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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Cls Holdings Plc | CLI | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| -1.10 | -1.30% | 83.60 | 14:25:17 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 86.50 | 83.60 | 86.50 | 84.70 |
| Industry Sector |
|---|
| REAL ESTATE INVESTMENT & SERVICES |
| Top Posts |
|---|
Posted at 07/11/2024 17:00 by skyship Back down to 90p! NAV discount at 60%. Yield up to 8.8%.Time to change the way we look at Reits Changing market conditions call for changing valuation methodologies IC - Published on November 6, 2024 by Natasha Voase The property sector has always liked to do things differently. While other sectors debate price/earnings ratios and enterprise value to Ebitda, real estate investors wax lyrical about discounts to net asset value (NAV) and loan-to-value (LTV). This approach made sense in the old world of declining yields and interest rates, says Tim Leckie, an analyst at Panmure Liberum. Falling rates meant shifts in portfolio valuation were a large component of returns. But now that rates are higher and valuations unsteady, Leckie says the focus must be on cash flow generation. Reits need to be able to generate enough cash to pay down increased interest costs and grow. For the low-yielding, low-risk portfolios of times gone by, this is a problem. Yet for Reits, just as when it comes to valuing companies more generally, no valuation metric should be taken in isolation. Harm Meijer, managing director and co-founder of real estate fund manager ICAMAP, says that this is why investors need to look at multiple valuation metrics, including net debt to Ebitda, funds from operations (FFO) yields and price/earnings ratios. "Every ratio metric has its drawbacks," Meijer says. "Because if [for example] you only look at the cash flow... the problem is you can really increase your FFO by just taking on more leverage, by buying assets." Analysts at Panmure Liberum have created what they call the Medium Term Sustainable Earnings (MTSE) metric, a seven-year figure encapsulating reversionary potential, administration costs and refinancing drag. The MTSE total return blends yield plus growth to give investors an idea of what their medium-term cash earnings per share might be. The chart below shows the result of those calculations, albeit outliers such as Grainger's estimated growth rate should be treated with caution. With that in mind, the stocks that stand out: Sirius Real Estate (SRE), Urban Logistics Reit (SHED), Segro (SGRO), CLS Holdings (CLI) and Life Science Reit (LABS). Analysing Reits through the lens of cash flow throws up some new names that look mispriced. Discounts to NAV alone might encourage investors to buy giants such as British Land (BLND) and Land Securities (LAND), given their discounts sit at around 30 per cent. However, from a forward-looking price/earnings perspective, they trade at 13.6 and 12.1 times, respectively, implying earnings per share of 41p and 71p. Even if investors favour Epra EPS of 42p and 50p, respectively, these valuations look fair or potentially a little high. |
Posted at 07/8/2024 10:02 by my retirement fund Yes, it's been a value trap, but with the board seeing a clearer bottoming out of valuations and interest rates declining, I personally feel there is a reason to see the nav discount narrow. That means share price appreciation. On a prospective yield of 9% and shareprice growth in the months a years ahead, it seems an excellent long term hold. I do appreciate there must be a lot of frustrated investors sitting on sizable losses here, but that economics for you! |
Posted at 11/4/2024 21:53 by nickrl presentation useful but largely a recycle of the annual results but at least the small investors get a look in and can ask questions. CEO rather laboured the Q&A time over why Germany wont be a car crash despite the negative economic outlook. |
Posted at 02/4/2024 20:10 by m_kerr Almost 10% yield now - transactions seem to be picking up in the London office market as well. THeyve had no difficulty refinancing either.The SPV structure also mitigates risk, and they have hotel and student accommodation holdings trading well for which there would be good investor demand should they need to sell. THeir offices are generally good quality and well located with good transport links. Debt is uncomfortable now but rates are widely expected to fall over the medium term. Cheap as chips (I may have said that at a price 50% higher though....!). |
Posted at 12/3/2024 14:01 by ammons dated 7 March 2024, sell, FWIW==================== CLS Holdings' office values continue their freefall Investors waiting on a recovery in this property equity's fortunes should invest their time and money elsewhere March 7, 2024 by Mitchell Labiak Vacancy rate climbing Earnings and dividend growth look weak Pretty much any way you look at it, CLS Holdings (CLI) is headed in the wrong direction. The landlord's portfolio of European office assets outside big city centres is nosediving in value even faster than last year as high interest rates and questions around post-Covid working continue. Its net asset value (NAV) has been slashed by 28.5 per cent from its 327p high point in 2021, while its shares have lost well over two-thirds of their value since a high of 311p in late 2019. IFRS earnings per share (EPS) do not cover its flat dividend, but adjusted earnings per share (EPS) stripped of valuation changes does. However, that adjusted EPS fell from 11.6p to 10.3 because its net rental income growth failed to offset rising finance costs from its growing net debt mountain, which is now larger than its equity value. This enormous leverage makes it unique in the UK-listed property sector. Not in a good way. Consensus forecasts are for adjusted EPS to nudge up to 10.6p by 2025 and for the dividend to hit 8.22p, but even this limited growth looks overly bullish. CLS' vacancy rate has climbed to 11 per cent from 7.4 per cent the year before, driven by its empty UK offices, where vacancy climbed from 10 per cent to 15.8 per cent. When there is so much space in your portfolio, it becomes hard to raise rents, something retail landlords know all too well. The discount to NAV might tempt some, but we believe this is a fair reflection of the strong possibility that CLS will need to offload its emptying assets into a depressed market to chip away at its debt. Sell. |
Posted at 28/2/2024 12:40 by cwa1 CLS Holdings plc ("CLS")Notice of Full Year Results CLS will announce its Full Year Results for the 12 months ended 31 December 2023 on Wednesday, 6 March 2024. The results presentation will be taking place in-person at The London Stock Exchange,10 Paternoster Square, London, EC4M 7LS at 08:30am on 6 March 2024. Investors and analysts can also attend the meeting by joining a live webcast and conference call. The details of the meeting, webcast and conference call will be included in the results statement. |
Posted at 12/12/2023 08:18 by wapping67 About 15 years ago and before I retired from the city is used to be an investor in CLS. The directors were very shrewd property operators and had a great reputation. I don’t think this has changed. I hadn’t really kept in touch with the share price until I noticed the extremely large directors purchases in the summer months. Been waiting for interest rate expectations to ease, which they now have. CLS have struggled to rally with the sector but to me that’s an opportunity. With the shares standing at less than half the expected NAV and yield (historic) of over 8% I’ve taken a position. Prepared to sit tight and wait for the markets perception of CLS to change. To me this represents a solid value play |
Posted at 16/6/2023 18:32 by strathroyal These do look something of a bargain and there must be a decent chance of another tender offer. From what I can see they have sold 4 of their UK properties this financial year although I have not been able to identify all, has anyone here been keeping watch?Here is the latest sale: hxxps://www.hanoverg |
Posted at 30/3/2023 10:31 by nickrl @oxman they are very office heavy so i would expect NTA to continue to drift downwards for a couple more years so discount will close up by a further 10-20% but would still leave them on a wide discount. Their debt costs are creeping up but despite saying a big chuck of 23/24 refi is a done deal they dont disclose specifics on the loans other than to say that investors should expect a 50-60bps outward move from the current low levels so we know interest costs going up. From my analysis they have one of the highest divi covers in the sector from free cash and this IR increase will still leave them above 100%. Conversely the vacancy level in the UK has been creeping up and is already at 10% and their estate whilst a bit better positioned than RGL feels like it will suffer further attrition over next couple of years so scope for rental growth limited. The other side of the coin though is the French and German assets are far better shape and have some reasonable inflation linked leases so all round neutral. With yield hovering around 6% i was tempted but now im not sure if 6% is sufficient in the current mkt albeit i doubt IR will move north of 4.5% i reckon they will be >4 for next 12mths min. |
Posted at 22/11/2022 16:11 by cwa1 We may be lacking a catalyst for a recovery in the share price, but the discount should help to protect us from further falls. Nor has the valuation disparity escaped management’s attention. Fredrik Widlund, the chief executive, and the board sanctioned a tender offer in the summer and bought back 2.5pc of the company’s share capital.Buybacks at such a large discount to NAV create value over the long term. Nor should investors forget the presence of the Mortstedt family. Although Sten Mortstedt, the founder, died in 2020, the family still owns more than half of the shares. That aligns their interests with those of other shareholders and should ensure that no undue risks are taken. Hold on to CLS. Questor says: hold Ticker: CLI Share price at close: 158.8p |
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