4th Mar 2014 12:33
LONDON (Alliance News) - Property investment company CLS Holdings PLC Tuesday reported a 27% increase in pretax profit for the full year, boosted by acquisitions and strong demand for its properties in the UK and Sweden.
The company, which lets properties across Europe, posted pretax profit of GBP71.4 million for 2013, up from GBP56.1 million, as revenue climbed to GBP91.2 million, from GBP80.2 million a year earlier, largely driven by acquisitions.
During the period the firm bought 42 properties for a combined GBP165.3 million, including the Neo portfolio of 34 properties in the UK for GBP123.7 million at a net initial yield of 12.2%.
CLS said the acquisitions have materially increased annual cash generation, and increased to 50% the rental income derived from governments such as the National Crime Agency in the UK and Västra Götaland County Council in Sweden.
Rental income rose to GBP76.0 million from GBP66.1 million, largely through the impact of acquisitions.
The company also sold a number of sites including Ingram House, west London, which realised a gain of GBP4.5 million after costs over its valuation at the end of 2012 of GBP8.6 million. The 1,308 square metre office and residential building was sold for GBP13.32 million.
CLS said it continues to trade well in the UK and has been buying actively in the UK with total acquisitions of GBP153.2 million.
Despite, positive trading in UK and Sweden, CLS said its French portfolio had fallen by 3.6% in the year in local currency or by 1.5% in sterling.
It said the French economy has continued to "suffer adversely from indecisive, variable policy-making under the Hollande presidency, high rates of tax, and a persistently low growth environment in the Eurozone; GDP was barely above zero for 2013."
This continued economic weakness adversely affected the French property market, where letting activity in 2013 fell by 25% from that of 2012.
Overall group EPRA net assets per share rose 9.9% to 1,268.4 pence from 1,54.4 pence and net assets per share by 13.6% yo 1,094.1 pence, from 963.1 pence in 2012.
EPRA is the European Public Real Estate Association, the industry body for European REITs.
In addition, the firm said the vacancy rate across its portfolio stands at 4.4%, and the portfolio is now worth GBP1.13 billion compared with GBP934.5 million a year earlier.
Financially, the company said cash balances stood at GBP129.8 million at the year-end, up from GBP97.6 million a year earlier, while gross debt rose to GBP800.3 million from GBP690.2 million largely though a GBP80.0 million secure notes issues to finance Neo, and the net increase in short term borrowings.
Looking ahead, the company has a number of projects in the pipeline including Spring Mews, a mixed-use scheme in Vauxhall, south London, which will consist of a 378-bed student accommodation building and a 93-bedroom suite hotel, as well as office and retail space. Construction of the site is well advanced and it is due for completion in the third quarter 2014.
Since 1998, CLS has not made dividend payments to shareholders, but instead has made capital distributions through tender offer buy-backs.
The stock was trading at 1,320.00 pence, down 35.00 pence or 2.6%
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
Copyright © 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
CLS Holdings