of the financial year and could cause the
results for the year to differ materially from expected or
historical results. The Directors do not consider that the
principal risks and uncertainties have changed since the
publication of the annual report for the year ended 31 December
2010. A detailed explanation of the risks summarised below can be
found on page 16 of the Annual Report, which is available at
www.clsholdings.com:
-- Underperformance of investment portfolio impacting on
financial performance due to:
- cyclical downturn in property market
- inappropriate buy/sell/hold decisions
-- Changes in supply of space and/or tenant demand affecting
rents and vacancies
-- Poor asset management
-- Underperformance of corporate bond portfolio
-- Unavailability of financing at acceptable prices
-- Adverse interest rate movements
-- Breach of borrowing covenants
-- Foreign currency exposure
-- Increases in tax rates or changes to the basis of
taxation
-- Inadequate working capital to remain a going concern for the
next 12 months
GOING CONCERN
As stated in note 2 to the Condensed Group Financial Statements,
the Directors are satisfied that the Group has sufficient resources
to continue in operation for the foreseeable future, being a period
of not less than 12 months from the date of this Half-Yearly
Financial Report. Accordingly, they continue to adopt the going
concern basis in preparing the Condensed Group Financial
Statements.
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
(a) the condensed set of financial statements has been prepared
in accordance with IAS 34 'Interim Financial Reporting';
(b) the Chairman's Statement and Business Review include a fair
review of the information required by DTR 4.2.7R (indication of
important events during the first six months and description of
principal risks and uncertainties for the remaining six months of
the year); and
(c) the Chairman's Statement and Business Review include a fair
review of the information required by DTR 4.2.8R (disclosure of
related party transactions and changes therein).
On behalf of the Board
Sten Mortstedt Henry Klotz
Executive Chairman Executive Vice Chairman
INDEPENDENT REVIEW REPORT TO CLS HOLDINGS PLC
We have been engaged by the Company to review the condensed set
of financial statements in the Half-Yearly Financial Report for the
six months ended 30 June 2011 which comprises the Condensed Group
Statement of Comprehensive Income, the Condensed Group Balance
Sheet, the Condensed Group Statement of Changes in Equity, the
Condensed Group Statement of Cash Flows and related notes 1 to 14.
We have read the other information contained in the Half-Yearly
Financial Report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
This report is made solely to the Company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Auditing Practices
Board. Our work has been undertaken so that we might state to the
Company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company, for our review work, for this
report, or for the conclusions we have formed.
DIRECTORS' RESPONSIBILITIES
The Half-Yearly Financial Report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the Half-Yearly Financial Report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Services Authority.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this Half-Yearly Financial Report has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting", as adopted by the European Union.
OUR RESPONSIBILITY
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the Half-Yearly
Financial Report based on our review.
SCOPE OF REVIEW
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
CONCLUSION
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the Half-Yearly Financial Report for the six months ended 30
June 2011 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 as adopted by the
European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
Deloitte LLP
Chartered Accountants and Statutory Auditor
London, United Kingdom
17 August 2011
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2011
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2011 2010 2010
GBPm GBPm GBPm
Notes (unaudited) (unaudited) (audited)
------------------------- ------ ------------- ------------- -------------
Continuing operations
Group revenue 3 39.9 38.4 79.1
Costs 3 (14.2) (14.2) (30.3)
------------------------- ------ ------------- ------------- -------------
25.7 24.2 48.8
Net movements on
revaluation of
investment properties 9 14.1 6.3 30.1
Profit on sale of
subsidiaries and
associates 1.2 - -
Net gain on sale of
corporate bonds and
other investments 0.3 10.6 9.3
------------------------- ------ ------------- ------------- -------------
Operating profit 41.3 41.1 88.2
Finance income 4 7.2 2.8 6.1
Finance costs 5 (13.5) (20.4) (31.1)
Share of profit of
associates after tax 10 2.1 4.6 7.7
------------------------- ------ ------------- ------------- -------------
Profit before tax 37.1 28.1 70.9
Taxation 6 (3.5) (3.4) (10.8)
------------------------- ------ ------------- ------------- -------------
Profit for the period 33.6 24.7 60.1
Other comprehensive
income
Foreign exchange
differences 9.0 (10.0) 1.1
Fair value
gains/(losses) on
corporate bonds and
other investments 2.0 (1.7) 3.1
Fair value
losses/(gains) taken to
the income statement on
disposal of corporate
bonds 0.1 (9.5) (8.5)
Deferred tax on net fair
value gains on
corporate bonds and
other investments 6 1.2 3.3 1.8
Share of other
comprehensive
income/(loss) of
associates 10 0.1 (1.3) (0.4)
Revaluation of
owner-occupied property 0.2 - -
------------------------- ------ ------------- ------------- -------------
Total comprehensive
income for the period 46.2 5.5 57.2
------------------------- ------ ------------- ------------- -------------
Profit attributable to:
Owners of the Company 32.3 24.7 60.1
Non-controlling
interests 1.3 - -
------------------------- ------ ------------- ------------- -------------
Profit for the period 33.6 24.7 60.1
------------------------- ------ ------------- ------------- -------------
Total comprehensive
income attributable to:
Owners of the Company 44.9 5.5 57.2
Non-controlling
interests 1.3 - -
------------------------- ------ ------------- ------------- -------------
Total comprehensive
income for the period 46.2 5.5 57.2
------------------------- ------ ------------- ------------- -------------
Earnings per share from
continuing operations
attributable to the
owners
of the Company during
the period (expressed in
pence per share)
Basic 7 69.9 51.8 127.1
Diluted 7 69.8 51.8 127.1
------------------------- ------ ------------- ------------- -------------
CONDENSED GROUP BALANCE SHEET
at 30 June 2011
30 June 30 June 31 December
2011 2010 2010
GBPm GBPm GBPm
Notes (unaudited) (unaudited) (audited)
-------------------------- ------ ------------- ------------- ------------
Non-current assets
Investment properties 9 924.8 792.3 876.9
Property, plant and
equipment 2.7 2.6 2.6
Intangible assets 1.1 1.1 1.1
Investments in associates 10 24.7 42.4 40.6
Other investments 11 114.7 62.6 81.6
Derivative financial
instruments 4.7 0.1 4.6
Deferred tax 6 10.5 13.1 11.2
-------------------------- ------ ------------- ------------- ------------
1,083.2 914.2 1,018.6
-------------------------- ------ ------------- ------------- ------------
Current assets
Trade and other
receivables 9.9 9.5 11.5
Derivative financial
instruments 0.4 - -
Cash and cash equivalents 119.5 64.0 48.3
-------------------------- ------ ------------- ------------- ------------
129.8 73.5 59.8
-------------------------- ------ ------------- ------------- ------------
Total assets 1,213.0 987.7 1,078.4
-------------------------- ------ ------------- ------------- ------------
Current liabilities
Trade and other payables (34.0) (29.3) (31.8)
Current tax 6 (3.7) (5.1) (5.3)
Derivative financial
instruments - (0.3) (1.0)
Borrowings 12 (98.3) (106.2) (85.0)
-------------------------- ------ ------------- ------------- ------------
(136.0) (140.9) (123.1)
-------------------------- ------ ------------- ------------- ------------
Non-current liabilities
Deferred tax 6 (79.0) (66.5) (74.5)
Derivative financial
instruments (14.1) (22.4) (19.3)
Borrowings 12 (587.6) (448.4) (504.3)
-------------------------- ------ ------------- ------------- ------------
(680.7) (537.3) (598.1)
-------------------------- ------ ------------- ------------- ------------
Total liabilities (816.7) (678.2) (721.2)
-------------------------- ------ ------------- ------------- ------------
Net assets 396.3 309.5 357.2
-------------------------- ------ ------------- ------------- ------------
EQUITY
Capital and reserves
attributable to owners of
the Company
Share capital 13 12.6 13.0 12.9
Share premium 71.5 71.5 71.5
Other reserves 115.4 86.1 102.5
Retained earnings 196.8 140.2 171.6
-------------------------- ------ ------------- ------------- ------------
396.3 310.8 358.5
Non-controlling interests - (1.3) (1.3)
-------------------------- ------ ------------- ------------- ------------
Total equity 396.3 309.5 357.2
-------------------------- ------ ------------- ------------- ------------
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2011
Non-
controlling
interests Total
Unaudited Attributable to the owners of the Company GBPm GBPm
--------------- ------------------------------------------------ ------------ ------
Share Share Other Retained
capital premium reserves earnings Total
GBPm GBPm GBPm GBPm GBPm
-------- -------- --------- --------- ------
At 1 January
2011 12.9 71.5 102.5 171.6 358.5 (1.3) 357.2
--------------- -------- -------- --------- --------- ------ ------------ ------
Arising in the
six months
ended 30 June
2011:
Total
comprehensive
income for
the period - - 12.6 32.3 44.9 1.3 46.2
Purchase of
own shares (0.3) - 0.3 (7.1) (7.1) - (7.1)
Expenses
thereof - - - (0.1) (0.1) - (0.1)
Employee share
option
schemes - - - 0.1 0.1 - 0.1
--------------- -------- -------- --------- --------- ------ ------------ ------
Total changes
arising in
the period (0.3) - 12.9 25.2 37.8 1.3 39.1
--------------- -------- -------- --------- --------- ------ ------------ ------
At 30 June
2011 12.6 71.5 115.4 196.8 396.3 - 396.3
--------------- -------- -------- --------- --------- ------ ------------ ------
Non-
controlling
interests Total
Unaudited Attributable to the owners of the Company GBPm GBPm
--------------- ------------------------------------------------ ------------ ------
Share Share Other Retained
capital premium reserves earnings Total
GBPm GBPm GBPm GBPm GBPm
-------- -------- --------- --------- ------
At 1 January
2010 13.3 70.5 105.0 121.5 310.3 (1.3) 309.0
--------------- -------- -------- --------- --------- ------ ------------ ------
Arising in the
six months
ended 30 June
2010:
Total
comprehensive
(loss)/income
for the
period - - (19.2) 24.7 5.5 - 5.5
Issue of
treasury
shares - 1.0 - - 1.0 - 1.0
Purchase of
own shares (0.3) - 0.3 (6.0) (6.0) - (6.0)
--------------- -------- -------- --------- --------- ------ ------------ ------
Total changes
arising in
the period (0.3) 1.0 (18.9) 18.7 0.5 - 0.5
--------------- -------- -------- --------- --------- ------ ------------ ------
At 30 June
2010 13.0 71.5 86.1 140.2 310.8 (1.3) 309.5
--------------- -------- -------- --------- --------- ------ ------------ ------
Non-
controlling
interests Total
Audited Attributable to the owners of the Company GBPm GBPm
--------------- ------------------------------------------------- ------------ -------
Share Share Other Retained
capital premium reserves earnings Total
GBPm GBPm GBPm GBPm GBPm
-------- -------- --------- --------- -------
At 1 January
2010 13.3 70.5 105.0 121.5 310.3 (1.3) 309.0
--------------- -------- -------- --------- --------- ------- ------------ -------
Arising in the
year ended 31
December
2010:
Total
comprehensive
(loss)/income
for the year - - (2.9) 60.1 57.2 - 57.2
Issue of
treasury
shares - 1.0 - - 1.0 - 1.0
Purchase of
own shares (0.4) - 0.4 (10.0) (10.0) - (10.0)
Expenses
thereof - - - (0.1) (0.1) - (0.1)
Employee share
option
schemes - - - 0.1 0.1 - 0.1
--------------- -------- -------- --------- --------- ------- ------------ -------
Total changes
arising in
the year (0.4) 1.0 (2.5) 50.1 48.2 - 48.2
--------------- -------- -------- --------- --------- ------- ------------ -------
At 31 December
2010 12.9 71.5 102.5 171.6 358.5 (1.3) 357.2
--------------- -------- -------- --------- --------- ------- ------------ -------
CONDENSED GROUP STATEMENT OF CASH FLOWS
for the six months ended 30 June 2011
Six months Year
Six months ended ended
ended 30 June 31 December
30 June 2010 2010
2011 GBPm GBPm
GBPm (unaudited) (audited)
Notes (unaudited) (restated) (restated)
------------------------- ------ ------------- ------------- -------------
Cash flows from
operating activities
Cash generated from
operations 14 28.3 25.5 51.2
Interest paid (12.7) (11.3) (21.7)
Income tax paid (1.6) (2.2) (3.4)
------------------------- ------ ------------- ------------- -------------
Net cash inflow from
operating activities 14.0 12.0 26.1
------------------------- ------ ------------- ------------- -------------
Cash flows from
investing activities
Purchase of investment
property (0.9) (1.8) (36.4)
Capital expenditure on
investment property (6.0) (4.7) (6.5)
Proceeds from sale of
investment property - - 0.1
Interest received 3.1 2.3 5.2
Purchase of corporate
bonds (44.8) (31.2) (51.7)
Proceeds from sale of
corporate bonds 17.4 41.4 47.7
Purchase of equity
investments (6.8) (1.0) (1.0)
Proceeds from sale of
equity investments 4.8 0.1 0.8
Purchase of interests in
associate - (0.3) (1.9)
Dividend received from
associate undertakings 19.9 1.8 11.9
(Costs)/proceeds on
foreign currency
transactions (1.2) 0.2 (1.2)
Amounts expended in
relation to corporate
disposals in prior
periods (0.7) - (0.7)
Proceeds on disposal of
subsidiaries and
associates, net of cash
sold (0.1) - -
Purchases of property,
plant and equipment (0.1) (0.1) (0.3)
------------------------- ------ ------------- ------------- -------------
Net cash
(outflow)/inflow from
investing activities (15.4) 6.7 (34.0)
------------------------- ------ ------------- ------------- -------------
Cash flows from
financing activities
Purchase of own shares (7.2) (6.0) (10.1)
Issue of ordinary shares
from treasury shares - 1.0 1.0
New loans 175.3 30.1 102.7
Issue costs of new loans (3.0) - (1.1)
Repayment of loans (91.7) (47.0) (100.6)
Purchase of financial
instruments (1.3) (0.1) (3.9)
------------------------- ------ ------------- ------------- -------------
Net cash
inflow/(outflow) from
financing activities 72.1 (22.0) (12.0)
------------------------- ------ ------------- ------------- -------------
Cash flow element of net
increase/(decrease) in
cash and cash
equivalents 70.7 (3.3) (19.9)
Foreign exchange
gain/(loss) 0.5 (3.0) (2.1)
------------------------- ------ ------------- ------------- -------------
Net increase/(decrease)
in cash and cash
equivalents 71.2 (6.3) (22.0)
Cash and cash
equivalents at the
beginning of the
period 48.3 70.3 70.3
------------------------- ------ ------------- ------------- -------------
Cash and cash
equivalents at the end
of the period 119.5 64.0 48.3
------------------------- ------ ------------- ------------- -------------
Interest received has been included in cash flows from investing
activities as the majority of it arises from investing in corporate
bonds. Previously, interest received was disclosed in cash flows
from operating activities.
NOTES TO THE CONDENSED GROUP FINANCIAL STATEMENTS
30 June 2011
1 BASIS OF PREPARATION
The financial information contained in this Half-Yearly
Financial Report does not constitute statutory accounts as defined
in section 434 of the Companies Act 2006. The results for the year
ended 31 December 2010 are an abridged version of the full accounts
for that year, which received an unqualified report from the
auditor, did not contain a statement under section 498(2) or (3) of
the Companies Act 2006 or include a reference to any matter to
which the auditor drew attention by way of emphasis without
qualifying the auditor's report, and have been filed with the
Registrar of Companies. The annual financial statements of CLS
Holdings plc are prepared in accordance with IFRSs as adopted by
the European Union. The condensed set of financial statements
included in this Half-Yearly Financial Report has been prepared in
accordance with IAS 34 Interim Financial Reporting, as adopted by
the European Union. The same accounting policies, presentation and
methods of computation are followed in the condensed set of
financial statements as applied in the latest audited annual
financial statements.
2 GOING CONCERN
The Directors regularly stress-test the business model to ensure
that the Group has adequate working capital. They have reviewed the
current and projected financial position of the Group as discussed
in the Business Review, taking into account the repayment profile
of the Group's loan portfolio, and making reasonable assumptions
about future trading performance. The Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future and, therefore,
they continue to adopt the going concern basis in preparing the
Half-Yearly Financial Report.
3 SEGMENT INFORMATION
The Group has two operating divisions - Investment Property and
Other Investments. Other Investments comprise corporate bonds,
shares in Catena AB, Bulgarian Land Development Plc and other small
corporate investments. The Group manages the Investment Property
division on a geographical basis due to its size and geographical
diversity. Consequently, the Group's principal operating segments
are:
Investment Property - London
France
Germany
Sweden
Other Investments
There are no transactions between the operating segments.
The Group's results for the six months ended 30 June 2011 by
operating segment were as follows:
Other
Investments Total
Investment property GBPm GBPm
------------------ ------------ -------
London France Germany Sweden
GBPm GBPm GBPm GBPm
------- ------- -------- -------
Rental income 13.1 9.4 7.1 3.1 - 32.7
Service charge
income 1.9 2.4 1.5 0.1 - 5.9
Other
property-related
income 0.3 0.2 - - - 0.5
Income from
non-property
activities - - - - 0.8 0.8
------------------ ------- ------- -------- ------- ------------ -------
Group revenue 15.3 12.0 8.6 3.2 0.8 39.9
------------------ ------- ------- -------- ------- ------------ -------
Service charges
and similar
expenses (2.8) (2.6) (1.5) (0.7) - (7.6)
Administration
expenses (1.0) (0.6) (0.5) (0.1) (1.1) (3.3)
Other expenses (0.6) (0.1) (0.3) - (0.1) (1.1)
------------------ ------- ------- -------- ------- ------------ -------
Costs (4.4) (3.3) (2.3) (0.8) (1.2) (12.0)
------------------ ------- ------- -------- ------- ------------ -------
Group revenue
less costs 10.9 8.7 6.3 2.4 (0.4) 27.9
Net movements
on revaluation
of investment
properties 9.1 3.6 1.3 0.1 - 14.1
Profit on
disposal of
subsidiaries and
associates - - - - 1.2 1.2
Net gain on sale
of corporate
bonds and other
investments - - - - 0.3 0.3
------------------ ------- ------- -------- ------- ------------ -------
Segment operating
profit 20.0 12.3 7.6 2.5 1.1 43.5
Finance income - - - - 7.2 7.2
Finance costs (6.1) (2.7) (3.2) (0.7) (0.8) (13.5)
Share of profit
of associates
after tax - - - - 2.1 2.1
------------------ ------- ------- -------- ------- ------------ -------
Segment profit
before tax 13.9 9.6 4.4 1.8 9.6 39.3
Taxation (0.1) (2.7) (0.4) (0.6) 0.3 (3.5)
------------------ ------- ------- -------- ------- ------------ -------
Segment profit
after tax 13.8 6.9 4.0 1.2 9.9 35.8
------------------ ------- ------- -------- ------- ------------ -------
Central
administration
costs (2.2)
------------------ ------- ------- -------- ------- ------------ -------
Profit for
the period 33.6
------------------ ------- ------- -------- ------- ------------ -------
The Group's results for the six months ended 30 June 2010 by
operating segment were as follows:
Other
Investments Total
Investment property GBPm GBPm
------------------ ------------ -------
London France Germany Sweden
GBPm GBPm GBPm GBPm
------- ------- -------- -------
Rental income 12.0 8.9 7.2 2.6 - 30.7
Service charge
income 1.8 1.9 1.4 0.1 - 5.2
Other
property-related
income 0.1 - - - - 0.1
Income from
non-property
activities - - - - 2.4 2.4
------------------ ------- ------- -------- ------- ------------ -------
Group revenue 13.9 10.8 8.6 2.7 2.4 38.4
------------------ ------- ------- -------- ------- ------------ -------
Service charges
and similar
expenses (2.9) (2.0) (1.4) (0.7) - (7.0)
Administration
expenses (1.5) (0.6) (0.5) (0.2) (2.0) (4.8)
Other expenses - (0.2) (0.6) - - (0.8)
------------------ ------- ------- -------- ------- ------------ -------
Costs (4.4) (2.8) (2.5) (0.9) (2.0) (12.6)
------------------ ------- ------- -------- ------- ------------ -------
Group revenue
less costs 9.5 8.0 6.1 1.8 0.4 25.8
Net movements
on revaluation
of investment
properties 1.7 4.7 0.5 (0.6) - 6.3
Net gain on sale
of corporate
bonds and other
investments - - - - 10.6 10.6
------------------ ------- ------- -------- ------- ------------ -------
Segment operating
profit 11.2 12.7 6.6 1.2 11.0 42.7
Finance income - - - - 2.8 2.8
Finance costs (12.2) (1.6) (4.2) (0.1) (2.3) (20.4)
Share of profit
of associates
after tax - - - - 4.6 4.6
------------------ ------- ------- -------- ------- ------------ -------
Segment
(loss)/profit
before tax (1.0) 11.1 2.4 1.1 16.1 29.7
Taxation 2.0 (3.8) 0.5 (0.1) (2.0) (3.4)
------------------ ------- ------- -------- ------- ------------ -------
Segment profit
after tax 1.0 7.3 2.9 1.0 14.1 26.3
------------------ ------- ------- -------- ------- ------------
Central
administration
costs (1.6)
------------------ ------- ------- -------- ------- ------------ -------
Profit for
the period 24.7
------------------ ------- ------- -------- ------- ------------ -------
The Group's results for the year ended 31 December 2010 were as
follows:
Other
Investments Total
Investment property GBPm GBPm
------------------ ----------------------------------- ------------ -------
London France Germany Sweden
GBPm GBPm GBPm GBPm
------- ------- -------- -------
Rental income 24.5 17.8 14.3 5.5 - 62.1
Service charge
income 4.2 4.9 2.7 0.3 - 12.1
Other
property-related
income 0.5 0.1 - - - 0.6
Income from
non-property
activities - - - - 4.3 4.3
------------------ ------- ------- -------- ------- ------------ -------
Group revenue 29.2 22.8 17.0 5.8 4.3 79.1
------------------ ------- ------- -------- ------- ------------ -------
Service charges
and similar
expenses (5.5) (5.2) (3.0) (1.4) - (15.1)
Administration
expenses (2.9) (1.5) (1.0) (0.3) (3.9) (9.6)
Other expenses (0.5) (0.2) (1.3) - (0.2) (2.2)
------------------ ------- ------- -------- ------- ------------ -------
Costs (8.9) (6.9) (5.3) (1.7) (4.1) (26.9)
------------------ ------- ------- -------- ------- ------------ -------
Group revenue
less costs 20.3 15.9 11.7 4.1 0.2 52.2
Net movements
on revaluation
of investment
properties 4.8 17.8 8.2 (0.7) - 30.1
Net gain on sale
of corporate
bonds and other
investments - - - - 9.3 9.3
(Loss)/profit
on sale of
subsidiaries - (1.6) - 1.6 - -
------------------ ------- ------- -------- ------- ------------ -------
Segment operating
profit 25.1 32.1 19.9 5.0 9.5 91.6
Finance income - 0.1 - - 6.0 6.1
Finance costs (16.2) (3.0) (6.9) (0.4) (4.6) (31.1)
Share of profit
of associates
after tax - - - - 7.7 7.7
------------------ ------- ------- -------- ------- ------------ -------
Segment profit
before tax 8.9 29.2 13.0 4.6 18.6 74.3
Taxation 0.1 (9.6) (0.5) (0.4) (0.4) (10.8)
------------------ ------- ------- -------- ------- ------------ -------
Segment profit
after tax 9.0 19.6 12.5 4.2 18.2 63.5
------------------ ------- ------- -------- ------- ------------
Central
administration
costs (3.4)
------------------ ------- ------- -------- ------- ------------ -------
Profit for
the year 60.1
------------------ ------- ------- -------- ------- ------------ -------
Segment assets and liabilities
Assets Liabilities
------------- ----------------------------- --------------------------------
31
30 June 30 June December 30 June 30 June 31 December
2011 2010 2010 2011 2010 2010
GBPm GBPm GBPm GBPm GBPm GBPm
------------- -------- -------- --------- -------- -------- ------------
Investment
Property
London 421.6 369.2 391.2 320.6 286.9 295.4
France 306.7 223.5 256.7 229.8 171.3 190.6
Germany 216.2 187.7 203.2 159.7 148.5 154.5
Sweden 65.4 56.3 61.6 46.0 28.0 45.0
Other
investments 203.1 151.0 165.7 60.6 43.5 35.7
------------- -------- -------- --------- -------- -------- ------------
1,213.0 987.7 1,078.4 816.7 678.2 721.2
------------- -------- -------- --------- -------- -------- ------------
Segment capital expenditure
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2011 2010 2010
GBPm GBPm GBPm
--------------------- ----------- ----------- -------------
Investment Property
London 3.2 1.8 23.7
France 1.2 1.3 15.5
Germany 1.3 2.2 2.7
Sweden 2.1 0.5 0.6
--------------------- ----------- ----------- -------------
7.8 5.8 42.5
--------------------- ----------- ----------- -------------
4 FINANCE INCOME
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2011 2010 2010
GBPm GBPm GBPm
---------------------------- ----------- ----------- -------------
Interest income 4.1 2.8 6.1
Other finance income 2.3 - -
Foreign exchange variances 0.8 - -
---------------------------- ----------- ----------- -------------
7.2 2.8 6.1
---------------------------- ----------- ----------- -------------
Other finance income comprised the write off of debt on the
liquidation of the subsidiaries which issued it.
5 FINANCE COSTS
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2011 2010 2010
GBPm GBPm GBPm
Interest expense
Bank loans 10.4 9.0 18.3
Debenture loans 2.7 2.3 4.7
Other interest - 0.1 -
Amortisation of loan issue costs 1.5 0.4 1.0
Movement in fair value of derivative
financial instruments
Interest rate swaps: transactions
not qualifying as hedges (2.3) 6.7 3.7
Interest rate caps: transactions not
qualifying as hedges 1.2 0.1 (0.6)
Foreign exchange variances - 1.8 4.0
------------------------------------- ----------- ----------- -------------
13.5 20.4 31.1
------------------------------------- ----------- ----------- -------------
6 TAXATION
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2011 2010 2010
GBPm GBPm GBPm
-------------- ----------- ----------- -------------
Current tax (0.1) 3.0 4.4
Deferred tax 3.6 0.4 6.4
-------------- ----------- ----------- -------------
3.5 3.4 10.8
-------------- ----------- ----------- -------------
The Balance Sheet movement in current and deferred tax since the
last reported balance sheet is as follows:
Current tax Deferred tax Deferred tax Total Net
Liability Asset Liability Liability
--------------------- ------------ ------------- ------------- -----------
At 1 January 2011 (5.3) 11.2 (74.5) (68.6)
Recognised directly
in arriving at
profit after tax 0.1 (1.3) (2.3) (3.5)
Recognised directly
in equity - 0.5 0.7 1.2
Net tax paid 1.6 - - 1.6
Foreign exchange
movements (0.1) 0.1 (2.9) (2.9)
--------------------- ------------ ------------- ------------- -----------
At 30 June 2011 (3.7) 10.5 (79.0) (72.2)
--------------------- ------------ ------------- ------------- -----------
7 EARNINGS PER SHARE
Management has chosen to disclose the European Public Real
Estate Association (EPRA) measure of earnings per share (Best
Practices Recommendations October 2010, as clarified by Additional
Guidance July 2011), which has been provided to give relevant
information to investors on the long-term performance of the
Group's underlying business. The EPRA measure excludes items which
are non-recurring in nature such as profits (net of related tax) on
sale of investment properties, other non-current investments and
items which have no impact to earnings over their life, such as the
change in fair value of derivative financial instruments and the
net movement on revaluation of investment properties, and the
related deferred taxation on these items. Comparatives have been
restated in accordance with EPRA Best Practices Recommendations
Additional Guidance July 2011.
Six months Year
Six months ended ended
ended 30 June 31 December
30 June 2010 2010
2011 GBPm GBPm
Earnings GBPm (restated) (restated)
------------------------------------ ----------- ------------ -------------
Profit for the period attributable
to the owners of the Company 32.3 24.7 60.1
Revaluation gains on investment
properties (14.1) (6.3) (30.1)
Profit on sale of subsidiaries and
associates (1.2) - -
Negative goodwill on share
acquisitions - - (0.1)
Change in fair value of derivative
financial instruments (1.1) 6.8 3.1
Net gain on sale of corporate bonds
and other investments (0.3) (10.6) (9.3)
Deferred tax relating to the above
adjustments 4.4 (1.4) 4.1
Adjustments in respect of
associates (2.7) (4.4) (7.7)
------------------------------------ ----------- ------------ -------------
EPRA Earnings 17.3 8.8 20.1
------------------------------------ ----------- ------------ -------------
Six months Six months Year
ended ended ended
30 June 30 June 31 December
Weighted average number of ordinary 2011 2010 2010
shares Number Number Number
------------------------------------- ----------- ----------- -------------
Weighted average number of ordinary
shares 46,237,751 47,719,329 47,280,274
Dilutive share options(1) 69,112 8,678 13,339
------------------------------------- ----------- ----------- -------------
Diluted weighted average number of
ordinary shares 46,306,863 47,728,007 47,293,613
------------------------------------- ----------- ----------- -------------
Six months Year
Six months ended ended
ended 30 June 31 December
30 June 2010 2010
2011 Pence Pence
Earnings per Share Pence (restated) (restated)
-------------------- ----------- ------------ -------------
Basic 69.9 51.8 127.1
Diluted 69.8 51.8 127.1
EPRA 37.4 18.4 42.5
-------------------- ----------- ------------ -------------
1. 300,000 share options were granted on 11 March 2010 at an
exercise price of 470 pence.
8 NET ASSETS PER SHARE
Management has chosen to disclose the two European Public Real
Estate Association (EPRA) measures of net assets per share (Best
Practices Recommendations October 2010, as clarified by Additional
Guidance July 2011): EPRA net assets per share and EPRA triple net
assets per share. The EPRA net assets per share measure highlights
the fair value of equity on a long-term basis, and so excludes
items which have no impact on the Group in the long term, such as
fair value movements of derivative financial instruments and
movements on fair value of investment properties, and associated
deferred tax. The EPRA triple net assets per share measure
discloses net assets per share on a true fair value basis: all
balance sheet items are included at their fair value in arriving at
this measure, including deferred tax, fixed rate loan liabilities
and any other balance sheet items not reported at fair value.
Comparatives have been restated in accordance with EPRA Best
Practices Recommendations Additional Guidance July 2011.
30 June 31 December
30 June 2010 2010
2011 GBPm GBPm
Net Assets GBPm (restated) (restated)
Basic net assets 396.3 309.5 357.2
Dilutive impact of share options 1.4 - 1.4
-------------------------------------- -------- ------------ ------------
Diluted net assets 397.7 309.5 358.6
Adjustment to increase fixed rate
debt to fair value, net of tax (18.0) (20.0) (19.4)
Goodwill as a result of deferred tax (1.1) (1.1) (1.1)
-------------------------------------- -------- ------------ ------------
EPRA Triple Net Assets 378.6 288.4 338.1
Deferred tax on property and other
non-current assets 74.4 58.8 68.4
Fair value of derivative financial
instruments 9.0 22.6 15.7
Adjustment to reduce fixed rate debt
to book value, net of tax 18.0 20.0 19.4
Adjustments in respect of associates 0.9 3.7 5.2
-------------------------------------- -------- ------------ ------------
EPRA Net Assets 480.9 393.5 446.8
-------------------------------------- -------- ------------ ------------
30 June 30 June 31 December
2011 2010 2010
Number Number Number
-------------------------------------- ----------- ----------- ------------
Number of ordinary shares in
circulation 45,597,005 47,226,439 46,588,244
Dilutive share options 300,000 - 300,000
-------------------------------------- ----------- ----------- ------------
Diluted number of ordinary shares
in issue 45,897,005 47,226,439 46,888,244
-------------------------------------- ----------- ----------- ------------
30 June 31 December
30 June 2010 2010
2011 Pence Pence
Net Assets Per Share Pence (restated) (restated)
---------------------- -------- ------------ ------------
Basic 869.1 655.3 766.7
Diluted 866.5 655.3 764.8
EPRA 1,047.7 828.0 952.9
EPRA Triple Net 824.9 606.8 721.1
---------------------- -------- ------------ ------------
9 INVESTMENT PROPERTIES
30 June 30 June 31 December
2011 2010 2010
GBPm GBPm GBPm
--------- -------- -------- ------------
London 387.3 350.3 375.0
France 267.0 211.3 248.7
Germany 209.7 179.7 196.5
Sweden 60.8 51.0 56.7
--------- -------- -------- ------------
924.8 792.3 876.9
--------- -------- -------- ------------
The movement in investment properties since the last reported
balance sheet is as follows:
London France Germany Sweden Total
GBPm GBPm GBPm GBPm GBPm
--------------------- ------- ------- -------- ------- ------
At 1 January
2011 375.0 248.7 196.5 56.7 876.9
Acquisitions 0.7 - 0.8 - 1.5
Capital expenditure 2.4 1.2 0.5 2.1 6.2
Net movements
on revaluation
of investment
properties 9.1 3.6 1.3 0.1 14.1
Rent-free period
debtor adjustments 0.1 - 0.1 0.1 0.3
Exchange rate
variances - 13.5 10.5 1.8 25.8
--------------------- ------- ------- -------- ------- ------
At 30 June 2011 387.3 267.0 209.7 60.8 924.8
--------------------- ------- ------- -------- ------- ------
The investment properties were revalued at 30 June 2011 to their
fair value. Valuations were based on current prices in an active
market for all properties. The property valuations were carried out
by external, professionally qualified valuers as follows:
London: Lambert Smith Hampton
France: Jones Lang LaSalle, except 30 June 2010: Jones Lang
LaSalle or DTZ Debenham Tie Leung
Germany: Colliers International, except 30 June 2010: Colliers
International or DTZ Debenham Tie Leung
Sweden: CB Richard Ellis
Investment properties include leasehold properties with a
carrying value of GBP21.0 million (June 2010: GBP18.4 million;
December 2010: GBP19.6 million).
Included within investment properties are properties held for
sale with a carrying value of GBP21.9 million (June 2010: GBPnil,
December 2010: GBPnil).
Where the Group leases out its investment property under
operating leases the duration is typically three years or more. No
contingent rents have been recognised in the current or comparative
years. Substantially all investment properties are secured against
debt. During 2010 the Group purchased a property in London for
GBP1.8 million. Under the terms of the purchase agreement, should
the site be developed additional consideration may become due to
the vendor. The maximum liability in respect of this is estimated
to be GBP0.5 million. At 30 June 2011 the fair value of the
liability was GBPnil (June 2010: GBPnil; December 2010:
GBPnil).
10 INVESTMENTS IN ASSOCIATES
Bulgarian
Land
Development Other
Catena AB Plc associates Total
At 30 June 2011 GBPm GBPm GBPm GBPm
Interest held in
ordinary share capital 29.9% 48.3% various
Revenues 0.2 0.3 0.4 0.9
--------------------------- ---------- ------------- ------------ -------
Share of profit/(loss)
of associates after
tax 2.6 (0.5) - 2.1
--------------------------- ---------- ------------- ------------ -------
Assets 19.8 18.2 0.9 38.9
Liabilities (12.1) (8.7) (0.5) (21.3)
--------------------------- ---------- ------------- ------------ -------
Net assets 7.7 9.5 0.4 17.6
Goodwill 5.4 - 1.7 7.1
--------------------------- ---------- ------------- ------------ -------
Investments in associates 13.1 9.5 2.1 24.7
--------------------------- ---------- ------------- ------------ -------
Market value of 37.9 n/a n/a
interest
--------------------------- ---------- ------------- ------------ -------
Bulgarian
Land
Development Other
Catena AB Plc associates Total
At 30 June 2010 GBPm GBPm GBPm GBPm
--------------------------- ---------- ------------- ------------ -------
Interest held in
ordinary share capital 29.9% 47.7% various
Revenues 2.4 0.4 - 2.8
--------------------------- ---------- ------------- ------------ -------
Share of profit/(loss)
of associates after
tax 5.2 (0.6) - 4.6
--------------------------- ---------- ------------- ------------ -------
Assets 59.3 25.4 0.1 84.8
Liabilities (33.6) (13.6) - (47.2)
--------------------------- ---------- ------------- ------------ -------
Net assets 25.7 11.8 0.1 37.6
Goodwill 4.8 - - 4.8
--------------------------- ---------- ------------- ------------ -------
Investments in associates 30.5 11.8 0.1 42.4
--------------------------- ---------- ------------- ------------ -------
Market value of 32.9 n/a n/a
interest
--------------------------- ---------- ------------- ------------ -------
Bulgarian
Land
Development Other
Catena AB Plc associates Total
At 31 December 2010 GBPm GBPm GBPm GBPm
--------------------------- ---------- ------------- ------------ -------
Interest held in
ordinary share capital 29.9% 48.3% various
Revenues 4.5 0.8 0.2 5.5
--------------------------- ---------- ------------- ------------ -------
Profit/(loss) after
tax 9.4 (1.7) (0.1) 7.6
Realisation of negative
goodwill on acquisition - 0.1 - 0.1
--------------------------- ---------- ------------- ------------ -------
Share of profit/(loss)
of associates after
tax 9.4 (1.6) (0.1) 7.7
--------------------------- ---------- ------------- ------------ -------
Assets 62.1 17.5 0.2 79.8
Liabilities (37.8) (8.1) (0.1) (46.0)
--------------------------- ---------- ------------- ------------ -------
Net assets 24.3 9.4 0.1 33.8
Goodwill 5.3 - 1.5 6.8
--------------------------- ---------- ------------- ------------ -------
Investments in associates 29.6 9.4 1.6 40.6
--------------------------- ---------- ------------- ------------ -------
Market value of 50.6 n/a n/a
interest
--------------------------- ---------- ------------- ------------ -------
The movement in associates since the last reported balance sheet
is as follows:
Net assets Goodwill Total
GBPm GBPm GBPm
------------------------------------- ----------- --------- -------
At 1 January 2011 33.8 6.8 40.6
Additions 0.5 1.5 2.0
Disposals (0.1) (1.4) (1.5)
Share of profit of associates after
tax 2.1 - 2.1
Dividends received (19.9) - (19.9)
Share of other comprehensive income
of associates 0.1 - 0.1
Exchange rate differences 1.1 0.2 1.3
------------------------------------- ----------- --------- -------
At 30 June 2011 17.6 7.1 24.7
------------------------------------- ----------- --------- -------
11 OTHER INVESTMENTS
30 30 31
Destination June June December
Investment of 2011 2010 2010
type Investment GBPm GBPm GBPm
Available-for-sale
financial
investments Listed
carried at fair corporate
value bonds UK 71.4 30.1 37.5
Eurozone 15.1 16.9 24.1
Other 22.8 11.7 16.5
------ ------- ---------
109.3 58.7 78.1
Listed
equity
securities UK 0.5 0.6 0.5
Sweden 4.3 2.5 2.4
Other 0.1 0.1 0.1
Unlisted
investments Sweden 0.4 0.6 0.4
Government
securities UK 0.1 0.1 0.1
------------- ---------------------------------- ------ ------- ---------
114.7 62.6 81.6
------------------------------------------------ ------ ------- ---------
The movement of other investments since the last reported
balance sheet is analysed below:
Corporate Other
Bonds Investments Total
GBPm GBPm GBPm
------------------------------------ ---------- ------------- -------
At 1 January 2011 78.1 3.5 81.6
Additions 44.8 6.8 51.6
Disposals (16.9) (5.0) (21.9)
Fair value movements recognised in
reserves 2.0 - 2.0
Fair value movements recognised in
profit before tax 0.1 - 0.1
Exchange rate differences 1.2 0.1 1.3
------------------------------------ ---------- ------------- -------
At 30 June 2011 109.3 5.4 114.7
------------------------------------ ---------- ------------- -------
Corporate Bond Portfolio
At 30 June 2011
Building
Sector Banking Insurance Societies Financials Other Total
--------- ------------ -------------- ----------- ----------- ----------------- ----------
Value GBP22.3m GBP37.4m GBP11.3m GBP11.9m GBP26.4m GBP109.3m
Coupon
yield 9.1% 7.4% 8.6% 8.2% 9.7% 8.5%
--------- ------------ -------------- ----------- ----------- ----------------- ----------
Issuers KBC AXA Yorkshire Investec TUI
RBS Aviva Nationwide Euroclear Swissport
Co-op Swiss Life Man Group Corral Finans
Lloyds Prudential Aberdeen Thomas Cook
AM
Dresdner Storebrand FS Funding (ISS)
SNS Bank Old Mutual Cable & Wireless
Swedbank RL Finance HeidelbergCement
Rothschild Assicurazioni Renewable Energy
Corp
Commerzbank Legal &
General
Scottish
Widows
Friends
Provident
--------- ------------ -------------- ----------- ----------- ----------------- ----------
12 BORROWINGS
Maturity profile
Bank Debenture Zero Coupon Other
loans loans Note loans Total
At 30 June 2011 GBPm GBPm GBPm GBPm GBPm
Within one year
or on demand 98.3 1.1 - - 99.4
More than one
but not more
than two years 132.1 1.3 - - 133.4
More than two
but not more
than five years 217.2 34.2 - - 251.4
More than five
years 169.6 26.5 10.3 - 206.4
------------------- ------- ---------- ------------ ------- -------
617.2 63.1 10.3 - 690.6
Unamortised issue
costs (3.8) (0.9) - - (4.7)
------------------- ------- ---------- ------------ ------- -------
Borrowings 613.4 62.2 10.3 - 685.9
Less amount due
for settlement
within 12 months (97.4) (0.9) - - (98.3)
------------------- ------- ---------- ------------ ------- -------
Amount due for
settlement after
12 months 516.0 61.3 10.3 - 587.6
------------------- ------- ---------- ------------ ------- -------
Bank Debenture Zero Coupon Other
loans loans Note loans Total
At 30 June 2010 GBPm GBPm GBPm GBPm GBPm
------------------- -------- ---------- ------------ ------- --------
Within one year
or on demand 103.5 1.0 - 2.3 106.8
More than one
but not more
than two years 39.4 1.1 - - 40.5
More than two
but not more
than five years 204.5 4.2 - - 208.7
More than five
years 163.6 28.2 9.3 - 201.1
------------------- -------- ---------- ------------ ------- --------
511.0 34.5 9.3 2.3 557.1
Unamortised issue
costs (2.5) - - - (2.5)
------------------- -------- ---------- ------------ ------- --------
Borrowings 508.5 34.5 9.3 2.3 554.6
Less amount due
for settlement
within 12 months (102.9) (1.0) - (2.3) (106.2)
------------------- -------- ---------- ------------ ------- --------
Amount due for
settlement after
12 months 405.6 33.5 9.3 - 448.4
------------------- -------- ---------- ------------ ------- --------
Bank Debenture Zero Coupon Other
At 31 December loans loans Note loans Total
2010 GBPm GBPm GBPm GBPm GBPm
------------------- ------- ---------- ------------ ------- -------
Within one year
or on demand 82.4 1.1 - 2.3 85.8
More than one
but not more
than two years 126.2 1.2 - - 127.4
More than two
but not more
than five years 204.4 4.5 - - 208.9
More than five
years 133.1 27.3 9.8 - 170.2
------------------- ------- ---------- ------------ ------- -------
546.1 34.1 9.8 2.3 592.3
Unamortised issue
costs (3.0) - - - (3.0)
------------------- ------- ---------- ------------ ------- -------
Borrowings 543.1 34.1 9.8 2.3 589.3
Less amount due
for settlement
within 12 months (81.6) (1.1) - (2.3) (85.0)
------------------- ------- ---------- ------------ ------- -------
Amount due for
settlement after
12 months 461.5 33.0 9.8 - 504.3
------------------- ------- ---------- ------------ ------- -------
Analysis
Fixed rate Floating rate
financial financial
liabilities liabilities Total
At 30 June 2011 GBPm GBPm GBPm
----------------- ------------- -------------- ------
Sterling 151.5 95.0 246.5
Euro 118.5 216.7 335.2
Swedish kronor - 91.9 91.9
Other - 12.3 12.3
----------------- ------------- -------------- ------
270.0 415.9 685.9
----------------- ------------- -------------- ------
Fixed rate Floating rate
financial financial
liabilities liabilities Total
At 30 June 2010 GBPm GBPm GBPm
----------------- ------------- -------------- ------
Sterling 153.4 111.1 264.5
Euro 114.5 150.7 265.2
Swedish kronor - 24.3 24.3
Other - 0.6 0.6
----------------- ------------- -------------- ------
267.9 286.7 554.6
----------------- ------------- -------------- ------
Fixed rate Floating rate
financial financial
liabilities liabilities Total
At 31 December 2010 GBPm GBPm GBPm
--------------------- ------------- -------------- ------
Sterling 155.2 91.6 246.8
Euro 117.6 185.8 303.4
Swedish kronor - 33.3 33.3
Other - 5.8 5.8
--------------------- ------------- -------------- ------
272.8 316.5 589.3
--------------------- ------------- -------------- ------
Fair values
Carrying amounts Fair values
------------------------- -------------------------
June June December June June December
2011 2010 2010 2011 2010 2010
GBPm GBPm GBPm GBPm GBPm GBPm
Current borrowings 98.3 106.2 85.0 98.3 106.2 85.0
Non-current
borrowings 587.6 448.4 504.3 611.5 475.2 530.2
-------------------- ------ ------ --------- ------ ------ ---------
685.9 554.6 589.3 709.8 581.4 615.2
-------------------- ------ ------ --------- ------ ------ ---------
The fair value of non-current borrowings represents the amount
at which a financial instrument could be exchanged in an arm's
length transaction between informed and willing parties, discounted
at the prevailing market rate, and excludes accrued interest.
13 SHARE CAPITAL
Number of Number of Ordinary Total
ordinary treasury Total shares in Treasury ordinary
shares in shares in number circulation shares shares
circulation circulation of shares GBPm GBPm GBPm
----------- ------------ ------------ ----------- ------------ --------- ---------
At 1
January
2011 46,588,244 4,793,000 51,381,244 11.7 1.2 12.9
Cancelled
following
tender
offer(1) (991,239) - (991,239) (0.3) - (0.3)
----------- ------------ ------------ ----------- ------------ --------- ---------
At 30 June
2011 45,597,005 4,793,000 50,390,005 11.4 1.2 12.6
----------- ------------ ------------ ----------- ------------ --------- ---------
Number of Number of Ordinary Total
ordinary treasury Total shares in Treasury ordinary
shares in shares in number circulation shares shares
circulation circulation of shares GBPm GBPm GBPm
----------- ------------ ------------ ------------ ------------ --------- ---------
At 1
January
2010 48,024,256 5,000,000 53,024,256 12.0 1.3 13.3
Cancelled
following
tender
offer(2) (1,004,817) - (1,004,817) (0.3) - (0.3)
Ordinary
shares
issued
from
treasury
shares 207,000 (207,000) - 0.1 (0.1) -
----------- ------------ ------------ ------------ ------------ --------- ---------
At 30 June
2010 47,226,439 4,793,000 52,019,439 11.8 1.2 13.0
----------- ------------ ------------ ------------ ------------ --------- ---------
Number of Number of Ordinary Total
ordinary treasury Total shares in Treasury ordinary
shares in shares in number circulation shares shares
circulation circulation of shares GBPm GBPm GBPm
----------- ------------ ------------ ------------ ------------ --------- ---------
At 1
January
2010 48,024,256 5,000,000 53,024,256 12.0 1.3 13.3
Cancelled
following
tender
offer(2 &
3) (1,643,012) - (1,643,012) (0.4) - (0.4)
Ordinary
shares
issued
from
treasury
shares 207,000 (207,000) - 0.1 (0.1) -
----------- ------------ ------------ ------------ ------------ --------- ---------
At 31
December
2010 46,588,244 4,793,000 51,381,244 11.7 1.2 12.9
----------- ------------ ------------ ------------ ------------ --------- ---------
1. A tender offer by way of a Circular dated 18 March 2011 for
the purchase of 1 in 47 shares at 725 pence per share was completed
in April 2011. It returned GBP7.1 million to shareholders,
equivalent to 15.4 pence per share.
2. A tender offer by way of a Circular dated 23 March 2010 for
the purchase of 1 in 48 shares at 600 pence per share was completed
in April 2010. It returned GBP6.0 million to shareholders,
equivalent to 12.5 pence per share.
3. A tender offer by way of a Circular dated 19 August 2010 for
the purchase of 1 in 74 shares at 625 pence per share was completed
in September 2010. It returned GBP4.0 million to shareholders,
equivalent to 8.5 pence per share.
14 CASH GENERATED FROM OPERATIONS
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2011 2010 2010
GBPm GBPm GBPm
Operating profit 41.3 41.1 88.2
Adjustments for:
Net movements on revaluation of
investment properties (14.1) (6.3) (30.1)
Depreciation 0.1 0.1 0.3
Profit on sale of subsidiaries and
associates (1.2) - -
Gain on disposal of corporate bonds
and other investments (0.3) (10.6) (9.3)
Share-based payment expense 0.1 - 0.1
Changes in working capital:
Decrease in debtors 3.6 1.5 0.5
(Decrease)/increase in creditors (1.2) (0.3) 1.5
------------------------------------- ----------- ----------- -------------
Cash generated from operations 28.3 25.5 51.2
------------------------------------- ----------- ----------- -------------
GLOSSARY OF TERMS
ADJUSTED NET ASSETS OR ADJUSTED SHAREHOLDERS' FUNDS
Net assets excluding the mark-to-market on effective cash flow
hedges and related debt adjustments and deferred tax on
revaluations and goodwill arising as a result of deferred tax,
including for associates
ADJUSTED NET GEARING
Net debt expressed as a percentage of adjusted net assets
ADJUSTED SOLIDITY
Adjusted net assets expressed as a percentage of adjusted total
assets
ADJUSTED TOTAL ASSETS
Total assets excluding deferred tax assets
CONTRACTED RENT
Annual contracted rental income after any rent-free periods have
expired
CORE PROFIT
Profit before tax and before net movements on revaluation of
investment properties, profit on sale of investment properties,
subsidiaries and corporate bonds, impairment of intangible assets
and goodwill, non-recurring costs, change in fair value of
derivatives and foreign exchange variances
DILUTED EARNINGS PER SHARE
Profit after tax divided by the diluted weighted average number
of ordinary shares
DILUTED NET ASSETS
Equity shareholders' funds increased by the potential proceeds
from issuing those shares issuable under employee share schemes
DILUTED NET ASSETS PER SHARE OR DILUTED NET ASSET VALUE
Diluted net assets divided by the diluted number of ordinary
shares
DILUTED NUMBER OF ORDINARY SHARES
Number of ordinary shares in circulation at the balance sheet
date adjusted to include the effect of potential dilutive shares
issuable under employee share schemes
DILUTED WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES
Weighted average number of ordinary shares in issue during the
period adjusted to include the effect of potential weighted average
dilutive shares issuable under employee share schemes
EARNINGS PER SHARE
Profit after tax divided by the weighted average number of
ordinary shares in issue in the period
EPRA
European Public Real Estate Association
EPRA EARNINGS PER SHARE
Profit after tax, but excluding net gains or losses from fair
value adjustments on investment properties, profits or losses on
disposal of investment properties and other non-current investment
interests, impairment of goodwill and intangible assets, movements
in fair value of derivative financial instruments and their related
current and deferred tax, including for associates
EPRA NET ASSETS
Diluted net assets excluding the mark-to-market on effective
cash flow hedges and related debt adjustments, deferred tax on
revaluations and goodwill arising as a result of deferred tax,
including for associates
EPRA NET ASSETS PER SHARE
EPRA net assets divided by the diluted number of ordinary
shares
EPRA NET INITIAL YIELD
Annual passing rent less net service charge costs on investment
properties expressed as a percentage of the investment property
valuation after adding purchasers' costs
EPRA TOPPED UP NET INITIAL YIELD
Annual net rents on investment properties expressed as a
percentage of the investment property valuation after adding
purchasers' costs
EPRA TRIPLE NET ASSETS
EPRA net assets adjusted to reflect the fair value of debt and
derivatives and to include the fair value of deferred tax on
property revaluations, including for associates
EPRA TRIPLE NET ASSETS PER SHARE
EPRA triple net assets divided by the diluted number of ordinary
shares
ESTIMATED RENTAL VALUE (ERV)
The market rental value of lettable space as estimated by the
Group's valuers
NET ASSETS PER SHARE OR NET ASSET VALUE (NAV)
Equity shareholders' funds divided by the number of ordinary
shares in circulation at the balance sheet date
NET DEBT
Total borrowings less cash and short-term deposits
NET GEARING
Net debt expressed as a percentage of net assets
NET INITIAL YIELD
Annual net rents on investment properties expressed as a
percentage of the investment property valuation
NET RENT
Contracted rent less net service charge costs
OCCUPANCY RATE
Contracted rent expressed as a percentage of the aggregate of
contracted rent and the ERV of vacant space
OVER-RENTED
The amount by which ERV falls short of the aggregate of passing
rent and the ERV of vacant space
PASSING RENT
Contracted rent before any rent-free periods have expired
PROPERTY LOAN TO VALUE
Property borrowings expressed as a percentage of the market
value of the property portfolio
RECURRING INTEREST COVER
The aggregate of group revenue less costs plus share of results
of associates, divided by the aggregate of interest expense and
amortisation of issue costs of debt, less interest income
RENT ROLL
Contracted rent
SOLIDITY
Equity shareholders' funds expressed as a percentage of total
assets
TOTAL SHAREHOLDER RETURN
For a given number of shares, the aggregate of the proceeds from
tender offer buy-backs and change in the market value of the shares
during the year adjusted for cancellations occasioned by such
buy-backs, as a percentage of the market value of the shares at the
beginning of the year
TRUE EQUIVALENT YIELD
The capitalisation rate applied to future cash flows to
calculate the gross property value, as determined by the Group's
external valuers
DIRECTORS, OFFICERS AND ADVISERS
Directors
Sten Mortstedt (Executive Chairman)
Henry Klotz (Executive Vice Chairman)
Richard Tice (Chief Executive Officer)
John Whiteley (Chief Financial Officer)
Malcolm Cooper * ++ (Non-Executive Director)
Joseph Crawley (Non-Executive Director)
Christopher Jarvis * (Non-Executive Director)
Thomas Lundqvist (Non-Executive Director)
Jennica Mortstedt (Non-Executive Director)
Brigith Terry (Non-Executive Director)
Thomas Thomson (Non-Executive Director)
* member of Remuneration Committee
member of Audit Committee
++ senior independent Director
Company Secretary
David Fuller BA, FCIS
Registered Office
86 Bondway
London
SW8 1SF
Registered Number
2714781
Registrars and Transfer Office
Computershare Investor Services Plc
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
Shareholder Helpline: 0870 889 3286
CLS Holdings plc on line:
www.clsholdings.com
email:
enquiries@clsholdings.com
Clearing Bank
Royal Bank of Scotland Plc
24 Grosvenor Place
London
SW1X 7HP
Financial Advisers
Kinmont Limited
5 Clifford Street
London
W1S 2LJ
Stockbrokers
Liberum Capital
Ropemaker Place, Level 12
25 Ropemaker Street
London
EC2Y 9LY
Brewin Dolphin
12 Smithfield Street
London
EC1A 9BD
Registered Auditor
Deloitte LLP
Chartered Accountants
2 New Street Square
London
EC4A 3BZ
Financial and Corporate Public Relations
Smithfield Consultants Limited
10 Aldersgate Street
London
EC1A 4HJ
This information is provided by RNS
The company news service from the London Stock Exchange
END
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