TIDMCLI
RNS Number : 1281J
CLS Holdings PLC
08 April 2020
PRESS RELEASE
Release date: 8 April 2020
Embargoed until: 07:00
CLS Holdings plc ("CLS", the "Company" or the "Group")
Trading Update for the period 1 January 2020 to 7 April 2020
STRONG BALANCE SHEET PROVIDES ONGOING STABILITY
Fredrik Widlund, Chief Executive of CLS, commented:
"During this unprecedented time, alongside the safety of our
staff, our key focus has been to work with our tenants to assist
them as best we can. As a result, and in line with current
government guidelines, all our properties across all regions are
open to ensure tenants can keep their business going if they need
an office in which to operate or are performing essential work. Our
remote-working operations are functioning effectively to support
our key stakeholders.
"Additionally, we want to support our local communities and have
offered parking spaces for key healthcare workers where our
buildings are located close to hospitals. We are also increasing
our charity donations to local charities and foodbanks as well as
looking into how we can support charities that are our tenants.
"Whilst Covid-19 is causing an undefined period of uncertainty,
our strong cash position and resilient tenant base provides ongoing
stability such that the Board believes it is appropriate to proceed
with the recommended final dividend payment"
A summary of our key operational and financial metrics is set
out below:
Liquid resources and cash collections
The Group remains in a strong financial position. As at 7 April
2020, CLS had cash of over GBP235 million with a further GBP50
million in undrawn facilities. Our balance sheet is well
capitalised with a Loan to Value of 31.8% (31 December 2019:
31.4%).
The Group's rental income in the UK and France is due on a
quarterly basis with the current payment due between 25 March and 6
April. In Germany, rents are due monthly and the current payment
was due on 6 April. As at 31 March 2020, the Group's contractual
rents are split 54% in the UK, 31% in Germany and 15% in
France.
By close on 7 April 2020, we had received 84% of contractual
rents due or 87% taking into account those tenants we are
supporting by switching to monthly rents (2019: 96% of rents had
been collected by 7 April 2019). We are engaging with tenants whose
businesses are impacted by short-term cash flow issues and, as a
consequence, we are in advanced discussions with a further 5% of
our tenants by rent around payment options and asset management
initiatives.
Final dividend
Given our strong cash position and resilient tenant base, the
Board has concluded, subject to approval at the AGM, that it
remains appropriate to pay the final dividend of 5.05 pence per
share. The dividend is payable on 29 April 2020.
Vacancy and lettings (as at 7 April 2020)
As expected, vacancy has increased from 31 December 2019 but
remains below our targeted level of 5%. This increase is due to
completed refurbishments, now available to let, and acquired
vacancy in the UK, and some recent lease expiries in France.
-- Vacancy rates:
Group: 4.6% (31 December 2019: 4.0%)
UK: 4.9% (31 December 2019: 4.1%)
Germany: 4.3% (31 December 2019: 4.3%)
France: 4.1% (31 December 2019: 3.1%)
Since 1 January 2020, 27 deals have been signed securing over
GBP4 million of annual rent at 3.5% above December 2019 ERVs . This
letting activity included a 10-year lease extension to 2049 agreed
with the City of Bochum, Germany. The lease is conditional on CLS
extending the existing 256,000 sq. ft (23,800 sqm) by building a
further 21,000 sq. ft (1,951 sqm). A 10-year lease for 24,500 sq.
ft (2,277 sqm) was also agreed with the main tenant, RSM
International, at Portland House, Crawley.
Financing
The Group has GBP114.5 million of debt, across 9 loans, due to
be refinanced in 2020. Three loans (GBP25.6 million) have already
been extended by between 6 and 18 months and a term sheet has been
agreed on the largest refinancing, for a new 7-year loan.
Discussions are progressing well on the remaining loans to be
financed this year.
Acquisitions and disposals
We have completed the transactions which had exchanged as at 31
December 2019 being:
-- Acquisitions: 166 College Road, Harrow and 'TWENTY' Kingston Road, Staines bought for total consideration of GBP32.8 million (before costs) with a blended net initial yield of 6.1% and reversionary yield of 6.4%; and
-- Disposals: Four properties (Sidcup and the remaining two
regional assets from our 30 December 2019 portfolio disposal in the
UK, and Foch in Paris) were sold for total consideration of GBP9.1
million.
Until market conditions stabilise and we have more clarity on
the medium to long term impact from the current situation,
evaluation of any significant acquisitions is on hold.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulations (EC No. 596/2014).
-ends-
For further information, please contact:
CLS Holdings plc
(LEI: 213800A357TKB2TD9U78)
www.clsholdings.com
Fredrik Widlund, Chief Executive Officer
Andrew Kirkman, Chief Financial Officer
+44 (0)20 7582 7766
Liberum Capital Limited
Richard Crawley
Jamie Richards
+44 (0)20 3100 2222
Whitman Howard
Hugh Rich
+44 (0)20 7659 1261
Elm Square Advisers Limited
Jonathan Gray
+44 (0)20 7823 3695
Smithfield Consultants (Financial PR)
Alex Simmons
Rob Yates
+44 (0)20 3047 2546
Forward-looking statements
This announcement may contain certain 'forward-looking
statements'. By their nature, forward-looking statements involve
risk and uncertainty because they relate to future events and
circumstances. Actual outcomes and results may differ materially
from those expressed or implied by such forward-looking statements.
Any forward-looking statements made by or on behalf of CLS speak
only as of the date they are made and no representation or warranty
is given in relation to them, including as to their completeness or
accuracy or the basis on which they were prepared. Except as
required by its legal or statutory obligations, the Company does
not undertake to update forward-looking statements to reflect any
changes in its expectations with regard thereto or any changes in
events, conditions or circumstances on which any such statement is
based. Information contained in this document relating to the
Company should not be relied upon as an indicator of future
performance or construed as a profit forecast.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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