CLS Holdings hikes dividend 23% as NAV jumps

Property investor CLS Holdings’ net asset value increased strongly in 2016 and its strong balance sheet and ample liquid resources gave confidence to hike the full year dividend 23%.

The FTSE 250 company’s net assets per share rose 17.9% to 2,456p, compared to the previous year, while the basic net asset value per share increased 18.8% to 2,151p and earnings per share was up 45.2% to 123p.

This was on the back of an 8.2% rise in net rents last year to £107.1m,

Although profit after tax fell to £97.8m from £129.9m due to a fall in the property revaluation uplift to £36.1m from £98m in 2915.

The company intends to make future distributions by way of a progressive dividend paid twice-yearly and will increase distributions to shareholders by 23% for the full year, with a proposed final dividend of 40p per share to be paid on 28 April, bringing the total for the year to 57.5p, or £23.5m.

It is also proposed a share sub-division of the existing ordinary shares of 25p each into 10 ordinary shares of 2.5p each.

Executive chairman Henry Klotz said that in changing to paying a progressive dividend, it intends to offer a more attractive investment proposition for shareholders, to improve liquidity in the company's shares and broaden the shareholder base.

CLS, which has £1.57bn portfolio in the UK, Germany and France, saw its vacancy rate reduce to lowest ever to 2.9% from 3.1% and last year bought four properties for £45.7m at an average net initial yield of 6.9% and sold four properties for £85.5m at an average net initial yield of 5.6%.

Since the start of 2017 the company has made a further five acquisitions for £31.4m and at a net initial field of 8%.

Klotz said: "Our record results illustrate the benefits of our diversified business: investing in high-yielding properties in major cities across our core markets, with a broad tenant base and diversified sources of funding.

"With our proven and successful business model, a strong balance sheet and ample liquid resources, we are well positioned to benefit from any challenges and opportunities which lie ahead."