CLS Holdings net assets surge on London revaluation uplift

CLS Holdings impressed with its first annual results since being promoted to the FTSE 250 in December, with the European property investor showing 40% growth in net assets, strong cashflow and an new share buyback.

CLS, which trades mainly in office property in the UK, France, Germany and Sweden through its CLS Capital Partners operating subsidiary, lifted net assets per share 39.9% to a record 1,774.1p.

This was driven by a significant increase in values across the London portfolio, particularly in CLS's heartland in Vauxhall, with a £186.5m revaluation uplift helping the property portfolio grow by £177.2m, or 15.6%, to £1.31bn.

France and Germany contributed positively, but the vast majority of the increase came from the London portfolio, particularly from developments and long leases with secure government income.

CLS completed two important developments in central London, its first student and hotel development and newly created offices at Clifford's Inn, plus opportunistic acquisitions in Germany and London and selective disposals in London and Paris.

Executive chairman Sten Mortstedt said that with the group's strong emphasis on cash generation he was proud that the portfolio produced a net initial yield of 6.5% and was financed by debt with a weighted average cost of 3.64% - one of the lowest in the property sector.

Profit after tax rose 208.4% to £194.9m, with earnings per share up 16.9% to 77.4p.

Distributions to shareholders were up 6.4% in the year on a like-for-like basis, with a proposed £10.4m by way of tender offer buy-back, equivalent to 24.4p per share.

Mortstedt added: "Our strategy, to invest in attractive, high-yielding office properties in major cities, should continue to serve the group well in 2015."