CLS (CLI) H2 2025 earnings summary

Executive summary

• Achieved highest secured rent in seven years, but vacancy rose to 14.5% due to planned expiries and German insolvencies.

• Completed £144 million of property disposals, reducing net debt by nearly £90 million and improving LTV to 50%.

• All 2025 refinancing completed or repaid, maintaining average cost of funds at 3.8%.

• Focused on cost reductions, asset management, and targeted CapEx, with in-house management and AI driving efficiency.

• Sustainability initiatives included 30 energy efficiency projects and a 5.8% reduction in landlord energy use.

Financial highlights

• EPRA earnings per share fell 17% to 7.6p, reflecting disposals and absence of prior year one-off income.

• EPRA NTA declined 7% to 200.7p, mainly due to portfolio value decline.

• Net rental income fell 11.1% to £101.3m, with like-for-like decline of 6.3% from higher vacancy and lease expiries.

• Dividend per share reduced to 4.0p, 1.9x covered by EPRA earnings.

• Portfolio valuation fell 3.8%, with UK down 4.6% (excluding Spring Gardens, down 1.6%).

Outlook and guidance

• Targeting £100–150 million of property disposals in 2026 to further reduce LTV.

• Vacancy expected to start reducing in 2026 due to increased leasing activity and fewer expiries.

• CapEx to be lower going forward, with focus on pre-lets and short paybacks.

• Earnings in 2026 will be impacted by disposals, lease expiries, and vacancy.

• Market fundamentals seen as more supportive, but geopolitical risks persist.