- Part 2: For the preceeding part double click ID
ASSETS
Non-current assets
Investment property 767,070 876,014 798,761
Property, plant and equipment 2,559 3,607 2,756
Intangible assets 1,055 12,297 1,088
Investment in associates 36,050 42,416 39,327
Corporate bonds 31,035 - 10,784
Other investments 3,541 6,430 3,531
Derivative financial instruments 58 2,699 371
Deferred income tax 14,393 1,708 12,427
Trade and other receivables 45 47 45
855,806 945,218 869,090
Current assets
Trade and other receivables 11,711 11,196 10,597
Derivative financial instruments - 2,796 -
Cash and cash equivalents 105,195 176,917 195,296
116,906 190,909 205,893
Total assets 972,712 1,136,127 1,074,983
LIABILITIES
Non- current liabilities
Deferred income tax 70,099 94,600 73,427
Borrowings, including finance leases 489,754 560,951 529,048
559,853 655,551 602,475
Current liabilities
Trade and other payables 27,523 36,190 32,853
Current income tax 6,203 3,799 5,937
Derivative financial instruments 17,115 - 22,575
Borrowings, including finance leases 72,347 32,229 72,558
123,188 72,218 133,923
Total liabilities 683,041 727,769 736,398
NET ASSETS 289,671 408,358 338,585
EQUITY
Capital and reserves attributable to the
Company's equity holders
Share capital 13,256 18,142 16,686
Share premium reserve 70,515 70,515 70,515
Other reserves 92,471 74,455 100,352
Retained earnings 114,570 246,445 152,215
290,813 409,557 339,768
Minority interest (1,142) (1,199) (1,183)
TOTAL EQUITY 289,671 408,358 338,585
Un-audited condensed consolidated statement of changes in equity
Attributable to equity holders
of the Company
Share Share Other Retained Minority Total
capital premium reserves earnings Interest
£000 £000 £000 £000 £000 £000
Balance at 1 January 2009 16,686 70,515 100,352 152,215 (1,183) 338,585
Arising in the period:-
Fair value gains/(losses)
- available-for-sale - - 6,028 - - 6,028
financial assets
- cash flow hedges - - (14) - - (14)
Currency translation - - (16,356) - - (16,356)
differences on foreign
currency net investments
Purchase of own shares (3,430) - 3,430 (48,024) - (48,024)
Change in associates - - (968) - - (968)
reserves
Change in minority - - - - 41 41
interest
Net amounts recognised (3,430) - (7,880) (48,024) 41 (59,293)
directly in equity
Profit for the period - - - 10,379 - 10,379
Total (decrease)/ increase (3,430) - (7,880) (37,645) 41 (48,914)
in equity for the period
Balance at 30 June 2009 13,256 70,515 92,472 114,570 (1,142) 289,671
Attributable to equity
holders of the Company
Share Share Other Retained Minority Total
capital premium reserves earnings Interest
£000 £000 £000 £000 £000 £000
Balance at 1 January 2008 18,712 69,824 61,198 254,432 (1,074) 403,092
Arising in the period:-
Fair value gains/(losses)
- available-for-sale - - (2,024) - - (2,024)
financial assets
- cash flow hedges - - 84 - - 84
Currency translation - - 15,190 - 15,190
differences on foreign -
currency net investments
Expenses of share issue / - - - (85) - (85)
purchase of own shares
Purchase of own shares (570) - 570 (9,048) - (9,048)
Exercise share options - 691 - - - 691
Change in associates - - (563) - - (563)
reserves
Change in minority interest - - - - (55) (55)
Net (expense)/income (570) 691 13,257 (9,133) (55) 4,190
recognised directly in
equity
Profit for the period - - - 1,146 (70) 1,076
Total (decrease)/increase in (570) 691 13,257 (7,987) (125) 5,266
equity for the period
Balance at 30 June 2008 18,142 70,515 74,455 246,445 (1,199) 408,358
Condensed consolidated cash flow statement
Forthe six months ended 30 June 2009
30-Jun-09 30-Jun-08 31-Dec-08
£000 £000 £000
Cash flows from operating activities (un-audited) (un-audited) (audited)
Cash generated from operations 20,869 21,489 49,918
Interest paid (15,709) (22,440) (41,637)
Income tax paid (1,894) (912) (720)
Net cash inflow/(outflow) from operating 3,266 (1,863) 7,561
activities
Cash flows from investing activities
Capital expenditure on investment property (15,368) (6,763) (18,947)
Proceeds from sale of investment property - 110,608 127,648
Exceptional finance costs on disposal in - (265) -
investment properties
Purchase of property, plant and equipment (34) (473) (190)
Proceeds from sale of property, plant and - 290 159
equipment
Purchase of corporate bonds (20,089) - (10,662)
Proceeds from disposal of corporate bonds 3,420 - -
Purchase of equity investments - (2,273) (3,322)
Proceeds from disposal of equity - 424 1,194
investments
Purchase of interests in joint venture/ (1,244) - (828)
associate net of cash acquired
Proceeds from disposal of interests in - 28,107 28,107
joint venture/associate net of cash sold
Proceeds on disposal of subsidiary - 34,857 49,164
undertakings net of cash sold
(Costs)/proceeds from foreign exchange (1,593) 1,051 2,376
transactions
Dividend received from associate 1,451 1,479 1,460
undertaking
Amount expended in relation to corporate (368) - (3,002)
disposals in prior periods
Interest received 3,012 4,048 8,680
Net cash (outflow)/inflow from investing (30,813) 171,090 181,837
activities
Cash flows from financing activities
Purchase of own shares (48,024) (9,134) (24,040)
Proceeds from exercise of options - 691 691
Proceeds from new loans 13,966 317 21,334
Issue costs of new loans (63) (651) (2,232)
Amotisation and repayment of loans (17,424) (108,039) (122,793)
Sale/(purchase) of financial instruments - (111) (70)
Non-recurring restructuring costs - (528) (1,288)
Net cash outflow from financing activities (51,545) (117,455) (128,398)
Net (decrease)/increase in cash and cash (79,092) 51,772 61,000
equivalents
Foreign exchange (loss)/gain (11,009) 3,115 12,266
Cash and cash equivalents at beginning of 195,296 122,030 122,030
period
Cash and cash equivalents at end of period 105,195 176,917 195,296
Cash generated from operations
30-Jun-09 30-Jun-08 31-Dec-08
£000 £000 £000
Operating profit/(loss) from continuing 27,267 (514) (90,332)
operations
Loss on discontinued operations
Adjustments for:
- revaluation (gain)/loss on investment (5,158) 26,618 103,393
properties
- depreciation and amortisation 263 790 1,428
- profit on disposal of investment properties - (6,399) (7,009)
- loss on disposal of subsidiaries 21 5,923 16,161
- loss on disposal/write-down of equity 649 400 4,084
investments
- impairment of goodwill - - 21,985
Changes in working capital:
Increase in debtors (602) (6,016) (4,840)
(Decrease) /increase in creditors (1,571) 687 5,048
Cash generated from operations 20,869 21,489 49,918
Note 1 - Basis of Preparation
The annual financial statements of CLS Holdings plc are prepared in accordance
with IFRS as adopted by the European Union. The condensed set of financial
statements included in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34 `Interim Financial
Reporting', as adopted by the European Union.
The same accounting policies, presentation and methods of computation are
followed in the condensed financial statements as were applied in the Group's
latest annual audited financial statements, except for the IAS1 "Presentation
of Financial Statements" (revised 2007). The Group has adopted IFRS 8
"Operating Segments" but the Standard has no significant impact on these
financial statements.
The information for the year ended 31 December 2008 does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. A copy
of the statutory accounts for that year has been delivered to the Registrar of
Companies. The auditors' report on those accounts was not qualified, did not
include a reference to any matters to which the auditors drew attention by way
of emphasis without qualifying the report and did not contain statements under
section 498(2) or (3) of the Companies Act 2006.
This half-yearly financial report incorporates the financial review section.
Note 2 - Going concern
The Directors regularly stress-test the business model to ensure that the Group
has adequate working capital and have reviewed the current and projected
financial position of the Group, taking into account the repayment profile of
the Group's loan portfolio, and making reasonable assumptions about future
trading performance. After making detailed enquiries, and based upon current
information available to them, the Directors have a reasonable expectation that
the Group has adequate resources to continue in operational existence for the
foreseeable future. Accordingly, they continue to adopt the going concern basis
in preparing the half-yearly financial report.
REPORT ON REVIEW OF CONDENSED SET OF FINANCIAL STATEMENTS OF CLS HOLDINGS PLC
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30 June
2009 which comprises the condensed consolidated income statement, the condensed
consolidated balance sheet, the condensed consolidated statement of
comprehensive income, the condensed consolidated statement of changes in
equity, the condensed consolidated cash flow statement and related notes 1 and
2. We have read the other information contained in the half-yearly financial
report and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set of financial
statements.
This report is made solely to the company in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim
Financial Information Performed by the Independent Auditor of the Entity"
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the company, for our review work, for this report, or for the conclusions
we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for preparing the
half-yearly financial report in accordance with the Disclosure and Transparency
Rules of the United Kingdom's Financial Services Authority.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34 `Interim Financial Reporting', as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2009 is not prepared, in all
material respects, in accordance with International Accounting Standard 34 as
adopted by the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
Deloitte LLP
Chartered Accountants and Statutory Auditors
25 August 2009
London, UK
GLOSSARY OF TERMS
Contracted rent
Contracted rent is defined as gross annualised rent supported by a signed
contract.
Net rent
Net rent is defined as contracted rent less net service charge costs.
Yield
Yields on net rents have been calculated by dividing the net rent by the book
value.
Estimated rental value (ERV)
The ERV of lettable space as determined biannually by the Company's valuers.
This may be different from the rent currently
being paid.
Underlying profit
Underlying profit is the profit before tax excluding net gains/losses from fair
value adjustment on investment properties, profit/losses on disposal of
investment properties, subsidiaries and joint ventures, non-recurring items and
impairment charges.
Gaap measures
Earnings per share = Profit after tax attributable to ordinary
(EPS) shareholders
Weighted average number of ordinary shares in free
issue
Non-Gaap measures
Adjusted net assets = Net assets excluding deferred tax liabilities and
deferred tax assets
Statutory net asset = Net assets
value (NAV) per share
Number of ordinary shares in free issue
Adjusted NAV per share = Net assets + deferred tax liabilities - deferred tax
assets
Number of ordinary shares in free issue
Statutory Gearing = Total gross borrowings - cash
Net assets
Adjusted Gearing = Total gross borrowings - cash
Net assets + deferred tax liabilities - deferred tax
assets
Statutory Solidity = Total equity
Total assets
Adjusted Solidity = Total equity+ deferred tax liabilities - deferred
tax assets
Total assets - deferred tax assets
Adjusted EPS = Profit after tax attributable to ordinary
shareholders excluding deferred tax and fair value
gains on investment properties
Weighted average number of ordinary shares in free
issue
Interest cover = EBIT - net gains from fair value adjustments in
investment properties - impairment loss
Net finance costs excluding change in fair value of
financial instruments
Reconciliation of condensed consolidated income statement to non-statutory
income statement
2009 2008
£m £m
Rental income 29.1 35.2
Service charge income 4.3 6.1
Income from non-property activities 1.8 1.7
Revenue 35.2 43.0
Rental income 29.1 35.2
Service charge income 4.3 6.1
Service charge expense (5.6) (7.2)
Net rental income 27.8 34.1
Income from non-property activities 1.8 1.7
Other operating income/(expense) 0.2 0.8
Other income 2.0 2.5
Admin expenses (5.8) (9.4)
Net property expenses (1.8) (1.6)
Operating expenses (7.6) (11.0)
Operating profit 22.2 25.6
(before gains on investment properties)
Finance income 3.0 5.4
Finance costs (17.5) (17.6)
Add back : Non-recurring finance costs on - 0.3
sales - shown below
Add back : Other fair value gains - shown (5.4) (6.2)
below
Add back : foreign exchange losses/(gains) - 10.0 (1.4)
shown below
Net finance expense (9.9) (19.5)
Share of profit of associates 0.4 (0.1)
Less : negative goodwill on acquisitions of (2.8) -
assocs
Net share of loss of associates (2.4) (0.1)
Other fair value gains - shown above 5.4 6.2
Underlying profit/(loss) 15.3 12.2
Fair value gains on investment properties 5.1 (26.6)
Foreign exchange (losses)/gains (10.0) 1.4
Less : negative goodwill on acquisitions of 2.8 -
assocs
Gain on sale of investment properties - 0.5
Non-recurring finance costs on sales - (0.3)
Other non-recurring costs - (1.8)
Impairment of intangibles - (10.0)
Profit before tax 13.2 (24.6)
Directors, Officers and Advisers
Directors
Sten A Mortstedt (Executive Chairman)
Henry Klotz (Chief Executive Officer)
Thomas J Thomson BA (Non-Executive Vice Chairman)
Malcolm Cooper ^ # (Non-Executive Director)
Joseph A Crawley * (Non-Executive Director)
Christopher P Jarvis ^ (Non-Executive Director)
H O Thomas Lundqvist * ^ (Non-Executive Director)
Bengt F Mörtstedt Juris Cand (Non-Executive Director)
* = member of Remuneration Committee
^ = member of Audit Committee
# = senior independent director
Company Secretary
Thomas J Thomson BA
Registered Office
86 Bondway
London SW8 1SF
Registered Number
2714781
Registered Auditors
Deloitte LLP
Chartered Accountants
London
Registrars and Transfer Office
Computershare Investor Services Plc
P O Box 82
The Pavillions,
Bridgewater Road
Bristol BS99 7NH
Shareholder helpline: 0870 889 3286
Clearing Bank
Royal Bank of Scotland Plc
24 Grosvenor Place
London SW1X 7HP
Financial Advisers and Stockbrokers
NCB Corporate Finance
51 Moorgate
London EC2R 6BH
CLS Holdings plc on line:
www.clsholdings.com
E-mail: enquiries@clsholdings.com
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