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CLS Holdings plc

CLS Holdings Plc Delivered robust and disciplined growth

CLS Holdings Plc (LON:CLI) is a FTSE 250 property investment company with a £1.9bn portfolio in the UK, Germany and France offering geographical diversification with local presence and knowledge. For the year ended 31 December 2018, the Group has delivered the following results:

FINANCIAL HIGHLIGHTS

· EPRA net asset value: up 8.5% to 309.8 pence (31 December 2017: 285.6 pence1)

· Basic net asset value: up 9.3% to 275.5 pence (31 December 2017: 252.0 pence)

· EPRA earnings per share up 4.0% to 13.1 pence (2017: 12.6 pence1)

· Basic earnings per share of 30.5 pence (2017: 38.7 pence including profit on sale of Vauxhall Square)

· Profit before tax from continuing operations of £144.9 million (2017: £190.5 million, including profit on sale of Vauxhall Square)

· Contracted rents rose by 5.6% to £109.6 million (31 December 2017: £103.8 million)

· A proposed final dividend of 4.7 pence per share to be paid on 29 April 2019, contributing to a total of 6.9 pence per share for the year, an uplift of 8.7% (2017: 6.35 pence per share)

OPERATIONAL HIGHLIGHTS

Investment Property Portfolio:

· Rental income increased by 9.9% to £103.0 million (2017: £93.7 million)

· Vacancy rate reduced to 3.8% (31 December 2017: 5.8%)

· Completed 176 lease events securing rental income of £16.2 million

· 57% of contracted rent is from Governments and major corporations

· Valuation gains up 4.4% (3.7% in local currency), reflecting increases in all three countries

· Disposal proceeds of £48.5 million from 11 properties: 8 properties in the UK, 2 in Germany and 1 in France

· Acquired properties for £70.0 million in the UK and France with an average net initial yield of 6.4%

· Significant acquisitions made after period end of 9 Prescot Street, London E1 and Les Reflets, Lille for £64 million in aggregate

Developments:

· Completed the refurbishment of Ateliers Victoires in central Paris, and the development of 16 Tinworth Street, SE11 – both fully let

· Invested a total of £18 million in developments and refurbishments, part of a rolling programme to maintain and upgrade the portfolio

Financing:

· Balance sheet loan to value 36.7% (31 December 2017: 36.9%)

· Further reduced the weighted average cost of debt at 31 December 2018 to 2.43% (31 December 2017: 2.51%)

· Financed or refinanced £137.7 million of debt at 2.16%, including £92.0m fixed at 2.20%

· Repaid debt of £158.6 million with an average interest rate of 3.26%, including a £65 million 5.5% retail bond 17 months early

· The loan portfolio as at 31 December 2018 had 79% at fixed rates (31 December 2017: 74%)

GOVERNANCE

· Malcolm Cooper, who joined the Board in May 2009 and is Senior Independent Director and Chairman of the Audit Committee, has expressed a wish to stand down from the Board in 2019, but to continue in post to assist in the handover to his successor

· Mrs Anna Seeley, Non-Executive Vice Chairman, will become Chairman of the Nominations Committee with immediate effect; Mr Sten Mortstedt will remain as a member of the Nominations Committee

· As previously announced, John Whiteley, Chief Financial Officer, will retire from the Board on 30 June 2019

1 Restated to exclude discontinued operations of First Camp.

Henry Klotz, Executive Chairman of CLS, commented:

“I am delighted to report a robust set of results in 2018 which once again endorses CLS’s strategy of geographical diversity as a long-term investor in the three largest economies in Europe.

“We shall continue to follow our medium-term strategy and long-term vision. Our balance sheet is strong, our business well-placed, and we remain focused on continuing to deliver value to our shareholders.”