CLS Holdings (LSE:CLS), a commercial landlord with a £1.6 billion office portfolio across the UK, Germany and France, lowered its full-year earnings guidance alongside half-year results showing widening losses.
EPRA earnings per share fell 32.5% to 2.7p in the six months to 30 June, down from 4.0p a year earlier, as lower rental income from asset sales and tenant departures outweighed savings on administration and finance costs.
The statutory loss after tax widened to £69.6 million, from £24.4 million, driven by an £84.2 million decline in investment property valuations.
Portfolio values fell 4.6% in local currency terms, with the UK down 7.2%, Germany down 2.5% and France down 3.7%, reflecting a 27 basis point expansion in property yields and a 1.8% drop in estimated rental values.
EPRA net tangible assets per share dropped 11.5% to 177.7p, further hit by sterling's 1.2% strengthening against the euro.
"The first half reflects the earnings and valuation pressures we set out in our recent trading update on 4 August," said chief executive Fredrik Widlund.
The board deferred its interim dividend decision to the full-year results, given priorities around deleveraging and completing disposals.
Net rental income fell 13.1% to £46.3 million, partly due to lease expiries including block departures at New Printing House Square.
CLS has completed or exchanged £75.7 million of disposals this year, with a further £22.5 million under offer, and targets around £100 million for the full year.
The loan-to-value ratio rose to 51.6%, from 50.0% at the end of 2025, as falling property values outweighed debt reduction.
News Intelligence what this means for the company
CLS Holdings' half-year results confirm the earnings collapse flagged in its August trading update: EPRA EPS fell 32.5% to 2.7p, driven by rental income losses from asset sales and tenant departures—notably its largest tenant quitting Spring Gardens. The company has cut full-year EPS guidance to 4.6–5.5p and deferred its interim dividend, prioritising debt reduction as property valuations fell 4.6% and the loan-to-value ratio rose to 51.6% despite £75.7m in completed or exchanged disposals.
The combination of falling valuations, rising leverage despite asset sales, and structural income loss from major tenant departures signals that CLS's deleveraging target of £100m disposals this year may not be enough to stabilise the balance sheet. Dividend suspension and full-year EPS guidance at less than half the prior-year run-rate materially weakens the income case.
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Panmure Liberum analyst Bjorn Zietsman said the first half shows weaker earnings and valuations but strategic progress on disposals and refinancing.
The broker, in a note, repeated a BUY and 75p target, flagged a material rerating depends on translation of balance-sheet repair into lower vacancy and leverage. He added that £75.7m of disposals are completed or exchanged, a further £22.5m is under offer, and 89% of 2026 refinancing is completed or agreed.
