Interims show EPRA earnings up 92% yoy, with forex boosting property valuations by 5%
Companies: CLS Holdings plc
CLS Holdings (LSE:CLSH) reported a solid set of Interim results this morning with a EPRA* earnings up 92% YoY, the shareholder distribution increased +10%, valuation gains across European portfolio, and last but not least the £/€ FX move alone boosting property valuations +5%.
*EPRA earnings exclude changes in values of investment properties.
The shares are down 30% over the last year and down 12% since Brexit, having failed to rebound along with the rest of the market. It trades at a 41% discount to the NAV in June.
Panmure struck a positive tone in a report published this morning highlighting the FX gains and also clarifying the drop in operating profit was a result of differences in property revaluations, whereas EPRA earnings were up significantly:
"The reduction in Operating profit primarily reflects a profit on revaluation of investment properties at £2.4m... compared to £53.9m in H1 2015. EPRA earnings were up strongly at 80.5p/share (+92%)."
Analyst Barrie Cornes says the hit to CLS's share price since the EU referendum is excessive:
"The shares are trading at an unwarranted 41% discount to EPRA NAV of 2282p/share."
City Stockbroker Liberum said the results showed CLS performance was making gains in Europe, steady in the UK, and benefiting from favourable FX.
Henry Klotz, Executive Chairman of CLS, commented:
"This has been a strong six months for the Group, with robust earnings and NAV growth demonstrating the advantages of having a geographically diversified business, in-house management and low-cost debt finance. With 37% of the Group's business conducted in Germany and France, and with 52% of our UK income derived from central government departments, we are well positioned to address any challenges, including those which the "Brexit" process may present."