CLS Holdings updated its dividend policy on Wednesday as it said it continues to trade in line with market expectations.
Following the conversion of its UK business to a real estate investment trust (REIT), the FTSE 250 office space specialist said it was maintaining a progressive dividend policy, with a dividend cover of 1.2 to 1.6 times EPRA earnings, versus 1.5 to 2.0 times previously. CLS expects that FY2022 dividend cover will be around the middle of the new range.
The company also said that it continues to trade in line with market expectations.
Chief executive officer Fredrik Widlund said: “I am pleased to announce an enhancement to our dividend policy following the conversion of our UK business to a REIT, which will be applied to all future dividends until further notice.
“The board is clear that the current share price discount to NTA (net tangible assets) is unjustified given that we are in the process of disposing of a number of properties at or above 31 December 2021 valuations and the quality of our portfolio is proving resilient in a challenging macro environment. Consequently, CLS intends to undertake a tender offer following the 2022 half yearly financial results.”
The terms of the tender offer will be announced after the company’s half-yearly results on 10 August.
“The quantum of any tender offer will be scaled to ensure the group’s loan-to-value is still within an acceptable level by the year-end,” it said.