cls hy results_2014
Post on 23-Jan-2015
1.306 Views
Preview:
DESCRIPTION
TRANSCRIPT
Interim Results 2014
1
CLS Holdings plc
Annual Report &
Accounts 2013
CLS Holdings plcAnnual Report & Accounts
CLS Holdings plc
86 BondwayLondonSW8 1SF
Tel: +44 (0)20 7582 7766Fax: +44 (0)20 7828 0960email: enquiries@clsholdings.com
www.clsholdings.com Taking advantageof Opportunities
Contents
Overview
Financials
Portfolio
Our Markets
Summary
2
Henry Klotz Executive Vice Chairman
John Whiteley Chief Financial Officer
Simon Wigzell Head of Group Property
CLS Holdings plc
Annual Report &
Accounts 2013
CLS Holdings plcAnnual Report & Accounts
CLS Holdings plc
86 BondwayLondonSW8 1SF
Tel: +44 (0)20 7582 7766Fax: +44 (0)20 7828 0960email: enquiries@clsholdings.com
www.clsholdings.com Taking advantageof Opportunities
London 47%
Rest of UK 8%
France 19%
Germany 18%
Direct 5%
Indirect 3%
Property investments by value
Sweden
About CLS
• Specialist in high-yielding offices and opportunistically adding value
• Cash generative: high yield (6.8%) vs low cost of debt (3.73%)
• Rental income £84.0m Property portfolio £1.2bn
• Management strong alignment of interest via shares
3
30 June 2014
Achievements in H1 2014 Benefiting from geographical diversity
• Healthy growth in NAV
– Strong growth in London valuations
– Enhanced cash generation as impact of 2013 acquisitions comes through
• Good progress on developments at Spring Mews, Clifford’s Inn and Vauxhall Square
• Record low vacancy rate of 3.5% (Dec 2013: 4.4%) driven by significant lettings in France and Germany
• Disposal of Cambridge House, W6 for £29.5m at 32% above Dec 2013 valuation
• Low cost of debt maintained
4
Contents
Overview
Financials
Portfolio
Our Markets
Summary
5
CLS Holdings plc
Annual Report &
Accounts 2013
CLS Holdings plcAnnual Report & Accounts
CLS Holdings plc
86 BondwayLondonSW8 1SF
Tel: +44 (0)20 7582 7766Fax: +44 (0)20 7828 0960email: enquiries@clsholdings.com
www.clsholdings.com Taking advantageof Opportunities
Financial Highlights In Good Health
• EPRA NAV up 11.3% to 1,412.0p (Dec 2013: 1,268.4p)
• Profit after tax up 173.1% to £62.0m (2013: £22.7m)
• EPRA EPS up 13.0% to 37.3p (2013: 33.0p)
• Interest cover 3.6x (2013: 3.8x)
• Low cost of debt 3.73% (Dec 2013: 3.64%)
• Half year distributions up 5.0% like-for-like; proposed £5.5m buy-back at 1 in 119 at 1,500p
6
1,268.4
1,412.0
51.2
104.4 11.9
-3.7
-20.2
1,200
1,240
1,280
1,320
1,360
1,400
1,440
1,480
1 Jan 2014 Underlying profit
Revaluation of properties
Other revaluations
Tender buy backs
FX 30 Jun 2014
Strong NAV Growth Movement in EPRA NAV
Pence
7
1 Jan 2014
Underlying Profit
Revaluation of Properties
Other Revaluations
Tender Buy Back
FX 30 Jun 2014
Strong Income Generation Profit after Tax
14.2
-3.5
1.8 7.2
3.0
22.7 16.3
39.6
7.0
-0.9
-
62.0
-20
0
20
40
60
80
2013 2014
For the six months to 30 June (£m)
8
EPRA Profit after Tax + Property
revaluation + Gain on disposals + Gain / (loss) on
sale of bonds + Other = Profit after Tax
69.4 84.3
129.8
21.8
-10.0
29.3
-31.1
-53.6 -1.9
69.4
0
50
100
150
200
250
300
At 1 Jan 2014 From operations
Tender buy-back
Sale of properties
Capital expenditure
Net loan repayments
Other At 30 Jun 2014
Very High Liquidity Movement in Liquid Resources
£m
9
Cash Corporate Bonds
153.7
199.2
Debt Profile As at 30 June 2014
0
50
100
150
200
250
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Amortisation Bullet Repayments
£m
10
2015: 4 loans 2016: 2 loans account for £105m
• Swedish bond • Loan on a building let until 2026
Diverse Financing Strategy to lower risk
• Spread risk
– 23 banks (71%)
– 1 secured note (11%)
– 1 debenture (6%)
– 2 unsecured bonds (12%)
– Ring-fencing model
• 76% fixed or hedged
• 67% floating rate
• Weighted avg. cost of debt 3.73% (Dec 2013: 3.64%)
• Balance sheet LTV 50.3% (Dec 2013: 52.8%)
Hedging of Finance
11
Hedged
Floating
33% Fixed
43% Capped
24% Unhedged
Contents
Overview
Financials
Portfolio
Our Markets
Summary
12
CLS Holdings plc
Annual Report &
Accounts 2013
CLS Holdings plcAnnual Report & Accounts
CLS Holdings plc
86 BondwayLondonSW8 1SF
Tel: +44 (0)20 7582 7766Fax: +44 (0)20 7828 0960email: enquiries@clsholdings.com
www.clsholdings.com Taking advantageof Opportunities
Govt. 51%
Major corporates 23%
Other 26%
Occupiers by sector
Property Portfolio Overview
• Diversified investment portfolio, primarily in major European cities:
– 473 customers in 109 properties
– 539,000 sqm1
– £84.0m contracted rental income
– £161 per sqm average rent
• 61% of rents indexed
• Secure income: 74% from governments & major corporates
• WAULT 6.7 years (5.7 years to first break)
• Core activity is cash generating investments (>85% of portfolio)
13 1. Excludes 24,200 sqm of developments
0.0
5.0
10.0
15.0
20.0
25.0
1 year 2 year 3 year 4 year 5 year 6 year 7 year 8 year 9 year 10 year Later
Rent expiring Current ERV of rent expiring
Portfolio Performance
• New lettings in London achieved at 7% above Dec 2013 ERVs • ERV movements in H1 2014:
• London rents moved from £0.4m net over-rented to £1.9m net reversionary • Portfolio broadly rack-rented
Rented in line with market rates (£m pa)1
14
- London - Rest of UK - Germany
+8.7% +1.7% +1.3%
- Sweden - France
-0.6% -1.4%
1. Current ERVs assume no rental growth
0.0%
2.5%
5.0%
7.5%
10.0%
12.5%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 H1 2014
CLS Portfolio Vacancy Rate European Avg
Actively Managed Portfolio In-House Property Management
• +100 asset management transactions in 6 months • 12,000 sqm expired; 17,140 sqm let/relet/regeared • Lowest ever vacancy rate of 3.5% (Dec 2013: 4.4%) • Vacancy rate consistently below comparable European average
Maintaining Low Vacancy Rate
European Average: RREEF Real Estate & BNP Paribas 15
Investment Property Portfolio
At 30 June 2014
Contracted rent
£m Valuation
£m
Revaluation in local
currency
EPRA Net Initial
Yield1 %
Vacancy by rent
% WAULT (Years)
Contracted rent
£ psm
Capital Value1 £ psm
London 31.0 570.3 ñ 8.4% 5.6 4.0 7.9 218 3,327
Rest of UK 13.3 98.7 ñ 0.8% 12.7 1.0 7.1 140 1,006
France 17.5 230.8 ò 1.0% 6.6 7.1 4.6 194 2,407
Germany 16.0 209.9 ñ 1.4% 6.7 1.5 8.0 107 1,378
Sweden 6.2 59.1 ñ 0.2% 8.7 0.6 2.9 139 1,303
Total portfolio 84.0 1,168.8 ñ 4.0% 6.8 3.5 6.7 161 2,022
16 1 Excludes development sites: Spring Mews and Clifford’s Inn
Total uplift £45.3m, of which £44.0m was in London
Movement in Rental Income 6 months to 30 June
35.9
35.9
45.2 44.6 44.1 43.0
42.1
42.1
9.3 0.2
-0.8 -0.5 -1.1 -0.9
20
25
30
35
40
45
50
Rental Income 2013
Acquisitions Indexation Disposals Lettings & Expiries
Surrender Premium
FX Rental Income 2014
£m
17
Movement in Investment Properties
1,132.9
1,168.8
2.0
28.8 2.9
45.3
-22.4
-20.7
1,100
1,120
1,140
1,160
1,180
1,200
1,220 Portfolio Value £m
18
1 Jan 2014
Additions Development Refurbish Valuation Uplift
Disposals FX 30 Jun 2014 Capex
Adding Value Sustainability
London & Rest of UK
• 800 sqm refurbishment at Falcon House achieved SKA Gold sustainability standard
• 11.3% reduction in CO2 emissions per sqm in 12 months to April 2014
• Ground source energy system completed at Spring Mews
• Completed third photovoltaic array
Sweden
• 9% reduction in electricity consumption
• 38% reduction in waste generation
France
• 11% reduction in electricity consumption
19
Adding Value: Vauxhall Regeneration Intense Activity
US Embassy
TfL Station upgrade
Vauxhall Square
Spring Mews
20
Dutch Embassy
Possible Chinese Embassy
Wanda 5 star hotel & residential
Berkeley Group 2 schemes
St Modwen
Barratt / Sainsbury BT
Vauxhall Cross
Christies Conditional long lease
Bondway Store
Adding Value: Vauxhall Square, SW8 Overview
Full consent in place for 143,000 sqm mixed-use scheme
• 520 apartments
– 410 private in two 50-storey towers
– 110 affordable homes
• 22,732 sqm offices
• 3,119 sqm of retail
• 3,777 sqm multi-screen cinema
• 278 bedroom hotel
• 123 bedroom suite hotel
• 359 student bedrooms
• Development cost c.£500m
21
Adding Value: Vauxhall Square, SW8 Good Progress
Achievements since 1 Jan 2014 • Conditional exchange with student
operator to build and manage - Good progress on meeting
conditions - Ground investigation works
under way - Application to increase consent
by 95 student bedrooms - Attractive terms, no Group cash
involved - On site 2015
• Revised application in preparation to upgrade to four-star hotel
• Section 106 variation agreed improving phasing flexibility
22
Adding Value: Spring Mews, SE11 Close to Completion
Gross internal area 20,800 sqm
• 378 student rooms
– 90% of rooms pre-let for 2014/15
– Including 210 rooms pre-let to Roehampton University on 10 year deal
– Opens September 2014
23
• 93 bedroom long-stay hotel
– Intercontinental Hotels Group Staybridge brand
– Opens Q4 2014
• 1,000 sqm offices
Adding Value: Spring Mews, SE11 Close to Completion
Phase One
- Development cost c.£55m ex. land
- Estimated rental value £5.5m
- Estimated capital value >£80m
- Funding to be sought H1 2015
24
Further Opportunities
- Planning consented for additional 22 student suites
- Additional floors subject to planning
Adding Value: Clifford’s Inn, EC4 Close to Completion
3,423 sqm office refurbishment and 8 residential apartments • Construction to complete Q4 2014 • £10.1m refurbishment cost • Estimated income £1.6m pa • Rental values +10%
since beginning of year • Estimated capital value >£26m
25
Adding Value More to come in next 12 months
• Annualised rental stream
– Spring Mews >£5.5m
– Clifford’s Inn >£1.6m
• Valuation uplift on developments to be realised in 2014/2015
– Spring Mews & Clifford’s Inn
• Profit on disposal
– Vauxhall Square student building 20151
1. Subject to discharging conditionality 26
Contents
Overview
Financials
Portfolio
Our Markets
Summary
27
CLS Holdings plc
Annual Report &
Accounts 2013
CLS Holdings plcAnnual Report & Accounts
CLS Holdings plc
86 BondwayLondonSW8 1SF
Tel: +44 (0)20 7582 7766Fax: +44 (0)20 7828 0960email: enquiries@clsholdings.com
www.clsholdings.com Taking advantageof Opportunities
5.0
6.0
7.0
8.0
9.0
10.0
Q2 2004 Q2 2006 Q2 2008 Q2 2010 Q2 2012 Q2 2014
London Momentum continues
Occupational market • Office vacancy at 6.4% around M25 - lowest in last 10 years
• Driven by: – Obsolete buildings – Lack of development stock – Residential conversions reducing office stock
• Leading to rental growth Investment market • Investor demand continuing to outweigh supply • Investment yields in suburbs have hardened by over 150 bps in last six months
M25 Office Vacancy Rates (%)1
1. Source: Knight Frank
28
Continental Europe Selective Investment Opportunities
Germany – Mixed economic picture • Forecast for 2014: GPD growth 1.9%; inflation 1.1% • Historically high employment levels; unemployment only 5.1% • Vacancy levels have fallen since mid-2010 and rents rising modestly • Most advantageous availability of bank debt
France - Stagnant economy • Forecast GDP growth 0.7% for 2014 • Unemployment at 10.1%; unlikely to fall • Letting activity in Paris 24% higher than 2013 • Investment market transactions in Paris Q2 2014 double that of Q2 2013
Sweden - Stable • Forecast GDP growth 2.5% for 2014
• 0.0% 2014 inflation forecast
• Yield compression in Stockholm secondary market driven by investment demand
29
Contents
Overview
Financials
Portfolio
Our Markets
Summary
30
CLS Holdings plc
Annual Report &
Accounts 2013
CLS Holdings plcAnnual Report & Accounts
CLS Holdings plc
86 BondwayLondonSW8 1SF
Tel: +44 (0)20 7582 7766Fax: +44 (0)20 7828 0960email: enquiries@clsholdings.com
www.clsholdings.com Taking advantageof Opportunities
Summary Strong Performance
• Driven by London portfolio
• Cash generation increased by >20%
• Active in-house management delivering lowest ever vacancy rate
• Developments adding significant value
• Retaining high levels of liquidity for future opportunities
31
Appendices
32
www.clsholdings.com CLS Holdings plc 86 Bondway Tel: +44 (0) 20 7582 7766 London Fax: +44 (0) 20 7820 7728 SW8 1SF Email: enquiries@clsholdings.com
CLS Holdings plc
Annual Report &
Accounts 2013
CLS Holdings plcAnnual Report & Accounts
CLS Holdings plc
86 BondwayLondonSW8 1SF
Tel: +44 (0)20 7582 7766Fax: +44 (0)20 7828 0960email: enquiries@clsholdings.com
www.clsholdings.com Taking advantageof Opportunities
Corporate Bond Portfolio At 30 June 2014
Banking Insurance Travel and
Tourism Food
Producers Other Total
Value £36.6m £5.3m £10.7m £4.9m £26.8m £84.3m
Running yield 10.5% 6.7% 6.8% 9.0% 7.4% 7.5%
Issuers Societe Generale
Bank of Ireland
Deutsche Bank
Commerzbank
Credit Agricole
Rothschild
SNS Bank
Unicredit
Barclays
Investec
Lloyds
RBS
Brit Insurance
Phoenix Life
British Airways
Stena
SAS
TUI
Boparan
Findus
Vedanta Resources
Telecom Italia
Arcelor Mittal
Corral Finans
Manutencoop
Century Link
Stora Enso
Enel
Dell
33
London and the South East
• 33 properties • 148,000 sqm
34
Rest of UK
• 32 properties • 98,000 sqm
35
• 26 properties • 17 in Paris • 96,000 sqm
France
36
LUXEMBOURG
PARIS
LILLE
LYON
ANTIBES
Germany
• 17 properties • 152,000 sqm
37
SÜDERHASTEDT
HAMBURG
BERLIN
BOCHUM
DÜSSELDORF
LANDSHUT
MUNICH FREIBURG
Sweden
1 property • 45,000 sqm office park
1 associate • Cood Investments
1 investment • Catena AB
– 150,000 sqm mixed-use development in Stockholm
– SEK 4.4 bn logistics portfolio
38
VÄNERPARKEN
GOTHENBURG
STOCKHOLM
Vauxhall & Nine Elms Central London’s largest regeneration
39
Vauxhall Square
Spring Mews
Conditional long lease
EPRA Profit After Tax
£m 2014 2013 Difference Rental income 42.1 35.9 6.2
Other income 0.8 0.7 0.1
Net service charges (2.1) (1.6) (0.5)
Net rental income 40.8 35.0 5.8
Expenses (8.0) (7.5) (0.5)
Operating profit 32.8 27.5 5.3
Finance income 4.6 5.8 (1.2)
Finance costs (13.0) (12.4) (0.6)
FX (1.7) 0.4 (2.1)
Share of associates (1.4) (1.8) 0.4
21.3 19.5 1.8
Tax (5.0) (5.3) 0.3
EPRA Profit after Tax 16.3 14.2 2.1 40
top related