TIDMCLI
RNS Number : 4378B
CLS Holdings PLC
08 October 2020
PRESS RELEASE
Release date: 8 October 2020
Embargoed until: 07:00
CLS Holdings plc ("CLS", the "Company" or the "Group")
Trading Update for the period 1 July 2020 to 7 October 2020
RENT COLLECTIONS and balance sheet remain resilient
Fredrik Widlund, Chief Executive of CLS, commented:
"The strength of our tenant base, underpinned by government and
major corporations, is again reflected in our high rent collection
with 90% of fourth quarter rent received to date and 99% for the
first three quarters. Equally important are the benefits of our
diversified country approach, focused on the UK, Germany and
France, with economic and leasing activity recovering in line with
the easing of lockdown measures.
"At the end of September, we were pleased to complete our first
green loan together with Aviva. The loan recognises our
sustainability progress and has a margin reduction incentive
dependent on the delivery of specific sustainability targets. The
additional funds raised ensures CLS is in a strong position with
over GBP240 million of cash."
A summary of our key operational and financial metrics is set
out below:
Q4 rent collections
The Group's rental income in the UK and France is due on a
quarterly basis with the current payment due between 29 September
2020 and 1 October 2020. In Germany, rents are due monthly and the
current payment was due on 5 October 2020.
By close on 7 October 2020, we had recei ved 89% of contractual
rents due or 92% taking into account those tenants we are
supporting by switching to monthly rents ( 2019: 94% of rents had
been collected by 7 October 2019).
Update on first three quarters rent collections
For the third quarter of 2020 we have now collected 98% of rents
due (2019: 99%), which is an increase of 3% since our half-yearly
results were announced on 12 August 2020 and 12% since our 8 July
2020 trading update. Overall, for the first three quarters of 2020,
we have received 99% of contractual rents due (2019: 98%).
Vacancy and lettings (as at 30 September 2020)
As expected, vacancy has decreased slightly from 30 June 2020 to
5.0%. This reduction is due to the completion of the sale of
Albert-Einstein-Ring in Germany, which had high vacancy, somewhat
offset by recent lease expiries across the portfolio.
-- Vacancy rates (B ased on June 2020 ERVs):
Group: 5.0% (30 June 2020: 5.2%)
UK: 6.0% (30 June 2020: 5.9%)
Germany: 3.4% (30 June 2020: 4.6%)
France: 4.8% (30 June 2020: 3.6%)
Since 8 July 2020, the Group has agreed 41 deals securing GBP4.4
million of annual rent 14.8% above ERV. Notable transactions
include the 6-month lease extension with Dr Hönle AG in Gräfelfing,
Munich for GBP0.4m (EUR0.4m) above ERV.
Liquid resources and financing
The Group's balance sheet remains well-capitalised and robust.
As at 30 September 2020, CLS had cash of over GBP240 million and a
Loan to Value of 35.0% based on 30 June 2020 portfolio valuation
(30 June 2020: 34.7%), with a further GBP50 million in undrawn
facilities.
On 29 September 2020, CLS completed a GBP154 million loan with
Aviva Investors which is secured on a portfolio of 12 UK
properties. The GBP154 million loan, which has a loan to value of
55%, is split equally between 10-year and 12-year tranches. The
average interest rate is 2.62% fixed.
The loan has been independently assured as a "green loan" in
line with LMA sustainability principles with up to a 10-basis point
margin reduction dependent on the delivery of specific
sustainability targets. In addition, subject to certain conditions,
CLS will be able to remove or substitute properties as security for
the loan.
For the remainder of 2020, the Group has only one loan, for
GBP11.4 million, due to expire. Discussions are well advanced to
extend this, and other associated loans, for up to seven years.
Acquisitions and disposal
In the UK, the Group completed the acquisition of three office
properties from Aviva Investors for GBP59.7 million (excluding
costs). The portfolio consists of: One Church Road, Richmond;
Priory Place, Chelmsford; and Kings Court, Leatherhead.
The portfolio is 94% let with a WAULT of 3.8 years to breaks and
delivers GBP3.7 million net rent per annum, reflecting a net
initial yield of 5.9%. There are significant opportunities to add
further value through additional refurbishments, sustainability
enhancements and other active asset management initiatives which
will continue to drive further rental growth.
In France, the Group completed the acquisition of one additional
floor at Rhône Alpes in Lyon for GBP0.6 million, a building the
Group already part owns. In addition, CLS has unconditionally
exchanged on additional floors at Park Avenue in Lyon for GBP3.3m
such that, upon completion, the Group will own the entire
building.
In Germany , the Group completed the disposal of
Albert-Einstein-Ring in Germany for GBP33.0 million (3.6% Net
Initial Yield), 38% ahead of the December 2019 book value.
-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
Panmure Gordon
Hugh Rich
+44 (0)20 7886 2733
Elm Square Advisers Limited
Jonathan Gray
+44 (0)20 7823 3695
Smithfield Consultants (Financial PR)
Alex Simmons
Rob Yates
+44 7970 174353
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.
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