Disposals help CLS to bumper first half

Property investment company CLS Holdings more than trebled first half pre-tax profits to £119.4m boosted by disposals.

Net assets per share were up 10.1% to 236.9p.

Disposals of £179.3m at a net initial yield of 2.1% generated pre-tax profits of £41.7m most of which came from the sale of the Vauxhall Square development in London.
CLS said £209.6m of acquisitions exchanged since the start of the calendar year at an net initial yield of 6.6%, of which £46.6m was completed by 30 June.

It added that a £133.7m million portfolio of 12 properties in Germany was due to complete in the third quarter, refocusing the portfolio.

The interim dividend was increased 6.6% to 2.05p a share.

“We have begun to reinvest the proceeds from the disposal of Vauxhall Square and other non-core assets, into well-located properties with good asset management opportunities, and we expect this process to continue, particularly in Germany and the South East of the UK, where we believe the better opportunities lie,” said executive chairman Henry Klotz.

“This reinvestment of funds into properties yielding well in excess of our cost of debt will enhance earnings and the prospects for dividend growth, and supports the group's ability to generate cash.”