TIDMFPO
RNS Number : 8863P
First Property Group PLC
23 November 2016
Date: 23 November 2016
On behalf First Property Group plc ("First
of: Property" or "the Group")
Embargoed: 0700hrs
First Property Group plc
Interim Results for the six months to 30 September 2016
First Property Group plc (AIM: FPO), the property fund manager
and investor, today announces its interim results for the six
months to 30 September 2016.
Highlights:
-- Profit before tax of GBP4.47m in line with the prior year
despite a significant reduction in one-off non-recurring items to
GBP290,000 (2015: GBP1.58 million);
-- Total assets under management up 43% to GBP405 million (2015: GBP283 million);
-- Adjusted NAV per share up 20% to 45.86 pence per share (2015:
38.27 pence per share restated);
-- Annualised fund management fee income at the period end,
excluding performance fees, increased by 46% to some GBP1.9 million
(2015: GBP1.3 million);
-- Weighted average unexpired fund management contract term
increased to 6.42 years (2015: 3.75 years);
-- Interim dividend up 3.9% to 0.40 pence per share (2015: 0.385 pence per share).
Financial performance summary:
Unaudited Unaudited Percentage Audited
Six months Six months change Year to
to 30 to 31 March
September 30 September 2016
2016 2015 Restated*
----------------------- ------------ ---------------- ----------- ----------
Income Statement:
----------------------- ------------ ---------------- ----------- ----------
Statutory profit GBP4.47m GBP4.46m +0.2% GBP7.35m
before tax
Non-recurring GBP0.29m GBP1.58m -81.6% GBP1.76m
items
Diluted earnings
per share 2.40p 2.89p -17.0% 4.28p
Dividend per share 0.400p 0.385p +3.9% 1.50p
Average EUR/GBP
rate used 1.217 1.386 1.363
----------------------- ------------ ---------------- ----------- ----------
Balance Sheet
at period end:
----------------------- ------------ ---------------- ----------- ----------
Net assets GBP36.43m GBP30.58m +19.1% GBP34.09m
Net assets per
share 29.50p 25.86p +14.1% 27.75p
Adjusted net assets GBP54.43m GBP45.40m +19.9% GBP51.03m
EPRA NNNAV per
share** 45.86p 38.27p +19.8% 43.01p
Cash Balances GBP14.12m GBP14.20m -0.6% GBP8.98m
Period-end EUR/GBP
rate 1.156 1.357 1.261
----------------------- ------------ ---------------- ----------- ----------
Group Property
Portfolio at period
end:
----------------------- ------------ ---------------- ----------- ----------
Group Properties GBP144.3m GBP125.9m +14.6% GBP134.5m
at book value***
Group Properties GBP170.3m GBP145.3m +17.2% GBP156.9m
at market value
Gross Debt secured GBP122.0m GBP108.3m +12.7% GBP114.8m
against Group
properties
LTV% 71.6% 74.5% 73.2%
----------------------- ------------ ---------------- ----------- ----------
Total assets under GBP405m GBP283m +43.1% GBP353m
management:
----------------------- ------------ ---------------- ----------- ----------
Poland 48.6% 53.8% 51.5%
United Kingdom 46.6% 43.6% 43.8%
Romania 4.8% 2.6% 4.7%
* 2015 restated in order to provide a like
for like prior year comparison to the period
** just ended, in which a provision has been
made for staff incentives pro-rated in
line with the full year's charge
EPRA - European Public Real Estate Association
providers of industry standards of NAV
calculations.
*** It is the Group's policy to hold assets
at the lower of cost or value adjusted
for prevailing FX rates.
Commenting on the results, Ben Habib, Chief Executive of First
Property Group, said:
"I am very pleased by the continued good progress made by the
Group.
"Assets under management have grown by 43% since the prior year
and we have additional commitments which, once invested, will
result in further growth.
"The quality of our earnings has continued to improve with very
nearly all our profits being earned from activities of a recurring
nature.
"The assets we own and manage are performing well, as are the
economies in which we operate and we expect continued earnings
growth.
"The contribution to earnings from Group Properties has
increased substantially in recent years as a result of us taking
advantage of opportunities for which we had no fund management
mandates. Going forward, we expect the relative contribution from
fund management to rise. The synergies between these two activities
further balance the business.
"We are confident that our strong balance sheet, operational
gearing and experienced team will continue to drive the Group's
growth and look forward to taking advantage of the in-built
opportunities available to us."
A briefing for analysts will be held at 10:30hrs today at the
headquarters of First Property Group plc, 32 St James's Street,
London, SW1A 1HD. Participants can also attend by telephone on +44
(20) 3043 2014 (pin 013555). 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
audio call will subsequently be posted on the company website,
www.fprop.com.
For further information please contact:
First Property Group plc Tel: 020 7340
0270
Ben Habib (Chief Executive www.fprop.com
& Chief Investment Officer)
George Digby (Group Finance
Director)
Jeremy Barkes (Director,
Business Development)
Arden Partners Tel: 020 7614
5900
Chris Hardie/ Ben Cryer
Redleaf Communications Tel: 020 7382
4747
Rebecca Sanders-Hewett/ Susie firstproperty@redleafpr.com
Hudson /
Henry Columbine
Notes to Investors and Editors:
First Property Group plc is an award winning property fund
manager and investor with operations in the United Kingdom and
Central Europe. Around one third of the shares in the Company are
owned by management and their families.
Its focus is on higher yielding commercial property with
sustainable cash flows. The company is flexible and takes an active
approach to asset management. 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 for third parties in property. FPAM currently
manages nine funds which are invested across the United Kingdom,
Poland and Romania. FPAM funds rank No.1 versus MSCI's Investment
Property Databank (IPD) Central & Eastern Europe (CEE) universe
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.
-- Group Properties - principal investments by the Group, to
earn a return on its own capital, usually in partnership with third
parties. Investments include eleven directly held properties in
Poland and Romania (including five held by Fprop Opportunities plc
[FOP], in which the Group is currently the majority shareholder),
and interests in six other funds managed by FPAM.
Listed on AIM the Company has offices in London and Warsaw.
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 interim results for the six months ended
30 September 2016.
Revenue earned by the Group amounted to GBP11.12 million (2015:
GBP10.95 million) yielding a profit before tax of GBP4.47 million
(2015: GBP4.46 million restated). Profit before tax was maintained
without any contribution from performance fees (2015: GBP864,000)
or from development profits from Fprop PDR (2015: GBP163,000) and
despite the discontinuation of the fund management contract with
Universities Superannuation Scheme (USS) last year (2015:
GBP301,000).
The main new sources of income which replaced this non-recurring
income were:
-- Foreign exchange gains - the Euro was on average some 12%
stronger versus Sterling during the period at EUR1.217 (2015:
EUR1.386). This resulted in Group profit before tax being
GBP620,000 higher than if on a constant currency basis;
-- Additional income from co-investments - our share of results
in associates increased to GBP271,000 (2015: GBP65,000) mainly due
to our co-investment in two new funds established in Poland and in
Romania in the last financial year;
-- Fund management fees of GBP253,000 from increased investment
by the Shipbuilding Industries Pension Scheme (SIPS) and from the
establishment of the two new funds referred to above; and
-- A realised profit of GBP144,000 from the strategic sale of
shares in Fprop Opportunities plc (FOP).
Diluted earnings per share were 2.40 pence (2015: 2.89 pence
restated). The reduction was mainly due to a higher provision for
deferred tax liabilities of GBP645,000 (2015: GBP73,000) resulting
from the impact of foreign exchange movements and changes in
accounting treatment under UK GAAP.
The Group ended the period with reported net assets of GBP36.43
million (2015: GBP30.58 million restated). It is the accounting
policy of the Group to carry its 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 GBP54.43 million (2015: GBP45.40 million
restated). The increase in net assets is attributable mainly to a
stronger Euro versus Sterling at the period end.
Group cash balances stood at GBP14.12 million (2015: GBP14.20
million) at the period end. Of this GBP5.34 million (2015: GBP3.26
million) was held by FOP (74% owned by the Group) and GBP326,000
(2015: GBP461,000) was held by Corp Sp z o,o. (90% owned by the
Group), the property management company for Blue Tower in Warsaw.
Our cash reserves enable us to take advantage of opportunities as
they arise as well as to co-invest in new funds established by
FPAM.
Dividend
The Directors have resolved to increase the interim dividend by
3.9% to 0.40 pence per share (2015: 0.385 pence per share) which
will be paid on 30 December 2016 to shareholders on the register at
2 December 2016, with an ex-dividend date of 1 December 2016.
Review of Operations:
PROPERTY FUND MANAGEMENT - (First Property Asset Management Ltd
or FPAM)
As at 30 September 2016 aggregate assets under management,
calculated by reference to independent third party property
valuations, stood at GBP405 million (2015: GBP283 million),
including some GBP170.3 million (2015: GBP145.3 million) of
properties held by the Group and FOP. Of these 48.6% were located
in Poland, 46.6% in the UK and 4.8% in Romania.
Fund management fees are levied monthly by FPAM by reference to
the value of properties under management.
The reconciliation of movement in funds under management during
the period is shown below:
Funds managed Group Totals
for third parties Properties
(including funds (including
in which the Group FOP)
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 2016 154.7 41.5 196.2 50 156.9 11 353.1 61
---------------- ------- ------- ------- -------- ------- -------- ------- --------
Purchases 37.7 - 37.7 6 - - 37.7 6
Sales - - - - - - -
Property
Depreciation - - - - (0.8) - (0.8) -
Property
Revaluation (4.0) 0.7 (3.3) - (0.1) - (3.4) -
FX Revaluation - 3.9 3.9 - 14.3 - 18.2 -
As at 30
Sept 2016 188.4 46.1 234.5 56 170.3 11 404.8 67
---------------- ------- ------- ------- -------- ------- -------- ------- --------
Revenue earned by this division amounted to GBP918,000 (2015:
GBP1.85 million), resulting in a profit before unallocated central
overheads and tax of GBP273,000 (2015: GBP1.19 million) and
representing 4.5% (2015: 18.5%) of Group profit before unallocated
central overheads and tax.
The decline in revenue, in spite of the increase in assets under
management, was due to the absence of performance fees (2015:
GBP864,000) and the expiry last year of FPAM's fund management
contract with USS (2015: GBP301,000).
FPAM now manages nine (2015: eight) closed-end funds. 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 at
30 September 30 September
2016 2015
-------------------- --------------- -------- -------------- ------------ --------------
SAM Property UK Rolling * * *
Company Ltd
(SAM)
Regional Poland Aug GBP7.0m 1.7% GBP6.3m
Property 2020
Trading Ltd
(RPT)
5(th) Property Poland Dec GBP8.5m 2.1% GBP7.8m
Trading Ltd 2022
(5PT)
UK Pension UK Feb GBP93.1m 23% GBP95.1m
Property 2017
Portfolio
LP (UK PPP)
Fprop PDR UK May Nil - Nil
LP 2018 (commitment
of GBP42m)
SIPS Property UK Jan GBP95.3m 23.6% GBP28.0m
Nominee Ltd 2025 (commitment
(SIPS) of GBP170m)
Fprop Romanian Romania Jan GBP10.2m 2.5% -
Supermarkets 2026
Ltd (FRS)
Fprop Galeria Poland Jan GBP20.4m 5.0% -
Corso Ltd 2026
(FGC)
-------------------- --------------- -------- -------------- ------------ --------------
Sub Total GBP234.5 57.9% GBP137.2m
m
-------------------- --------------- -------- -------------- ------------ --------------
Fprop Opportunities Poland Oct GBP67.0m 16.6% GBP55.5m
plc (FOP) 2020
Group Properties Poland n/a GBP103.3m 25.5% GBP89.8m
& Romania
-------------------- --------------- -------- -------------- ------------ --------------
Sub Total GBP170.3m 42.1% GBP145.3m
-------------------- --------------- -------- -------------- ------------ --------------
Total GBP404.8m 100% GBP282.5m
-------------------- --------------- -------- -------------- ------------ --------------
* Not subject to recent revaluation
We have made good progress in investing the SIPS fund, awarded
to us in January 2015. At 30 September the value of the properties
acquired by it stood at GBP95.3 million. We have since completed
the purchase of a further GBP14.6 million of commercial property on
its behalf, and have a further GBP47.1 million of property under
offer. In October 2016 SIPS increased its minimum commitment to the
fund from GBP125 million to GBP170 million. We expect this fund to
be fully invested before the financial year-end.
At the period end FPAM's fund management fee income, excluding
performance fees, was being earned at an annualised rate of GBP1.9
million (2015: GBP1.3 million), a year on year increase of 46%. We
expect this rate to increase as we continue to invest on behalf of
SIPS and as we win new contracts. FPAM's weighted average unexpired
fund management contract term increased to 6.42 years (2015: 3.75
years).
GROUP PROPERTIES
Group Properties comprises eleven commercial properties in
Poland and Romania, including five held by FOP (in which the Group
is currently the majority shareholder), and non-controlling
interests in six of the nine funds managed by FPAM, as set out in
the tables below. New investments by Group Properties are expected
to be non-controlling interests.
It is the Group's policy to carry its properties and interests
in associates at the lower of cost or market value for accounting
purposes, and to recognise dividends when received.
1. Properties held at 30 September 2016:
Country No. Book Market Contribution Contribution
of properties value value to Group to Group
profit profit
before before
tax period tax period
to 30 to 30
September September
2016 2015
------------ --------------- ---------- ---------- ------------- -------------------
Poland 3 GBP79.6m GBP94.0m GBP3.15m GBP2.79m
Romania 3 GBP6.0m GBP9.3m GBP0.58m GBP0.45m
FOP (All 5 GBP58.7m GBP67.0m GBP1.92m GBP1.72m
in Poland)
------------ --------------- ---------- ---------- ------------- -------------------
Total 11 GBP144.3m GBP170.3m GBP5.65m GBP4.96m
------------ --------------- ---------- ---------- ------------- -------------------
2. Non-controlling interests in funds and joint ventures managed by FPAM at 30 September 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 30 September 30 September
2016 2015
----- ---------- ------------- ------------- -------------- --------------
Interest in associates
5PT 37.8% GBP560,000 GBP1,012,000 GBP61,000 GBP59,000
RPT 28.6% GBP185,000 GBP220,000 GBP26,000 GBP6,000
FRS 24.1% GBP766,000 GBP764,000 GBP83,000 -
FGC 28.2% GBP1,587,000 GBP1,661,000 GBP101,000 -
----- ---------- ------------- ------------- -------------- --------------
Sub Total GBP3,098,000 GBP3,657,000 GBP271,000 GBP65,000
----------------- ------------- ------------- -------------- --------------
Investments
UK PPP 0.9% GBP905,000 GBP905,000 GBP18,000 GBP29,000
Fprop 5% GBP13,000 GBP13,000 - GBP163,000
PDR LP
-------- ----- ----------- ----------- ---------- -----------
Sub Total GBP918,000 GBP918,000 GBP18,000 GBP192,000
--------------- ----------- ----------- ---------- -----------
Total GBP4,016,000 GBP4,575,000 GBP289,000 GBP257,000
------ ------------- ------------- ----------- -----------
Revenue from Group Properties amounted to GBP10.20 million
(2015: GBP9.10 million), generating a profit before unallocated
central overheads and tax of GBP5.84 million (2015: GBP5.22
million) and representing 95.5% (2015: 81.5%) of Group profit
before unallocated central overheads and tax.
The contribution to Group earnings by the Group's eleven
properties, but excluding its non-controlling interests in funds
managed by FPAM, is detailed below:
Six months to Six months to
30 Sep 2016 30 Sep 2015
EURm. EURm.
--------------------- -------------- --------------
Net operating
income (NOI) 9.66 9.69
Interest expense
on bank loans
/ finance leases (1.67) (1.92)
--------------------- -------------- --------------
NOI after interest
expense 7.99 7.77
Current tax (0.61) (0.53)
Debt amortisation (3.60) (3.47)
Capital expenditure (0.46) (1.38)
--------------------- -------------- --------------
Free cash 3.32 2.39
--------------------- -------------- --------------
Market value
of properties EUR196.87 EUR197.16
Average yield
on market value 9.8% 9.8%
Bank loans/ finance
leases outstanding EUR141.00 EUR146.96
Loan to value
(LTV) 71.6% 74.5%
Weighted average 3.73yrs 4.39yrs
unexpired lease
term (WAULT)
Vacancy rate 1.8% 4.0%
--------------------- -------------- --------------
The loans secured against these eleven 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 GBP602,000 per annum. The current
weighted average borrowing cost is 2.59% (2015: 2.87%) per
annum.
The income return from our four associate shareholdings in funds
managed by FPAM contributed GBP271,000 (2015: GBP65,000) to Group
profit before tax prior to the deduction of unallocated central
overheads, representing 4.6% of the contribution by Group
Properties. This represents a net increase of GBP206,000 from the
same period last year and is primarily a result of the new
investments in Fprop Romanian Supermarkets Ltd and Fprop Galeria
Corso Ltd, both made in the second half of the last financial
year.
Now that FOP is fully invested and generating the kind of
returns we had hoped of it at its establishment in 2010, the Group
has begun to sell some of its shareholding. During the period it
sold GBP370,000 of shares and loan notes, resulting in a profit of
GBP144,000. It is the Group's long term aim to continue to reduce
its interest in FOP until it ceases to be consolidated in the
Group's results, following which the Group will recognise only its
share of FOP's profits and FPAM will recognise fund management fees
earned from it.
Commercial Property Markets Outlook
Poland:
GDP growth in Poland continues to exceed that of most other EU
nations, and is forecast to be 3.7% in 2016 and 3.6% in 2017.
Inflation has been negative since the second half of 2014 but is
expected to turn positive in the next few months. Government debt
remains low by international standards at some 54% of GDP. There
are concerns that economic growth may slow in due course due to the
populist policies of the new government (elected Oct-2015) but the
government is showing pragmatism by implementing its policies on
generally milder terms than first proposed.
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 around one third more than equivalent property in
Western Europe.
Investment demand from international investors remains high and
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.
Government plans to introduce REIT legislation in Poland should
lead to increased domestic demand for commercial property in due
course.
Romania:
The economic backdrop in Romania is favourable for property
investment. Growth in GDP is expected to top 4% this year.
Occupier demand as well as investor demand for commercial
property is picking up albeit from a relatively low level.
Meanwhile bank lending margins, which started the year at more
than twice those available in Poland, are beginning to reduce,
which should boost investment demand for commercial property.
United Kingdom:
Economic growth in the UK following the Referendum has been much
stronger than very nearly all economists and the Bank of England
predicted. The UK remains on track to finish 2016 as the fastest
growing G7 nation (with GDP growth of around 2%).
Growth in GDP is expected to slow in 2017 but the forecast rate
is still a respectable 1.5% and is likely to exceed expectations
again.
Commercial property values fell in the wake of the Referendum,
in particular for properties with shorter leases, or requiring
asset management. Prime properties with longer leases were less
affected, apart from in Scotland, due to heightened fears of a
second referendum on Scottish independence.
It is our view that values will recover. The occupier market
remains robust and the Bank of England's decision in August to cut
the base rate from 0.5% to 0.25% and institute a further round of
QE will provide substantial support.
Current Trading and Prospects
I am very pleased by the continued good progress made by the
Group.
Assets under management have grown by 43% since the prior year
and we have additional commitments which, once invested, will
result in further growth.
The quality of our earnings has continued to improve with very
nearly all our profits being earned from activities of a recurring
nature.
The assets we own and manage are performing well, as are the
economies in which we operate and we expect continued earnings
growth.
The contribution to earnings from Group Properties has increased
substantially in recent years as a result of our taking advantage
of opportunities for which we had no fund management mandates.
Going forward, we expect the relative contribution from fund
management to rise. The synergies between these two activities
further balance the business.
We are confident that our strong balance sheet, operational
gearing and experienced team will continue to drive the Group's
growth and look forward to taking advantage of the in-built
opportunities available to us.
Ben Habib
Chief Executive
23 November 2016
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months to 30 September 2016
Notes Six months Six months Year to
to to
30 Sept 30 Sept 31 March
2016 (unaudited) 2015 (unaudited) 2016
Restated (audited)
Total Total Total
results results results
-------------------------- ------ ------------------- ------------------- -----------
GBP'000 GBP'000 GBP'000
Revenue 2 11,121 10,947 21,955
-------------------------- ------ ------------------- ------------------- -----------
Cost of sales (1,893) (1,773) (4,255)
Gross profit 9,228 9,174 17,700
Reversal of impairment
loss to
investment properties 142 556 462
Operating expenses (3,897) (4,080) (8,404)
Operating profit 2 5,473 5,650 9,758
Profit on sale of 144 - -
subsidiary investment
Share of results in
associates 271 65 170
Distribution income 18 192 223
Interest income 3 81 69 126
Interest expense 3 (1,514) (1,518) (2,931)
Profit before tax 2 4,473 4,458 7,346
Tax charge 4 (1,220) (661) (1,687)
-------------------------- ------ ------------------- ------------------- -----------
Profit for the period 3,253 3,797 5,659
Attributable to:
Owners of the parent 2,849 3,417 5,008
Non-controlling interest 404 380 651
3,253 3,797 5,659
Earnings per Ordinary
1p share
-basic 5 2.46p 2.99p 4.37p
-diluted 5 2.40p 2.89p 4.28p
-------------------------- ------ ------------------- ------------------- -----------
CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
for the six months to 30 September 2016
Notes Six months Six months Year to
to 30 to 31 March
Sept 2016 30 Sept 2016
2015
unaudited unaudited audited
----------------------------------- ------- ----------- ----------- ----------
GBP'000 GBP'000 GBP'000
----------------------------------- ------- ----------- ----------- ----------
Profit for the period 3,253 3,797 5,659
-------------------------------------------- ----------- ----------- ----------
Other comprehensive
income
Exchange difference
on retranslation of
foreign subsidiaries 286 (3,161) (1,346)
Revaluation of available-for-sale
financial assets - 13 11
Taxation - - -
Total comprehensive
income for the period 3,539 649 4,324
-------------------------------------------- ----------- ----------- ----------
Total comprehensive
income for the period:
Owners of the parent 3,321 659 3,486
Non-controlling interest 218 (10) 838
-------------------------------------------- ----------- ----------- ----------
3,539 649 4,324
------------------------------------------- ----------- ----------- ----------
CONDENSED CONSOLIDATED BALANCE SHEET
as at 30 September 2016
Notes As at As at As at
30 Sept 30 Sept 31 March
2016 (unaudited) 2015 (unaudited) 2016 (audited)
Restated
------------------------------ ------ ------------------ ------------------ ----------------
GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill 153 153 153
Investment properties 6 129,333 112,956 120,718
Property, plant and
equipment 181 162 186
Interest in associates 7a 3,098 675 3,044
Other financial assets 7b 918 916 914
Other receivables 8 139 228 186
Deferred tax assets 3,430 4,100 3,016
------------------------------ ------ ------------------ ------------------ ----------------
Total non-current
assets 137,252 119,190 128,217
Current assets
Inventories - land
and buildings 14,998 12,958 13,894
Current tax assets 123 52 56
Trade and other receivables 8 5,307 5,378 10,128
Cash and cash equivalents 14,115 14,202 8,975
------------------------------ ------ ------------------ ------------------ ----------------
Total current assets 34,543 32,590 33,053
Current liabilities
Trade and other payables 9 (7,685) (7,869) (7,938)
Financial liabilities 10a (8,383) (6,101) (7,668)
Current tax liabilities (187) (162) (200)
------------------------------ ------ ------------------ ------------------ ----------------
Total current liabilities (16,255) (14,132) (15,806)
------------------------------ ------ ------------------ ------------------ ----------------
Net current assets 18,288 18,458 17,247
------------------------------ ------ ------------------ ------------------ ----------------
Total assets less
current liabilities 155,540 137,648 145,464
------------------------------ ------ ------------------ ------------------ ----------------
Non-current liabilities
Financial liabilities 10b (115,519) (104,061) (108,992)
Deferred tax liabilities (3,593) (3,003) (2,382)
Net assets 36,428 30,584 34,090
------------------------------ ------ ------------------ ------------------ ----------------
Equity
Called up share capital 1,166 1,149 1,166
Share premium 5,777 5,508 5,773
Foreign Exchange Translation
Reserve (1,679) (3,389) (2,151)
Investment revaluation
reserve (38) (36) (38)
Share-based payment
reserve 203 218 203
Retained earnings 28,789 26,076 27,231
------------------------------ ------ ------------------ ------------------ ----------------
Equity attributable
to the owners of the
parent 34,218 29,526 32,184
Non-controlling interest 2,210 1,058 1,906
------------------------------ ------ ------------------ ------------------ ----------------
Total equity 36,428 30,584 34,090
------------------------------ ------ ------------------ ------------------ ----------------
Net assets per share 5 29.50p 25.86p 27.75p
------------------------------ ------ ------------------ ------------------ ----------------
CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
for the six months to 30 September 2016
Share Share Share Foreign Purchase/Sale Investment Retained Non-controlling TOTAL
capital premium Based Exchange of own Shares Revaluation Earnings Interest Restated
Payment Translation Reserve Restated
Reserve Reserve
------------------ -------- -------- -------- ------------ -------------- ------------ --------- ---------------- ---------
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
Fair value (or
revaluation)
gains on - - - - - - 3,797 - 3,797
available- for-
sale assets - - - - - 13 - - 13
Movement on
foreign exchange - - - (2,771) - - - (390) (3,161)
Share based
payments - - 15 - - - - - 15
New shares issued - - - - - - - - -
Non-controlling
interest - - - - - - (380) 380 -
Sale of treasury
shares - 3 - - 66 - - - 69
Dividends paid - - - - - - (1,142) (26) (1,168)
At 30 Sept 2015 1,149 5,508 218 (3,389) (107) (36) 26,183 1,058 30,584
------------------ -------- -------- -------- ------------ -------------- ------------ --------- ---------------- ---------
Profit for the
period - - - - - - 1,862 - 1,862
Fair value (or
revaluation)
gains on
available- for-
sale assets - - - - - (2) - - (2)
Movement on
foreign exchange - - - 1,238 - - - 577 1,815
Share based
payments - - (15) - - - - - (15)
New shares issued 17 258 - - - - - - 275
Non-controlling
interest - - - - - - (271) 271 -
Sale of treasury
Shares - 7 - - 4 - - - 11
Dividends paid - - - - - - (440) - (440)
------------------ -------- -------- -------- ------------ -------------- ------------ --------- ---------------- ---------
At 1 April 2016 1,166 5,773 203 (2,151) (103) (38) 27,334 1,906 34,090
------------------ -------- -------- -------- ------------ -------------- ------------ --------- ---------------- ---------
Profit for the
period
Change in
proportion held
by non - - - - - - 3,253 - 3,253
controlling
interest - - - - - - - 100 100
Movement on
foreign exchange - - - 472 - - - (186) 286
Share based - - - - - - - - -
payments
Non-controlling
interest - - - - - - (404) 404 -
Sale of treasury
shares - 4 - - 2 - - - 6
Dividends paid - - - - - - (1,293) (14) (1,307)
------------------ -------- -------- -------- ------------ -------------- ------------ --------- ---------------- ---------
At 30 Sept 2016 1,166 5,777 203 (1,679) (101) (38) 28,890 2,210 36,428
------------------ -------- -------- -------- ------------ -------------- ------------ --------- ---------------- ---------
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
for the six months to 30 September 2016
Six months Six months Year to
to to 30
Sept 2015
(unaudited)
30 Sept Restated 31 March
2016 (unaudited) 2016
(audited)
----------------------------------- ------ ------------------- ------------- ------------
Notes GBP'000 GBP'000 GBP'000
----------------------------------- ------ ------------------- ------------- ------------
Cash flows from operating
activities
Operating profit 5,473 5,650 9,758
Adjustments for:
Depreciation of investment
property, and property,
plant & equipment 976 815 1,704
Reversal of impairment
loss to investment properties 6 (142) (556) (462)
Share based payments - 15 -
(Increase)/decrease
in inventories (135) (141) (291)
(Increase)/decrease
in trade and other receivables (122) 307 903
Increase/(decrease)
in trade and other payables (364) 241 (356)
Other non-cash adjustments 40 43 460
Cash generated from
operations 5,726 6,374 11,716
Income taxes paid (667) (357) (922)
----------------------------------- ------ ------------------- ------------- ------------
Net cash flow from operating
activities 5,059 6,017 10,794
----------------------------------- ------ ------------------- ------------- ------------
Cash flow from investing
activities
Capital expenditure
on investment properties (176) (1,009) (1,216)
Proceeds from partial
disposal of available-for-sale
assets 153 627 628
Purchase of property,
plant and equipment (16) (125) (197)
Consideration from the 244 - -
sale of FOP shares
Investment in shares
of new associates - - (2,293)
Dividends from associates 7a 64 62 90
Distributions received 18 192 223
Interest received 3 81 69 126
----------------------------------- ------ ------------------- ------------- ------------
Net cash flow from /(used
in) investing activities 368 (184) (2,639)
----------------------------------- ------ ------------------- ------------- ------------
Cash flow from financing
activities
Net repayment of shareholder
loans in subsidiaries (75) (48) (95)
Interest paid 3 (1,455) (1,462) (2,825)
Proceeds from bank loan - 7,813 8,993
Repayment of finance
leases/bank loans (2,958) (9,015) (11,787)
Short term loan to an
associate 5,083 - (4,729)
Sale of shares held
in Treasury 6 69 80
Proceeds from the issue
of share capital - - 275
Dividends paid (1,293) (1,142) (1,582)
Dividends paid to non-controlling
interest (14) (26) (26)
----------------------------------- ------ ------------------- ------------- ------------
Net cash flow (used
in) financing activities
of continuing operations (706) (3,811) (11,696)
Net increase/(decrease)
in cash and cash equivalents 4,721 2,022 (3,541)
----------------------------------- ------ ------------------- ------------- ------------
Cash and cash equivalents
at the beginning of
period 8,975 12,240 12,240
----------------------------------- ------ ------------------- ------------- ------------
Currency translation
gains/(losses) on cash
and cash equivalents 419 (60) 276
----------------------------------- ------ ------------------- ------------- ------------
Cash and cash equivalents
at the end of the period 14,115 14,202 8,975
----------------------------------- ------ ------------------- ------------- ------------
NOTES TO THE CONDENSED CONSOLIDATED RESULTS
for the six months ended 30 September 2016
1. Basis of Preparation
-- These interim condensed consolidated financial statements for
the six months ended 30 September 2016 have not been audited or
reviewed and do not constitute statutory accounts within the
meaning of section 435 of the Companies Act 2006. They have been
prepared in accordance with the Group's accounting policies as set
out in the Group's latest annual financial statements for the year
ended 31 March 2016 and are in compliance with IAS 34 "Interim
Financial Reporting". 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).
-- The comparative figures for the half year ended 30 September
2015 have been restated from those previously reported. The
restated figures include one adjustment for GBP1,471,000 being an
accrual for staff incentives pro-rated in line with the full year's
charge. There has been no re-statement for the comparative figure
for the full year ended 31 March 2016. See note 5 for a
reconciliation of the restated earnings and net assets.
-- The comparative figures for the financial year ended 31 March
2016 are not the statutory accounts for the financial year but are
abridged 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 interim financial statements were approved by a
committee of the Board on 22 November 2016.
2. Segmental Analysis
Segment reporting six months to 30 September 2016
The parent holding company costs and related listing costs are
shown separately under unallocated central costs.
Property fund Group properties Group fund Unallocated central TOTAL
management properties ("FOP") overheads
--------------------- --------------------- ----------------- -------------------- --------------------- --------
GBP'000 GBP'000 GBP000 GBP'000 GBP'000
Total Revenue 918 6,800 3,403 - 11,121
Depreciation and
amortisation (17) (864) (95) - (976)
--------------------- --------------------- ----------------- -------------------- --------------------- --------
Operating profit
Existing operations 273 4,422 2,427 (1,649) 5,473
Profit on sale of
subsidiary
investment - 144 - - 144
Share of results in
associates - 271 - - 271
Distribution income - 18 - - 18
Interest income - 51 20 10 81
Interest expense - (719) (795) - (1,514)
--------------------- --------------------- ----------------- -------------------- --------------------- --------
Profit/(loss) before
tax 273 4,187 1,652 (1,639 ) 4,473
--------------------- --------------------- ----------------- -------------------- --------------------- --------
Analysed as:
Before performance
fees and related
items:
273 5,235 1,576 (445) 6,639
Performance fees - - - - -
Reversal of
impairment loss to
investment
properties - - 142 - 142
Depreciation - (812) - - (812)
Staff incentives - - - (1,113) (1,113)
Realised foreign
currency loss - (236) (66) (81) (383)
Profit/(loss) before
tax 273 4,187 1,652 (1,639) 4,473
--------------------- --------------------- ----------------- -------------------- --------------------- --------
Revenue for the six months to 30 September 2016 from continuing
operations consists of revenue arising in the United Kingdom 6%
(2015: 14%) and Central and Eastern Europe 94% (2015: 86%) and all
relates solely to the Group's principal activities.
Segment reporting six months to 30 September 2015 as
restated
Property fund Group properties Group fund Unallocated TOTAL
management properties ("FOP") central overheads As restated
-------------------- -------------------- ----------------- ------------------- ------------------- -------------
GBP'000 GBP'000 GBP000 GBP'000 GBP'000
Total Revenue 1,845 6,099 3,003 - 10,947
Depreciation and
amortisation (13) (747) (55) - (815)
-------------------- -------------------- ----------------- ------------------- ------------------- -------------
Operating profit
Existing operations 1,188 3,952 2,471 (1,961) 5,650
Share of results in
associates - 65 - - 65
Distribution income - 192 - - 192
Interest income - 14 45 10 69
Interest expense - (721) (797) - (1,518)
-------------------- -------------------- ----------------- ------------------- ------------------- -------------
Profit/(loss)
before tax 1,188 3,502 1,719 (1,951) 4,458
-------------------- -------------------- ----------------- ------------------- ------------------- -------------
Analysed as:
Before performance
fees and related
items: 324 4,324 1,242 (480) 5,410
Performance fees 864 - - - 864
Reversal of
impairment loss to
investment
properties - - 556 - 556
Depreciation - (717) - - (717)
Staff incentives as
restated - - - (1,471) (1,471)
Realised foreign
currency loss - (105) (79) - (184)
Profit/(loss)
before tax 1,188 3,502 1,719 (1,951) 4,458
-------------------- -------------------- ----------------- ------------------- ------------------- -------------
Segment reporting year to 31 March 2016
Property Group Group Unallocated TOTAL
fund properties fund central
management properties overheads
("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 expense - (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
Performance
fees 1,131 - - - 1,131
Reversal of
impairment
loss to investment
properties - - 462 - 462
Depreciation - (1,450) - - (1,450)
Provision (49) (17) (17) (663) (746)
Staff incentives (481) (169) (164) (1,610) (2,424)
Realised foreign
currency gain/(loss) - (246) (142) 288 (100)
Profit/(loss)
before tax 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
----------------------- ------------ ------------ ------------ ------------ ----------
Assets, liabilities and costs that relate to Group central
activities (including free cash) have not been allocated to
business segments.
3. Interest income/(expense)
Sept 2016 Sept 2015 March
2016
----------------------- ---------- ---------- --------
GBP'000 GBP'000 GBP'000
Interest income -
bank deposits 18 18 36
Interest income -
other 63 51 90
Total interest income 81 69 126
----------------------- ---------- ---------- --------
Sept 2016 Sept 2015 March
2016
------------------------ ---------- ---------- --------
GBP'000 GBP'000 GBP'000
Interest expense -
property loans (1,141) (1,153) (2,254)
Interest expense -
bank and other (59) (51) (106)
Finance charges on
finance leases (314) (314) (571)
------------------------ ---------- ---------- --------
Total interest expense (1,514) (1,518) (2,931)
------------------------ ---------- ---------- --------
4. Tax Expense
The tax charge is based on a combination of actual current and
deferred tax charged at an effective rate that is expected to apply
to the profits for the full year.
Sept 2016 Sept 2015 March
2016
-------------- ---------- ---------- --------
GBP'000 GBP'000 GBP'000
Current tax (575) (588) (1,203)
Deferred tax (645) (73) (484)
-------------- ---------- ---------- --------
Total (1,220) (661) (1,687)
-------------- ---------- ---------- --------
5. Earnings/NAV per share
The basic earnings per ordinary share is calculated on the
profit on ordinary activities after taxation and after
non-controlling interests on the weighted average number of
ordinary shares in issue, during the period.
Figures in the table below have been used in the
calculations.
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 March
2016 2015 Restated 2016
--------------------------- ------------ --------------- ------------
Basic - pence per
Share 2.46p 2.99p 4.37p
Diluted - pence per
Share 2.40p 2.89p 4.28p
--------------------------- ------------ --------------- ------------
Number Number
--------------------------- ------------ --------------- ------------
Weighted average number
of ordinary shares
in issue for basic 115,967,888 114,177,240 114,543,523
Share options 2,700,000 4,450,000 2,700,000
--------------------------- ------------ --------------- ------------
Total for diluted 118,667,888 118,627,240 117,243,523
--------------------------- ------------ --------------- ------------
GBP'000 GBP'000 GBP'000
--------------------------- ------------ --------------- ------------
Basic earnings as
previously reported 2,849 4,888 5,008
Restatement for staff - (1,471) -
incentive
--------------------------- ------------ --------------- ------------
Basic earnings as
restated 2,849 3,417 5,008
--------------------------- ------------ --------------- ------------
Adjustment for dilution 4 7 8
Diluted earnings assuming
full dilution 2,853 3,424 5,016
--------------------------- ------------ --------------- ------------
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 March
2016 2015 2016
Restated
---------------------- ----------- ----------- ----------
Net assets per share 29.50p 25.86p 27.75p
Adjusted net assets
per share 45.86p 38.27p 43.01p
---------------------- ----------- ----------- ----------
The following numbers have been used to calculate both the net
assets and adjusted net assets per share.
Number Number Number
---------------------------- ------------ ------------ ------------
Number of shares in
issue at period end 115,980,040 114,192,541 115,967,111
---------------------------- ------------ ------------ ------------
GBP'000 GBP'000 GBP'000
Restated
---------------------------- ------------ ------------ ------------
Net assets excluding
non- controlling interest 34,218 29,526 32,184
Adjusted net assets Number Number Number
per share
---------------------------- ------------ ------------ ------------
Number of shares in
issue at period end 115,980,040 114,192,541 115,967,111
Number of share options
assumed to be exercised 2,700,000 4,450,000 2,700,000
---------------------------- ------------ ------------ ------------
Total 118,680,040 118,642,541 118,667,111
---------------------------- ------------ ------------ ------------
Adjusted net assets GBP'000 GBP'000 GBP'000
per share
---------------------------- ------------ ------------ ------------
Net assets excluding
non-controlling interest 34,218 30,997 32,184
Restatement of net - (1,471) -
assets
Adjustments for market
value of assets less
deferred tax 19,359 14,814 18,133
Other adjustments 850 1,059 716
---------------------------- ------------ ------------ ------------
Total 54,427 45,399 51,033
---------------------------- ------------ ------------ ------------
6. Investment Properties
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 March
2016 2015 2016
------------------------------ ----------- ----------- ----------
GBP'000 GBP'000 GBP'000
------------------------------ ----------- ----------- ----------
1 April 120,718 114,262 114,262
Capital expenditure 176 1,009 1,216
Depreciation (947) (786) (1,654)
Fair value adjustment 142 556 462
Foreign exchange translation 9,244 (2,085) 6,432
End of period 129,333 112,956 120,718
------------------------------ ----------- ----------- ----------
7. Interest in Associates and Other Financial Assets
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 March
2016 2015 2016
----------------------------- ----------- ----------- ----------
a) Associated undertakings GBP'000 GBP'000 GBP'000
Cost of investment
at beginning of period 3,044 671 671
Additions - - 2,293
Disposals (153) - -
Share of associates
profit after tax 271 66 170
Dividends received (64) (62) (90)
Cost of investment
at end of period 3,098 675 3,044
----------------------------- ----------- ----------- ----------
Investments in associated
undertakings
5(th) Property Trading
Ltd 868 838 871
Regional Property
Trading Ltd 185 145 159
Fprop Romanian Supermarkets
Ltd 766 - 737
Fprop Galeria Corso
Ltd 1,587 - 1,585
----------------------------- ----------- ----------- ----------
3,406 983 3,352
Less: Group share
of profit after tax
withheld on sale of
property to an associate
in 2007 (308) (308) (308)
----------------------------- ----------- ----------- ----------
Cost of investment
at end of period 3,098 675 3,044
----------------------------- ----------- ----------- ----------
b) Other financial
assets and investments
----------------------------- ----------- ----------- ----------
Cost of investment
at beginning of period 914 1,531 1,531
Additions 4 - -
Disposal - (627) (628)
Net increase in fair
value - 12 11
----------------------------- ----------- ----------- ----------
Cost of investment
at end of period 918 916 914
----------------------------- ----------- ----------- ----------
8. Trade and Other Receivables
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 March
2016 2015 2016
------------------------- ----------- ----------- ----------
GBP'000 GBP'000 GBP'000
Current assets
Trade receivables 1,758 1,756 1,684
Other receivables 3,159 2,971 7,554
Prepayments and accrued
income 390 651 890
5,307 5,378 10,128
------------------------- ----------- ----------- ----------
Non-current assets 139 228 186
------------------------- ----------- ----------- ----------
9. Trade and Other Payables
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 March
2016 2015 2016
-------------------- ----------- ----------- ----------
GBP'000 GBP'000 GBP'000
Trade payables 2,787 2,144 2,189
Other taxation and
social security 673 1,336 575
Other payables and
accruals 4,214 4,378 5,163
Deferred income 11 11 11
7,685 7,869 7,938
-------------------- ----------- ----------- ----------
10. Financial Liabilities
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 March
2016 2015 2016
---------------------------- ----------- ----------- ----------
GBP'000 GBP'000 GBP'000
a) Current liabilities
Loans repayable by
subsidiary (FOP) to
third party shareholders 1,918 - 1,841
Bank loans 3,340 3,426 3,014
Finance leases 3,125 2,675 2,813
8,383 6,101 7,668
---------------------------- ----------- ----------- ----------
b) Non-current liabilities
Loans repayable by - 1,888 -
subsidiary (FOP) to
third party shareholders
Bank loans 66,022 57,413 62,038
Finance leases 49,497 44,760 46,954
---------------------------- ----------- ----------- ----------
115,519 104,061 108,992
---------------------------- ----------- ----------- ----------
c) Total obligations under financial liabilities
Repayable within one
year 8,383 6,101 7,668
Repayable within one
and five years 99,041 67,584 93,150
Repayable after five
years 16,478 36,477 15,842
---------------------------- ----------- ----------- ----------
123,902 110,162 116,660
---------------------------- ----------- ----------- ----------
Loans repayable by Fprop Opportunities plc (FOP) to third party
shareholders are unsecured and repayable on demand.
Eight bank loans and three finance leases (all denominated in
Euros) totalling GBP121,984,000 (31 March 2016: GBP114,819,000)
included within financial liabilities are secured against
investment properties owned by the Group and Fprop Opportunities
plc (FOP), and one property owned by the Group shown under
inventories. These bank loans and finance leases are otherwise
non-recourse to the Group's assets.
The interim 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
IR BLLLLQFFXFBQ
(END) Dow Jones Newswires
November 23, 2016 02:00 ET (07:00 GMT)
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