TIDMFPO

RNS Number : 6798A

First Property Group PLC

09 June 2016

   Date:                      9 June 2016 
   On Behalf of:         First Property Group plc ("First Property", "the Company" or "the Group") 
   Embargoed:         0700hrs 

First Property Group plc

Preliminary Results for the twelve months to 31 March 2016

First Property Group plc (AIM: FPO), the property fund manager and investor, today announces its preliminary results for the twelve months ended 31 March 2016.

Financial Summary:

 
                                  Unaudited      Audited   Percentage 
                                    year to         year       change 
                                   31 March           to 
                                       2016     31 March 
                                                    2015 
------------------------------  -----------  -----------  ----------- 
 
   Income Statement: 
------------------------------  -----------  -----------  ----------- 
 Revenue                          GBP21.96m    GBP18.52m       +18.6% 
 Statutory profit before 
  tax                              GBP7.35m     GBP8.08m        -9.0% 
 Non-recurring income              GBP1.29m     GBP3.99m 
 Diluted earnings per 
  share                               4.28p        6.93p       -38.2% 
 Total dividend per 
  share                               1.50p        1.35p       +11.1% 
 Average EUR/ GBP rate                1.363        1.285        -6.1% 
------------------------------  -----------  -----------  ----------- 
 
   Balance Sheet at year-end: 
------------------------------  -----------  -----------  ----------- 
 Net assets                       GBP34.09m    GBP31.02m        +9.9% 
 Net assets per share                27.75p       26.30p        +5.5% 
 Adjusted net assets 
  per share*                         43.01p       35.75p       +20.3% 
 Cash balances                     GBP8.98m    GBP12.24m       -26.6% 
 Period-end EUR/ GBP 
  rate                                1.261        1.382        +8.8% 
------------------------------  -----------  -----------  ----------- 
 
   Group Direct Property Portfolio at year-end: 
   (excludes the Group's non-controlling interests 
   in six other FPAM managed funds) 
--------------------------------------------------------------------- 
 Book value                      GBP134.53m   GBP126.90m        +6.0% 
 Market value                    GBP156.92m   GBP142.04m       +10.5% 
 Gross debt (non-recourse 
  to Group)                      GBP114.82m   GBP107.78m        +6.5% 
 LTV%                                73.17%       75.88% 
 
   Total Assets Under 
   Management:                      GBP353m      GBP327m        +8.0% 
------------------------------  -----------  -----------  ----------- 
 Poland                                 51%          65% 
 United Kingdom                         44%          33% 
 Romania                                 5%           2% 
------------------------------  -----------  -----------  ----------- 
 
 
  *   Calculated according to EPRA triple net 
       valuation methodology, which includes 
       adjustments for fair values of i) financial 
       instruments, ii) debt, and iii) deferred 
       taxes. 
 

Highlights:

   --      Total assets under management grew by 8% to GBP353 million, despite major fund expiry; 
   --      UK PPP fund life extended by five years to February 2022; 

-- Two new investment companies established which invested EUR24.08 million in a shopping centre in Swinoujście, in Poland and EUR10.31 million in nine Lidl supermarkets in Romania respectively;

-- Good cash generation - Group cash balances decreased by GBP3.26 million but would have increased by some 15.4% to GBP14.13 million had the loan of EUR6.5 million (GBP5.15 million) made to Fprop Romanian Supermarkets Ltd been included. This loan was repaid after the year-end;

   --      Improved earnings visibility - 94.8% of revenue now of a recurring nature (2015: 81.8%); 

-- Total annualised fund management fees of GBP1.68 million at the year-end (2015: GBP1.35 million), with a weighted average unexpired fund management contract term of 6 years, 6 months (2015: 2 years, 10 months);

-- Final dividend increased to 1.115 pence per share (2015: 1 penny per share), an increase of 11.5%, which together with the interim dividend of 0.385 pence per share (2015: 0.35 pence per share) equates to a dividend for the year of 1.50 pence per share (2015: 1.35 pence per share);

-- The impact of a weaker Euro versus Sterling during the year resulted in profit before tax being some GBP671,000 lower than if translated at last year's rate;

-- Funds under management once again ranked No.1 versus MSCI's Investment Property Databank (IPD) Central & Eastern Europe (CEE) Benchmark, now for the ten years from 2005 to 31 December 2015, and for the annualised periods from 2005 to the end of each of the years between 31 December 2008 and 31 December 2015.

Commenting on the results, Ben Habib, Chief Executive of First Property Group, said:

The Group is trading well across the board and the number and value of assets under management is increasing.

In the financial year just ended the Group benefitted from a full year of contributions from the investments made by it and Fprop Opportunities plc in the previous financial year, all of which have yielded income at or above our expectations at the time of their purchase and are, without exception, valued at levels exceeding their acquisition prices. The recurring nature of these earnings should enable us to build on the impressive increase in adjusted net assets, which together with dividend payments has averaged 21% per annum since 1 April 2008, the onset of the credit crunch.

The markets in which we operate are generally buoyant and offer interesting investment opportunities which we hope to capitalise on in due course.

A briefing for analysts will be held at 10.30hrs today at the Group's headquarters, 32 St James's Street, London, SW1A 1HD. A conference call facility will also be available on +44 (20) 3364 5721, passcode: 811985. A copy of the accompanying investor presentation can be accessed simultaneously at http://www.fprop.com/plc-results/81/88/. A recorded copy of the call will subsequently be posted on the Company website, www.fprop.com.

For further information please contact:

 
 First Property Group plc         Tel: +44 (20) 7340 
                                   0270 
 Ben Habib (Chief Executive       www.fprop.com 
  Officer)                         investor.relations@fprop.com 
  George Digby (Group Finance 
  Director) 
  Jeremy Barkes (Director, 
  Business Development) 
 
 Arden Partners (NOMAD &          Tel: +44 (20) 7614 
  Broker)                          5900 
 Chris Hardie (Director, 
  Corporate Finance) 
  Ben Cryer (Corporate Finance) 
 
 Redleaf Communications           Tel:+ 44 (20) 7382 
  (PR)                             4747 
 Henry Columbine / Rebecca        firstproperty@redleafpr.com 
  Sanders-Hewett / 
  Susie Hudson 
 

Notes to investors and editors:

First Property Group plc is a property fund manager and investor with operations in the United Kingdom and Central Europe. Its earnings are derived from:

-- Fund management - via its FCA regulated and AIFMD approved subsidiary, First Property Asset Management Ltd (FPAM), which earns fees from investing on behalf of third parties in property;

o Management fees are levied by reference to the value of properties under management;

o Performance fees are levied where appropriate, usually payable upon realisation of profits above an agreed hurdle.

-- Group Properties - principal investments by the Group to earn a return on its own capital, usually in partnership with third parties.

FPAM funds rank No.1 versus MSCI's Investment Property Databank (IPD) Central & Eastern Europe (CEE) Benchmark for the ten years from the commencement of its operations in Poland in 2005 to 31 December 2015, and for the annualised periods from 2005 to the end of each of the years between 31 December 2008 and 31 December 2015.

First Property Asset Management Limited is authorised and regulated by the Financial Conduct Authority. Further information about the Company and its products can be found at: www.fprop.com.

CHIEF EXECUTIVE'S STATEMENT

Financial Results

I am pleased to report final results for the twelve months ended 31 March 2016.

Revenue earned by the Group increased to GBP21.96 million (2015: GBP18.52 million) yielding a profit before tax of GBP7.35 million (2015: GBP8.08 million). The decrease in profit before tax is principally attributable to the reduction in the contribution made by Fprop PDR which has now wound down its activities. This reduction was, to a material extent, offset by the increased contribution made by Group Properties.

Diluted earnings per share were 4.28 pence (2015: 6.93 pence), the decrease being principally due to a one off deferred tax credit of GBP992,000 relating to acquisitions in 2015.

The Group ended the period with reported net assets of GBP34.09 million (2015: GBP31.02 million). It is the accounting policy of the Group to carry its direct properties and interests in associates at the lower of cost or market value. The net assets of the Group when adjusted to their market value less any deferred tax liabilities, stood at GBP51.03 million (2015: GBP42.41 million). The increase in net assets is attributable mainly to higher property values and a stronger Euro versus Sterling at the year-end.

Group cash balances stood at GBP8.98 million (2015: GBP12.24 million) at the year-end but would have been some GBP14.13million had the loan of EUR6.5 million (GBP5.15 million) made to Fprop Romanian Supermarkets Ltd been included. This loan was repaid after the year-end. Of the cash balances at year-end, GBP4.76 million (2015: GBP3.26 million) was held by Fprop Opportunities plc (FOP, 76.2% owned by the Group) and GBP635,000 (2015: GBP573,000) was held by Corp Sp. z o.o. (the property management company for Blue Tower in Warsaw, 90% owned by the Group).

Dividend

The Directors have resolved to recommend increasing the final dividend to 1.115 pence per share (2015: 1 penny per share), an increase of 11.5%, which together with the interim dividend of 0.385 pence per share (2015: 0.35 pence per share) equates to a dividend for the year of 1.50 pence per share (2015: 1.35 pence per share).

The proposed final dividend will be paid on 30 September 2016 to shareholders on the register at 2 September 2016, and is subject to shareholder approval at the forth coming annual general meeting.

REVIEW OF OPERATIONS

Key Points

The year just ended marked a period of financial consolidation for the Group during which the visibility of its earnings has increased, with some 94.8% (2015: 81.8%) of revenue now of a recurring nature. This increase in the level of recurring earnings is primarily the result of a full year of contributions from the investments made by the Group and Fprop Opportunities plc (FOP).

The average EUR/ GBP rate during the year was 6.1% lower at EUR1.363 (2015: EUR1.285). This resulted in Group profit before tax being GBP671,000 lower than if translated at last year's rate.

PROPERTY FUND MANAGEMENT (First Property Asset Management Ltd or FPAM)

As at 31 March 2016 aggregate assets under management, calculated by reference to independent third party valuations, stood at GBP353 million (2015: GBP327 million), including some GBP156 million (2015: GBP142 million) of properties owned directly by the Group. Of these, 51% (2015: 65%) were located in Poland, 44% (2015: 33%) in the UK, and 5% (2015: 2%) in Romania.

The reconciliation of movement in funds under management during the year is shown below:

 
                             Funds managed               Group Properties         Totals 
                            for third parties               (including 
                            (including funds                   FOP) 
                           in which the Group 
                              is a minority 
                              shareholder) 
----------------  -----------------------------------  -------------------  ----------------- 
                     UK      CEE     Total      No.       All       No.       AUM       No. 
                    GBPm.    GBPm.    GBPm.      of       CEE        of       GBPm.      of 
                                               prop's    GBPm.     prop's              prop's 
----------------  -------  -------  -------  --------  --------  ---------  -------  -------- 
 
 As at 
  1 April 
  2015             108.3     76.8    185.1      44       142.0       11      327.1      55 
----------------  -------  -------  -------  --------  --------  ---------  -------  -------- 
 Purchases          49.1      -       49.1      10         -         -        49.1      10 
 Sales             (3.6)      -      (3.6)      (1)        -         -       (3.6)      (1) 
 New fund 
  mandates           -       26.9     26.9      10         -         -        26.9      10 
 Expiring 
  fund 
  mandate            -      (62.9)   (62.9)    (13)        -         -       (62.9)    (13) 
 Property 
  Depreciation       -        -        -         -       (1.5)       -       (1.5)       - 
 Property 
  Revaluation       0.9     (0.6)     0.3        -        2.8        -        3.1        - 
 FX Revaluation      -       1.3      1.3        -       13.6        -        14.9       - 
 
 As at 
  31 March 
  2016             154.7     41.5    196.2      50       156.9       11      353.1      61 
----------------  -------  -------  -------  --------  --------  ---------  -------  -------- 
 
 

Fund management fees are levied monthly by FPAM by reference to the value of funds under management excluding cash and cash commitments, with the exception of Fprop PDR (which levies performance fees on realised profits only).

Revenue earned by this division amounted to GBP2.90 million (2015: GBP6.14 million), resulting in a profit before unallocated central overheads and tax of GBP1.38 million (2015: GBP4.44 million) and representing 14% (2015: 40%) of Group profit before unallocated central overheads and tax.

The decline in revenue was principally the result of lower fees earned from the following funds:

1. Fprop PDR - from which we earned performance fees of GBP0.9 million (2015: GBP3.37 million). We have sold all eight investments made by this fund and we do not expect to earn further fees from it.

2. USS Fprop Managed Property Portfolio - from which we earned fees of GBP301,000 (2015: GBP1.54 million) prior to the expiry of the fund management contract in August 2015.

At the year-end FPAM's fund management fee income, excluding performance fees, was being earned at an annualised rate of GBP1.68 million (2015: GBP1.35 million), with a weighted average unexpired fund management contract term of 6 years, 6 months (2015: 2 years, 10 months).

First Property Asset Management Ltd (FPAM) now manages nine (2015: eight) closed-end funds and joint venture investments. A brief synopsis of the value of assets and maturity of each of these vehicles is set out below:

 
 Fund                  Country         Fund            Assets    % of total        Assets 
                    of investment      expiry           under        assets         under 
                                                   management         under    management 
                                                    at market    management     at market 
                                                        value                       value 
                                                        at 31                       at 31 
                                                        March                       March 
                                                         2016                        2015 
----------------  ----------------  ----------  -------------  ------------  ------------ 
                                                        GBPm.                       GBPm. 
----------------  ----------------  ----------  -------------  ------------  ------------ 
 Sam Property            UK           Rolling               *             *             * 
  Company 
  Ltd (SAM) 
 Regional 
  Property 
  Trading 
  Ltd (RPT)            Poland        Aug 2020            6.83          1.9%          6.21 
 5(th) 
  Property 
  Trading 
  Ltd (5PT)            Poland        Dec 2017            7.77          2.2%          7.68 
 UK Pension 
  Property 
  Portfolio 
  LP (UK 
  PPP)                   UK          Feb 2022           94.93         27.0%         94.35 
                                                            - 
 Fprop                                            (commitment 
  PDR LP                 UK          May 2018      of GBP42m)             -          3.61 
 SIPS Property                                          59.80 
  Nominee                                         (commitment 
  Ltd                    UK          Jan 2025     of GBP125m)         16.9%         10.33 
 NEW - 
  Fprop 
  Romanian 
  Supermarkets 
  Ltd                  Romania       Jan 2026            8.17          2.3%             - 
 NEW - 
  Fprop 
  Galeria 
  Corso 
  Ltd                  Poland        Mar 2026           18.68          5.3%             - 
 EXPIRING 
  - USS 
  Contract             Poland        Aug 2015               -             -          62.9 
----------------  ----------------  ----------  -------------  ------------  ------------ 
 Sub Total                                             196.18         55.6%        185.08 
----------------------------------------------  -------------  ------------  ------------ 
 
 Fprop 
  Opportunities 
  plc (FOP)            Poland        Oct 2020           61.46         17.4%         54.44 
 Group 
  properties 
  (excluding           Poland 
  FOP)                & Romania         n/a             95.47         27.0%          87.6 
----------------  ----------------  ----------  -------------  ------------  ------------ 
 Sub Total                                             156.93         44.4%        142.04 
----------------------------------------------  -------------  ------------  ------------ 
 
 Total                                                 353.11          100%        327.12 
----------------------------------------------  -------------  ------------  ------------ 
 

* Not subject to recent revaluation

Independent Fund Performance Analysis:

Our investments in Poland and Romania once again ranked No.1 against MSCI's Investment Property Databank (IPD) Central & Eastern Europe (CEE) Benchmark, now for the ten years from the commencement of our operations in Poland in 2005 to 31 December 2015, and for the annualised periods from 2005 to the end of each of the years between 31 December 2008 and 31 December 2015.

We were also:

-- awarded "Best fund manager" by Alternative Investment Awards and by Acquisition International; and

   --      shortlisted for awards by Pensions Age, Property Week and Property Investor Europe. 

GROUP PROPERTIES

Group Properties comprise eleven commercial properties held directly by the Group (including five held by FOP (in which the Group is a 76.2% shareholder), and non-controlling interests in six of the nine funds and joint ventures managed by FPAM, as set out in the tables below. It is the Group's policy to carry its direct properties and interest in associates at the lower of cost or market value for accounting purposes and to recognise dividends when received.

   1.     Directly held Properties at 31 March 2016: 
 
 Property                      No.     Book   Market   Contribution   Contribution 
  / Country          of properties    value    value       to Group       to Group 
                                                             profit         profit 
                                                             before         before 
                                                              tax -          tax - 
                                                            year to        year to 
                                                           31 March       31 March 
                                                               2016           2015 
-----------------  ---------------  -------  -------  -------------  ------------- 
                                      GBPm.    GBPm.          GBPm.          GBPm. 
 
 Poland                          3     74.6     86.9            5.7            2.7 
 Romania                         3      5.5      8.5            0.9            0.6 
 FOP (Poland 
  - consolidated 
  undertaking).                  5     54.4     61.5            3.3            1.5 
-----------------  ---------------  -------  -------  -------------  ------------- 
 Total                          11    134.5    156.9            9.9            4.8 
-----------------  ---------------  -------  -------  -------------  ------------- 
 
 
   2.     Non-controlling interests in funds and joint ventures managed by FPAM at 31 March 2016: 
 
 Fund               % owned          Book        Current       Group's       Group's 
                         by         value         market         share         share 
                      First      of First          value    of pre-tax    of pre-tax 
                   Property    Property's    of holdings       profits       profits 
                      Group         share                       earned        earned 
                                       in                      by fund       by fund 
                                     fund                     31 March      31 March 
                                                                  2016          2015 
---------------  ----------  ------------  -------------  ------------  ------------ 
                                  GBP'000        GBP'000       GBP'000       GBP'000 
---------------  ----------  ------------  -------------  ------------  ------------ 
 Interest in associates 
 5(th) 
  Property 
  Trading 
  Ltd (5PT)           37.8%           563            923           121           153 
 Regional 
  Property 
  Trading 
  Ltd (RPT)           28.6%           159            219            20            32 
 Fprop 
  Romanian 
  Supermarkets 
  Ltd                 24.1%           737            802            12           Nil 
 Fprop 
  Galeria 
  Corso 
  Ltd                 28.2%         1,585          1,607            17           Nil 
---------------  ----------  ------------  -------------  ------------  ------------ 
 Share of results 
  in associates                     3,044          3,551           170           185 
---------------------------  ------------  -------------  ------------  ------------ 
 
 
 
   Investments 
 UK Pension 
  Property 
  Portfolio 
  LP (UK 
  PPP)         0.9%   900   900    60    64 
 Fprop 
  PDR LP       4.9%    13    13   163   630 
------------  -----  ----  ----  ----  ---- 
 Sub Total            913   913   223   694 
-------------------  ----  ----  ----  ---- 
 
 
 Total    3,957   4,464   393   879 
-------  ------  ------  ----  ---- 
 

Revenue from Group Properties, including FOP, amounted to GBP19.06 million (2015: GBP12.38 million), generating a profit before unallocated central overheads and tax of GBP8.85 million (2015: GBP6.57 million) and representing 87% (2015: 60%) of Group profit before unallocated central overheads and tax. The increase in revenue and profit before tax prior to the deduction of unallocated central overhead costs was primarily attributable to a full year of income from investments made by the Group and FOP.

The contribution to Group earnings by the eleven directly held properties is detailed below:

 
                               Year to          Year to 
                         31 March 2016    31 March 2015 
                                 EURm.            EURm. 
---------------------  ---------------  --------------- 
 Net operating 
  income (NOI)                   19.74            11.08 
 Interest expense 
  on bank loans 
  / finance leases              (3.59)           (2.70) 
---------------------  ---------------  --------------- 
 NOI after interest 
  expense                        16.15             8.38 
 Current tax                    (1.25)           (0.56) 
 Debt amortisation              (7.11)           (4.14) 
 Capital expenditure            (1.94)           (0.71) 
---------------------  ---------------  --------------- 
 Free cash                        5.85             2.97 
---------------------  ---------------  --------------- 
 
 Market value 
  of properties              EUR197.92        EUR196.33 
 Average yield                   9.97%           5.64%* 
  on market value 
 Bank loans/ finance 
  leases outstanding         EUR144.82        EUR148.97 
 Loan to value 
  (LTV)                         73.17%           75.88% 
 Weighted average         4 yrs, 1 mth     4 yrs, 9mths 
  unexpired lease 
  term (WAULT) 
 Vacancy rate                     2.4%             4.1% 
---------------------  ---------------  --------------- 
 

* reflects partial contributions to NOI from the six acquisitions not held for the full year.

The loans secured against these properties are each held in separate non-recourse special purpose vehicles.

In order to mitigate potential interest rate rises we have fixed the interest rate on a proportion of the loans. A one percentage point increase from current market interest rates would increase the annual interest bill by GBP663,000 per annum. The current weighted average borrowing cost is 2.96% (2015: 3.10%)

The income return from our six minority shareholdings in funds managed by FPAM contributed GBP393,000 to Group profit before tax prior to the deduction of unallocated central overheads, representing 3.8% of the contribution by Group Properties. This should increase as we benefit from a full period contribution from the two new investments in Fprop Romanian Supermarkets Ltd and Fprop Galeria Corso Ltd, which were established in the second half of the year.

Commercial property markets outlook

Poland:

GDP is forecast to grow by 3.9% in 2016 and 3.5% in 2017, maintaining its status as one of Europe's fastest growing economies. Inflation is beginning to trend upwards and is expected to turn positive later this year. Government debt as a percentage of GDP remains relatively low at some 52%.

The election of a new populist government in October 2015 has, however, resulted in increased fiscal risks which have led to increased volatility in the price of Polish government bonds and the Zloty and the downgrading of the country's credit rating by S&P from A- to BBB+.

Rent levels for office property in Warsaw and other main cities have generally softened over the past couple of years, as the pace of new development has increased. Capital values for prime property have increased but for good secondary property, of the sort we favour, values remain largely unchanged from their credit crunch lows, yielding some 2% per annum more than equivalent property in Western Europe. Transaction volumes in 2016 are expected to exceed the EUR4 billion recorded in 2015, which was the second highest year on record in Poland and the highest since the onset of the credit crunch.

Romania:

GDP is forecast to grow by 4.2% in 2016 and 3.7% in 2017, as the economy recovers from the credit crunch. Average net wages grew by some 20% in 2015 and private consumption is accelerating, aided by cuts in VAT from 24% to 20%, and from 24% to 9% on food sales. Inflation is not expected to turn positive until 2017. Government debt as a percentage of GDP is low at 38%, the fifth lowest in the EU. Anti-corruption measures are being implemented with zeal - in 2015 the former Prime Minister Victor Ponta was forced to resign, five other ministers were indicted, as were twenty one members of the combined Houses of Parliament, and the Bucharest Mayor.

Such an economic and political backdrop should provide a favourable environment for property investment.

Occupier demand for commercial property is improving as the economy recovers and rent levels are broadly stable, subject to location. Transaction data in the investment market is thin but rising. Generally the mismatch between buyer and seller expectations which has been prevalent through the credit crunch still persists. However the banking market is improving and commercial property investment volumes in 2016 are expected to exceed those of 2015.

United Kingdom:

GDP growth slowed to 2.1% per annum in the first quarter and is forecast to grow at just over 2% per annum for the next few years, a figure which could be higher but for the continued scale of fiscal tightening required to eliminate the budget deficit. Occupier demand for commercial property continues to gradually improve, particularly in the South East. Yields for well let investment property are at post credit crunch lows and we are of the view that in general there is little room for further yield compression, but rather that future gains are more likely to come from rental growth. Transaction levels for investment property have declined in recent months. Attractive investment opportunities are hard to find and tend to require active management in order to add value.

Current Trading and Prospects

The Group is trading well across the board and the number and value of assets under management is increasing.

In the financial year just ended the Group benefitted from a full year of contributions from the investments made by it and Fprop Opportunities plc in the previous financial year, all of which have yielded income at or above our expectations at the time of their purchase and are, without exception, valued at levels exceeding their acquisition prices. The recurring nature of these earnings should enable us to build on the impressive increase in adjusted net assets, which together with dividend payments has averaged 21% per annum since 1 April 2008, the onset of the credit crunch.

The markets in which we operate are generally buoyant and offering interesting investment opportunities which we hope to capitalise on in due course.

Ben Habib

Chief Executive

9 June 2016

CONSOLIDATED INCOME STATEMENT

for the year ended 31 March 2016

 
                                   Notes           Year ended             Year ended 
                                                     31 March               31 March 
                                             2016 (unaudited)                   2015 
                                                        Total              (audited) 
                                                      results 
                                                                               Total 
                                                                             results 
                                                      GBP'000                GBP'000 
--------------------------------  ------  -------------------  --------------------- 
 
 Revenue - existing operations                         21,955                 14,325 
   - business acquisitions                                  -                  4,198 
--------------------------------  ------  -------------------  --------------------- 
                                                       21,955                 18,523 
--------------------------------  ------  -------------------  --------------------- 
 Cost of sales                                        (4,255)                (3,156) 
--------------------------------  ------  -------------------  --------------------- 
 Gross profit                                          17,700                 15,367 
 Recognition of negative 
  goodwill on refinancing 
  of subsidiary                                             -                  1,123 
 Recognition of negative 
  goodwill on acquisition 
  of subsidiaries                                           -                    716 
 Fair value adjustment 
  to investment properties                                462                  (876) 
 Operating expenses                                   (8,404)                (6,925) 
--------------------------------  ------  -------------------  --------------------- 
 Operating profit                                       9,758                  9,405 
--------------------------------  ------  -------------------  --------------------- 
 Share of results in associates                           170                    185 
 Distribution income                                      223                    694 
 Interest income                       4                  126                    145 
 Interest expense                      4              (2,931)                (2,346) 
--------------------------------  ------  -------------------  --------------------- 
 Profit before tax                                      7,346                  8,083 
 Tax (charge)/ credit                  5              (1,687)                    328 
--------------------------------  ------  -------------------  --------------------- 
 Profit for the year                                    5,659                  8,411 
--------------------------------  ------  -------------------  --------------------- 
 
 Attributable to: 
 Owners of the parent                                   5,008                  8,172 
 Non-controlling interest                                 651                    239 
--------------------------------  ------  -------------------  --------------------- 
                                                        5,659                  8,411 
--------------------------------  ------  -------------------  --------------------- 
 
   Earnings per share: 
 Basic                                 6                4.37p                  7.21p 
 Diluted                               6                4.28p                  6.93p 
--------------------------------  ------  -------------------  --------------------- 
 
 

All operations are continuing.

CONSOLIDATED SEPARATE STATEMENT

OF OTHER COMPREHENSIVE INCOME

for the year ended 31 March 2016

 
                                             Year ended   Year ended 
                                               31 March     31 March 
                                                   2016         2015 
                                            (unaudited)    (audited) 
                                                  Total        Total 
                                                results      results 
                                                GBP'000      GBP'000 
-----------------------------------  ---  -------------  ----------- 
 
 Profit for the year                              5,659        8,411 
----------------------------------------  -------------  ----------- 
 Other comprehensive income 
 Exchange differences 
  on retranslation of foreign 
  subsidiaries                                  (1,346)          272 
 Revaluation of available-for-sale 
  financial assets                                   11           37 
 Taxation                                             -            - 
-----------------------------------  ---  -------------  ----------- 
 Total comprehensive income 
  for the year                                    4,324        8,720 
 
 Total comprehensive income 
  for the year attributable 
  to: 
 Owners of the parent                             3,486        8,505 
  Non-controlling interest                          838          215 
                                                  4,324        8,720 
 ---------------------------------------  -------------  ----------- 
 

CONSOLIDATED BALANCE SHEET

As at 31 March 2016

 
                                  Notes          As at        As at 
                                              31 March     31 March 
                                                  2016         2015 
                                           (unaudited)    (audited) 
                                               GBP'000      GBP'000 
 
 Non-current assets 
 Goodwill                             7            153          153 
 Investment properties                8        120,718      114,262 
 Property, plant and equipment                     186           43 
 Interest in associates            9(a)          3,044          671 
 Other financial assets            9(b)            914        1,531 
 Other receivables                   11            186          283 
 Deferred tax assets                             3,016        3,803 
-------------------------------  ------  -------------  ----------- 
 Total non-current assets                      128,217      120,746 
-------------------------------  ------  -------------  ----------- 
 
 Current assets 
 Inventories - land and 
  buildings                          10         13,894       12,639 
 Current tax assets                                 56          236 
 Trade and other receivables         11         10,128        5,744 
 Cash and cash equivalents                       8,975       12,240 
-------------------------------  ------  -------------  ----------- 
 Total current assets                           33,053       30,859 
-------------------------------  ------  -------------  ----------- 
 
 Current liabilities 
 Trade and other payables            12        (7,938)      (8,134) 
 Financial liabilities               13        (7,668)     (11,788) 
 Current tax liabilities                         (200)        (108) 
-------------------------------  ------  -------------  ----------- 
 Total current liabilities                    (15,806)     (20,030) 
-------------------------------  ------  -------------  ----------- 
 Net current assets                             17,247       10,829 
-------------------------------  ------  -------------  ----------- 
 Total assets less current 
  liabilities                                  145,464      131,575 
-------------------------------  ------  -------------  ----------- 
 
 Non-current liabilities: 
 Financial liabilities               13      (108,992)     (97,925) 
 Deferred tax liabilities                      (2,382)      (2,631) 
 Net assets                                     34,090       31,019 
-------------------------------  ------  -------------  ----------- 
 
 Equity 
 Called up share capital                         1,166        1,149 
 Share premium                                   5,773        5,505 
 Foreign exchange translation 
  reserve                                      (2,151)        (618) 
 Revaluation reserve                              (38)         (49) 
 Share-based payment reserve                       203          203 
 Retained earnings                              27,231       23,735 
-------------------------------  ------  -------------  ----------- 
 Equity attributable to 
  the owners of the parent                      32,184       29,925 
 Non-controlling interest                        1,906        1,094 
-------------------------------  ------  -------------  ----------- 
 Total equity                                   34,090       31,019 
-------------------------------  ------  -------------  ----------- 
 
 Net assets per share                 6         27.75p       26.30p 
-------------------------------  ------  -------------  ----------- 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 March 2016

 
 Group                   Share     Share   Share-based       Foreign   Purchase    Investment   Retained   Non-controlling     Total 
                       capital   premium       payment      exchange     of own   revaluation   earnings          interest 
                                               reserve   translation     shares       reserve 
                                                             reserve 
                                               GBP'000                                                             GBP'000 
                       GBP'000   GBP'000                     GBP'000    GBP'000       GBP'000    GBP'000                     GBP'000 
--------------------  --------  --------  ------------  ------------  ---------  ------------  ---------  ----------------  -------- 
 At 1 
  April 
  2015                   1,149     5,505           203         (618)      (173)          (49)     23,908             1,094    31,019 
 Profit 
  for the 
  period                     -         -             -             -          -             -      5,659                 -     5,659 
 Fair 
  value 
  (or revaluation) 
  gains 
  on 
  available-for-sale 
  financial 
  assets 
  to profit 
  or loss                    -         -             -             -          -            11          -                 -        11 
 Movement 
  on foreign 
  exchange                   -         -             -       (1,533)          -             -          -               187   (1,346) 
 Sale 
  of treasury 
  shares                     -        10             -             -         70             -          -                 -        80 
 New shares 
  issued                    17       258             -             -          -             -          -                 -       275 
 Non-controlling 
  interest                   -         -             -             -          -             -      (651)               651         - 
 Dividends 
  paid                       -         -             -             -          -             -    (1,582)              (26)   (1,608) 
--------------------  --------  --------  ------------  ------------  ---------  ------------  ---------  ----------------  -------- 
 At 31 
  March 
  2016                   1,166     5,773           203       (2,151)      (103)          (38)     27,334             1,906    34,090 
--------------------  --------  --------  ------------  ------------  ---------  ------------  ---------  ----------------  -------- 
 
 At 1 
  April 
  2014                   1,149     5,498           203         (914)      (310)          (86)     17,027               895    23,462 
 Profit 
  for the 
  period                     -         -             -             -          -             -      8,411                 -     8,411 
 Fair 
  value 
  (or revaluation) 
  gains 
  on 
  available-for-sale 
  financial 
  assets 
  to profit 
  or loss                    -         -             -             -          -            37          -                 -        37 
 Movement 
  on foreign 
  exchange                   -         -             -           296          -             -          -              (24)       272 
 Sale 
  of treasury 
  shares                     -         7             -             -        137             -          -                 -       144 
 Non-controlling 
  interest                   -         -             -             -          -             -      (239)               239         - 
 Dividends 
  paid                       -         -             -             -          -             -    (1,291)              (16)   (1,307) 
--------------------  --------  --------  ------------  ------------  ---------  ------------  ---------  ----------------  -------- 
 At 31 
  March 
  2015                   1,149     5,505           203         (618)      (173)          (49)     23,908             1,094    31,019 
--------------------  --------  --------  ------------  ------------  ---------  ------------  ---------  ----------------  -------- 
 
 

CONSOLIDATED CASH FLOW STATEMENT

for the year ended 31 March 2016

 
 
                                                  2016       2015 
                                      Notes      Group      Group 
                                               GBP'000    GBP'000 
-----------------------------------  ------  ---------  --------- 
 Cash flows from operating 
  activities 
-----------------------------------  ------  ---------  --------- 
 Operating profit                                9,758      9,405 
 Adjustments for: 
 Depreciation of investment 
  property and property 
  plant & equipment                              1,704        384 
 Fair value adjustment 
  on investment properties                       (462)        876 
 Negative goodwill                                   -    (1,839) 
 (Increase)/decrease in 
  inventories                                    (291)      (258) 
 Decrease/(increase) in 
  trade and other receivables                      903      (486) 
 Increase/(decrease) in 
  trade and other payables                       (356)        577 
 Other non-cash adjustments                        460         84 
 Cash generated from operations                 11,716      8,743 
 Taxes paid                                      (922)      (826) 
-----------------------------------  ------  ---------  --------- 
 Net cash flow from operating 
  activities                                    10,794      7,917 
-----------------------------------  ------  ---------  --------- 
 
 Cash flow from/ (used 
  in) investing activities 
-----------------------------------  ------  ---------  --------- 
 Purchase of investments              9(b)           -      (353) 
 Capital expenditure on 
  investment properties                 8      (1,216)      (383) 
 Proceeds from partial 
  disposal of available-for-sale 
  assets                              9(b)         628        565 
 Purchase of property, 
  plant & equipment                              (197)       (14) 
 Cash paid on control/ 
  acquisitions of new subsidiaries                   -    (4,638) 
 Cash and cash equivalents 
  received on control/ 
  acquisitions of new subsidiaries                   -      3,055 
 Investment in shares 
  of new associates                   9(a)     (2,293)          - 
 Interest received                      4          126        145 
 Dividends from associates            9(a)          90        189 
 Distributions received                            223        694 
 Net cash flow from/ (used 
  in) investing activities                     (2,639)      (740) 
-----------------------------------  ------  ---------  --------- 
 
 Cash flow from/ (used 
  in) financing activities 
 Net repayment of shareholder 
  loan in subsidiary                              (95)      (293) 
 Proceeds from bank loan                         8,993      3,547 
 Repayment of bank loans                       (9,341)    (4,574) 
 Short term loan to an                         (4,729)          - 
  associate 
 Repayment of finance 
  lease                                        (2,446)    (1,202) 
 Sale of shares held in 
  treasury                                          80        144 
 Proceeds from the issue                           275          - 
  of share capital 
 Interest paid                                 (2,825)    (2,266) 
 Dividends paid                                (1,582)    (1,291) 
 Dividends paid to non-controlling 
  interest                                        (26)       (16) 
-----------------------------------  ------  ---------  --------- 
 Net cash flow from/ (used 
  in) financing activities                    (11,696)    (5,951) 
-----------------------------------  ------  ---------  --------- 
 
 Net (decrease)/ increase 
  in cash and cash equivalents                 (3,541)      1,226 
-----------------------------------  ------  ---------  --------- 
 Cash and cash equivalents 
  at the beginning of the 
  year                                          12,240     11,279 
-----------------------------------  ------  ---------  --------- 
 Currency translation 
  gains/ (losses) on cash 
  and cash equivalents                             276      (265) 
-----------------------------------  ------  ---------  --------- 
 Cash and cash equivalents 
  at the year-end                                8,975     12,240 
-----------------------------------  ------  ---------  --------- 
 
   1.             Basis of preparation 

These preliminary financial statements have not been audited and are derived from the statutory accounts within the meaning of section 434 of the Companies Act 2006. They have been prepared in accordance with the Group's accounting policies that will be applied in the Group's annual financial statements for the year ended 31 March 2016. These are consistent with the policies applied for the year ended 31 March 2015. These accounting policies are drawn up in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and as adopted by the European Union (EU). Whilst the financial information included in this preliminary statement has been prepared in accordance with IFRS, this announcement does not itself contain sufficient information to fully comply with IFRS. The comparative figures for the financial year ended 31 March 2015 are not the statutory accounts for the financial year but are derived from those accounts prepared under IFRS which have been reported on by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified, did not include references to any matter to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

These preliminary financial statements were approved by the Board of Directors on 8 June 2016.

   2.             Revenue 

Revenue from continuing operations consists of revenue arising in the United Kingdom 10% (2015: 20%), Poland 82% (2015: 74%) and Romania 8% (2015: 6%). All revenue relates solely to the Group's principal activities.

   3.             Segment reporting 2016 
 
                          Property             Group         Group   Unallocated       Total 
                              fund        properties          fund       central 
                        management         and other    properties     overheads 
                                      co-investments         "FOP" 
                           GBP'000           GBP'000       GBP'000       GBP'000     GBP'000 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Total revenue               2,895            12,894         6,166             -      21,955 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 
 Depreciation 
  and amortisation            (31)           (1,535)         (138)             -     (1,704) 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 
 Operating 
  profit                     1,384             7,316         3,962       (2,904)       9,758 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Share of results 
  in associates                  -               170             -             -         170 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Distribution 
  income                         -               223             -             -         223 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Interest income                 -               101             5            20         126 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Interest payable                -           (1,424)       (1,507)             -     (2,931) 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Profit/ (loss) 
  before tax                 1,384             6,386         2,460       (2,884)       7,346 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 
 Analysed as: 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Before performance 
  fees and related 
  items                        783             8,268         2,321         (899)      10,473 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Fair value 
  adjustment 
  to investment 
  properties                     -                 -           462             -         462 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Depreciation                    -           (1,450)             -             -     (1,450) 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Provision                    (49)              (17)          (17)         (663)       (746) 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Performance 
  and related 
  fees                       1,131                 -             -             -       1,131 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Staff incentives            (481)             (169)         (164)       (1,610)     (2,424) 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Realised foreign 
  currency loss                  -             (246)         (142)           288       (100) 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 
 Total                       1,384             6,386         2,460       (2,884)       7,346 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 
 Assets - Group                497            88,670        62,283         6,776     158,226 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Share of net 
  assets of 
  associates                     -             3,352             -         (308)       3,044 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Liabilities                 (249)          (76,454)      (48,132)       (2,345)   (127,180) 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Net assets                    248            15,568        14,151         4,123      34,090 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Additions 
  to 
  non-current 
  assets 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Property, 
  plant and 
  equipment                    197                 -             -             -         197 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Investment 
  properties                     -               968           248             -       1,216 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Inventories                     -               291             -             -         291 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Investments                     -                 -             -             -           - 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Interest in 
  associates                     -             2,293             -             -       2,293 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 

Segment reporting 2015-

 
                          Property             Group         Group   Unallocated       Total 
                              fund        properties          fund       central 
                        management         and other    properties     overheads 
                                      co-investments         "FOP" 
                           GBP'000           GBP'000       GBP'000       GBP'000     GBP'000 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 External revenue 
  - Existing 
  operations 
  - Sale of 
  inventory                  6,140             2,968         5,217             -      14,325 
  - Business                     -                 -             -             -           - 
  acquisitions                   -             3,479           719             -       4,198 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Total                       6,140             6,447         5,936             -      18,523 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 
 Depreciation 
  and amortisation            (18)             (360)           (6)             -       (384) 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Operating 
  profit                     4,435             5,454         2,454       (2,938)       9,405 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 
 Share of results 
  in associates                  -               185             -             -         185 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Distribution 
  income                         -               694             -             -         694 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Interest income                 -                36            89            20         145 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Interest payable                -             (730)       (1,616)             -     (2,346) 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Profit/ (loss) 
  before tax                 4,435             5,639           927       (2,918)       8,083 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 
 Analysed as: 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Before performance 
  fees and related 
  items                      1,605             4,489         2,272         (963)       7,403 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Negative goodwill 
  on refinancing 
  of subsidiary                  -             1,123             -             -       1,123 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Negative goodwill 
  on acquisition 
  of subsidiaries                -               716             -             -         716 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Fair value 
  adjustment 
  to investment 
  properties                     -                 -         (876)             -       (876) 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Depreciation                    -             (357)             -             -       (357) 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Performance 
  fees                       3,365                 -             -             -       3,365 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Staff incentives            (535)             (194)         (184)       (1,955)     (2,868) 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Realised foreign 
  currency loss                  -             (138)         (285)             -       (423) 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Total                       4,435             5,639           927       (2,918)       8,083 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 
 Assets - Group              1,633            84,478        58,522         6,301     150,934 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Share of net 
  assets of 
  associates                     -               979             -         (308)         671 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Liabilities                 (289)          (72,437)      (45,666)       (2,194)   (120,586) 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Net assets                  1,344            13,020        12,856         3,799      31,019 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Additions 
  to 
  non-current 
  assets 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Property, 
  plant and 
  equipment                      8                 -             -             -           8 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Investment 
  properties                     -            66,909         8,864             -      75,773 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Inventories                     -               258             -             -         258 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Investments                     -               353             -             -         353 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 Interest in                     -                 -             -             -           - 
  associates 
--------------------  ------------  ----------------  ------------  ------------  ---------- 
 
   4.             Interest income 
 
                                        2016       2015 
                                       Group      Group 
                                     GBP'000    GBP'000 
---------------------------------  ---------  --------- 
 Interest income - bank deposits          36         63 
 Interest income - other                  90         82 
 Total interest income                   126        145 
---------------------------------  ---------  --------- 
 
 
                                    2016       2015 
                                   Group      Group 
                                 GBP'000    GBP'000 
-----------------------------  ---------  --------- 
 Interest expense - property 
  loans                          (2,254)    (1,730) 
 Interest expense - bank and 
  other                            (106)       (80) 
 Finance charges on finance 
  leases                           (571)      (536) 
-----------------------------  ---------  --------- 
 Total interest expense          (2,931)    (2,346) 
-----------------------------  ---------  --------- 
 
   5.             Tax expense 
 
                                   2016       2015 
                                GBP'000    GBP'000 
----------------------------  ---------  --------- 
 Analysis of tax charge for 
  the year 
 Current tax                    (1,203)      (525) 
 Deferred tax                     (484)        853 
 Total tax charge for the 
  year                          (1,687)        328 
----------------------------  ---------  --------- 
 

The tax charge includes actual current and deferred tax for continuing operations.

As in prior years, brought forward and current UK tax losses have not been recognised as a deferred tax asset due to insufficient foreseeable taxable income being earned in the UK. As a result of this treatment the effective tax rate for the Group has increased to 23% (2015: -4.1%), which is higher than both the main stream corporation tax rates of 19% in Poland and 16% in Romania.

The deferred tax credit in the prior year was largely attributable to three acquisitions made during that year, amounting to GBP992,000. This was created as a result of the nil value paid for the deferred tax asset on acquisition. The deferred tax asset has been restricted to two years worth of profits.

   6.             Earnings/ NAV per share 
 
                                  2016      2015 
 Basic earnings per share        4.37p     7.21p 
 Diluted earnings per share      4.28p     6.93p 
 
                               GBP'000   GBP'000 
 Basic earnings                  5,008     8,172 
 Diluted earnings assuming 
  full dilution                  5,016     8,187 
 

The following numbers of shares have been used to calculate both the basic and diluted earnings per share:

 
                                           2016          2015 
                                         Number        Number 
---------------------------------  ------------  ------------ 
 Weighted average number 
  of Ordinary shares in issue 
  (used for basic earnings 
  per share calculation)            114,543,523   113,348,847 
---------------------------------  ------------  ------------ 
 Number of share options              2,700,000     4,850,000 
---------------------------------  ------------  ------------ 
 Total number of Ordinary 
  shares used in the diluted 
  earnings per share calculation    117,243,523   118,198,847 
---------------------------------  ------------  ------------ 
 

The following earnings have been used to calculate both the basic and diluted earnings per share:

 
                                         2016       2015 
                                      GBP'000    GBP'000 
----------------------------------  ---------  --------- 
 Basic earnings per share 
 Basic earnings                         5,008      8,172 
----------------------------------  ---------  --------- 
 
 Diluted earnings per share 
 Basic earnings                         5,008      8,172 
 Notional interest on share 
  options assumed to be exercised           8         15 
----------------------------------  ---------  --------- 
 Diluted earnings                       5,016      8,187 
----------------------------------  ---------  --------- 
 
 
                                    2016     2015 
 Net assets per share             27.75p   26.30p 
 Adjusted net assets per share    43.01p   35.75p 
-------------------------------  -------  ------- 
 
 
 The following numbers have been used to calculate 
  both the net assets and adjusted net assets 
  per share: 
 Net assets per share                    Number        Number 
---------------------------------  ------------  ------------ 
 Number of shares in issue 
  at year-end                       115,967,111   113,792,541 
 Net assets per share                   GBP'000       GBP'000 
---------------------------------  ------------  ------------ 
 Net assets excluding non 
  controlling interest                   32,184        29,925 
                                         Number        Number 
 Adjusted net assets per share 
 Number of shares in issue 
  at year-end                       115,967,111   113,792,541 
 Number of share options assumed 
  to be exercised                     2,700,000     4,850,000 
---------------------------------  ------------  ------------ 
 Total                              118,667,111   118,642,541 
---------------------------------  ------------  ------------ 
 
 
 
                                  GBP'000   GBP'000 
 Adjusted net assets per share 
 Net assets excluding non 
  controlling interest             32,184    29,925 
 Investment properties at 
  fair value net of deferred 
  tax                              16,338    11,018 
 Inventories at fair value 
  net of deferred tax               1,795     1,248 
 Other items                          716       222 
-------------------------------  --------  -------- 
 Total                             51,033    42,413 
-------------------------------  --------  -------- 
 
   7.             Goodwill 
 
                    2016       2015 
                   Group      Group 
                 GBP'000    GBP'000 
-------------  ---------  --------- 
 
 At 1 April          153        153 
 Additions             -          - 
 At 31 March         153        153 
-------------  ---------  --------- 
 

The Directors have carried out an annual impairment test and concluded that no impairment write down is necessary because the estimated recoverable amount was higher than the value stated.

   8.             Investment properties 
 
                                     2016       2015 
                                    Group      Group 
                                  GBP'000    GBP'000 
------------------------------  ---------  --------- 
 Investment properties 
 At 1 April                       114,262     48,759 
 Business acquisitions                  -     75,390 
 Capital expenditure                1,216        383 
 Depreciation                     (1,654)      (357) 
 Fair value adjustment                462      (876) 
 Foreign exchange translation       6,432    (9,037) 
------------------------------  ---------  --------- 
 At 31 March                      120,718    114,262 
------------------------------  ---------  --------- 
 

Investment properties owned by the Group, and indirectly via FOP are stated at cost less depreciation and accumulated impairment losses. The properties were valued by CBRE, Polish Properties and BNP Paribas at the Group's financial year-end at EUR177.73 million (2015: EUR176.73 million), the Sterling equivalent at closing foreign exchange rates being GBP140.91 million (2015: GBP127.86 million). On acquisition of the Gdynia Podolska property the Directors took the decision to depreciate the property over the lease term. In the Director's opinion the property's estimated residual value at the end of the period of ownership will be lower than the carrying value. No other property has been depreciated as the estimated residual value is expected to be higher than the carrying value.

   9.             Investment in associates and other financial assets and investments 

The Group has the following investments:

 
                                   2016       2015 
                                  Group      Group 
                                GBP'000    GBP'000 
----------------------------  ---------  --------- 
 a) Associates 
 At 1 April                         671        675 
 Additions                        2,293          - 
 Disposals                            -          - 
 Share of associates profit 
  after tax                         170        185 
 Dividends received                (90)      (189) 
----------------------------  ---------  --------- 
 At 31 March                      3,044        671 
----------------------------  ---------  --------- 
 

The Group's investments in associated companies is held at cost plus its share of post-acquisition profits assuming the adoption of the cost model for accounting for investment properties under IAS40 and comprises the following:

 
                                          2016       2015 
                                         Group      Group 
                                       GBP'000    GBP'000 
-----------------------------------  ---------  --------- 
 Investments in associates 
 5(th) Property Trading Ltd                871        827 
 Regional Property Trading 
  Ltd                                      159        152 
 Fprop Romanian Supermarkets               737          - 
  Ltd 
 Fprop Galeria Corso Ltd                 1,585          - 
-----------------------------------  ---------  --------- 
                                         3,352        979 
-----------------------------------  ---------  --------- 
 Less: Share of profit after 
  tax withheld on sale of property 
  to 5(th) Property Trading 
  Ltd in 2007                            (308)      (308) 
-----------------------------------  ---------  --------- 
                                         3,044        671 
-----------------------------------  ---------  --------- 
 

If the Group had adopted the alternative fair value model for accounting for investment properties, the carrying value of the investment in associates would have increased to GBP3,551,159 (2015: GBP1,175,000).

 
                                      2016       2015 
                                     Group      Group 
                                   GBP'000    GBP'000 
-------------------------------  ---------  --------- 
 b) Other financial assets 
  and investments 
 At 1 April                          1,531      1,706 
 Additions                               -        353 
 Disposals                           (628)      (565) 
 Increase in fair value during 
  the year                              11         37 
-------------------------------  ---------  --------- 
 At 31 March                           914      1,531 
-------------------------------  ---------  --------- 
 

The Group holds two unlisted investments in funds managed by it. Both are held at fair value. All of the assets have been classified as available for sale. In the Directors' view the fair value has been estimated to be not materially different from their carrying value. Fair value has been arrived at by applying the Group's percentage holding in the investments of the fair value of their net assets.

   10.          Inventories - land and buildings 
 
 
                                     2016       2015 
                                    Group      Group 
                                  GBP'000    GBP'000 
------------------------------  ---------  --------- 
 Group properties for resale 
  at cost 
 At 1 April                        12,639     12,304 
 Purchases                              -          - 
 Capital expenditure                  291        258 
 Disposals                              -          - 
 Foreign exchange translation         964         77 
------------------------------  ---------  --------- 
 At 31 March                       13,894     12,639 
------------------------------  ---------  --------- 
 

The Group's total interest in Blue Tower (an office block in Warsaw) is 48.2% with a fair value of GBP16.01 million (2015: GBP14.18 million), and is shown at cost under inventories.

   11.          Trade and other receivables 
 
                                       2016       2015 
                                      Group      Group 
                                    GBP'000    GBP'000 
--------------------------------  ---------  --------- 
 Current assets 
 Trade receivables                    2,589      2,304 
 Less provision for impairment 
  of receivables                      (905)      (649) 
--------------------------------  ---------  --------- 
 Trade receivables net                1,684      1,655 
 Other receivables                    7,554      3,147 
 Prepayments and accrued income         890        942 
--------------------------------  ---------  --------- 
                                     10,128      5,744 
--------------------------------  ---------  --------- 
 
   Other receivables include a short term loan 
   to an associate for EUR6.5m (GBP5.15m) which 
   was repaid after the year end in May 2016. 
 
 Non-current assets 
--------------------------------  ---------  --------- 
 Other receivables                      186        283 
--------------------------------  ---------  --------- 
 
   12.          Trade and other payables 
 
                                    2016       2015 
                                   Group      Group 
                                 GBP'000    GBP'000 
-----------------------------  ---------  --------- 
 Current liabilities 
 Trade payables                    2,189      2,605 
 Other taxation and social 
  security                           575        580 
 Other payables and accruals       5,163      4,938 
 Deferred income                      11         11 
-----------------------------  ---------  --------- 
                                   7,938      8,134 
-----------------------------  ---------  --------- 
 
   13.          Financial liabilities 
 
                                           2016       2015 
                                          Group      Group 
                                        GBP'000    GBP'000 
------------------------------------  ---------  --------- 
 Current liabilities 
 Loans repayable by subsidiary            1,841          - 
  (FOP) to third party shareholders 
 Bank loan                                3,014      9,382 
 Finance leases                           2,813      2,406 
------------------------------------  ---------  --------- 
                                          7,668     11,788 
------------------------------------  ---------  --------- 
 
 Non-current liabilities 
 Loans repayable by subsidiary 
  (FOP) to third party shareholders           -      1,936 
 Bank loans                              62,038     50,610 
 Finance leases                          46,954     45,379 
------------------------------------  ---------  --------- 
                                        108,992     97,925 
------------------------------------  ---------  --------- 
 
 
                                      2016       2015 
                                     Group      Group 
                                   GBP'000    GBP'000 
-------------------------------  ---------  --------- 
 Total obligations under bank 
  loans and finance leases 
 Repayable within one year           7,668     11,788 
 Repayable within one and five 
  years                             93,150     57,928 
 Repayable after five years         15,842     39,997 
-------------------------------  ---------  --------- 
                                   116,660    109,713 
-------------------------------  ---------  --------- 
 

Loans repayable by FOP to third party shareholders are unsecured and repayable on demand.

Eight bank loans and three finance leases all denominated in Euros totalling GBP114,819,000 (2015: GBP107,777,000) included within financial liabilities are secured against investment properties owned by the Group and Fprop Opportunities plc (FOP) and the property owned by the Group shown under inventories. These bank loans and finance leases are otherwise non-recourse to the Group's assets.

The preliminary results are being circulated to all shareholders and can be downloaded from the Company's web-site (www.fprop.com). Further copies can be obtained from the registered office at 32 St James's Street, London, SW1A 1HD.

This information is provided by RNS

The company news service from the London Stock Exchange

END

FR SSEEDAFMSELM

(END) Dow Jones Newswires

June 09, 2016 02:00 ET (06:00 GMT)

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