June Review and results

Transcription

1 June Review and results

2 Contents Business overview Financial highlights Debt structure Property statistics Operational highlights Share capital structure Pipeline 2005/6 2

3 Business overview Property Investment and pro-active management Operate in 3 main home markets UK, Sweden and Continental Europe with strong local management Proactive approach towards new markets Portfolio of 111 properties, value: 1.05 billion Robust, long-term growth Long-term lettings Strong covenants 3

4 New CEO Per Sjöberg will take over as CEO from 1 January 2006 Close knit management team: Sten Mortstedt Executive Chairman Per Sjöberg CEO Dan Bäverstam CFO Steven Board COO Tom Thomson to become non-executive Vice Chairman and remains on the board We remain firmly focused on property investments and growing value 4

5 5 Financial highlights

6 Impact of IFRS on opening balance sheet 01/01/2005 NET ASSETS UK GAAP 426 ADDITIONAL DEFERRED TAX - Revaluation of properties (112) - Capital allowances (10) - Financial instruments (2) (124) - Available losses 15 (109) Goodwill arising on business combinations 3 Goodwill released on consolidation of joint ventures 1 Fair value of equity investments 12 Fair value of other financial investments (2) 331 m 6

7 Key figures Property portfolio 1.05 bn 2.6% Adjusted NAV per share 551.2p 5.7% Retained profit 28.2m 105.8% Net rental income 34.0m 5.6% Net interest payable 18.6m 12.0% Profit before tax 38.8m 110.9% Underlying profit before tax 7.3m 8.8% Adjusted gearing 134.4% from 134.1% Interest cover x1.41 from x1.49 Cash at bank 54.2m 5.6% Proposed initial tender offer 7.0m 9.1% Balance sheet figures are compared to December 2004 Income statement figures are compared to June

8 Core profit Core Profit Jun-05 Jun-04 m m Underlying Profit Fair Value Gains Profit Before Tax Deduct m m 39.6m Profit Before Tax Core Profit Equity investment profit (1.6) (0.3) Cable company losses Sale of investment property ( -) (0.5)( ) m 20.1m Core profit Increase in core profit June 2005 June 2004 In percentage 97.0% 8

9 Adjusted NAV per share (Pence per Share) Increase in period Pence Underlying profit 8.9 Revaluation uplift 38.5 Current tax (0.6) Deferred tax Tender offer (12.2) Forex (22.0) IAS Total 16.6 '97 '98 '99 00 '01 '02 '03 04 June 05 UK GAAP Adjusted IFRS Effect of share buy back Note: Before FRS 19 adjustment 9

10 Cash movements June June m Total Cash: 54.2m m (13.7) (10.1) (17.0) (2.4) (27.4) -50 Operations Net new loans Sale of properties Refurbishments Property purchase Tender offer & share buybacks Net interest Other 10

11 Investment & gearing % June 2005 Property assets m Gearing % m 1,100 1, m Acquisitions Disposals (3) 700 Net 10 Capital Expenditure Forex Translation (43) 500 Revaluation Total '95 '96 '97 '98 '99 '00 '01 ' June 05 Note: Before FRS 19 adjustment 11

12 12 Debt structure

13 Financing June 2005 Net debt Total m % UK m % Sweden m % France m % Fixed rate loans (394.1) 60 (236.2) 72 (80.5) 50 (77.4) 46 Floating rate loans (260.5) 40 (90.9) 28 (79.5) 50 (90.1) 54 (654.6) (327.1) (160.0) (167.5) Bank 54.2 Net debt (600.4) Proportion of fixed / floating loans of total debt December 2004 Floating 38% June 2005 Floating 40% Fixed 62% Fixed 60% 13

14 Interest rates on debt June 2005 Total UK Sweden France Average interest rate on fixed rate debt 6.4% 7.1% 5.8% 4.6% Average interest rate on variable rate debt 4.4% 6.2% 3.5% 3.4% Overall average interest 5.6% 6.9% 4.6% 4.0% 14

15 15 Property statistics

16 Property statistics Assets: By location June 2005 Dec 2004 Dec 2003 m m m UK* Sweden France Total * UK includes proportional consolidation of joint venture properties amounting to 41 million Continental Europe (25.6%) Sweden (27.1%) UK (47.3%) 16

17 Property statistics Analysis: Period end revaluations UK Sweden Continental Europe Actuals m Change from December 2004 % Total

18 Property statistics Analysis: Rent June Contracted Refurbishments % m m Vacant Vacant by Total m area % m Vacant m Vacant area % UK Sweden Europe Group millions Refurbishments Vacant Contracted 20 0 UK Sweden Continental Europe Group 18

19 Property statistics Analysis: Lease length by rental income UK Sweden <5 years 5-10 yrs >10 yrs Under refurbishment Vacant 32% 5% 36% 13% 12% 3% 18% Total 27% Continental Europe 11% 54% 28% 4% 6% 20% 38% 51% 42% 19

20 Property statistics Analysis: Gross rent by sector Residential 6% Other 16% Charity 1% Government 35% Medium Companies 9% Major Companies 33% 20

21 21 Operational highlights

22 Operational highlights Highlights: UK UK portfolio, including JVs up from million to million, an increase of 3.5%. Spring Gardens 855 sq m (9,203 sq ft) infill under construction between units 3 and 4. NCIS will occupy it after completion before the end of the year. The letting was signed last year for per sq ft on a 20 year lease and the adjoining properties (comprising 44% of the estate) will all move to 20 years lease terms. Planning permission has been granted to build a 10,600 sq ft infill between units 5 and 6. NCIS has an option to call for the infill to be constructed. They will pay a rent of 32 per sq ft Planning consent granted for one final further infill of 1,558 sq m (16,770 sq ft) between units 1 and 2, terms being discussed with NCIS. Great West House undergoing a major refurbishment at a cost of 11.5 million to be completed in the first quarter of London Bridge Tower - marketing of the office element of the The Shard at London Bridge continues following the pre-letting of the hotel to Shangri-La at the start of the year. UK vacant space, excluding joint ventures, which are fully let, has decreased marginally from 7.2% to 6.9% since December. 22

23 Operational highlights Highlights: Sweden New leases signed over 9,380 sq m (100,968 sq ft) of previously vacant space at Solna Business Park. Refurbishment of Fräsaren 12 was completed successfully. ICA opened their supermarket on 25 May and moved into its new head office premises on 15 August. Projected refurbishment cost of the building is 39 million of which 31.3 million incurred at 30 June Acquisition of Yrket 3 at Solna Business Park for a total price of SEK 70 million ( 5.26 million) including costs. The property, which comprises a lettable area of 6,273 sq m (67,524 sq ft) generates rent of SEK 5.0 million ( 0.4 million) and is fully let. The property offers development opportunities. 23

24 Operational highlights Highlights: Continental Europe Le 41, with a lettable area of 6,026 sq m, became vacant during the year, increasing the vacancy rate to 9.3% (5.6% end of 2004). Acquisition of Rue Raspail,Ivry-sur-Seine, Paris at a cost of 8.1 million ( 11.6 million) at an initial yield of 8.7% generating a return on equity of 40 per cent. Three small properties with an area of 2,134 sq m (22,971 sq ft) were sold in the period generating a profit of 35,000. New lettings at 1/15 Eduard Belin in Rueil to BNP Paribas on a 6/9 year basis 9,468 of sq m (101,915 sq ft). The premises are currently let, the existing tenant will vacate by the end of the year, the new lease will take effect as of 1 January

25 Operational highlights Investment division During the year the shares in Sit-up were sold at a profit of 1.6 million. The investment division has been further formalised through the establishment of CLS Capital Partners Ltd as a holding company for all CLS venture capital investments. We have recruited a Board for CLS Capital Partners, the membership of which includes two non-executive directors who have either held senior positions in venture capital organisations or at Board level within successful blue chip companies. A number of other unlisted investments held have the potential to add value in the coming months through stock market listings or trade sales. Equity investments held: 19.1 million representing 1.6% of gross assets. 25

26 26 Share capital structure

27 CLS shares Outstanding shares (millions) Shares in issue for NAV purposes Tender offer (2.1) (4.1) Shares issued for options exercised Closing shares for NAV purposes Shares held in Treasury (by the company) Closing shares in issue

28 CLS share price graph CLS share price and NAV per share CAGR: (Dec-94 Sep-05) CLS share price reached all time high on 23rd of August 2005 closing at 487p NAV/ Share Share Price 14.3% 16.0% 400 Pence Dec-94 Jun-95 Dec-95 Jun-96 Dec-96 Jun-97 Dec-97 Jun-98 Dec-98 Jun-99 Dec-99 Jun-00 Dec-00 Jun-01 Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 28

29 May-04 Nov-04 May-05 Nov-03 Total shareholders return CLS shareholders return vs FTSE All share and FTSE Real estate indexes Rebased May-94 Nov-94 May-95 Nov-95 May-96 Nov-96 May-97 Nov-97 May-98 Nov-98 May-99 Nov-99 May-00 Nov-00 May-01 Nov-01 May-02 Nov-02 May CLS FTSE Real Estate FTSE All Shares

30 CLS major shareholders Rank Fund Manager % 1 Directors ABP Investments (Stichting Pensionenfonds ABP) Merrill Lynch Investment Management JP Morgan Fleming Asset Management JO Hambro Capital Management (Trident European Hedge Fund) Legal and General Investment Management F&C Asset Management Aberdeen Asset Management (Aberdeen Property Share Unit Trust) UBS Global Asset Management (UBS Managed Fund) Fidelity Investments

31 Summary Return to shareholders since flotation 227% higher than FTSE All Share Index Sustained asset growth Growth in net rental income Continuing strong long-term cash flow Long leases and secure tenants Strong management Clear vision and strategy 31