CLS Holdings plc 2024 Full Year Results Announcement

THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT QUALIFIED OR MAY HAVE QUALIFIED AS INSIDE INFORMATION WITHIN THE MEANING OF ARTICLE 7(1) OF THE MARKET ABUSE REGULATION (EU) 596/2014 

CLS HOLDINGS PLC (“CLS”, the “Company” or the “Group”) ANNOUNCES ITS ANNUAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2024 

Delivering on our strategic priorities 

CLS’ vision is to be a leading pan-European office and commercial property specialist and a supportive, progressive and sustainably focused property investment company. We aim to deliver long-term value through the active management of high-yielding properties. 

For the year ended 31 December 2024, the Group has delivered the following results: 

¹A reconciliation of statutory to alternative performance measures is set out in Note 5 to the financial statements 

Fredrik Widlund, Chief Executive Officer of CLS, commented: 

“In 2024, CLS made significant progress in executing our strategic objectives, despite a demanding economic backdrop. Our strong leasing performance highlights the quality and resilience of our portfolio, while completed property sales and refinancing efforts have strengthened our balance sheet and positioned the business for future growth.  
 
“Looking ahead, we believe the commercial property market is at or near the bottom of the current cycle across the UK, Germany, and France. Over the past year, the real estate sector has entered a period of cautious optimism, with signs of gradual recovery and stabilising investment activity. While economic uncertainties remain, improving market fundamentals, such as strong leasing take-up, a limited pipeline of new office supply, and moderating interest rates, are creating new opportunities. With a 30-year track record of successfully navigating market cycles, CLS is well-placed to capitalise on this improving landscape. 
 
“By resetting our dividend and increasing our asset disposal programme, we will unlock funds to invest in capturing the upside potential embedded in our portfolio in the years ahead, while maintaining or reducing our LTV.” 
 
OPERATIONAL HIGHLIGHTS 
• Net rental income increased by 3.8% to £117.3 million on a like-for-like and constant currency basis (0.9% to £114.0 million (2023: £113.0 million) on a statutory basis) as a result of: new leases and renewals, other income including the buyer’s forfeited deposit on the failed sale of Westminster Tower, increased student and hotel revenue and indexation (54.4% of contracted rent is index-linked) 
• Strong leasing performance securing contracted annual rent of £16.6 million (2023: £15.5 million) with 112 new lettings and renewals in 2024 (2023: 130). The leases were 6.8% above 31 December 2023 estimated rental values 
• Underlying vacancy decreased by 0.4% to 10.6% but overall vacancy increased to 12.7% (2023: 11.0%), due to the completion of developments in the year, adding c.14,200 sqm (153,000 sq. ft) of high-quality and refurbished space to our portfolio 
• Rent collection has continued to be strong with 99% collected (2023: 99%) and 99% of Q1 2025 contracted rent due collected to date 
• High occupancy levels continue in our Student and Hotel assets in Vauxhall, with the student accommodation fully let for the current academic year and the hotel achieving record revenue  • Completed the disposal of five properties for a total of £66.1 million, which was in line with presale valuations 
• In 2025, we exchanged on the disposal of the student accommodation asset at Spring Mews, for £101.1 million, in-line with book value. CLS has also agreed the disposal of one property in Germany and one property in the UK for a combined £24.2 million, in-line with the latest valuation.  All three sales are targeted to complete in the first half of 2025 
• CLS intends to complete the remaining £78.6 million of its £270 million targeted sales program this year. In due course, CLS is also considering additional sales of up to £130 million to help fund the pipeline of refurbishment and redevelopment opportunities in the portfolio whilst maintaining or reducing LTV 
 
FINANCIAL HIGHLIGHTS 
• Portfolio valuation down 5.8% in local currency (UK -8.3%, Germany -3.5% and France -5.1%), with estimated rental value decline of -0.8% (1.8% growth excluding New Printing House Square which was impacted by a change in valuation assumption) as well as equivalent yield expansion of 24 basis points on a like-for-like basis. The pace of these valuation declines reduced in 2024, and in the second half of the year valuations were flat in Germany and France with a small decrease in the UK 
• EPRA NTA per share down 15.0% primarily as a result of property valuation falls. Total accounting return for the year of -11.9% (2023: -20.8%) 
• EPRA EPS down 10.7% to 9.2 pence per share due to higher financing costs and non-recoverable costs related to vacancy 
• Loss before tax of £97.4 million (2023: £263.4 million loss) from net valuation declines on investment properties of £127.7 million (2023: £302.7 million loss). Statutory EPS was a loss of 23.6p 
• A proposed final dividend of 2.68 pence per share, so as to retain cash to invest in the significant opportunities within our portfolio, resulting in a full-year dividend of 5.28 pence per share (2023: 7.95 pence per share).  Dividend cover of 1.73 times, in line with the Group’s revised dividend policy of the dividend being covered 1.50 to 3.00 times by EPRA earnings 
 
FINANCING HIGHLIGHTS 
• Balance sheet remains resilient with total liquidity of £120.5 million comprising cash and cash equivalents of £60.5 million, two undrawn revolving credit facilities totalling £50 million and a £10 million overdraft facility 
• Balance sheet loan-to-value at 50.7% (2023: 48.5%) reflecting valuation declines with net debt down by over £60 million to £938.7 million (2023: £1,000.0 million). Weighted average debt maturity of 3.2 years (2023: 3.5 years) with 80% at fixed rates and 4% subject to interest rate caps (2023: 76% fixed and 4% caps) 
• Weighted average cost of debt at 31 December 2024 up 16 basis points to 3.77% (2023: 3.61%) resulting from higher interest rates on completed refinancings and new debt, less a decrease in the reference rates on floating rate loans and repayments of higher-cost loans 
• Refinanced or extended nine loans totalling £154.5 million in 2024 at an average of 5.13%, including £137.7 million fixed at 4.99% 
• Significant progress made with the refinancing activity for 2025 such that of the £373.7 million expiring in 2025 (including £9.6 million of amortisation), progress has been made with £342.1 million: £42.1 million has been refinanced; £85.8 million that will be refinanced or repaid alongside the completion of the Spring Mews Student sale and £189.1 million has been credit approved or is well progressed 
 
ENVIRONMENTAL, SOCIAL AND Governance 
• Our sustainability progress was again recognised by maintaining our Gold award in the EPRA Sustainability Best Practices Recommendations as well as maintaining our GRESB award of 4 green stars 
• Progress continues with implementing our ambitious, but achievable, long-term sustainability targets including our 2030 Net Zero Carbon Pathway. We achieved landlord energy savings of 4.9% for the year on a like-for-like basis and maintained over 99% Group purchased electricity being carbon-free 
• In 2024, we spent a further £0.8 million towards our estimated total programme cost of £65 million such that we have now invested over £17 million since launching our Net Zero Carbon Pathway 
Over 50% of our UK properties are now rated A or B, and we are fully compliant with 2024 minimum EPC regulations in the UK 
 
 
– ends –
 
Results presentation live webcast is available to access here:
 
https://sparklive.lseg.com/CLSHoldings/events/5ba5e123-5ed2-42e9-8521-06b1e2f0cb75/cls-holdings-plc-fullyear-results-2024
 
 
 
For further information, please contact:
 
CLS Holdings plc                                                            
(LEI: 213800A357TKB2TD9U78)
www.clsholdings.com
Fredrik Widlund, Chief Executive Officer
Andrew Kirkman, Chief Financial Officer
+44 (0)20 7582 7766
 
Panmure Liberum
Jamie Richards
David Watkins
+44 (0)20 3100 2000
 
Berenberg
Matthew Armitt
Richard Bootle
+44 (0)20 3207 7800
 
Edelman Smithfield (Financial PR)
Alex Simmons +44 7970 174 353
Hastings Tarrant +44 7813 407 665
cls@edelmansmithfield.com