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And using conventional performance metrics, he has been doing a pretty good job. Net assets last year rose 9.9 per cent to 1,268p a share last year using the European Public Real Estate Association (EPRA) valuation method, and headline pre-tax profits jumped 27.3 per cent to £71.4m. Even more impressive was the rise in contracted gross rental income, up 25.3 per cent to £85.6m. The company does not pay dividends in the usual way, but operates a tender offer buy-back which last year worked out at an equivalent dividend of 22.65p a share. What’s more, total shareholder return (share price movements plus capital returns) last year was 80.3 per cent and the group has achieved compound growth of 27.2 per cent per year over the last six years - the highest return by any UK listed property company
CLS Holdings (CLI) is taking full advantage of the renaissance in the UK property market, and as landlord to a portfolio of London suburban offices, its performance has been impressive. But while the shares have more than doubled in the last two years, they still trade at an 8 per cent discount to forecast net asset value for the current year, widening to 17 per cent for 2015, which gives it one of the lowest ratings of all the quoted real estate companies. Given the group’s track record this is remarkable, and it may be that institutional interest has been blunted by the fact that executive chairman Sten Mortstedt and his wife own nearly 60 per cent of the shares. For private investors, this should not be seen as such a big issue. Besides, with with such a chunk of the equity, Mr Mortstedt has a strong interest in preserving the value of the shares.
Ceo leaving , price unch
Yeah big Palace fan. Who's your team? I only noticed CLI due to the amount of director buys on investegate. Looked into it further, only bad point is the gearing is high, but guess that is the nature of the beast for a company in property / rent.
never heard of it...what do they do? and are u Crystal Palace Footie Club?!
Surprised this board is so quiet. Any other holders out there? I like the fact S Mortstedt keeps buying, shows a lot of confidence for things to come.
CLS Holdings (CLI) Director name: Mr Richard Tice Amount purchased: 4,459 @ 669.00p Value: £29,831
CLS Holdings (CLI) Director name: Mr Sten A Mortstedt Amount purchased: 10,000 @ 665.00p Value: £66,500
CLS Holdings Buy 06-Nov-12 £70,500.00 Richard Tice 10,000 @ 705.00p
CLS Holdings (CLI) Director name: Mr Sten A Mortstedt Amount purchased: 15,000 @ 697.50p Value: £104,625
Top Director Buys CLS Holdings (CLI) Director name: Mr Sten A Mortstedt Amount purchased: 17,228 @ 705.50p Value: £121,544
Sten Mortstedt, the Executive Chairman of CLS Holdings, a property investment company, has sold by tender 368,371 shares in the company on behalf of himself and his family. The shares were tendered for up to and including the pro rata entitlement of one ordinary share for every 76 ordinary shares at 805p per share. The family pocketed a totalled £2.97m. Following the sale the Mortstedt family holds 23.1m shares. Over the past year the company's share price has risen 24%, equal to 139p. In its most recent set of results, the firm said net assets per share in the six months to June 30th rose 5.6% to 1037.7p from 983.1p at the end of 2011. The aggregate value of net assets rose 3.1% to £458.5m from the year-end figure of £444.9m, as the company enjoyed a boost from receiving planning permission for its Spring Mews mixed-use development and completed the second of its German pre-lets. Group revenue in the first half of the year edged up to £40.0m from £39.9m the year before, but profit before tax fell to £27.3m from £37.1m, in part because the gain on the revaluation if investment properties was lower this time round at £10.1m versus £14.1m last year.
CLS Holdings (CLI) Director name: Mr Sten A Mortstedt Amount purchased: 2,632 @ 721.00p Value: £18,977
Been looking at this.They seem to have fixed the 5.5% about right . Presumably CLS are undertaking this exercise as they having difficulty in raising development finance for their proposed student accomodation development. which would push their loan to value stays up affecting their overall status Cant find any info when the leases on the various properties on the CLS portfolio start end .As we all know once theswe leases fall below 10 years there is a seismic shift downwards in open market valuation
Share tip summary Some investors may want to link it to an investment in CLS's ordinary shares on which no dividends are paid, thus generating potential to combine income and capital growth.
The company's existing capital structure is heavily weighted towards bank debt, with a syndicate of 19 banks holding the debt, along with the Swedish retail bond. The company's average interest rate is 3.74 per cent and payments are covered 3.4 times by earnings. The rent roll on £900m of property is £66.5m. In relation to the underlying assets, the bond will count as senior debt, so it ranks ahead of equity but is unsecured against the company's buildings, which are held as security for bank debt. CLS's bosses have shaped the UK bond as a "mirror image" of the Swedish retail bond. That indicated that the issue price and coupon would initially generate a yield between 5.5 per cent and 6 per cent. But the UK bond differs from its Swedish counterpart in one significant respect - its coupon is fixed (at 5.5 per cent, paid in semi-annual amounts), whereas the Swedish bond will most likely fall. That won't matter for investors who plan to hold the asset until maturity. Their risks will be those of exposure to inflation, default by the borrower and, in effect, exposure to the euro and Swedish krona via CLS's property assets. However, investors will be able to take the income tax-free because the bond will be eligible for inclusion in an individual savings account (subject, of course, to the usual Isa constraints).
CLS is the latest property company after Primary Health Properties to try to convince retail investors to buy a single company bond and Investors Chronicle got first sight of the details at the bond's launch. For income seekers, it looks promising - with a yield at launch of 5.5 per cent. The company owns high-yielding commercial property in the UK, Germany, Sweden and France and its bosses are looking to diversify its funding. Given the demand for any sort of yield, it should attract interest for a bond sale mooted at the £50m mark. The bookbuilding process means the company is cagey about announcing the bond's coupon (the dividend). However, it was never likely to stray far from the yield of a bond that CLS issued in Sweden. The basic approach to assessing the bond is similar to assessing the value of CLS's shares, which we suggested buying at 670p (22 June 2012). The difference is that bondholders' returns are defined upfront. So the question is whether CLS can generate enough cash to pay the coupon and eventually to pay back the debt. For starters, the balance sheet must be in decent shape. Currently, CLS's net debt is quite high, but its loan-to-value ratio stands at just 56 per cent; shareholders' funds are close to £380m and cash resources come in at £123m. That equates to sound financing, which partly stems from the decision taken in 2006 to sell properties amid signs of the market overheating. Consequently, CLS avoided the worst of the downturn by selling 40 per cent of its portfolio at peak prices.
N+1 Brewin maintained its "buy" rating for CLS Holdings (CLI) with an increased target price of 850p, from 825p. The property investment company reported year-on-year NAV growth of 5.6% to 1,038p and the broker noted that the firm is well financed, with liquid resources of 123 million pounds. Brewin added that the group achieved a record occupancy rate of 96.5%, despite the economic downturn, with interest payments covered 3.4 times. The shares inched up by 4.5p to 725p.
These developments should generate big profits in time. But the main reason for me buying CLS's shares remains its well-managed, high-yielding office portfolio, which should continue to churn out cash to fund growing returns to shareholders but as always do your own research gl.........
The company also seems to be trading remarkably well. Its vacancy rate is 3.9 per cent, the lowest in a decade. About 65 per cent of its rental income is subject to indexation, guaranteeing growth even in a flat lettings market, and 40 per cent of it is paid by the public sector. The company is wary of developments - perhaps after its harrowing experience with the Shard (after years of planning, it sold out when the project was refused debt in late 2007). But it is ramping up activity in Vauxhall, south London, where it is based, in anticipation of the area's gradual regeneration around the new US embassy. Last month it received planning consent for a mixed-use scheme with nearly 400 student rooms.
That dictum still holds. CLS sold out of its central London assets in 2008 and now focuses on high-yielding offices in the suburbs. These account for 43 per cent of the portfolio; offices in France (27 per cent), Germany (22 per cent) and Sweden (6 per cent) make up the balance. This policy takes full advantage of the unusually wide gap between rental yields and the cost of debt, one of the most compelling quirks of the current property market. At the time of the last valuation in December, CLS's basic rental yield was 7 per cent, while Mr Mortstedt announced in May that the company's cost of debt had fallen to 3.8 per cent after various refinancing deals. Despite carrying a lot of debt, the company has excellent access to capital. This has made CLS a successful cash generator. Strip out non-cash items, such as property revaluations, and earnings per share increased from 28p in 2009 to 65p last year. Distributions to shareholders have risen accordingly. Mr Mortstedt does not pay dividends, but buys back shares every six months via a tender. This is sensible while CLS's shares trade so far below their asset value. CLS paid out £12.3m last year, equivalent to a dividend yield of 4.6 per cent. That was well under half recurring earnings of £29.7m, so there's scope for buy-backs to grow
That's one reason why it has outperformed its peers, but not the only one. Mr Mortstedt also sold about a third of the portfolio - about £400m of assets, including a 33 per cent share of the soon-to-be-built Shard skyscraper at London Bridge - in the first half of 2008. He didn't quite predict the property crash but, unlike other property executives, he reacted speedily when it hit. Also, he never bought prime property at bubbly valuations.
Given its long-term track record, it's amazing that CLS isn't better known. Its shares have the best total return of any listed property company over the past four years - 65 per cent in total - and there's no reason why that can't continue. Yet they also trade at 36 per cent below forecast net asset value (see table). One reason for that discount is that it's difficult to deal in them: over 60 per cent are owned by executive chairman Sten Mortstedt and his wife. That keeps institutions away, but it's less of a barrier for private investors. And the quid pro quo of being a minority shareholder in the family investment vehicle of a Swedish property baron is that he has a strong interest in preserving the value of the shares. Maybe that's why CLS was one of the few property companies that did not issue equity at a steep discount in 2009.
CLS Holdings Buy 09-Mar-12 £187,650.00 Sten A Mortstedt 30,000 @ 625.50p
N+1 Brewin maintained its "buy" rating for CLS Holdings (CLI), with an 835p target price. The property investor continues to impress the broker, with a 9% rise in underlying NAV year-on-year to 1,037p and lower vacancy rates of 3.9%. Brewin added that the firm has 140 million pounds of liquid assets which will allow it to pounce on attractive targets. Meanwhile, as a result of the large fall in long-term interest rates the broker expects the firm to achieve interest savings of 10.7 million pounds over the next three years.