TIDMCLI
RNS Number : 6314L
CLS Holdings PLC
14 August 2013
Release date: 14 August 2013
Embargoed until: 07.00am
CLS HOLDINGS PLC
("CLS", THE "COMPANY" OR THE "GROUP")
ANNOUNCES ITS HALF-YEARLY FINANCIAL REPORT FOR THE SIX MONTHS TO
30 JUNE 2013
Taking advantage of opportunities
CLS is a property investment company with a diverse portfolio of
GBP1.0 billion modern, well-let properties in London, France,
Germany and Sweden. CLS's properties have been selected for their
potential to add value and to generate high returns on capital
investment through active asset management.
FINANCIAL HIGHLIGHTS
-- EPRA net assets per share up 6.0% to 1,223.7 pence (31 December 2012: 1,154.4 pence)
-- EPRA earnings per share up 7.5% to 33.0 pence (2012: 30.7 pence)
-- EPRA profit before tax up 8.9% to GBP19.5 million (2012: GBP17.9 million)
-- Net assets per share up 6.4% to 1,024.8 pence (31 December 2012: 963.1 pence)
-- Earnings per share up 10.3% to 52.7 pence (2012: 47.8 pence)
-- Profit after tax up 6.6% to GBP22.7 million (2012: GBP21.3 million)
-- Seven property acquisitions since 1 January 2013 at cost of
GBP41.0 million, and a portfolio of 34 others in due diligence
-- Investment property portfolio valued at GBP1,001.8 million
(31 December 2012: GBP934.5 million), down 0.4% like-for-like in
local currencies
-- GBP158.5 million of liquid resources available for investment
-- Low weighted average cost of debt reduced further to 3.55% (31 December 2012: 3.67%)
-- High interest cover of 3.8 times (2012: 3.9 times)
-- Total shareholder return of 30.1% in the six months to 30
June 2013, and top performer in UK listed property sector total
shareholder return since July 2008 of 190.9%
-- Proposed distribution to shareholders up 7.4% to GBP5.0
million (September 2012: GBP4.6 million) by way of tender offer
buy-back of 1 in 113 at 1320 pence, equivalent to 11.68 pence per
share
OPERATIONAL HIGHLIGHTS
-- Development under way at Spring Mews, SE11 mixed-use
development in Vauxhall, with completion on schedule for late
2014
-- Refurbishment of Clifford's Inn, Fetter Lane, EC4 under way
with completion on schedule for late 2014
-- Section 106 agreement signed on the 143,000 sq m Vauxhall Square, SW8 development
-- Vacancy rate of 5.5% well below the benchmark average of over 9% for our type of portfolio
Sten Mortstedt, Executive Chairman of CLS, commented:
"This is a good time in the cycle to be buying property. The
Group continues to benefit from low interest rates and favourable
rental markets, which remain solid throughout our regions.
Furthermore, our cash generative business, with its strong balance
sheet and high level of liquid resources, is very well placed to
benefit from any interesting investment opportunities and to
continue to produce attractive returns for shareholders."
ENDS
For further information please contact:
CLS Holdings plc +44 (0)20 7582 7766
www.clsholdings.com
Sten Mortstedt, Executive
Chairman
Henry Klotz, Executive
Vice Chairman
Richard Tice, Chief
Executive Officer
Kinmont Limited +44 (0)20 7087 9100
Jonathan Gray
Smithfield Consultants
Limited +44 (0)20 7360 4900
Alex Simmons
Liberum Capital Limited +44 (0)20 3100 2222
Tom Fyson
Charles Stanley Securities +44 (0)20 7149 6000
Mark Taylor
Hugh Rich
CLS will be presenting to analysts at 8.30am on Wednesday, 14
August 2013, at
Smithfield Consultants, 10 Aldersgate Street, London, EC1A
4HJ.
Conference call dial in numbers as follows:
Conference call access numbers:
Participant telephone +44 (0)20 3427 1919 (UK Toll)
number:
Confirmation code: 3029268
INVESTORS IN EUROPEAN COMMERCIAL PROPERTY
LISTED SINCE 1994
-- Shareholders' funds of GBP438 million
-- EPRA net assets of GBP523 million
-- GBP1 billion of office properties across London, France, Germany and Sweden
-- Top UK property company total shareholder return performance in the last 5 years
-- Strong alignment of interest with shareholders: management owns 54%
-- Substantial cash and liquid resources available for new investment
-- Cautiously entrepreneurial approach to future opportunities
GENERATING CASH THROUGH HIGH NET INITIAL YIELD AGAINST LOW COST
OF DEBT
HOW WE OPERATE
Our goal is to create long-term shareholder value
We aim to achieve our goal by:
-- Pursuing an opportunistic investment strategy
-- Focusing on cash returns
-- Operating in diverse locations
-- Utilising diversified sources of finance
-- Maintaining a broad customer base
-- Minimising vacant space
-- Imposing strict cost control
-- Retaining a high level of liquid resources
Financial highlights
-- EPRA net assets per share: up 6.0% to 1,223.7 pence (31 December 2012: 1,154.4 pence)
-- EPRA net assets: up 3.9% to GBP522.8 million (31 December 2012: GBP503.4 million)
-- EPRA earnings per share: up 7.5% to 33.0 pence (2012: 30.7 pence)
-- EPRA profit before tax: up 8.9% to GBP19.5 million (2012: GBP17.9 million)
-- Cash flow from operating activities: GBP15.0 million (2012: GBP14.3 million)
-- Net assets per share: up 6.4% to 1,024.8 pence (31 December 2012: 963.1 pence)
-- Net assets: up 5.0% to GBP437.8 million (31 December 2012: GBP417.1 million)
-- Earnings per share: up 10.3% to 52.7 pence (2012: 47.8 pence)
-- Profit after tax: up 6.6% to GBP22.7 million (2012: GBP21.3 million)
-- Proposed distribution to shareholders: GBP5.0 million
(September 2012: GBP4.6 million) by way of tender offer buy-back: 1
in 113 at 1,320 pence, equivalent to 11.7 pence per share
-- Low weighted average cost of debt: 3.55% (31 December 2012: 3.67%)
-- Interest cover: 3.8 times (year ended 31 December 2012: 3.9 times)
-- Adjusted solidity: 42.9% (31 December 2012: 41.1%)
-- Balance sheet loan to value: 51.4% (31 December 2012: 52.5%)
Other key data
-- Top performer in UK listed property sector total shareholder return since July 2008: 190.9%
-- Portfolio value: GBP1,001.8 million - down 0.4% in local currencies
-- Proportion of rental income from Government tenants: 39%
-- Occupancy rate: 94.5%
-- Indexation applies to 64% of contracted rent
-- Liquid resources: GBP158.6 million
CHAIRMAN'S STATEMENT
A good time to be buying property
Overview
The Group has had a very active first six months of 2013, with a
number of successes for shareholders. Five acquisitions in London
and Germany have helped the core investment portfolio to grow to
over GBP1 billion in value and further acquisitions are being made
in the second half. In London, construction is well under way at
Spring Mews, Vauxhall and at Clifford's Inn, Fetter Lane, and solid
progress is being made in advancing our Vauxhall Square project.
All this activity has led to EPRA net asset value growing by 6.0%
to 1,223.7 pence per share (31 December 2012: 1,154.4 pence).
The economic development in our markets across Europe continues
to be mixed: the unemployment level in France is almost double that
of Germany; and sovereign debt levels continue to grow.
Meanwhile, the core fundamentals of the Group's business
strategy remain sound. The investment property portfolio contains a
diverse base of 450 occupiers across four markets generating rental
income well in excess of the Group's cost of debt, with 39% of
rents paid by governments, 29% from major corporations; 64% of
rents are subject to indexation. The balance sheet continues to
grow ever stronger with significant levels of cash and liquid
resources and a widespread funding base including 22 banks and
other capital market funding sources.
The Group has produced a Total Shareholder Return in six months
of 30.1% with the share price reaching record highs in recent
months.
Results and Financing
Profit before tax was GBP27.9 million for the six months to 30
June 2013 (2012: GBP27.1 million), with earnings per share of 52.7
pence (2012: 47.8 pence). EPRA earnings per share were 33.0 pence
(2012: 30.7 pence) and EPRA profit before tax was GBP19.5 million
(2012: GBP17.9 million).
Shareholders' funds have grown by 5.0% in the six months ended
30 June 2013 to GBP437.8 million after distributions to
shareholders of GBP8.6 million.
Interest cover remains a very healthy 3.8 times (2012: 3.9
times) and the weighted average cost of debt has reduced further to
3.55% (31 December 2012: 3.67%), which is one of the lowest in the
real estate sector of the London Stock Exchange. We continue to
believe that interest rates will stay low, and, therefore, in our
hedging strategy we favour the use of interest rate caps. At 30
June 2013, net debt as a proportion of gross assets (less cash) was
51.4%.
Availability of debt is improving, with more lenders in the
market and better terms being offered. This is likely to lead to
improved values for high yielding property in due course.
Net debt was unchanged at GBP592.3 million (31 December 2012:
GBP592.6 million) as acquisitions and additional development
expenditure were financed in part from the proceeds of the sale of
corporate bonds. Our liquid resources, consisting of cash and
corporate bonds, nevertheless remained at a very healthy level of
GBP158.6 million, reinforcing the strength of the balance sheet and
our capacity to invest in the future. We have reduced the corporate
bond portfolio in the period from GBP127.3 million to GBP88.9
million, taking profits ahead of deteriorating market conditions in
the second quarter. The corporate bonds generated a total return of
GBP7.9 million, or 6.2%, in the six months. In August 2013, we sold
a further GBP68.4 million of corporate bonds over five days, and
without affecting their individual prices, evidencing their very
liquid nature.
Property Portfolio
The value of the investment property portfolio has grown to
GBP1.0 billion, with the five acquisitions in the period, in London
and Germany, totalling GBP34.2 million with an annualised rental
income of GBP3.36 million for a blended net initial yield of
10.01%.
Rental income has grown in the period to GBP35.9 million, a like
for like increase of 6.1%, due in part to rental indexation, from
which 64% of the portfolio benefits.
The investment property portfolio's underlying value rose by
2.3% in the six months, including a foreign exchange gain from
sterling's relative weakness against the euro and Swedish krona. In
local currencies the underlying portfolio fell by 0.4%. The London
portfolio grew by 0.2%; developments added 3.2% after capital
expenditure, acquisitions fell by 2.4% due to incidental
transaction costs, and the remaining properties fell by 0.4%. The
French portfolio reduced in value in local currency by 1.7%,
reflecting the anticipated increase in the vacancy rate due to
exceptionally high lease expiries and the soft economic conditions
which we highlighted earlier in the year. The German portfolio
increased in value by 0.8% in local currency (excluding the
acquisition), and its vacancy rate has been successfully reduced
since the year end. Sweden's property remained broadly level, down
1.1% in local currency. Overall the vacancy rate at 30 June 2013
was 5.5% (31 December 2012: 3.8%).
As new acquisitions are subject to somewhat abstruse valuation
principles, such as excluding transaction costs in the valuation,
an acquired property will initially be valued below its purchase
price by at least 5%. During the period this had a negative effect
of GBP2.2 million on valuations, an effect which may, albeit
temporarily, increase should the Group make any larger acquisitions
ahead.
Across the portfolio, the average rental level is now GBP173.5
per sq m which means we are very competitively priced in the key
European cities in which we operate. In London, we are exploring a
number of opportunities for the residential conversion of parts of
the office portfolio. This is designed to benefit from the new
planning rules, which are rightly aimed at increasing the stock of
housing and generating additional economic activity. In the short
term we expect this to lead to a modest increase in vacancy in the
London portfolio. The low level of new construction of offices is
expected to produce further growth of office rents in suburban
London areas over the next few years, which we already see signs of
happening.
The sale of our interest in Fielden House adjacent to the Shard,
in April, generated a gain to the Group of GBP1.8 million
corresponding to a sale price 66% above the year end valuation.
At Clifford's Inn, Fetter Lane, EC4 we are receiving strong
pre-let enquiries for the 3,423 sq m office space being
redeveloped.
Good progress is being made at Spring Mews, Vauxhall, SE11 where
construction is proceeding to plan on our student and hotel scheme,
and we have received enquiries from educational establishments to
take a large number of rooms. In addition, we are in the process of
finalising heads of terms with an international hotelier for the
suite hotel.
The Vauxhall Nine Elms area is much in the news, with new
investors being announced, a five star hotel planned, and more
embassies expected. This bodes particularly well for Vauxhall
Square, SW8, where we have signed the Section 106 agreement and are
working on phasing and design options. We have received strong
interest from student operators to build and manage the 359 room
student building, which could be the first phase to start in early
2015, and from international 4-star hoteliers for the two hotels in
the scheme.
In Sweden, Stockholm-listed Catena AB, in which the Group owns
29.9%, continues to work on the detail of phasing and funding its
150,000 sq m mixed use development, where further progress can be
expected in the second half of the year.
Since 1 July 2013, we have completed the purchase of two
properties in London for GBP6.2 million in aggregate and yielding
9.3% after costs. We have also agreed broad terms and signed an
exclusivity agreement with the receiver of a portfolio of 34
government-let properties across the UK, generating over GBP15
million per annum to produce a yield of over 12.25% including
costs.
Distributions
In April, the Group made a distribution to shareholders of
GBP8.6 million using our traditional tender offer buy-back process.
We propose to distribute a further GBP5.0 million by similar means
in September, offering 1 in 113 shares at 1,320 pence per share,
and a circular will be sent to shareholders in the next few days.
If approved, these two shareholder distributions will amount to an
implied dividend yield of 3.62% based on the average share price
during the first half of 2013.
Outlook
Whilst the economic situation has improved in certain areas in
which we operate, many challenges still lie ahead. The major EU
economies are growing only modestly at best, and many are
struggling to reduce their deficits. Significant macro-economic
challenges remain to be resolved which may lead the financial
markets to remain wary, and are likely to keep interest rates low
for the foreseeable future.
In this environment, the Group continues to benefit from low
interest rates and favourable rental markets, which remain solid
throughout our regions. This is a good time in the cycle to be
buying property. Furthermore, our cash generative business, with
its strong balance sheet and high level of liquid resources, is
very well placed to benefit from any interesting investment
opportunities and to continue to produce attractive returns for
shareholders.
Sten Mortstedt
Executive Chairman
14 August 2013
BUSINESS REVIEW
Taking advantage of opportunities
Investment Property
LONDON Recent data suggests the UK has avoided a double dip
recession, and is growing modestly, with a 0.6% GDP improvement in
Q2 2013. However, London continues to outperform considerably,
particularly in prime real estate. London is viewed as a safe haven
by international investors in both residential and commercial
property, and there is no sign of this trend abating.
The Group's London region has had a very busy six months. We
have acquired four investment properties, totalling GBP22.1 million
(including costs) and yielding GBP2.3 million, for a weighted
average net initial yield of 10.01%:
Cost Net Initial
GBPm Yield
------------------------------------------ ------ ------------
Benwell House, Green Street, Sunbury 3.5 9.67%
Kings House, 32/40 Widmore Road, Bromley 2.3 14.23%
405 Kennington Road, London SE11 4.2 8.43%
Hygeia Building, College Road, Harrow 12.8 9.92%
------------------------------------------ ------ ------------
22.8 10.01%
------------------------------------------ ------ ------------
As is often the case as an economic recovery begins, borrowers
in financial difficulties are being placed under increased pressure
by their banks to liquidate property holdings. This has been a
lucrative source of investments for the Group, and since 1 July
2013 we have completed the acquisition of two further properties in
London, in Staines and Chertsey, totalling GBP6.2 million,
including costs, with an aggregate rent of GBP576,000 and a net
initial yield of 9.3%. The total area is 2,528 sq m.
Whilst having been bought for their investment value, five of
the purchases have residential potential as a viable alternative
use and we fully support the government's new measures to ease the
conversion of offices to residential, which can be a win-win for
asset values and for the need for new homes. Within our existing
portfolio there are also a number of asset management opportunities
to create vacant space for conversion. In the short term this will
lead to a slight increase in our vacancy levels, but it will add to
net asset value in the medium term. The strategy would aim to grow
a residential let portfolio in London over time.
The vacancy rate in London remains low at 4.4% (31 December
2012: 2.3%) despite our taking back space to refurbish, and adding
to vacancies through partially let property acquisitions. Letting
activity within the London investment portfolio has been healthy,
with 2,475 sq m of space having been let or renewed in the six
months, and 4,949 sq m made vacant, including 1,385 sq m to
relocate a tenant to a new building, and other space taken back for
refurbishment projects. There are signs in the market that office
rents in suburban London will start rising in the next couple of
years, with very little new construction and some office buildings
being converted to other uses or becoming obsolete.
On a like-for-like basis, the value of our London portfolio
moved marginally. In total it rose by 0.2% in the six months to 30
June 2013. Of this, the development portfolio rose by 3.2%, the
acquisitions fell in value by 2.4% (without the dampening effect of
purchaser's costs, they would have risen by 3.0%) and the rest of
the London portfolio fell by 0.4%.
Good progress has been made on our three developments in Central
London. At Spring Mews, Vauxhall, SE11, Shepherd Construction is on
target to complete in autumn 2014 the mixed-use scheme of 400
student beds and a 93 bed suite hotel. We have appointed Fresh
Student Living to run the direct letting of the student rooms, and
have received enquiries from educational institutions to take a
large number of rooms. Further, for the hotel, agreed terms are
being finalised with an international hotel operator.
At Clifford's Inn, Fetter Lane, EC4, Vinci Construction is on
site carrying out the comprehensive refurbishment, to create 3,423
sq m of offices and eight residential apartments, and is due to
complete in summer 2014. Letting agents for the offices have
received a number of pre-let enquiries.
The Vauxhall Nine Elms area continues to strengthen, with the
Dutch embassy relocating there, and the Chinese Embassy rumoured to
be acquiring a large site. A Chinese developer, Wanda, has acquired
the One Nine Elms site for a 5-star hotel and residential
development. On our adjacent Vauxhall Square site, the Section 106
agreement was signed at the beginning of July. Considerable
interest has been received from international hoteliers for both of
our hotels, which will be of at least a 4-star quality. This
interest is under consideration, and design and phasing options are
being progressed. Vacant possession dates are to be discussed with
existing occupiers and are likely from 2015 onwards. Strong
interest has been received from student operators for the 359 bed
student building which is adjacent to the main scheme and could
start on site in early 2015.
FRANCE The economy in France continues to falter, as businesses
and consumers assess the impact of the Hollande presidency, and the
malaise across much of the Eurozone persists. Policy
decision-making appears variable and lacking direction as competing
interests weigh on the government. GDP growth in the country is
forecast to be only just in positive territory by the end of the
year and the unemployment rate has reached 10.8%, having risen for
each of the last eight quarters.
Against this background, letting activity in the Paris region at
19% below average is not unexpected. The investment market has also
seen lower levels of activity, down 13% from the first half of
2012.
As we indicated earlier this year, our vacancy levels are being
adversely affected, in particular by the long expected departure of
occupiers of 2,800 sq m at Reuil Malmaison in May and of 1,300 sq m
in Lyon in June. Our vacancy rate at 30 June had risen to 9.3% by
rental income (31 December 2012: 3.8%); this has already begun to
fall and we expect to reduce it further by the year end as space is
refurbished and relet. There continue to be a number of encouraging
enquiries across the portfolio, and during the period we let or
renewed 3,859 sq m, whilst occupiers vacated 8,472 sq m.
The value of our French investment portfolio fell marginally by
1.7% in local currency since the beginning of the year, the
increase in vacancies being offset to some extent by an increase in
rental income of EUR752,000 per annum through indexation.
GERMANY Economic indicators suggest that the economy appears
relatively robust in Germany compared to much of the rest of the
Eurozone, with latest GDP growth forecasts of 0.6% for 2013,
employment levels up to a record high of 41.8 million, and
unemployment down to 5.3%. The German business confidence index,
Ifo, has risen for each of the last 3 months.
In the main German office markets, letting activity in the first
half of 2013 was 4.0% below that of last year, but this was not
reflected in our own portfolio where numerous letting successes,
particularly around Munich, have reduced our vacancy rate
significantly to 4.2% by rental income (31 December 2012: 7.4%). We
achieved lettings and renewals in the period of 5,193 sq m, whilst
only 255 sq m was vacated by occupiers.
Meanwhile, commercial investment transactions in Germany are up
to EUR12.6 billion, some 34% above the corresponding six months in
2012.
In June, the Group completed the acquisition of a 7,135 sq m,
fully let office building in the centre of Freiburg in south-west
Germany for EUR13.1 million, consisting of 5,127 sq m of modern
offices, 1,247 sq m of retail, 761 sq m of archives and 112 car
parking spaces. The net initial yield of 8.75% after costs is
derived from rent of EUR1,235,410 from six occupiers including
KPMG, Commerzbank and a government department. Debt was sourced
from a regional Sparkasse bank.
The availability of bank debt in Germany continues to be the
most prevalent, and the terms the most advantageous, of our
operating regions.
The value of the existing German investment portfolio in local
currency increased on a like-for-like basis by 0.8%, but, including
the acquisition and its costs, the portfolio rose in value by only
0.3%.
SWEDEN The Swedish economy is forecast to grow 1.4% in 2013
rising to 2.3% in 2014, mainly driven by domestic demand as export
markets struggle. However, in Q2 2013 GDP fell by 0.1% on the
previous quarter, and for the year to 30 June 2013 grew by a
surprisingly low 0.6%. Both household consumption and exports fell
in Q2 2013, and inventories were higher than forecast which could
be a drag on near-term growth.
At the Group's wholly-owned property, Vänerparken, lease
negotiations are under way with the local County Council occupier
as expected ahead of its 2015 lease expiries, which comprise 72% of
passing rent.
Catena AB, the Stockholm-listed real estate company in which the
Group owns a 29.9% shareholding, has continued to move forward the
planning process on its scheme for 800 apartments and 73,000 sq m
of offices at Haga Norra, Stockholm. The market value of the
Group's stake at 30 June was GBP8.2 million over the book value,
representing 19.0 pence per share on our EPRA net asset value.
Cood Investments AB, the residential-focused property company in
which the Group owns 44.2%, is on track with its busy summer season
of bookings. In addition the operational improvement process is
ongoing to ensure it has a more efficient seasonal cost base. The
book value of the holding at 30 June 2013 was GBP3.5 million and we
remain confident in its future prospects.
Results for the Period
HEADLINES Profit after tax of GBP22.7 million (2012: GBP21.3
million) generated basic earnings per share of 52.7 pence (2012:
47.8 pence), and EPRA earnings per share of 33.0 pence (2012: 30.7
pence). Gross property assets at 30 June 2013 rose to GBP1,001.8
million (31 December 2012: GBP934.5 million), net assets per share
increased by 6.4% to 1,024.8 pence (31 December 2012: 963.1 pence)
and EPRA net assets per share by 6.0% to 1,223.7 pence (31 December
2012: 1,154.4 pence).
STATEMENT OF COMPREHENSIVE INCOME We continue to increase the
level of cash generated annually by the Group. Rental income for
the six months to 30 June 2013 of GBP35.9 million (2012: GBP33.1
million) was higher than last year by GBP2.8 million, of which
GBP0.8 million was due to changes in exchange rates. Acquisitions
added GBP0.9 million, indexation GBP0.5 million, and a one-off
lease surrender receipt contributed GBP0.9 million, whilst a rise
in the vacancy rate accounted for a GBP0.3 million fall in
like-for-like income. This was offset by an increase in
dilapidations fees of GBP0.4 million charged to outgoing
occupiers.
The increase in net rental income to GBP35.0 million (2012:
GBP31.9 million) drove an increase in Group revenue less costs to
GBP27.5 million (2012: GBP25.4 million).
Operating profit of GBP33.0 million (2012: GBP35.4 million) was
marginally below that of last year due largely to non-cash items.
Investment property values rose in the six months like-for-like by
GBP22.2 million (2012: fall of GBP5.4 million), but in local
currencies the portfolio fell in value by 0.4% or GBP3.5 million
(2012: rose by 1.1% or GBP10.1 million). The disposal of GBP83.0
million (2012: GBP24.9 million) of corporate bonds and GBP1.7
million of equity investments (2012: GBPnil) realised historical
cost profits of GBP7.2 million (2012: loss of GBP0.1 million) and a
profit of GBP1.8 million was made on the disposal of the Group's
one-third interest in a joint venture adjacent to the Shard in
London.
Interest income of GBP5.5 million (2012: GBP4.5 million) was
higher than last year due to the higher average value of corporate
bonds held by the Group, after investing some of the proceeds from
the issue in the second half of 2012 of our GBP65 million 5.5% bond
due 2019.
Interest expense of GBP12.7 million (2012: GBP11.9 million) was
GBP0.8 million higher than in 2012. The 5.5% bond added GBP1.8
million, but the cost of bank debt fell by GBP1.1 million to GBP7.1
million (2012: GBP8.2 million) due to large falls in short-term
interest rates upon which the Group's floating rate cost is based.
The Board continues to favour floating rate debt, hedged by
interest rate caps, and took advantage of the expiry of fixed rate
loans in the six months to 30 June 2013 to increase this, thereby
reducing the weighted cost of debt to only 3.55% (31 December 2012:
3.67%).
Whilst the total tax charge was in line with previous periods,
the consistent profitability in the UK and Sweden has utilised many
of the tax losses brought forward in these countries, creating a
shift from deferred to current tax.
EPRA NET ASSETS PER SHARE EPRA net assets per share rose from
1,154.4 pence to 1,223.7 pence in the six months to 30 June 2013,
an increase of 69.3 pence per share, or 6.0%. The majority of this
increase came from profit after tax, which added 46.4 pence per
share, and foreign exchange gains of 28.7 pence per share on the
weakness of sterling.
CASH FLOW, NET DEBT AND GEARING The Group's ability to generate
cash was further enhanced in the period, with net cash flow from
operating activities rising to GBP15.0 million (2012: GBP14.3
million), GBP8.6 million of which was distributed to shareholders,
and interest of GBP8.3 million was received from investments.
Property acquisitions of GBP35.4 million were financed in part by
new bank loans of GBP20.8 million, GBP12.1 million was spent on the
development programme, and GBP65.7 million of bank loans were
repaid through amortisation or property sales, or the repayment of
short-term facilities, financed in part by proceeds from net bond
disposals of GBP43.1 million. After all of this activity, liquid
resources of cash and corporate bonds were GBP158.6 million at 30
June 2013.
In the six months to 30 June 2013, gross borrowings fell by
GBP28.2 million to GBP662.0 million (31 December 2012: GBP690.2
million), broadly matching the reduction in cash balances of
GBP27.9 million. The Group's weighted average property loan to
value was 58.8% (2012: 58.8%), balance sheet loan to value was
51.4% (2012: 52.5%) and adjusted gearing, based on EPRA net assets,
was 96.3% (2012: 92.7%). 79% of borrowings had their interest rate
fixed or capped, and 77% were at floating rates.
SHARE CAPITAL In April 883,793 shares were cancelled under the
tender offer buy-back at 970 pence per share, and in May 300,000
shares were issued on the exercise of share options. At 30 June
2013, there were 42,722,083 shares in issue, and 4,503,103 Treasury
Shares held by the Company.
Sustainability
At Crosspoint House, London SM6, which we bought in 2012, we
have installed the portfolio's second array of photovoltaic cells.
These will provide much of the electricity needed for the
building's common parts and will cut carbon dioxide emissions by
six tonnes per annum.
The year-to-date total consumption of gas and electricity by
managed London buildings has increased in line with the four new
property purchases. Spending on energy has increased by GBP56,000,
representing an increase of 4% in carbon dioxide emissions at a
cost of GBP3,500 from the Carbon Reduction Commitment (CRC) levy.
However, a like-for-like comparison of the London portfolio to July
2012 shows reduced energy usage savings of GBP132,500, plus
GBP9,500 for the CRC levy, showing the Group is achieving growth
without cost to the environment.
Water consumption continues to fall: we have achieved a 66.7%
reduction in water usage in London managed buildings since the 2010
baseline year, and we expect the Group's work in this field soon to
be featured as a case study in a cross industry white paper.
Principal Risks and Uncertainties
There are a number of potential risks and uncertainties which
could have a material impact on the Group's performance over the
remaining six months of the financial year and could cause the
results for the year to differ materially from expected or
historical results. The Directors do not consider that the
principal risks and uncertainties have changed since the
publication of the annual report for the year ended 31 December
2012. A detailed explanation of the risks summarised below can be
found on pages 24 and 25 of the 2012 Annual Report, which is
available at www.clsholdings.com:
-- Underperformance of investment portfolio due to:
- Cyclical downturn in property market
- Inappropriate buy/sell/hold decisions
- Changes in supply of space and/or occupier demand
- Poor asset management
-- Corporate bond investments:
- Underperformance of portfolio
- Insolvency of bond issuer
-- Failure to secure planning permission
-- Contractor solvency and availability
-- Downturn in investment or occupational markets
-- Unavailability of financing at acceptable prices
-- Adverse interest rate movements
-- Breach of borrowing covenants
-- Foreign currency exposure
-- Financial counterparty credit risk
-- Increases in tax rates or changes to the basis of taxation
-- Break-up of the Euro
-- Economic downturn
-- Inadequate working capital to remain a going concern for the next 12 months
Going Concern
As stated in note 2 to the Condensed Group Financial Statements,
the Directors are satisfied that the Group has sufficient resources
to continue in operation for the foreseeable future, being a period
of not less than 12 months from the date of this Half-Yearly
Financial Report. Accordingly, they continue to adopt the going
concern basis in preparing the Condensed Group Financial
Statements.
PORTFOLIO STATISTICS
Weighted Contracted
average rent Capital
6 month unexpired per value
Contracted revaluation Net lease let sq per
At 30 rent Valuation in local initial Vacancy term m sq m
June 2013 (GBPm) (GBPm) currency yield by rent (years) (GBP) (GBP)
------------ ----------- ---------- ------------- --------- --------- ----------- ----------- --------
London 30.2 468.6 +0.2% 6.6% 4.4% 7.9 219 2,990
France 18.9 249.7 -1.7% 7.4% 9.3% 4.8 215 2,599
Germany 16.4 221.4 +0.3% 7.3% 4.2% 8.7 113 1,437
Sweden 6.7 62.1 -1.1% 7.4% 1.7% 3.8 150 1,426
------------ ----------- ----------
Total
portfolio 72.2 1,001.8 -0.4% 7.0% 5.5% 6.9 174 2,204
------------ ----------- ----------
Responsibility statement
We confirm that to the best of our knowledge:
(a) the condensed set of financial statements has been prepared
in accordance with IAS 34 'Interim Financial Reporting';
(b) the Chairman's Statement and Business Review include a fair
review of the information required by DTR 4.2.7R (indication of
important events during the first six months and description of
principal risks and uncertainties for the remaining six months of
the year); and
(c) the Chairman's Statement and Business Review include a fair
review of the information required by DTR 4.2.8R (disclosure of
related party transactions and changes therein).
On behalf of the Board
Sten Mortstedt Henry Klotz
Executive Chairman Executive Vice Chairman
14 August 2013
INDEPENDENT REVIEW REPORT TO CLS HOLDINGS PLC
We have been engaged by the Company to review the condensed set
of financial statements in the Half-Yearly Financial Report for the
six months ended 30 June 2013 which comprises the Condensed Group
Statement of Comprehensive Income, the Condensed Group Balance
Sheet, the Condensed Group Statement of Changes in Equity, the
Condensed Group Statement of Cash Flows and related notes 1 to 15.
We have read the other information contained in the Half-Yearly
Financial Report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
This report is made solely to the Company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Auditing Practices
Board. Our work has been undertaken so that we might state to the
Company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company, for our review work, for this
report, or for the conclusions we have formed.
Directors' responsibilities
The Half-Yearly Financial Report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the Half-Yearly Financial Report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this Half-Yearly Financial Report has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the Half-Yearly
Financial Report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the Half-Yearly Financial Report for the six months ended 30
June 2013 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 as adopted by the
European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
Deloitte LLP
Chartered Accountants and Statutory Auditor
London, United Kingdom
14 August 2013
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2013
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
GBPm GBPm GBPm
Notes (unaudited) (unaudited) (audited)
------------------------------------------------- ------ ------------- ------------- -------------
Continuing operations
Group revenue 43.3 39.9 80.2
------------------------------------------------- ------ ------------- ------------- -------------
Net rental income 3 35.0 31.9 62.9
Administration expenses (5.7) (5.2) (10.5)
Other expenses (1.8) (1.3) (2.9)
------------------------------------------------- ------ ------------- ------------- -------------
Group revenue less costs 27.5 25.4 49.5
Net movements on revaluation of investment
properties (3.5) 10.1 16.2
Net gain/(loss) on sale of corporate bonds
and other investments 11 7.2 (0.1) (0.4)
Profit on sale of joint venture 1.8 - -
------------------------------------------------- ------ ------------- ------------- -------------
Operating profit 33.0 35.4 65.3
Finance income 4 6.2 5.0 10.6
Finance costs 5 (10.2) (12.7) (25.6)
Share of (loss)/profit of associates after
tax (1.1) (0.6) 5.8
------------------------------------------------- ------ ------------- ------------- -------------
Profit before tax 27.9 27.1 56.1
Taxation 6 (5.2) (5.8) (9.4)
------------------------------------------------- ------ ------------- ------------- -------------
Profit for the period 22.7 21.3 46.7
Other comprehensive income
Foreign exchange differences 8.5 (4.6) (2.6)
Fair value (losses)/gains on corporate
bonds and other investments (0.1) 3.1 19.7
Fair value (gains)/losses taken to net
gain/(loss) on sale of corporate bonds
and other investments (4.6) 1.8 4.0
Deferred tax on net fair value gains on
corporate bonds and other investments 6 1.5 (1.1) (5.9)
Share of other comprehensive loss of associates - (0.6) -
Revaluation of owner-occupied property (0.1) 0.1 0.1
------------------------------------------------- ------ ------------- ------------- -------------
Total comprehensive income for the period 27.9 20.0 62.0
------------------------------------------------- ------ ------------- ------------- -------------
Earnings per share from continuing operations
attributable to the owners of the Company
during the period (expressed in pence
per share)
Basic 7 52.7 47.8 106.0
Diluted 7 52.6 47.7 105.8
------------------------------------------------- ------ ------------- ------------- -------------
CONDENSED GROUP BALANCE SHEET
at 30 June 2013
30 June 30 June 31 December
2013 2012 2012
GBPm GBPm GBPm
Notes (unaudited) (unaudited) (audited)
-------------------------------------- ------ ------------- ------------- ------------
Non-current assets
Investment properties 9 1,001.8 904.4 934.5
Property, plant and equipment 2.7 2.8 2.8
Goodwill and other intangible assets 1.1 1.1 1.1
Investments in associates 10 33.5 25.8 33.3
Other investments 11 92.3 78.4 129.9
Derivative financial instruments 0.5 0.8 0.2
Deferred tax 6 6.6 12.5 8.7
-------------------------------------- ------ ------------- ------------- ------------
1,138.5 1,025.8 1,110.5
-------------------------------------- ------ ------------- ------------- ------------
Current assets
Trade and other receivables 13.2 10.6 17.0
Derivative financial instruments - 0.7 0.6
Cash and cash equivalents 69.7 47.1 97.6
-------------------------------------- ------ ------------- ------------- ------------
82.9 58.4 115.2
-------------------------------------- ------ ------------- ------------- ------------
Total assets 1,221.4 1,084.2 1,225.7
-------------------------------------- ------ ------------- ------------- ------------
Current liabilities
Trade and other payables (35.1) (30.3) (33.0)
Current tax 6 (5.1) (1.3) (3.6)
Borrowings 12 (99.9) (149.8) (135.6)
Derivative financial instruments (0.2) (0.1) (0.4)
-------------------------------------- ------ ------------- ------------- ------------
(140.3) (181.5) (172.6)
-------------------------------------- ------ ------------- ------------- ------------
Non-current liabilities
Deferred tax 6 (78.9) (73.9) (77.8)
Borrowings 12 (557.3) (440.0) (549.4)
Derivative financial instruments (7.1) (9.1) (8.8)
-------------------------------------- ------ ------------- ------------- ------------
(643.3) (523.0) (636.0)
-------------------------------------- ------ ------------- ------------- ------------
Total liabilities (783.6) (704.5) (808.6)
-------------------------------------- ------ ------------- ------------- ------------
Net assets 437.8 379.7 417.1
-------------------------------------- ------ ------------- ------------- ------------
Equity
Share capital 13 11.8 12.2 12.0
Share premium 71.5 71.5 71.5
Other reserves 107.2 85.0 101.8
Retained earnings 247.3 211.0 231.8
-------------------------------------- ------ ------------- ------------- ------------
437.8 379.7 417.1
-------------------------------------- ------ ------------- ------------- ------------
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2013
Attributable to the owners of the Company
--------------------------------- -----------------------------------------------------
Share Share Other Retained
capital premium reserves earnings Total
Unaudited GBPm GBPm GBPm GBPm GBPm
--------------------------------- --------- --------- ---------- ---------- -------
Arising in the six months ended
30 June 2013:
Total comprehensive income for
the period - - 5.2 22.7 27.9
Purchase of own shares (0.2) - 0.2 (8.6) (8.6)
Exercise of share options - - - 1.4 1.4
--------------------------------- --------- --------- ---------- ---------- -------
Total changes arising in the
period (0.2) - 5.4 15.5 20.7
At 1 January 2013 12.0 71.5 101.8 231.8 417.1
--------------------------------- --------- --------- ---------- ---------- -------
At 30 June 2013 11.8 71.5 107.2 247.3 437.8
--------------------------------- --------- --------- ---------- ---------- -------
Attributable to the owners of the Company
-----------------------------------------------------
Share Share Other Retained
capital premium reserves earnings Total
Unaudited GBPm GBPm GBPm GBPm GBPm
--------------------------------- --------- --------- ---------- ---------- -------
Arising in the six months ended
30 June 2012:
Total comprehensive income for
the period - - (1.3) 21.3 20.0
Purchase of own shares (0.3) - 0.3 (7.9) (7.9)
Employee share option schemes - - - 0.1 0.1
--------------------------------- --------- --------- ---------- ---------- -------
Total changes arising in the
period (0.3) - (1.0) 13.5 12.2
At 1 January 2012 12.5 71.5 86.0 197.5 367.5
--------------------------------- --------- --------- ---------- ---------- -------
At 30 June 2012 12.2 71.5 85.0 211.0 379.7
--------------------------------- --------- --------- ---------- ---------- -------
Attributable to the owners of the Company
-----------------------------------------------------
Share Share Other Retained
capital premium reserves earnings Total
Audited GBPm GBPm GBPm GBPm GBPm
--------------------------------- --------- --------- ---------- ---------- -------
Arising in the year ended 31
December 2012:
Total comprehensive income for
the year - - 15.3 46.7 62.0
Purchase of own shares (0.5) - 0.5 (12.5) (12.5)
Expenses thereof - - - (0.1) (0.1)
Employee share option schemes - - - 0.2 0.2
--------------------------------- --------- --------- ---------- ---------- -------
Total changes arising in 2012 (0.5) - 15.8 34.3 49.6
At 1 January 2012 12.5 71.5 86.0 197.5 367.5
--------------------------------- --------- --------- ---------- ---------- -------
At 31 December 2012 12.0 71.5 101.8 231.8 417.1
--------------------------------- --------- --------- ---------- ---------- -------
CONDENSED GROUP STATEMENT OF CASH FLOWS
for the six months ended 30 June 2013
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
GBPm GBPm GBPm
Notes (unaudited) (unaudited) (audited)
------------------------------------------------- ------ ------------- ------------- -------------
Cash flows from operating activities
Cash generated from operations 14 26.2 26.4 54.3
Interest paid (9.1) (11.3) (22.5)
Income tax (paid)/refunded (2.1) (0.8) 0.1
------------------------------------------------- ------ ------------- ------------- -------------
Net cash inflow from operating activities 15.0 14.3 31.9
------------------------------------------------- ------ ------------- ------------- -------------
Cash flows from investing activities
Purchase of investment property (35.4) - (13.1)
Capital expenditure on investment property (12.1) (7.8) (13.5)
Interest received 8.3 5.4 8.2
Purchase of corporate bonds (39.9) (11.0) (65.6)
Proceeds from sale of corporate bonds
and other investments 83.0 24.9 45.8
Purchase of equity investments (2.8) (0.2) (0.6)
Dividends received from equity investments 0.3 - 0.1
Proceeds from sale of equity investments 1.7 - 0.6
Purchase of interests in associate undertakings (0.3) (4.0) (4.1)
Loans repaid from/(made to) associate
undertakings 2.3 - (4.5)
Proceeds from sale of joint venture 2.6 - -
Distributions received from associate
undertakings 0.3 0.6 0.8
(Costs of)/income from foreign currency
transactions (0.4) (0.3) 0.3
Costs of corporate disposals - (0.3) (0.8)
Purchases of property, plant and equipment - (0.1) (0.2)
------------------------------------------------- ------ ------------- ------------- -------------
Net cash inflow/(outflow) from investing
activities 7.6 7.2 (46.6)
------------------------------------------------- ------ ------------- ------------- -------------
Cash flows from financing activities
Purchase of own shares (8.6) (7.9) (12.6)
Proceeds from exercise of share options 1.4 - -
New loans 20.8 12.1 223.3
Issue costs of new loans (0.2) (0.1) (2.4)
Repayment of loans (65.7) (33.7) (151.7)
Purchase or cancellation of financial
instruments (0.3) (0.1) (0.1)
------------------------------------------------- ------ ------------- ------------- -------------
Net cash (outflow)/inflow from financing
activities (52.6) (29.7) 56.5
------------------------------------------------- ------ ------------- ------------- -------------
Cash flow element of net (decrease)/increase
in cash and cash equivalents (30.0) (8.2) 41.8
Foreign exchange gain 2.1 - 0.5
------------------------------------------------- ------ ------------- ------------- -------------
Net (decrease)/increase in cash and cash
equivalents (27.9) (8.2) 42.3
Cash and cash equivalents at the beginning
of the period 97.6 55.3 55.3
------------------------------------------------- ------ ------------- ------------- -------------
Cash and cash equivalents at the end of
the period 69.7 47.1 97.6
------------------------------------------------- ------ ------------- ------------- -------------
NOTES TO THE CONDENSED GROUP FINANCIAL STATEMENTS
30 June 2013
1 BASIS OF PREPARATION
The financial information contained in this Half-Yearly
Financial Report does not constitute statutory accounts as defined
in section 434 of the Companies Act 2006. The results for the year
ended 31 December 2012 are an abridged version of the full accounts
for that year, which received an unqualified report from the
auditor, did not contain a statement under section 498(2) or (3) of
the Companies Act 2006 or include a reference to any matter to
which the auditor drew attention by way of emphasis without
qualifying the auditor's report, and have been filed with the
Registrar of Companies. The annual financial statements of CLS
Holdings plc are prepared in accordance with IFRSs as adopted by
the European Union. The condensed set of financial statements
included in this Half-Yearly Financial Report has been prepared in
accordance with IAS 34 Interim Financial Reporting, as adopted by
the European Union. The same accounting policies, presentation and
methods of computation are followed in the condensed set of
financial statements as applied in the latest audited annual
financial statements.
2 GOING CONCERN
The Directors regularly stress-test the business model to ensure
that the Group has adequate working capital. They have reviewed the
current and projected financial position of the Group as discussed
in the Business Review, taking into account the repayment profile
of the Group's loan portfolio, and making reasonable assumptions
about future trading performance. The Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future and, therefore,
they continue to adopt the going concern basis in preparing the
Half-Yearly Financial Report.
3 SEGMENT INFORMATION
The Group has two operating divisions - Investment Property and
Other Investments. Other Investments comprise corporate bonds,
shares in Catena AB, Bulgarian Land Development Plc and Cood
Investments AB, and other small corporate investments. The Group
manages the Investment Property division on a geographical basis
due to its size and geographical diversity. Consequently, the
Group's principal operating segments are:
Investment London
Property -
France
Germany
Sweden
Other Investments
There are no transactions between the operating segments. There
was no change in the basis of segmentation, nor in the basis of
measurement of segment profit or loss in the period.
The Group's results for the six months ended 30 June 2013 by
operating segment were as follows:
Investment Property
-----------------------------------
Other
London France Germany Sweden Investments Total
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------ ------- ------- -------- ------- ------------- -------
Rental income 15.2 10.0 7.3 3.4 - 35.9
Other property-related
income 0.3 0.3 0.1 - - 0.7
Service charge income 2.3 3.1 1.1 0.2 - 6.7
Service charges and
similar expenses (2.9) (3.1) (1.5) (0.8) - (8.3)
------------------------------ ------- ------- -------- ------- ------------- -------
Net rental income 14.9 10.3 7.0 2.8 - 35.0
Administration expenses (1.2) (0.7) (0.6) (0.2) (0.3) (3.0)
Other expenses (0.7) (0.3) (0.7) (0.1) - (1.8)
------------------------------ ------- ------- -------- ------- ------------- -------
Group revenue less costs 13.0 9.3 5.7 2.5 (0.3) 30.2
Net movements on revaluation
of investment properties 0.6 (4.1) 0.7 (0.7) - (3.5)
Net gain on sale of
corporate bonds and
other investments - - - - 7.2 7.2
Profit on sale of joint
venture 1.8 - - - - 1.8
------------------------------ ------- ------- -------- ------- ------------- -------
Segment operating profit 15.4 5.2 6.4 1.8 6.9 35.7
Finance income - - - - 6.2 6.2
Finance costs (4.1) (1.6) (1.5) (0.4) (2.6) (10.2)
Share of loss of associates
after tax - - - - (1.1) (1.1)
------------------------------ ------- ------- -------- ------- ------------- -------
Segment profit before
tax 11.3 3.6 4.9 1.4 9.4 30.6
------------------------------ ------- ------- -------- ------- -------------
Central administration
expenses (2.7)
------------------------------ ------- ------- -------- ------- ------------- -------
Profit before tax 27.9
------------------------------ ------- ------- -------- ------- ------------- -------
The Group's results for the six months ended 30 June 2012 by
operating segment were as follows:
Investment property
-----------------------------------
Other
London France Germany Sweden Investments Total
GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------------- ------- ------- -------- ------- ------------- -------
Rental income 13.7 9.4 6.9 3.1 - 33.1
Other property-related
income 0.3 - - - - 0.3
Service charge income 2.1 2.8 1.4 0.2 - 6.5
Service charges and
similar expenses (2.7) (2.9) (1.6) (0.8) - (8.0)
--------------------------------- ------- ------- -------- ------- ------------- -------
Net rental income 13.4 9.3 6.7 2.5 - 31.9
Administration expenses (1.0) (0.7) (0.5) (0.2) (0.2) (2.6)
Other expenses (0.6) (0.2) (0.4) (0.1) - (1.3)
--------------------------------- ------- ------- -------- ------- ------------- -------
Group revenue less costs 11.8 8.4 5.8 2.2 (0.2) 28.0
Net movements on revaluation
of investment properties 12.2 (0.9) (0.3) (0.9) - 10.1
Net loss on sale of
corporate bonds and
other investments - - - - (0.1) (0.1)
--------------------------------- ------- ------- -------- ------- ------------- -------
Segment operating profit/(loss) 24.0 7.5 5.5 1.3 (0.3) 38.0
Finance income 0.2 0.1 - - 5.0 5.3
Finance costs (5.6) (2.6) (2.6) (0.7) (1.5) (13.0)
Share of loss of associates
after tax - - - - (0.6) (0.6)
--------------------------------- ------- ------- -------- ------- ------------- -------
Segment profit before
tax 18.6 5.0 2.9 0.6 2.6 29.7
--------------------------------- ------- ------- -------- ------- -------------
Central administration
expenses (2.6)
--------------------------------- ------- ------- -------- ------- ------------- -------
Profit before tax 27.1
--------------------------------- ------- ------- -------- ------- ------------- -------
The Group's results for the year ended 31 December 2012 were as
follows:
Investment property
--------------------------------- -----------------------------------
Other
London France Germany Sweden Investments Total
GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------------- ------- ------- -------- ------- ------------- -------
Rental income 27.5 18.5 13.9 6.2 - 66.1
Other property-related
income 0.6 0.1 0.1 - - 0.8
Service charge income 4.7 5.5 2.7 0.4 - 13.3
Service charges and
similar expenses (6.0) (5.6) (3.6) (2.1) - (17.3)
--------------------------------- ------- ------- -------- ------- ------------- -------
Net rental income 26.8 18.5 13.1 4.5 - 62.9
Administration expenses (2.3) (1.4) (0.9) (0.3) (0.5) (5.4)
Other expenses (1.5) (0.4) (0.9) (0.1) - (2.9)
--------------------------------- ------- ------- -------- ------- ------------- -------
Group revenue less costs 23.0 16.7 11.3 4.1 (0.5) 54.6
Net movements on revaluation
of investment properties 19.8 (3.5) 0.1 (0.2) - 16.2
Net loss on sale of
corporate bonds and
other investments - - - - (0.4) (0.4)
--------------------------------- ------- ------- -------- ------- ------------- -------
Segment operating profit/(loss) 42.8 13.2 11.4 3.9 (0.9) 70.4
Finance income - 0.1 - - 10.5 10.6
Finance costs (11.9) (4.6) (4.6) (1.2) (3.3) (25.6)
Share of profit of associates
after tax - - - - 5.8 5.8
--------------------------------- ------- ------- -------- ------- ------------- -------
Segment profit before
tax 30.9 8.7 6.8 2.7 12.1 61.2
--------------------------------- ------- ------- -------- ------- -------------
Central administration
expenses (5.1)
--------------------------------- ------- ------- -------- ------- ------------- -------
Profit before tax 56.1
--------------------------------- ------- ------- -------- ------- ------------- -------
Segment assets and liabilities
Assets Liabilities
-------------------------------- --------------------------------
30 June 30 June 31 December 30 June 30 June 31 December
2013 2012 2012 2013 2012 2012
GBPm GBPm GBPm GBPm GBPm GBPm
--------------------- -------- -------- ------------ -------- -------- ------------
Investment Property
London 493.6 441.7 463.5 366.4 296.8 358.7
France 258.5 248.3 247.0 215.1 206.1 207.5
Germany 232.0 199.0 202.5 158.4 144.2 144.4
Sweden 65.6 62.7 62.9 40.5 40.2 40.2
Other investments 171.7 132.5 249.8 3.2 17.2 57.8
--------------------- -------- -------- ------------ -------- -------- ------------
1,221.4 1,084.2 1,225.7 783.6 704.5 808.6
--------------------- -------- -------- ------------ -------- -------- ------------
Segment capital expenditure
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
GBPm GBPm GBPm
--------------------- ----------- ----------- -------------
Investment Property
London 33.2 2.2 19.9
France 1.4 0.3 1.4
Germany 12.7 4.7 5.5
Sweden 0.6 0.4 0.7
--------------------- ----------- ----------- -------------
47.9 7.6 27.5
--------------------- ----------- ----------- -------------
4 FINANCE INCOME
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
GBPm GBPm GBPm
---------------------------- ----------- ----------- -------------
Interest income 5.5 4.5 9.9
Other finance income 0.3 0.1 0.1
Foreign exchange variances 0.4 0.4 0.6
---------------------------- ----------- ----------- -------------
6.2 5.0 10.6
---------------------------- ----------- ----------- -------------
5 FINANCE COSTS
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
GBPm GBPm GBPm
--------------------------------------------------- ----------- ----------- -------------
Interest expense
Bank loans 7.1 8.2 15.4
Debenture loans 2.3 2.3 4.7
Other interest 2.5 0.9 2.8
Amortisation of loan issue costs 0.8 0.5 1.3
--------------------------------------------------- ----------- ----------- -------------
Total interest costs 12.7 11.9 24.2
Less interest capitalised on development projects (0.3) - (0.1)
--------------------------------------------------- ----------- ----------- -------------
12.4 11.9 24.1
Movement in fair value of derivative financial
instruments
Interest rate swaps: transactions not qualifying
as hedges (2.2) 0.1 0.2
Interest rate caps: transactions not qualifying
as hedges - 0.7 1.3
10.2 12.7 25.6
--------------------------------------------------- ----------- ----------- -------------
6 TAXATION
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
GBPm GBPm GBPm
-------------- ----------- ----------- -------------
Current tax 3.5 1.0 2.3
Deferred tax 1.7 4.8 7.1
-------------- ----------- ----------- -------------
5.2 5.8 9.4
-------------- ----------- ----------- -------------
The Balance Sheet movement in current and deferred tax since the
last reported balance sheet is as follows:
Current Deferred Deferred Total
tax tax tax Net
Liability Asset Liability Liability
GBPm GBPm GBPm GBPm
----------------------------------------- ---------- --------- ---------- ----------
At 1 January 2013 (3.6) 8.7 (77.8) (72.7)
Charged in arriving at profit after tax (3.5) (2.1) 0.4 (5.2)
Credited to other comprehensive income - - 1.5 1.5
Net tax paid 2.1 - - 2.1
Foreign exchange variances (0.1) - (3.0) (3.1)
----------------------------------------- ---------- --------- ---------- ----------
At 30 June 2013 (5.1) 6.6 (78.9) (77.4)
----------------------------------------- ---------- --------- ---------- ----------
7 EARNINGS PER SHARE
Management has chosen to disclose the European Public Real
Estate Association (EPRA) measure of earnings per share, which has
been provided to give relevant information to investors on the
long-term performance of the Group's underlying business. The EPRA
measure excludes items which are non-recurring in nature such as
profits (net of related tax) on sale of investment properties,
other non-current investments and items which have no impact to
earnings over their life, such as the change in fair value of
derivative financial instruments and the net movement on
revaluation of investment properties, and the related deferred
taxation on these items.
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
Earnings GBPm GBPm GBPm
-------------------------------------------------- ----------- ----------- -------------
Profit for the period attributable to the owners
of the Company 22.7 21.3 46.7
Net movements on investment properties 3.5 (10.1) (16.2)
Profit on sale of joint venture (1.8) - -
Net (gain)/loss on sale of corporate bonds and
other investments (7.2) 0.1 0.4
Change in fair value of derivative financial
instruments (2.2) 1.1 1.5
Deferred tax relating to the above adjustments (0.1) 1.6 2.0
Adjustments in respect of associates (0.7) (0.3) (5.6)
-------------------------------------------------- ----------- ----------- -------------
EPRA Earnings 14.2 13.7 28.8
-------------------------------------------------- ----------- ----------- -------------
Six months Six months Year
ended ended ended
30 June 30 June 31 December
Weighted average number of ordinary shares in 2013 2012 2012
circulation Number Number Number
----------------------------------------------- ----------- ----------- -------------
Weighted average number of ordinary shares in
circulation 43,058,195 44,571,352 44,072,410
Dilutive share options(1) 98,031 70,814 85,002
----------------------------------------------- ----------- ----------- -------------
Diluted weighted average number of ordinary
shares 43,156,226 44,642,166 44,157,412
----------------------------------------------- ----------- ----------- -------------
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
Earnings per Share Pence Pence Pence
-------------------- ----------- ----------- -------------
Basic 52.7 47.8 106.0
Diluted 52.6 47.7 105.8
EPRA 33.0 30.7 65.3
-------------------- ----------- ----------- -------------
1. 300,000 share options were granted on 11 March 2010 at an
exercise price of 470 pence, and exercised on 17 May 2013.
8 NET ASSETS PER SHARE
Management has chosen to disclose the two European Public Real
Estate Association (EPRA) measures of net assets per share: EPRA
net assets per share; and EPRA triple net assets per share. The
EPRA net assets per share measure highlights the fair value of
equity on a long-term basis, and so excludes items which have no
impact on the Group in the long term, such as fair value movements
of derivative financial instruments and movements on fair value of
investment properties, and associated deferred tax. The EPRA triple
net assets per share measure discloses net assets per share on a
true fair value basis: all balance sheet items are included at
their fair value in arriving at this measure, including deferred
tax, fixed rate loan liabilities and any other balance sheet items
not reported at fair value.
30 June 30 June 31 December
2013 2012 2012
Net Assets GBPm GBPm GBPm
------------------------------------------------ -------- -------- ------------
Basic net assets 437.8 379.7 417.1
Dilutive impact of share options - 1.4 1.4
------------------------------------------------ -------- -------- ------------
Diluted net assets 437.8 381.1 418.5
Adjustment to increase fixed rate debt to fair
value, net of tax (19.7) (23.4) (23.9)
Goodwill as a result of deferred tax (1.1) (1.1) (1.1)
------------------------------------------------ -------- -------- ------------
EPRA Triple Net Assets 417.0 356.6 393.5
Deferred tax on property and other non-current
assets 75.9 68.8 74.6
Fair value of derivative financial instruments 6.8 7.7 8.4
Adjustment to decrease fixed rate debt to book
value, net of tax 19.7 23.4 23.9
Adjustments in respect of associates 3.4 2.0 3.0
------------------------------------------------ -------- -------- ------------
EPRA Net Assets 522.8 458.5 503.4
------------------------------------------------ -------- -------- ------------
30 June 30 June 31 December
2013 2012 2012
Number of ordinary shares in circulation Number Number Number
-------------------------------------------------- ----------- ----------- ------------
Number of ordinary shares in circulation 42,722,083 43,883,287 43,305,876
Dilutive share options - 300,000 300,000
-------------------------------------------------- ----------- ----------- ------------
Diluted number of ordinary shares in circulation 42,722,083 44,183,287 43,605,876
-------------------------------------------------- ----------- ----------- ------------
30 June 30 June 31 December
2013 2012 2012
Net Assets per Share Pence Pence Pence
---------------------- -------- -------- ------------
Basic 1,024.8 865.2 963.1
Diluted n/a 862.5 959.7
EPRA 1,223.7 1,037.7 1,154.4
EPRA Triple Net 976.0 807.1 902.5
---------------------- -------- -------- ------------
9 INVESTMENT PROPERTIES
30 June 30 June 31 December
2013 2012 2012
GBPm GBPm GBPm
--------- -------- -------- ------------
London 468.6 412.7 437.5
France 249.7 239.5 239.6
Germany 221.4 194.8 197.4
Sweden 62.1 57.4 60.0
--------- -------- -------- ------------
1,001.8 904.4 934.5
--------- -------- -------- ------------
The movement in investment properties since the last reported
balance sheet was as follows:
London France Germany Sweden Total
GBPm GBPm GBPm GBPm GBPm
------------------------------------- ------- ------- -------- ------- --------
At 1 January 2013 437.5 239.6 197.4 60.0 934.5
Acquisitions 23.3 - 12.1 - 35.4
Capital expenditure 9.9 1.4 0.6 0.6 12.5
Disposals (2.8) - - - (2.8)
Net movements on revaluation
of investment properties 0.6 (4.1) 0.7 (0.7) (3.5)
Rent-free period debtor adjustments 0.1 - - - 0.1
Exchange rate variances - 12.8 10.6 2.2 25.6
------------------------------------- ------- ------- -------- ------- --------
At 30 June 2013 468.6 249.7 221.4 62.1 1,001.8
------------------------------------- ------- ------- -------- ------- --------
The investment properties were revalued at 30 June 2013 to their
fair value. Valuations were based on current prices in an active
market for all properties. The property valuations were carried out
by external, professionally qualified valuers as follows:
London: Lambert Smith Hampton or Knight Frank
France: Jones Lang LaSalle
Germany: Colliers International
Sweden: CB Richard Ellis
Investment properties include leasehold properties with a
carrying value of GBP19.4 million (30 June 2012: GBP18.3 million;
31 December 2012: GBP18.3 million).
Where the Group leases out its investment property under
operating leases the duration is typically three years or more. No
contingent rents have been recognised in the current or comparative
years.
Substantially all investment properties are secured against
debt.
10 INVESTMENTS IN ASSOCIATES
Bulgarian
Land
Catena Development Other
AB Plc associates Total
At 30 June 2013 GBPm GBPm GBPm GBPm
-------------------------------------------- -------- ------------- ------------ -------
Interest held in ordinary share capital 29.9% 48.3% various
Revenues 0.4 0.1 1.8 2.3
-------------------------------------------- -------- ------------- ------------ -------
Share of profit/(loss) of associates after
tax 0.9 (0.2) (1.8) (1.1)
-------------------------------------------- -------- ------------- ------------ -------
Assets 27.9 8.6 20.0 56.5
Liabilities (13.2) (0.6) (17.3) (31.1)
-------------------------------------------- -------- ------------- ------------ -------
Net assets 14.7 8.0 2.7 25.4
Goodwill 5.4 - 2.7 8.1
-------------------------------------------- -------- ------------- ------------ -------
Investments in associates 20.1 8.0 5.4 33.5
-------------------------------------------- -------- ------------- ------------ -------
Market value of interest 28.3 n/a n/a
-------------------------------------------- -------- ------------- ------------ -------
Bulgarian
Land
Catena Development Other
AB Plc associates Total
At 30 June 2012 GBPm GBPm GBPm GBPm
-------------------------------------------- ------- ------------- ------------ -------
Interest held in ordinary share capital 29.9% 48.3% various
Revenues 0.4 0.2 0.7 1.3
-------------------------------------------- ------- ------------- ------------ -------
Share of profit/(loss) of associates after
tax 0.4 (0.4) (0.6) (0.6)
-------------------------------------------- ------- ------------- ------------ -------
Assets 19.6 8.9 6.4 34.9
Liabilities (11.7) (0.8) (3.5) (16.0)
-------------------------------------------- ------- ------------- ------------ -------
Net assets 7.9 8.1 2.9 18.9
Goodwill 5.1 - 1.8 6.9
-------------------------------------------- ------- ------------- ------------ -------
Investments in associates 13.0 8.1 4.7 25.8
-------------------------------------------- ------- ------------- ------------ -------
Market value of interest 16.0 n/a n/a
-------------------------------------------- ------- ------------- ------------ -------
Bulgarian
Land
Catena Development Other
AB Plc associates Total
At 31 December 2012 GBPm GBPm GBPm GBPm
-------------------------------------------- ------- ------------- ------------ -------
Interest held in ordinary share capital 29.9% 48.3% various
Revenues 0.7 0.4 2.7 3.8
-------------------------------------------- ------- ------------- ------------ -------
Share of profit/(loss) of associates after
tax 5.8 (0.7) 0.7 5.8
-------------------------------------------- ------- ------------- ------------ -------
Assets 26.1 8.4 10.0 44.5
Liabilities (12.4) (0.6) (6.0) (19.0)
-------------------------------------------- ------- ------------- ------------ -------
Net assets 13.7 7.8 4.0 25.5
Goodwill 5.2 - 2.6 7.8
-------------------------------------------- ------- ------------- ------------ -------
Investments in associates 18.9 7.8 6.6 33.3
-------------------------------------------- ------- ------------- ------------ -------
Market value of interest 20.7 n/a n/a
-------------------------------------------- ------- ------------- ------------ -------
The movement in associates since the last reported balance sheet
is as follows:
Net assets Goodwill Total
GBPm GBPm GBPm
--------------------------------------- ----------- --------- ------
At 1 January 2013 25.5 7.8 33.3
Additions 0.3 - 0.3
Share of loss of associates after tax (1.1) - (1.1)
Dividends received (0.3) - (0.3)
Exchange rate differences 1.0 0.3 1.3
--------------------------------------- ----------- --------- ------
At 30 June 2013 25.4 8.1 33.5
--------------------------------------- ----------- --------- ------
11 OTHER INVESTMENTS
Destination 30 June 30 June 31 December
Investment of 2013 2012 2012
type Investment GBPm GBPm GBPm
------------------------------ ---------------------- ------------- -------- -------- ------------
Available-for-sale financial
investments
Listed corporate
bonds UK 50.4 47.3 73.2
Eurozone 13.5 11.3 21.7
Other 25.0 17.5 32.4
-------- -------- ------------
88.9 76.1 127.3
Listed equity
securities UK 0.2 0.4 0.3
Sweden 2.8 1.5 1.7
Other - - 0.2
Unlisted investments Sweden 0.3 0.3 0.3
Government
securities UK 0.1 0.1 0.1
---------------------- -------------------------------------------- -------- -------- ------------
92.3 78.4 129.9
------------------------------------------------------------------- -------- -------- ------------
The movement of other investments since the last reported
balance sheet, based on the methods used to measure their fair
value, is given below:
Level Level Level
1 2 3
Quoted Observable Other
market market valuation
price data methods Total
GBPm GBPm GBPm GBPm
--------------------------------------------- -------- ------------ ----------- -------
At 1 January 2013 2.3 127.3 0.3 129.9
Additions 2.8 39.9 - 42.7
Disposals (2.6) (74.2) - (76.8)
Fair value movements recognised in reserves
on available-for-sale assets (0.3) (0.1) - (0.4)
Fair value movements recognised in profit
before tax on available-for-sale assets 0.9 (5.5) - (4.6)
Exchange rate variations - 1.5 - 1.5
--------------------------------------------- -------- ------------ ----------- -------
At 30 June 2013 3.1 88.9 0.3 92.3
--------------------------------------------- -------- ------------ ----------- -------
The net gain/(loss) on sale of corporate bonds and other
investments for the six months ended 30 June 2013 included a
valuation impairment of GBP0.3 million (30 June 2012: GBPnil; 31
December 2012: GBPnil).
Corporate Bond Portfolio
At 30 June 2013
Building
Sector Banking Insurance Societies Financials Other Total
--------- ----------- --------------- ----------- ----------- -------------- ---------
Value GBP30.1m GBP24.2m GBP6.4m GBP7.6m GBP20.6m GBP88.9m
Running
yield 8.9% 7.7% 9.1% 9.5% 9.3% 8.7%
--------- ----------- --------------- ----------- ----------- -------------- ---------
Friends Aberdeen Telecom
Issuers Rothschild Provident Nationwide AM Italia
SNS Bank Brit Insurance Yorkshire Man Group Corral Finans
Phoenix Alliance
Investec Life Oil
Lloyds Direct Line Swissport
Co-op Swiss Re Europcar
KBC Generali JC Penny
RBS SAS
TUI
ISS
--------- ----------- --------------- ----------- ----------- -------------- ---------
12 BORROWINGS
Maturity profile
Bank Debenture Zero Coupon Other
loans loans Note loans Total
At 30 June 2013 GBPm GBPm GBPm GBPm GBPm
--------------------------------- ------- ---------- ------------ ------- -------
Within one year or on demand 99.9 1.4 - - 101.3
More than one but not more than
two years 39.9 1.6 - - 41.5
More than two but not more than
five years 340.0 5.8 - 29.4 375.2
More than five years 43.8 22.4 12.8 65.0 144.0
--------------------------------- ------- ---------- ------------ ------- -------
523.6 31.2 12.8 94.4 662.0
Unamortised issue costs (3.5) - - (1.3) (4.8)
--------------------------------- ------- ---------- ------------ ------- -------
Borrowings 520.1 31.2 12.8 93.1 657.2
Less amount due for settlement
within 12 months (98.8) (1.4) - 0.3 (99.9)
--------------------------------- ------- ---------- ------------ ------- -------
Amount due for settlement after
12 months 421.3 29.8 12.8 93.4 557.3
--------------------------------- ------- ---------- ------------ ------- -------
Bank Debenture Zero Coupon Other
loans loans Note loans Total
At 30 June 2012 GBPm GBPm GBPm GBPm GBPm
--------------------------------- -------- ---------- ------------ ------- --------
Within one year or on demand 149.6 1.3 - - 150.9
More than one but not more than
two years 65.3 1.4 - - 66.7
More than two but not more than
five years 175.2 5.2 - 27.6 208.0
More than five years 131.8 24.5 11.5 - 167.8
--------------------------------- -------- ---------- ------------ ------- --------
521.9 32.4 11.5 27.6 593.4
Unamortised issue costs (3.2) - - (0.4) (3.6)
--------------------------------- -------- ---------- ------------ ------- --------
Borrowings 518.7 32.4 11.5 27.2 589.8
Less amount due for settlement
within 12 months (148.5) (1.3) - - (149.8)
--------------------------------- -------- ---------- ------------ ------- --------
Amount due for settlement after
12 months 370.2 31.1 11.5 27.2 440.0
--------------------------------- -------- ---------- ------------ ------- --------
Bank Debenture Zero Coupon Other
loans loans Note loans Total
At 31 December 2012 GBPm GBPm GBPm GBPm GBPm
--------------------------------- -------- ---------- ------------ ------- --------
Within one year or on demand 135.7 1.3 - - 137.0
More than one but not more than
two years 37.1 1.5 - - 38.6
More than two but not more than
five years 286.1 5.5 - 28.4 320.0
More than five years 94.0 23.5 12.1 65.0 194.6
--------------------------------- -------- ---------- ------------ ------- --------
552.9 31.8 12.1 93.4 690.2
Unamortised issue costs (3.8) - - (1.4) (5.2)
--------------------------------- -------- ---------- ------------ ------- --------
Borrowings 549.1 31.8 12.1 92.0 685.0
Less amount due for settlement
within 12 months (134.5) (1.3) - 0.2 (135.6)
--------------------------------- -------- ---------- ------------ ------- --------
Amount due for settlement after
12 months 414.6 30.5 12.1 92.2 549.4
--------------------------------- -------- ---------- ------------ ------- --------
Currency profile
Fixed Floating
rate rate
financial financial
liabilities liabilities Total
At 30 June 2013 GBPm GBPm GBPm
----------------- ------------- ------------- ------
Sterling 121.8 173.8 295.6
Euro 47.2 254.7 301.9
Swedish krona - 59.7 59.7
----------------- ------------- ------------- ------
169.0 488.2 657.2
----------------- ------------- ------------- ------
Fixed Floating
rate rate
financial financial
liabilities liabilities Total
At 30 June 2012 GBPm GBPm GBPm
----------------- ------------- ------------- ------
Sterling 60.0 172.2 232.2
Euro 70.0 228.5 298.5
Swedish krona - 57.3 57.3
Other - 1.8 1.8
----------------- ------------- ------------- ------
130.0 459.8 589.8
----------------- ------------- ------------- ------
Fixed Floating
rate rate
financial financial
liabilities liabilities Total
At 31 December 2012 GBPm GBPm GBPm
--------------------- ------------- ------------- ------
Sterling 123.9 206.9 330.8
Euro 60.5 223.6 284.1
Swedish krona - 68.6 68.6
Other - 1.5 1.5
--------------------- ------------- ------------- ------
184.4 500.6 685.0
--------------------- ------------- ------------- ------
Fair values
Carrying amounts Fair values
------------------------- -------------------------
June June December June June December
2013 2012 2012 2013 2012 2012
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------ ------ ------ --------- ------ ------ ---------
Current borrowings 99.9 149.8 135.6 100.0 149.8 136.1
Non-current borrowings 557.3 440.0 549.4 582.9 470.6 579.8
------------------------ ------ ------ --------- ------ ------ ---------
657.2 589.8 685.0 682.9 620.4 715.9
------------------------ ------ ------ --------- ------ ------ ---------
The fair value of borrowings represents the amount at which a
financial instrument could be exchanged in an arm's length
transaction between informed and willing parties, discounted at the
prevailing market rate, and excludes accrued interest.
13 SHARE CAPITAL
Number Number
of of Ordinary Total
shares
ordinary treasury Total in Treasury ordinary
shares shares
in in number circulation shares shares
circulation circulation of shares GBPm GBPm GBPm
---------------------------- ------------- ------------ ----------- ------------ --------- ----------
At 1 January 2013 43,305,876 4,803,103 48,108,979 10.8 1.2 12.0
Cancelled following tender
offer(1) (883,793) - (883,793) (0.2) - (0.2)
Exercise of share options 300,000 (300,000) - 0.1 (0.1) -
---------------------------- ------------- ------------ ----------- ------------ --------- ----------
At 30 June 2013 42,722,083 4,503,103 47,225,186 10.7 1.1 11.8
---------------------------- ------------- ------------ ----------- ------------ --------- ----------
Number Number
of of Ordinary Total
shares
ordinary treasury Total in Treasury ordinary
shares shares
in in number circulation shares shares
circulation circulation of shares GBPm GBPm GBPm
---------------------------- ------------- ------------ ------------ ------------ --------- ----------
At 1 January 2012 44,953,611 4,803,103 49,756,714 11.3 1.2 12.5
Cancelled following tender
offer(2) (1,070,324) - (1,070,324) (0.3) - (0.3)
---------------------------- ------------- ------------ ------------ ------------ --------- ----------
At 30 June 2012 43,883,287 4,803,103 48,686,390 11.0 1.2 12.2
---------------------------- ------------- ------------ ------------ ------------ --------- ----------
Number Number
of of Ordinary
ordinary treasury shares Total
shares shares Total in Treasury ordinary
in in number circulation shares shares
circulation circulation of shares GBPm GBPm GBPm
---------------------------- ------------- ------------- ------------ ------------- --------- ----------
At 1 January 2012 44,953,611 4,803,103 49,756,714 11.3 1.2 12.5
Cancelled following tender
offer(2 & 3) (1,647,735) - (1,647,735) (0.5) - (0.5)
---------------------------- ------------- ------------- ------------ ------------- --------- ----------
At 31 December 2012 43,305,876 4,803,103 48,108,979 10.8 1.2 12.0
---------------------------- ------------- ------------- ------------ ------------- --------- ----------
1. A tender offer by way of a Circular dated 15 March 2013 for
the purchase of 1 in 49 shares at 970 pence per share was completed
in April 2013. It returned GBP8.6 million to shareholders,
equivalent to 19.8 pence per share.
2. A tender offer by way of a Circular dated 16 March 2012 for
the purchase of 1 in 42 shares at 735 pence per share was completed
in April 2012. It returned GBP7.9 million to shareholders,
equivalent to 17.5 pence per share.
3. A tender offer by way of a Circular dated 24 August 2012 for
the purchase of 1 in 76 shares at 805 pence per share was completed
in September 2012. It returned GBP4.6 million to shareholders,
equivalent to 10.6 pence per share.
14 Cash generated from operations
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
GBPm GBPm GBPm
------------------------------------------------------- ----------- ----------- -------------
Operating profit 33.0 35.4 65.3
Adjustments for:
Net movements on revaluation of investment properties 3.5 (10.1) (16.2)
Depreciation and amortisation - 0.1 0.2
Profit on sale of joint venture (1.8) - -
Net (gain)/loss on sale of corporate bonds and
other investments (7.2) 0.1 0.4
Share-based payment expense - 0.1 0.2
Non-cash rental income (0.1) (0.3) -
Changes in working capital:
(Increase)/decrease in debtors (1.1) 0.2 0.8
(Decrease)/increase in creditors (0.1) 0.9 3.6
------------------------------------------------------- ----------- ----------- -------------
Cash generated from operations 26.2 26.4 54.3
------------------------------------------------------- ----------- ----------- -------------
15 RELATED PARTY TRANSACTIONS
There have been no material changes in the related party
transactions described in the last annual report, other than those
disclosed elsewhere in this condensed set of financial
statements.
GLOSSARY OF TERMS
ADJUSTED NET ASSETS OR ADJUSTED SHAREHOLDERS' FUNDS
Net assets excluding the mark-to-market on effective cash flow
hedges and related debt adjustments and deferred tax on
revaluations and goodwill arising as a result of deferred tax,
including for associates
ADJUSTED NET GEARING
Net debt expressed as a percentage of adjusted net assets
ADJUSTED SOLIDITY
Adjusted net assets expressed as a percentage of adjusted total
assets
ADJUSTED TOTAL ASSETS
Total assets excluding deferred tax assets
ADMINISTRATION COST RATIO
Recurring administration expenses of the Investment Property
operating segment expressed as a percentage of net rental
income
BALANCE SHEET LOAN TO VALUE
Net debt expressed as a percentage of total assets less cash and
short-term deposits
CONTRACTED RENT
Annual contracted rental income after any rent-free periods have
expired
CORE PROFIT
Profit before tax and before net movements on revaluation of
investment properties, profit on sale of investment properties,
subsidiaries and corporate bonds, impairment of intangible assets
and goodwill, non-recurring costs, change in fair value of
derivatives and foreign exchange variances
DILUTED EARNINGS PER SHARE
Profit after tax divided by the diluted weighted average number
of ordinary shares
DILUTED NET ASSETS
Equity shareholders' funds increased by the potential proceeds
from issuing those shares issuable under employee share schemes
DILUTED NET ASSETS PER SHARE OR DILUTED NET ASSET VALUE
Diluted net assets divided by the diluted number of ordinary
shares
DILUTED NUMBER OF ORDINARY SHARES
Number of ordinary shares in circulation at the balance sheet
date adjusted to include the effect of potential dilutive shares
issuable under employee share schemes
DILUTED WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES
Weighted average number of ordinary shares in issue during the
period adjusted to include the effect of potential weighted average
dilutive shares issuable under employee share schemes
EARNINGS PER SHARE
Profit after tax divided by the weighted average number of
ordinary shares in issue in the period
EPRA
European Public Real Estate Association
EPRA EARNINGS PER SHARE
Profit after tax, but excluding net gains or losses from fair
value adjustments on investment properties, profits or losses on
disposal of investment properties and other non-current investment
interests, impairment of goodwill and intangible assets, movements
in fair value of derivative financial instruments and their related
current and deferred tax, including for associates
EPRA NET ASSETS
Diluted net assets excluding the mark-to-market on effective
cash flow hedges and related debt adjustments, deferred tax on
revaluations and goodwill arising as a result of deferred tax,
including for associates
EPRA NET ASSETS PER SHARE
EPRA net assets divided by the diluted number of ordinary
shares
EPRA NET INITIAL YIELD
Annual passing rent less net service charge costs on investment
properties expressed as a percentage of the investment property
valuation after adding purchasers' costs
EPRA TOPPED UP NET INITIAL YIELD
Annual net rents on investment properties expressed as a
percentage of the investment property valuation after adding
purchasers' costs
EPRA TRIPLE NET ASSETS
EPRA net assets adjusted to reflect the fair value of debt and
derivatives and to include the fair value of deferred tax on
property revaluations, including for associates
EPRA TRIPLE NET ASSETS PER SHARE
EPRA triple net assets divided by the diluted number of ordinary
shares
ESTIMATED RENTAL VALUE (ERV)
The market rental value of lettable space as estimated by the
Group's valuers
LIQUID RESOURCES
Cash and short-term deposits and listed corporate bonds
NET ASSETS PER SHARE OR NET ASSET VALUE (NAV)
Equity shareholders' funds divided by the number of ordinary
shares in circulation at the balance sheet date
NET DEBT
Total borrowings less cash and short-term deposits
NET GEARING
Net debt expressed as a percentage of net assets
NET INITIAL YIELD
Annual net rents on investment properties expressed as a
percentage of the investment property valuation
NET RENT
Contracted rent less net service charge costs
OCCUPANCY RATE
Contracted rent expressed as a percentage of the aggregate of
contracted rent and the ERV of vacant space
OVER-RENTED
The amount by which ERV falls short of the aggregate of passing
rent and the ERV of vacant space
PASSING RENT
Contracted rent before any rent-free periods have expired
PROPERTY LOAN TO VALUE
Property borrowings expressed as a percentage of the market
value of the property portfolio
RECURRING INTEREST COVER
The aggregate of group revenue less costs plus share of results
of associates, divided by the aggregate of interest expense and
amortisation of issue costs of debt, less interest income
RENT ROLL
Contracted rent
SOLIDITY
Equity shareholders' funds expressed as a percentage of total
assets
TOTAL SHAREHOLDER RETURN
For a given number of shares, the aggregate of the proceeds from
tender offer buy-backs and change in the market value of the shares
during the year adjusted for cancellations occasioned by such
buy-backs, as a percentage of the market value of the shares at the
beginning of the year
TRUE EQUIVALENT YIELD
The capitalisation rate applied to future cash flows to
calculate the gross property value, as determined by the Group's
external valuers
DIRECTORS, OFFICERS AND ADVISERS
Directors
Sten Mortstedt (Executive Chairman)
Henry Klotz (Executive Vice Chairman)
Richard Tice (Chief Executive Officer)
John Whiteley (Chief Financial Officer)
Malcolm Cooper * ++ (Non-Executive Director)
Joseph Crawley (Non-Executive Director)
Claes-Johan Geijer (Non-Executive Director)
Christopher Jarvis * (Non-Executive Director)
Thomas Lundqvist (Non-Executive Director)
Jennica Mortstedt (Non-Executive Director)
Brigith Terry (Non-Executive Director)
Thomas Thomson (Non-Executive Director)
* member of Remuneration Committee
member of Audit Committee
++ Senior Independent Director
Company Secretary
David Fuller BA, FCIS
Registered Office
86 Bondway
London
SW8 1SF
Registered Number
2714781
Registrars and Transfer Office
Computershare Investor Services Plc
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
Shareholder Helpline: 0870 889 3286
CLS Holdings plc on line:
www.clsholdings.com
email:
enquiries@clsholdings.com
Clearing Bank
Royal Bank of Scotland Plc
24 Grosvenor Place
London
SW1X 7HP
Financial Advisers
Kinmont Limited
5 Clifford Street
London
W1S 2LJ
Stockbrokers
Liberum Capital
Ropemaker Place, Level 12
25 Ropemaker Street
London
EC2Y 9LY
Charles Stanley Securities
131 Finsbury Pavement
London
EC2A INT
Registered Auditor
Deloitte LLP
Chartered Accountants
2 New Street Square
London
EC4A 3BZ
Financial and Corporate Public Relations
Smithfield Consultants Limited
10 Aldersgate Street
London
EC1A 4HJ
CLS Holdings plc
86 Bondway
London
SW8 1SF
Tel: +44 (0)20 7582 7766
Fax: +44 (0)20 7828 0960
email: enquiries@clsholdings.com
www.clsholdings.com
This information is provided by RNS
The company news service from the London Stock Exchange
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Da Giu 2024 a Lug 2024
Grafico Azioni Cls (LSE:CLI)
Storico
Da Lug 2023 a Lug 2024