CLS (LON:CLI) Releases Earnings Results

Key Points

• Earnings and guidance weakened: H1 EPRA earnings per share fell 32.5% to £0.027, prompting CLS to cut full-year guidance to £0.046–£0.055 per share. The company will not pay an interim dividend and will consider a final dividend after year-end results.
• Leverage remains elevated: Portfolio valuations declined 4.6%, lifting loan-to-value to 51.6%, above CLS’s 35%–45% target range. However, the company has completed or exchanged about £75.7 million in property sales and refinanced or agreed financing for 89% of 2026 maturities.
• Shares fell 3.9% amid mixed outlook: Leasing remained active, with £7.6 million of annual rent secured across H1 and July, but analysts’ consensus rating is “Hold” with an average target price of GBX 48.

CLS (LON:CLI - Get Free Report) posted its quarterly earnings data on Wednesday. The company reported GBX 2.70 earnings per share for the quarter, Digital Look Earnings reports. CLS had a negative return on equity of 6.67% and a negative net margin of 36.01%.

Here are the key takeaways from CLS's conference call:

• Near-term earnings pressure intensified: H1 EPRA earnings per share fell 32.5% to £0.027, and full-year guidance was reduced to £0.046–£0.055 per share due to asset disposals, prior tenant departures and the Spring Gardens tenant not extending its lease.
• No interim dividend will be paid; the board will instead consider a single final dividend after year-end earnings are known. Portfolio valuations declined 4.6% in local currency, pushing LTV up to 51.6%, above the company’s 35%–45% target range.
• CLS made progress on deleveraging and refinancing, completing or exchanging approximately £75.7 million of property sales and remaining on track for its £100 million 2026 sales target. Refinancings covering 89% of 2026 maturities are completed, credit-approved or agreed, with no additional lender covenants reported.
• Leasing activity remained steady, with £5.7 million of annual rent secured in H1 and a further £1.9 million signed in July, while vacancy held at 14.5%. Management sees potential to increase contracted rent from £100.4 million to more than £125 million through leasing vacant space and refurbishment projects, although timing depends on capital availability and market conditions.

CLS Stock Down 3.9%

Shares of LON:CLI traded down GBX 1.90 during trading hours on Wednesday, reaching GBX 47.15. The stock had a trading volume of 3,618,032 shares, compared to its average volume of 827,024. CLS has a 1 year low of GBX 45.30 and a 1 year high of GBX 64.70. The firm's 50 day moving average is GBX 49.32 and its 200-day moving average is GBX 51.89. The stock has a market capitalization of £187.71 million, a price-to-earnings ratio of -3.74 and a beta of 1.02. The company has a debt-to-equity ratio of 121.99, a quick ratio of 0.59 and a current ratio of 0.29.

Analyst Upgrades and Downgrades

CLI has been the subject of several analyst reports. Peel Hunt reissued a "reduce" rating and set a GBX 45 target price on shares of CLS in a research note on Tuesday, August 4th. Berenberg Bank reduced their price target on CLS from GBX 58 to GBX 51 and set a "buy" rating on the stock in a research report on Wednesday. One investment analyst has rated the stock with a Buy rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, the company currently has a consensus rating of "Hold" and an average target price of GBX 48.

Insider Activity

In other news, insider Fredrik Widlund bought 20,109 shares of the stock in a transaction that occurred on Wednesday, May 27th. The stock was purchased at an average price of GBX 46 per share, for a total transaction of £9,250.14. Company insiders own 60.13% of the company's stock.

About CLS

We are a commercial property investment company with a £2.1bn portfolio listed on the Premium Main Market on the London Stock Exchange, specialising in future-focused office space in the UK, Germany and France. Through geographical diversification, local expertise and an active management approach, we transform office properties into sustainable, modern spaces that help our tenants' businesses to grow.

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