CLS Holdings Plc (LSE:CLI) shares were down 10.5% in Friday's trade, changing hands at 52.33p, after the firm cut its full-year dividend after weaker earnings and higher vacancy weighed on 2025 performance, even as the office landlord stepped up asset sales and debt refinancing to shore up its balance sheet.
EPRA earnings fell 17% to £30.2 million, with EPRA earnings per share down to 7.6p from 9.2p, while net rental income dropped 11.1% to £101.3 million. Vacancy rose to 14.5% from 12.7%, reflecting lease expiries in London and Paris as well as two late-year tenant insolvencies in Germany.
The group still improved its statutory loss after tax to £50.3 million from £93.6 million, helped by a smaller property valuation hit than in 2024.
The final dividend is set at 2.7p per share, taking the full-year payout to 4.0p, down from 5.28p. CLS is also proposing an optional enhanced scrip dividend that would let shareholders take new shares at a 5% discount to the reference price instead of cash.
Net debt fell by £86.2 million during the year and the group refinanced, extended or repaid £373.7 million of loans, leaving its weighted average cost of debt unchanged at 3.8%. Management is now targeting £100 million to £150 million of disposals in 2026, alongside continued efforts to reduce vacancy and bring loan-to-value down toward its 35% to 45% target range from 50.0% at year-end. CLS also said there remains a material uncertainty related to going concern because the timing and value of future refinancings and property sales are not fully within its control.