TIDMCLI
RNS Number : 6213L
CLS Holdings PLC
14 January 2021
PRESS RELEASE
Release date: 14 January 2021
Embargoed until: 07:00
CLS Holdings plc ("CLS", the "Company" or the "Group")
Trading Update for the period 8 October 2020 to 13 January
2021
RENT COLLECTIONS Remain strong, acquisitions to drive future
growth
Fredrik Widlund, Chief Executive of CLS, commented:
"With stricter lockdown measures being reimposed across the UK,
Germany and France, our focus remains on the welfare of our staff
and other stakeholders. All of our offices remain open to allow for
essential work with safety measures in place to support our
tenants. Our diverse tenant base with a strong underpinning of
government and major corporations, as well as limited exposure to
those sectors that have been most impacted by Covid-19, such as
retail, hospitality and leisure, has again been reflected in strong
rent collections.
We continued to sign leases and extensions in the fourth
quarter, which were on average above ERV, and our successful
execution of financings with Aviva and Deutsche Pfandbriefbank, in
particular, together with selected acquisitions, leave us well
placed to deliver future growth when the economy returns to more
normal conditions."
A summary of our key operational and financial metrics is set
out below:
Q1 2021 rent collections
The Group's rental income in the UK and France is due on a
quarterly basis with the current payment due between 25 December
2020 and 1 January 2021. In Germany, rents are due monthly and the
current payment was due on 6 January 2021.
By close on 13 January 2021, we had received 90% of contractual
rents due or 93% taking into account those tenants we are
supporting by switching to monthly rents (2020: 91% of rents had
been collected by 13 January 2020).
Update on 2020 rent collections
For the fourth quarter of 2020 we have now collected 99% of
rents due (2019: 97%), which is an increase of 9% since our 8
October 2020 trading update. Overall, for entire year of 2020, we
have received 99% of contractual rents due (2019: 98%).
Vacancy and lettings (as at 31 December 2020)
As expected, vacancy has increased from 8 October 2020. This
increase is due to completed refurbishments, now available to let,
and some recent lease expiries across the portfolio, both of which
have been harder to let due to the restrictions resulting from the
responses to Covid-19.
-- Vacancy rates (Based on June 2020 ERVs):
Group: 5.3% (30 June 2020: 5.2%, 30 September
2020: 5.0%)
UK: 6.2% (30 June 2020: 5.9%, 30 September
2020: 6.0%)
Germany: 3.9% (30 June 2020: 4.6%, 30 September
2020: 3.4%)
France: 5.1% (30 June 2020: 3.6%, 30 September
2020: 4.8%)
Since 8 October 2020, there have been 23 deals securing GBP2.2
million of annual rent at 13% above ERV. Notable transactions
include a five-year lease extension to 2030 with the Institute for
Hematopathology Hamburg in Fangdieckstraße, Hamburg resulting in an
increase of GBP0.1 million contracted rent effective December 2020.
The strong market and letting performance in Germany is forecast to
positively influence the year-end valuation.
Liquid resources and financing
The Group's balance sheet remains well-capitalised and robust.
As at 31 December 2020, CLS had cash of around GBP235 million and a
loan to value ratio of around 35% based on 30 June 2020 portfolio
valuation (30 September 2020: 35.0%), with a further GBP50 million
in undrawn facilities.
As a result of the sale of Albert-Einstein-Ring in Hamburg and
the proposed development of Vor dem Lauch in Stuttgart, the loan
secured by the group of properties known as the Metropolis
portfolio was refinanced in December with Deutsche Pfandbriefbank.
EUR74.3 million (55% LTV) was secured at a 1.30% fixed rate of
interest with the loan expiring in 2027. In September 2020 CLS
executed its first green loan for GBP154 million with Aviva
Investors at a 2.62% fixed rate of interest for 11 years on
average.
Acquisitions
In Germany, the Group unconditionally exchanged on the
acquisitions of Goldstuck in North-West Berlin for EUR43.5 million
and The Brix in Essen for EUR38.2 million in December 2020. They
present excellent opportunities for the refurbishment and reletting
of existing vacancy to capture market rents with a combined
estimated reversionary yield of 6.3%. Both properties are expected
to complete in Q1 2021.
In the UK, the Group unconditionally exchanged on the
acquisition of Radius House in Watford for GBP16.9 million in
December 2020 at a net initial yield of 5.6%. 51% of the current
income is contracted to a UK government agency until 2030. The
acquisition is expected to complete in January 2021.
In France, the Group completed the acquisition of additional
floors at Park Avenue in Lyon for GBP3.3 million. The Group now
owns the entire building and will be carrying out a significant
refurbishment.
Disposals
In Germany, the Group completed on the sale of Bismarckallee
18-20 in Freiburg for EUR22.5 million in December 2020 at 12.3%
above the 30 June 2020 valuation.
In the UK, in December 2020 the Group unconditionally exchanged
on the sale of Quest House in Hounslow and Atholl House in Aberdeen
for a combined total of GBP5.9 million at 9.3% above the 30 June
2020 valuation. Both sales are expected to complete in the first
half of 2021.
Development opportunities
In the UK, planning consent was secured for a new 10-storey
office adjacent to the Group's head office in December 2020. This
development on Vauxhall Walk will provide 28,500 sq. ft of grade A
office space with a roof terrace, café, shower and changing
facilities along with secure cycle storage.
Listed building consent and planning permission was granted for
a major refurbishment of 9 Prescot Street in the City of London in
December 2020. The building will be transformed by reconfiguring
the main entrance, creating a new central reception and café,
extending the roof terrace and enhancing shower and cycle
facilities.
The works on the properties are sustainably focused with both
expected to achieve BREEAM Excellent on completion.
-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 (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.
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