Half Year 2024 CLS Holdings PLC Earnings Call Transcript
Key Points
- CLS Holdings PLC (STU:838) experienced strong leasing momentum, with new leases signed at 5.9% above Estimated Rental Values (ERVs).
- Net rental income increased by 5.9%, driven by higher income from indexation and strong performance from hotel and student operations.
- The company successfully completed property sales worth GBP61 million in H1, with a further GBP160 million planned for H2.
- CLS Holdings PLC maintained a strong balance sheet with over 80% of debt fixed or capped and an interest cost of 3.81%.
- The company is making progress on its Net Zero Carbon pathway, with a 4.3% decrease in like-for-like energy consumption.
- EPRA EPS decreased by 7.7% due to increasing financing costs, despite growth in net rents.
- Valuations fell by 4.1% in local currency, driven by yield expansion, with declines across the UK, Germany, and France.
- The total vacancy rate increased to 13.2% due to completed developments, despite a reduction in underlying vacancy.
- EPRA NTA was down 10.1%, impacted by valuation declines and a strengthening of sterling against the euro.
- The company faces higher financing costs, with interest costs increasing by 58 basis points compared to last year.
Good morning to everyone, and welcome to CLS Holdings plc half-year results 2024 presentation and Q&A. I'm Fredrik Widlund, Chief Executive. And next to me is our CFO, Andrew Kirkman. Today, we will present the results of the first six months of the year and give you an update on the portfolio and how we are delivering on what we set out to do at the beginning of the year. But first, let me start with an overview of the period.
We had strong leasing momentum in the first six months of the year. And excluding the large Essen lease in June 2023, we did 23% more leases by value and with new leases signed at 5.9% above ERVs. Our net rental income was up 5.9% as a result of higher income from indexation, stronger performance from our hotel and student operation, and the net retention of part of the deposit from the previously failed sale of Westminster Tower. Excluding Westminster Tower, net rental income was up 3.1%. Our underlying vacancy was down to 10.8% while the total vacancy increased to 13.2% from
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