CLS Holdings PLC profits sink as property valuation uplifts suffer sharp
The commercial property group reported an uplift in valuations of £2.7mln in the first six months of 2020 compared to £36.9mln in the previous year
PLC () reported a sharp fall in profits in the first six months of the year which it attributed to a lower investment property valuation uplift than in 2019.
For the six months ended June 30, 2020, the commercial landlord reported a pre-tax profit of £31.5mln, down 62.8% on the prior year, despite a 3.2% increase in its EPRA net asset value to 339.6p per share and a 3.8% rise in commercial rents to £113.5mln.
READ: CLS receives nearly all rent payments but vacancy numbers increase
The profit slide was attributed to the lower property value uplift, which was £2.7mln in the period compared to £36.9mln in the previous year, however, the company still managed to maintain its interim dividend at 2.35p per share.
CLS also said that its portfolio valuation had been flat during the first half as increases for its holdings in Germany and France were offset by a decline in the UK.
Looking ahead, the group said with lockdown restrictions easing its priority for the second half will be on the conversion of its leasing enquiry pipeline to increase occupancy as well as maintaining “a high level of cash collection” from its portfolios. It added that leasing enquiries were picking up “in lockstep” with general economic activity and they were “encouraged” by recent increases in leasing activity.
The firm also said it expects to see “attractive acquisition opportunities” and will look for opportunities to drive growth and earnings capacity.
“CLS has delivered an encouraging performance in the first six months of 2020 despite a challenging economic and market backdrop. Our rent collection has remained strong with 99% of first-half rent and 95% of contracted rent due for the third quarter collected to date”, said chief executive Fredrik Widlund.
“This rent collection performance and our diverse portfolio together with our robust balance sheet demonstrate the resilience of our business model and we have maintained our dividend. We also continue to look for suitable acquisitions to add to our portfolio”, he added.
CLS shares were down 1% at 205p in early deals on Wednesday.
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