CLS (CLI) H2 2023 earnings summary

Executive summary

• Leasing momentum strengthened: 130 deals secured £15.5m annual rent, 89% more leases by value YoY; new leases were 6.9% above ERV.

• Net rental income rose 4.8% to £113.0m; portfolio valuation fell 12.5% in local currency, driven by yield expansion.

• EPRA EPS was 10.3p, EPRA NTA 253.0p per share, and the proposed full-year dividend was maintained at 7.95p.

Financial highlights

• Net rental income increased from £107.8m in FY2022 to £113.0m in FY2023, supported by indexation and acquisitions; disposals reduced income by £2.0m.

• EPRA EPS declined 11.2% to 10.3p, mainly reflecting £2.5m per-share impact from higher net finance expenses.

• Property portfolio value fell to £2.1bn from £2.4bn; year-end portfolio movement included £299.5m of revaluation decreases.

• EPRA NTA fell 23.2% to 253.0p per share, including a 75.6p-per-share property valuation reduction.

Outlook and guidance

• 2024 focus is reducing vacancy; net rental growth is expected to continue, supported by indexation and leasing completed refurbishments.

• More than 20% rental growth is embedded in the portfolio; potential ERV is shown at approximately £141m post-2026, including development opportunities.

• Approximately £270m of disposals is targeted in 2024; capex is expected to reduce to approximately £30m annually going forward.

• Cost of debt is expected to increase by 10–20 bps based on current swap curves; all remaining 2024 debt maturities are targeted for refinancing.