CLS (CLI) H1 2025 earnings summary

Executive summary

• Strategic focus on reducing vacancy, executing £400m property sales to lower LTV, completing 2025 refinancings, and investing in higher-quality, faster-growing properties for future growth.

• Over 50% of targeted property sales completed, with £143m–£143.4m sold in H1 2025 and £190m in progress to further reduce LTV and fund investments.

• Strong leasing momentum with £7.5m annual rents signed, up 17% year-over-year, but vacancy increased to 15.1% due to planned expiries for redevelopment; expected to decline in H2.

• EPS down 16.7% to 4.0p per share; interim dividend halved to 1.3p per share, aligning with new policy to retain cash for investment.

• Loss after tax for H1 2025 was £24.4m, a significant improvement from £61.1m loss in H1 2024, mainly due to lower revaluation losses.

Financial highlights

• EPRA NTA per share at 209.5p, down 2.6% from December 2024, mainly due to property valuation declines; total portfolio value at £1.75bn.

• Net rental income decreased by £5.6m to £53.3m, mainly from lease expiries and disposals, partially offset by new leases and indexation.

• LTV reduced by 1.5% to 49.2%; cost of debt decreased to 3.75%.

• Net debt reduced by £80m since year-end; cash and undrawn facilities stable at over £100m.

• Net initial yield 4.9%, equivalent yield 5.4%, both above cost of debt.

Outlook and guidance

• Vacancy expected to reduce in H2 2025 and into 2026 as leasing momentum continues.

• LTV forecasted to reach 35%-45% target range by year-end as further disposals complete.

• Over 90% of 2025 debt maturities refinanced, repaid, or credit approved, with a more evenly spread debt maturity profile.

• Market fundamentals and sentiment improving, but recovery expected to be gradual; focus on unlocking value through reducing vacancy, indexation-driven rental growth, and development opportunities.