TIDMFPO
RNS Number : 9282S
First Property Group PLC
29 November 2011
Date: 29 November 2011
On behalf First Property Group plc ("First Property",
of: "the Company" or "the Group")
Embargoed: 0700hrs
First Property Group plc
Interim Results for the six months to 30 September 2011
First Property Group plc (AIM: FPO), the commercial property fund management group, today announces its interim results forthe six months to 30 September 2011.
Financial Highlights:
Unaudited Unaudited Percentage Audited
Six months Six months change from Year to
to 30 September to 30 September 30 September 31 March
2011 2010 2010 2011
Profit before tax GBP2.54m GBP1.42m +79% GBP2.95m
(continuing operations)
Assets under management GBP374m GBP315m +19% GBP366m
(AUM)
Net assets GBP16.79m GBP15.70m +7% GBP16.57m
Diluted earnings
per share (continuing
operations) 1.61p 0.98p +64% 1.90p
Dividend per share 0.33p 0.32p +3% 1.06p
Profit before tax
by segment:
Profit before tax GBP1.62m GBP1.47m +10% GBP2.74m
from property fund
management ("FPAM")
Profit before tax GBP1.37m GBP0.38m +261% GBP1.24m
from total Group
Properties (including
"FOP"- Fprop Opportunities
plc)
Operational Highlights:
-- The value of assets under management increased by 19% to GBP374 million (2010: GBP315 million).
-- The UK fund established in February 2010, UK PPP LP, is now close to being fully invested, having made property purchases of GBP91.6 million, representing 87% of its GBP106 million of committed capital. The fund is earning an annualised un-geared rate of return on equity of 6.4%.
-- Fprop Opportunities plc, the Polish focused fund established in October 2010, has acquired EUR26.4 million (GBP22.7 million) of property and earned an annualised rate of return on equity of 13.4% during the period. Progress is being made in raising new capital for this fund.
-- Fund raising has begun for a new UK fund, designed to mimic UK PPP LP and to deliver an un-geared and defensive annual dividend return of over 6%.
Commenting on the results, Ben Habib, Chief Executive of First Property, said:
"The steps we took last year in establishing two new funds, one focused on the UK, the other on Poland, together with restructuring the cost base of the Blue Tower office block in Warsaw, which we own directly, have resulted in an excellent first half for the Group.
"The unfolding sovereign debt crisis in Europe naturally causes us concern but the Polish economy, where 71% of our assets under management are located, has continued to perform well, as have our properties there. Poland remains a bright spot on the European landscape but we are closely monitoring the crisis in Europe and any consequences it may have for the Group.
"First Property Group has remained profitable throughout the credit crunch. This fact and, in particular these excellent interim results, exemplify the strength of our business model and staff. Notwithstanding the storms blowing through Europe at the moment I expect our good performance to continue."
A briefing for analysts will be held at 09:30hrs today at the offices of First Property Group plc at 35, Old Queen Street, London SW1H 9JA. A conference call facility will also be available on +44 208 817 9301, a recorded copy of which 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 & Chief www.fprop.com
Investment Officer)
George Digby (Group Finance Director)
Jeremy Barkes (Director, Business
Development)
Arden Partners Tel: 020 7614 5917
Chris Hardie (Director, Corporate
Finance )
Redleaf Polhill Tel: 020 7566 6750
Mike Ward / George Parrett firstproperty@redleafpolhill.com
Notes to investors and editors:
-- First Property Group plc is a commercial property fund manager with operations in the United Kingdom and Central Europe. The performance of its funds under management ranked No.1 versus the Investment Property Databank (IPD) Central & Eastern Europe (CEE) Benchmark over the three, four and five years to 31 December 2008, 2009 and 2010 and also No.1 versus the IPD Polish Benchmark for the four and five years to 31 December 2009 and 2010.
-- The business model of First Property Group is to:
o Raise third party funds to invest in income producing commercial property;
o Co-invest in these funds;
o Earn fees for the management of these funds. Fees earned are a function of the value of assets under management as well as the performance of the funds;
o Earn a return on its own capital invested in these funds.
-- Further information about the Company can be found at: www.fprop.com.
CHIEF EXECUTIVE'S STATEMENT
Financial Results
I am pleased to report interim results for the six months to 30 September 2011.
Revenue during the period amounted to GBP4,587,000 (2010: GBP2,960,000), yielding a 79% increase in profit on ordinary activities before taxation of GBP2,539,000 (2010: GBP1,419,000).
Diluted earnings per ordinary share increased by 64% to 1.61 pence (2010: 0.98 pence).
The Group ended the period with net assets of GBP16.79 million (2010: GBP15.70 million) including a cash balance of GBP8.96m (2010: GBP10.18m).
Dividend
The Board has recommended an increased interim dividend of 0.33 pence per share (2010: 0.32 pence per share) which will be paid on 29 December 2011 to shareholders on the register at 9 December 2011.
Review of operations
Property fund management (First Property Asset Management Limited or FPAM)
At 30 September 2011 assets under management stood at GBP374 million (2010: GBP315 million). Of these, 71% were located in Poland (2010: 77%), 26% were located in the UK (2010: 19%) and 3% in Romania (2010: 4%). There were five purchases with a total value of some GBP16.5 million during the period and no property sales.
Revenue earned by this division amounted to GBP2,112,000 (2010: GBP1,930,000), generating a profit before tax of GBP1,624,000 (2010: GBP1,474,000) prior to the deduction of unallocated central overhead costs. This represents 54% (2010: 78%) of the Group's profit before tax prior to the deduction of unallocated central overhead costs. Our fund management fee income is currently running at circa GBP4.35 million per annum on an annualised basis.
The continued growth in assets under management in the UK is principally attributable to the on-going investment of our most recent UK fund, UK PPP LP. At 30 September 2011, UK PPP LP had completed the purchase of GBP91.6 million worth of properties at an average net initial yield of 7.3% and with a weighted average unexpired lease term in excess of 12 years. The fund, which is not geared, is currently making distributions at a rate of some 6.4% per annum. The fund has a capacity of GBP106 million and we expect it to be fully invested in the near future.
In anticipation of UK PPP LP becoming fully invested we have begun to solicit investors for a new UK fund designed to mimic UK PPP LP in its investment strategy. The new fund will target well located properties, let at low rents to creditworthy tenants on long leases. It will target a minimum annualised dividend yield of 6%. We expect interest rates to remain low for some years and we believe that this relatively high dividend yield should prove to be attractive to investors, particularly pension funds.
We have not raised any additional third party investments into Fprop Opportunities plc (FOP) this year. We have had encouraging discussions with several institutional investors during the period and are hopeful that these discussions will be positively concluded. In order to expedite our fund raising efforts we are also considering issuing an unsecured bond to retail investors. Such bonds offer a potentially cost effective way to raise funds. We plan to carry out a feasibility study before launching such a bond. In the meantime FOP generated an annualised rate of return on equity during the six month period of 13.4%.
Our other funds under management have all continued to perform well generating an annualised rate of return on equity in excess of 20% per annum.
Group Properties
Group Properties comprises two properties owned directly by the Group (both located in Warsaw) and shareholdings in four of the six funds managed by FPAM.
Revenue from these investments has grown considerably to GBP2,475,000 (2010: GBP1,002,000), resulting in an increase of profit before tax of GBP1,371,000 for the period (2010: GBP383,000) prior to the deduction of unallocated central overhead costs. This represents 46% (2010: 20%) of Group profit before tax prior to the deduction of unallocated central overhead costs. The bulk of this growth in earnings was attributable to our investment in FOP, in which the Group is, for the time being at least, the majority shareholder and is thus required to consolidate FOP's results. FOP earned income of GBP1,306,000 (2010: nil) which generated a profit before tax of GBP724,000 during the period (2010: nil), of which GBP609,000 was attributable to the Group.
The two properties owned by the Group continue to trade well. The Blue Tower office block located in central Warsaw, and the smaller office block in the Mokotow district of Warsaw, contributed GBP397,000 (2010: GBP143,000) and GBP132,000 (2010: GBP122,000) respectively to the Group's profit before tax prior to the deduction of unallocated central overhead costs. These profits equate to annualised rates of return on equity of 46.1% and 12.5% respectively. The latter of the two properties is not geared.
Commercial property markets outlook
Poland
Poland's GDP continues to grow at one of the fastest rates in Europe, by some 4.3% on an annualised basis in the first six months of 2011. Looking ahead, its economy is forecast to continue to grow, but at a slower rate, as the effects of fiscal tightening and a slowdown in the Global economy begin to bite.
Poland's commercial investment property market had a very good first nine months of the year with some EUR1.8 billion of property changing hands. Occupancy levels remain high and indeed rents have risen in certain areas. We expect the market to slow in the fourth quarter as the effects of the sovereign debt crisis in Europe instil a higher degree of caution amongst investors.
Our most immediate concern is a withdrawal of capital from Poland and a weakening of the PLN. Tenants in our Polish portfolio of properties typically pay their rents in Euros. A weakening of the PLN effectively equates to an increase in rents. The PLN is now some 10% weaker against the Euro (at circa PLN 4.4/ Eur) compared to the level it was trading at prior to the eruption of troubles in Europe over the summer (at circa PLN 4.0/ Eur). We do not see the current exchange rate level as threatening to the properties owned or managed by the Group in view of the fact that these properties were not stressed by the weakening of the PLN in 2009, after the collapse of Lehman Brothers, when the PLN dropped to a low of close to PLN 5/ Eur.
Our other concern is a weakening of the Euro and a consequent reduction in the Sterling value of the investments we own and manage. It seems certain to us that the European Central Bank (ECB) is going to have to significantly loosen monetary policy. This would be likely to result in the Euro weakening. However, the UK itself is vulnerable to the financial consequences of the European crisis and is involved in its own programme of quantitative easing. So the Euro may not weaken as much as one might otherwise expect. In addition, if European leaders eventually take decisive action along with the ejection of some of the weaker members of the Euro-zone, this may result in the Euro strengthening. Predicting foreign exchange movements with any degree of certainty is difficult.
Our investment strategy is income orientated. We expect income levels in Poland to be sustained and rents to rise over time. The European situation does not undermine the case for investing in Poland but we are obviously treading very carefully, as we always have done.
United Kingdom
The UK economy remains weak and vulnerable. We expect this to continue for a number of years. In addition, even though the UK is not a member of the Euro-zone, the financial effects of the European sovereign debt crisis are being felt in the UK, as would any fallout from a collapse in the Euro or its restructuring.
The commercial investment property market, as a whole, is holding broadly steady at the moment. Values of prime properties, particularly in central London, have recovered sharply since 2009. It is our view that certain parts of the prime market are now in bubble territory. On the other hand, secondary properties have not recovered to the same extent. The gap between the yields available on prime properties versus those available from secondary properties is as wide as ever. This creates opportunities for buyers, such as us, who are prepared to step away from prime markets.
Banks are now taking more action to force the sale of properties which are in breach of loan terms, including income producing properties. It is difficult to assess if the supply of these properties into the market might suppress values. There is no evidence of this at this stage, though the tone of the market is certainly weaker than it was a year ago.
Current trading and prospects
The steps we took last year in establishing and co-investing in two new funds, together with restructuring the cost base of the Blue Tower office block in Warsaw which we own directly, have resulted in an excellent first half for the Group.
The unfolding sovereign debt crisis in Europe naturally causes us concern but the Polish economy, where 71% of our properties under management are based, has continued to perform well, as have our properties there. Poland remains a bright spot on the European landscape but we are closely monitoring the crisis in Europe and any consequences it may have for the Group.
First Property Group has remained profitable throughout the credit crunch. This fact and, in particular, these excellent interim results, exemplify the strength of our business model and staff. Notwithstanding the storms blowing through Europe at the moment, I expect our good performance to continue.
Ben Habib
Chief Executive
29 November 2011
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months to 30 September 2011
Notes 6 months to 30 Sept 2011 6 months to 30 Sept 2010 Year to 31 March 2011
(unaudited) (unaudited) (audited)
Total results Total results Total results
GBP'000 GBP'000 GBP'000
Continuing operations
-------------------------- ---------- -------------------------- -------------------------- ----------------------
Revenue 2 4,587 2,960 7,110
---------------------------------- -------------------------- -------------------------- ----------------------
Cost of sales (529) (354) (1,050)
Gross profit 4,058 2,606 6,060
Operating expenses (1,271) (1,195) (2,852)
Operating profit 2 2,787 1,411 3,208
Share of results in associates 97 114 221
Dividend income 21 7 14
Interest income 42 50 109
Interest expense (408) (163) (602)
Profit on ordinary activities
before tax 2,539 1,419 2,950
Tax expense 3 (505) (234) (621)
---------------------------------- -------------------------- -------------------------- ----------------------
Profit from continuing operations 2,034 1,185 2,329
---------------------------------- -------------------------- -------------------------- ----------------------
Discontinued operations
Profit/(Loss) for period from
discontinued operations 4 - (69) (82)
Continuing and discontinued
operations
Profit for the period 2,034 1,116 2,247
Attributable to:
Owners of the parent 1,891 1,145 2,178
Non-controlling interest 143 (29) 69
2,034 1,116 2,247
Profit for the period from
continuing operations
attributable to:
Owners of the business 1,891 1,187 2,221
Non-controlling interest 143 (2) 108
---------------------------------- -------------------------- -------------------------- ----------------------
2,034 1,185 2,329
Loss for the period from
discontinued operations
attributable to:
Owners of the business - (41) (43)
Non-controlling interest - (28) (39)
---------------------------------- -------------------------- -------------------------- ----------------------
- (69) (82)
---------------------------------- -------------------------- -------------------------- ----------------------
Earnings per Ordinary 1p share
-basic continuing operations 5 1.70p 1.08p 2.02p
-basic discontinued operations 5 - (0.04)p (0.04)p
---------------------------------- -------------------------- -------------------------- ----------------------
1.70p 1.04p 1.98p
-diluted continuing operations 5 1.61p 1.02p 1.90p
-diluted discontinued operations 5 - (0.04)p (0.04)p
---------------------------------- -------------------------- -------------------------- ----------------------
1.61p 0.98p 1.86p
------------------------------------- -------------------------- -------------------------- ----------------------
CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
for the six months to 30 September 2011
2011 2010 2011
------------------------------- ------- ------------------------- ------------------------- ----------------------
Notes 6 months to 30 Sept 2011 6 months to 30 Sept 2010 Year to 31 March 2011
(unaudited) (unaudited) (audited)
------------------------------- ------- ------------------------- ------------------------- ----------------------
GBP'000 GBP'000 GBP'000
------------------------------- ------- ------------------------- ------------------------- ----------------------
Profit for the period 2,034 1,116 2,247
---------------------------------------- ------------------------- ------------------------- ----------------------
Other comprehensive income
Exchange differences on retranslation
of foreign subsidiaries (1,015) (273) (171)
Taxation - - -
Total comprehensive income for the year 1,019 843 2,076
---------------------------------------- ------------------------- ------------------------- ----------------------
Total comprehensive income for
the year:
Owners of the parent 887 872 2,012
Non-controlling interest 132 (29) 64
1,019 843 2,076
--------------------------------------- ------------------------- ------------------------- ----------------------
CONDENSED CONSOLIDATED BALANCE SHEET
as at 30 September 2011
Notes As at 30 Sept 2011 As at 30 Sept 2010 As at 31 March 2011
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
-------------------------- ------ -------------------------- -------------------------- --------------------------
Non-current assets
Goodwill 114 138 114
Investment properties 21,428 - 22,061
Property, plant and
equipment 73 94 79
Interest in associates 6a 413 363 377
Other receivables 7 420 - 473
Other financial assets 6b 874 423 711
Deferred tax assets 622 237 199
-------------------------- ------ -------------------------- -------------------------- --------------------------
Total non-current Assets 23,944 1,255 24,014
Current assets
Inventories - land and
buildings 10,687 10,848 10,896
Current tax assets - - 95
Trade and other
receivables 7 1,122 2,107 1,660
Cash and cash equivalents 8,966 10,180 5,441
-------------------------- ------ -------------------------- -------------------------- --------------------------
Total current assets 20,775 23,135 18,092
Current liabilities:
Trade and other payables 8 (1,219) (1,809) (1,859)
Financial liabilities 9a (561) (19) (500)
Current tax liabilities (126) (25) (39)
-------------------------- ------ -------------------------- -------------------------- --------------------------
Total current liabilities (1,906) (1,853) (2,398)
-------------------------- ------ -------------------------- -------------------------- --------------------------
Net current assets 18,869 21,282 15,694
Total assets less current
liabilities 42,813 22,537 39,708
-------------------------- ------ -------------------------- -------------------------- --------------------------
Non-current liabilities:
Financial liabilities 9b (25,385) (6,760) (22,946)
Deferred tax liabilities (635) (72) (191)
-------------------------- ------ -------------------------- -------------------------- --------------------------
Net assets 16,793 15,705 16,571
-------------------------- ------ -------------------------- -------------------------- --------------------------
Equity
Called up share capital 1,149 1,136 1,146
Share premium 5,490 5,423 5,463
Foreign Exchange
Translation Reserve (326) 577 678
Share-based payment
reserve 155 120 140
Retained earnings 10,023 8,264 8,950
-------------------------- ------ -------------------------- -------------------------- --------------------------
Issued capital and
reserves attributable to
the owners of the parent 16,491 15,520 16,377
Non-controlling interest 302 185 194
-------------------------- ------ -------------------------- -------------------------- --------------------------
Total equity 16,793 15,705 16,571
-------------------------- ------ -------------------------- -------------------------- --------------------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months to 30 September 2011
Share Share Share Foreign Purchase/Sale Retained Non-controlling TOTAL
capital premium Based Exchange of own Shares Earnings Interest
Payment Translation
Reserve Reserve GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
At 1 April 2010 1,136 5,423 105 844 (625) 8,520 251 15,654
Total
comprehensive
income for the
period - - - (267) - 1,145 (35) 843
Share based
payments - - 15 - - - - 15
Dividends Paid - - - - - (776) (31) (807)
At 30 Sept 2010 1,136 5,423 120 577 (625) 8,889 185 15,705
Issue of new
shares 10 39 - - - - - 49
Sale of
discontinued
business - - - - - - (103) (103)
Total
comprehensive
income for the
period - - - 101 - 1,102 30 1,233
Non-controlling
interest in FOP
share capital - - - - - - 13 13
Treasury Shares - 1 - - 4 - - 5
Non-controlling
interest on
acquisition - - - - - (69) 69 -
Share based
payments - - 20 - - - - 20
Dividends Paid - - - - - (351) - (351)
At 1 April 2011 1,146 5,463 140 678 (621) 9,571 194 16,571
Issue of new
shares 3 27 - - - - - 30
Total
comprehensive
income for the
period - - - (1,004) - 1,891 132 1,019
Share based
payments - - 15 - - - - 15
Sale/purchase of
treasury shares - - - - 4 - - 4
Dividends paid - - - - - (822) (24) (846)
At 30 Sept 2011 1,149 5,490 155 (326) (617) 10,640 302 16,793
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
for the six months to 30 September 2011
6 months to 30 Sept 2011 (unaudited) 6 months to 30 Sept 2010 (unaudited) 12 months to 31 March 2011
(audited)
GBP'000 GBP'000 GBP'000
----------------------- ------------------------------------- ------------------------------------- ---------------------------
Cash flows from
operating activities
Operating profit 2,787 1,411 3,208
Adjustments for:
Depreciation of
property, plant &
equipment 21 12 28
(Profit)/loss on sale
of property, plant &
equipment (3) - (27)
(Profit)/loss on sale - (9) -
of investments
Share based payments 15 15 35
Released (profit) from
sale of associate - - (26)
(Increase)/decrease in
inventories (20) (46) (171)
(Increase)/decrease in
trade and other
receivables 346 607 483
Increase/(decrease) in
trade and other
payables (493) (255) 671
Other non cash - (23) -
adjustments
----------------------- ------------------------------------- ------------------------------------- ---------------------------
Cash generated from
operations 2,653 1,712 4,201
Income taxes paid (464) (174) (582)
----------------------- ------------------------------------- ------------------------------------- ---------------------------
Net cash flow
from/(used in)
operating activities
of continuing
operations 2,189 1,538 3,619
Net cash flow
from/(used in)
operating activities
by discontinued
activities - (282) (465)
----------------------- ------------------------------------- ------------------------------------- ---------------------------
Net cash flow from
operating activities 2,189 1,256 3,154
----------------------- ------------------------------------- ------------------------------------- ---------------------------
Cash flow from
investing activities
Proceeds from disposal
of discontinued
activity - - 20
Cash and cash
equivalents disposed
on sale of
discontinued activity - - (110)
Purchase of
investments (163) (324) (612)
Proceeds on sale of
associates and
investments - 87 131
Purchase of investment
properties - - (21,955)
Proceeds from sale of 4 - -
property, plant &
equipment
Purchase of property,
plant and equipment (19) (8) (75)
Dividends received 82 46 117
Interest received 42 50 109
----------------------- ------------------------------------- ------------------------------------- ---------------------------
Net cash flow from
investing activities
from continuing
operations (54) (149) (22,375)
Net cash flow from - (8) -
investing activities
from discontinued
operations
----------------------- ------------------------------------- ------------------------------------- ---------------------------
Net cash flow
from/(used in)
investing activities (54) (157) (22,375)
----------------------- ------------------------------------- ------------------------------------- ---------------------------
Cash flow from
financing activities
Proceeds from issue of
shares 30 - 49
(Repayments)/Proceeds
from shareholder
loans in subsidiaries (33) - 1,267
Interest paid (408) (163) (602)
Proceeds from finance
lease/bank loans 3,194 - 15,394
Repayment of finance
lease/bank loans (259) - (187)
Sale of shares held in
Treasury 4 - 4
Dividends paid (822) (776) (1,127)
Dividends paid to
minority interest (24) (31) (31)
----------------------- ------------------------------------- ------------------------------------- ---------------------------
Net cash flow from
financing activities
of continuing
operations 1,682 (970) 14,767
Net cash flow from
financing activities
of discontinued
activities - (19) (33)
----------------------- ------------------------------------- ------------------------------------- ---------------------------
Net cash flow
from/used in
financing activities 1,682 (989) 14,734
----------------------- ------------------------------------- ------------------------------------- ---------------------------
Net
increase/(decrease)
in cash and cash
equivalents 3,817 110 (4,487)
----------------------- ------------------------------------- ------------------------------------- ---------------------------
Cash and cash
equivalents at the
beginning of period 5,441 10,126 10,126
----------------------- ------------------------------------- ------------------------------------- ---------------------------
Currency translation
gains/(losses) on
cash and cash
equivalents (292) (56) (198)
----------------------- ------------------------------------- ------------------------------------- ---------------------------
Cash and cash
equivalents at the
end of the period 8,966 10,180 5,441
----------------------- ------------------------------------- ------------------------------------- ---------------------------
NOTES TO THE CONDENSED CONSOLIDATED RESULTS
for the six months ended 30 September 2011
1. Basis of preparation
-- These interim condensed consolidated financial statements for the six months ended 30 September 2011 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 2011 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 following IFRS's which are effective for the first time have been applied in these financial statements. Where adoption is material their effect is detailed below:
IFRIC 19: Extinguishing financial liabilities with equity instruments, had no effect on these financial statements,
Improvements to IFRS 2010: Amendments were made to IFRS 1, 3 and 7; IAS 1,27 and 34, and IFRIC 13 none of which had any effect on these financial statements,
IAS 24 (Revised) Related party disclosures had no effect on these financial statements,
And Amendment to IFRIC 14: prepayments of a minimum funding requirement, had no effect on these financial statements.
-- The comparative figures for the financial year ended 31 March 2011 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 the Board of Directors on 28 November 2011.
2. Segmental Analysis
Segment Reporting six months to 30 September 2011
Property Group Group fund Property Other fees & Unallocated
fund properties properties facilities income central TOTAL
management ("FOP") management overheads
("FPS")
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
External
revenue
-existing
operations 2,112 1,169 1,306 - - - 4,587
-business - - - - - - -
acquisitions
2,112 1,169 1,306 - - - 4,587
Depreciation
and
amortisation (12) (9) - - - - (21)
Operating
profit
-existing
operations 1,624 620 1,029 - - (486) 2,787
-interest
payable - (91) (317) - - - (408)
- interest
receivable
and dividend
income - 21 12 - - 30 63
-share of
results in
associates - 97 - - - - 97
Profit before
tax 1,624 647 724 - - (456) 2,539
Analysed as:
Before
performance
fees and
related
items: 1,624 647 511 - - (456) 2,326
Performance - - - - - - -
fees
Staff bonus - - - - - - -
Realised
foreign
currency
gain - - 213 - - - 213
Profit before
tax 1,624 647 724 - - (456) 2,539
Segment Reporting six months to 30 September 2010
Property fund Group Group fund Property Other fees & Unallocated
management properties properties facilities income central TOTAL
("FOP") management overheads
("FPS")
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
External
revenue
-existing
operations 1,930 1,002 - 1,136 28 - 4,096
-less
discontinued
operations - - - (1,136) - - (1,136)
1,930 1,002 - - 28 - 2,960
Depreciation
and
amortisation (10) (1) - (19) - - (30)
Operating
profit
-existing
operations 1,474 424 - - 27 (514) 1,411
-discontinued
operations - - - (93) - - (93)
-interest
payable - (163) - (3) - - (166)
-interest
receivable
and dividend
income - 8 - - - 49 57
-share of
results in
associates - 114 - - - - 114
-less
discontinued
operations - - - 96 - - 96
Profit before
tax 1,474 383 - - 27 (465) 1,419
Analysed as:
Before
performance
fees and
related
items: 1,474 383 - - 27 (465) 1,419
Performance - - - - - - -
fees
Staff bonus - - - - - - -
Profit before
tax 1,474 383 - - 27 (465) 1,419
Reconciliation of segmental profit before tax as previously reported for 2010:
Operating profit as previously reported 1,474 538 - (93) 27 (514) 1,432
-interest payable - (163) - (3) - - (166)
-interest receivable - 8 - - - 49 57
Less: discontinued operations - - - 96 - - 96
Profit before tax 1,474 383 - - 27 (465) 1,419
----------------------------------------- ------ ------ --- ----- --- ------ ------
Segment Reporting 12 months to 31 March 2011
Property Group Group fund Property Other fees Unallocated
fund properties properties facilities & income central TOTAL
management ("FOP") management overheads
("FPS")
------------------- ------------ ------------ ----------- ----------------- ------------ ------------ ---------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- ------------ ------------ ----------- ----------------- ------------ ------------ ---------
External revenue
-existing
operations 3,970 2,233 907 2,305 - - 9,415
-less discontinued
operations - - - (2,305) - - (2,305)
------------------- ------------ ------------ ----------- ----------------- ------------ ------------ ---------
3,970 2,233 907 - - - 7,110
Depreciation and
amortisation (18) (10) - (32) - - (60)
Operating profit
-existing
operations 2,735 1,022 581 - - (1,130) 3,208
-discontinued
operations (114) (114)
-Interest payable - (277) (325) (7) - - (609)
-Interest
receivable and
dividend income - 14 - 1 - 109 124
-share of results
in associates - 221 - - - - 221
Less: discontinued
operations - - - 120 - - 120
------------------- ------------ ------------ ----------- ----------------- ------------ ------------ ---------
Profit before tax 2,735 980 256 - - (1,021) 2,950
------------------- ------------ ------------ ----------- ----------------- ------------ ------------ ---------
Analysed as:
Before performance
fees and related
items: 2,826 995 268 - - (653) 3,436
Performance fees - - - - - - -
Staff bonus (91) (15) (12) - - (368) (486)
------------------- ------------ ------------ ----------- ----------------- ------------ ------------ ---------
Profit before tax 2,735 980 256 - - (1,021) 2,950
------------------- ------------ ------------ ----------- ----------------- ------------ ------------ ---------
Assets-group 1,151 12,159 22,824 - - 5,595 41,729
Assets-associates - 685 - - - (308) 377
Liabilities (563) (7,538) (17,167) - - (267) (25,535)
------------------- ------------ ------------ ----------- ----------------- ------------ ------------ ---------
Net assets 588 5,306 5,657 - - 5,020 16,571
------------------- ------------ ------------ ----------- ----------------- ------------ ------------ ---------
Revenue for the six months to 30 September 2011 from continuing operations consists of revenue arising in the United Kingdom 9% (2010: 6%) and Central and Eastern Europe 91% (2010: 94%) and all relates solely to the Group's principal activities.
Head office costs and overheads that are common to all segments are shown separately under unallocated central costs. Assets, liabilities and costs that relate to Group central activities (including all cash) have not been allocated to business segments.
3. Discontinued operations
The Group sold its 60% interest in First Property Services Ltd ("FPS"), for GBP170,000 on 17 March 2011 resulting in a profit on sale of GBP16,000. The carried value of the Group's shareholding in FPS at the date of the sale was GBP154,000 (March 2010: GBP213,000). The consideration of GBP170,000 was partly settled by a cash payment of GBP20,000 on the date of sale, with the remaining GBP150,000 payable in cash within twenty four months.
Year ended 31 March 2011
The pre-tax loss during the year up to the date of the disposal in March 2011 of discontinued operations amounted to GBP136,000 and for the first six months to 30 September 2010 the pre-tax loss was GBP96,000.
Financial performance of 2011 2010 2011
discontinued operations
Six months to 30 September Six months to 30 September Twelve months to 31 March
GBP'000 GBP'000 GBP'000
Trading performance of
discontinued operations
External revenue - 1,136 2,305
Operating costs - (1,229) (2,435)
Operating profit - (93) (130)
Interest income - - 1
Interest expense - (3) (7)
(Loss)/profit before tax - (96) (136)
Tax (expense)/credit - 27 38
(Loss)/profit after tax - (69) (98)
Non-controlling interest - 28 39
(Loss)/profit attributable to
owners of the parent - (41) (59)
Profit/(loss) for the year
from discontinued operations
Profit/(loss) after tax - (69) (98)
Profit on disposal of
discontinued operations - - 16
Tax on profit on disposal of - - -
discontinued operations
- (69) (82)
Net assets disposed and disposal proceeds of discontinued operations 2011 2010 2011
GBP'000 GBP'000 GBP'000
---------------------------------------------------------------------- ---------- ---------- ---------
Increase/(decrease) in retained liabilities - - -
---------------------------------------------------------------------- ---------- ---------- ---------
Cash and cash equivalents disposed on sale of subsidiary - - (110)
---------------------------------------------------------------------- ---------- ---------- ---------
Profit/(loss) on disposal before tax - - 16
---------------------------------------------------------------------- ---------- ---------- ---------
Cash consideration received, net of costs - - 20
---------------------------------------------------------------------- ---------- ---------- ---------
Consideration deferred to future periods - - 150
---------------------------------------------------------------------- ---------- ---------- ---------
Total consideration - - 170
---------------------------------------------------------------------- ---------- ---------- ---------
Net assets of discontinued operations disposed of - - (154)
---------------------------------------------------------------------- ---------- ---------- ---------
Profit/(loss) on disposal before tax - - 16
---------------------------------------------------------------------- ---------- ---------- ---------
Net cash inflow/(outflow) from disposals - - (90)
---------------------------------------------------------------------- ---------- ---------- ---------
Summary of net assets disposed of
2011 2010 2011
GBP'000 GBP'000 GBP'000
Non-current assets - - 63
Debtors - - 955
Cash - - 110
Current liabilities - - (854)
Non-current liabilities - - (17)
Non-controlling interest - - (103)
--------- --------- --------
- - 154
--------- --------------------------------------------- --------
4. Tax expense
The tax charge is based on a combination of actual current tax charged and an effective rate that is expected to apply to the profits for the full year.
5. Earnings per ordinary 1p 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 ended Six months 12 months ended
30 Sept 2011 ended 30 Sept 31 March 2011
2010
--------------------- ----------------- --------------- ----------------
Basic 1.70p 1.04p 1.98p
Diluted 1.61p 0.98p 1.86p
--------------------- ----------------- --------------- ----------------
Number Number Number
--------------------- ----------------- --------------- ----------------
Weighted average
number of ordinary
shares in issue 111,032,835 109,770,727 109,890,897
Share options 7,540,000 7,650,000 7,790,000
--------------------- ----------------- --------------- ----------------
Total 118,572,835 117,420,727 117,680,897
--------------------- ----------------- --------------- ----------------
GBP'000 GBP'000 GBP'000
--------------------- ----------------- --------------- ----------------
Basic earnings 1,891 1,145 2,178
Diluted earnings
assuming full
dilution at
closing share
price 1,908 1,153 2,195
--------------------- ----------------- --------------- ----------------
6. Interest in associates and other financial assets
Six months Six months 12 months
ended 30 ended 30 ended 31
Sept 2011 Sept 2010 March 2011
--------------------------------- ----------- ----------- ------------
a) Associated undertakings GBP'000 GBP'000 GBP'000
Cost of investment at beginning
of period 377 337 337
Share of accumulated post
tax profit 97 114 221
Dividends received (61) (39) (103)
Disposals - (72) (104)
Release of share of profit
in associate withheld - 23 26
--------------------------------- ----------- ----------- ------------
Cost of investment at end
of period 413 363 377
--------------------------------- ----------- ----------- ------------
Investments in Associated
undertakings
5(th) Property Trading Ltd 528 459 495
Regional Property Trading
Ltd 193 215 190
--------------------------------- ----------- ----------- ------------
721 674 685
Less: share of profit withheld
after tax on sale of property
to associate in 2007 (308) (311) (308)
--------------------------------- ----------- ----------- ------------
Cost of investment at end
of period 413 363 377
--------------------------------- ----------- ----------- ------------
b) Other financial assets
and investments
--------------------------------- ----------- ----------- ------------
Cost of investment at beginning
of period 711 99 99
Additions 163 324 612
Impairment charge - - -
--------------------------------- ----------- ----------- ------------
Cost of investment at end
of period 874 423 711
--------------------------------- ----------- ----------- ------------
7. Trade and other receivables
Six months Six months 12 months
ended 30 ended 30 ended 31
Sept 2011 Sept 2010 March 2011
------------------------------- ----------- ----------- ------------
GBP'000 GBP'000 GBP'000
Current assets
Trade receivables 772 1,068 1,059
Amounts due from undertakings - - -
in which the company has
a participation interest
Other receivables 123 228 312
Prepayments and accrued
income 227 811 289
1,122 2,107 1,660
------------------------------- ----------- ----------- ------------
Non-current assets 420 - 473
------------------------------- ----------- ----------- ------------
8. Trade and other payables
Six months Six months 12 months
ended 30 ended 30 ended 31
Sept 2011 Sept 2010 March 2011
----------------------------- ----------- ----------- ------------
GBP'000 GBP'000 GBP'000
Trade payables 228 622 831
Other taxation and social
security 287 262 313
Other payables and accruals 687 875 698
Deferred income 17 50 17
1,219 1,809 1,859
----------------------------- ----------- ----------- ------------
9. Financial liabilities
Six months Six months 12 months
ended 30 ended 30 ended 31
Sept 2011 Sept 2010 March 2011
------------------------------------ ----------- ----------- ------------
a) Current liabilities GBP'000 GBP'000 GBP'000
Finance lease 458 19 499
Foreign bank loans 103 - 1
561 19 500
------------------------------------ ----------- ----------- ------------
b) Non-current liabilities
------------------------------------ ----------- ----------- ------------
Loans repayable by subsidiary
(FOP) to third party shareholders 1,234 - 1,267
Finance lease 14,422 26 15,063
Foreign bank loans 9,729 6,734 6,616
25,385 6,760 22,946
------------------------------------ ----------- ----------- ------------
Loans repayable by FOP to third party shareholders are repayable in August 2020.
Bank loans and finance leases totalling GBP24,712,000 (2010:GBP6,779,000) included within financial liabilities are secured against investment properties owned by Fprop Opportunities plc ("FOP") and properties owned by the Group shown under inventories.
There are two foreign bank loans. The first of these two, for a sum of GBP6,809,000 (2010: GBP6,734,000), is included under non-current financial liabilities and is secured against the Blue Tower office block owned by the Group. It is non-recourse and is denominated in U.S. Dollars. Capital repayments commence in November 2013 at a rate of US$17,675 per month until its maturity in November 2015. Interest payments are charged at an annualised rate of one month US Dollar Libor plus a margin of 2.15%.
The second bank loan, for a sum of GBP3,023,000, is partly included under current liabilities and partly under non-current liabilities and is secured against the Krasnystaw shopping centre owned by FOP. It is non-recourse and is denominated in Euros. The loan was drawn down by FOP in June 2011. Capital repayments are made on a quarterly basis at a rate of approximately Eur 30,000 per quarter until its maturity in 2014. Interest payments are fixed for 30% of the loan at an annualised rate of 2.4% plus a margin of 2.8% and for the remaining 70%, charged at an annualised rate of three month Euribor plus a margin of 2.8%.
The finance lease outstanding, for GBP14,880,000 (2010: GBPnil), is included partly under current liabilities and partly under non-current liabilities and is secured against the Lodz hypermarket owned by FOP. It is non-recourse and is denominated in Euros. Capital repayments are made on a monthly basis at a rate of approximately Eur 45,000 per month until its maturity in 2017. The monthly interest rate payable is fixed at an annualised rate of 3.58% until October 2013 when it reverts to a floating rate based on an annualised rate of three month Euribor plus an all in margin of 2.68%. Interest rate caps are in place with effect from October 2013 until maturity.
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 35 Old Queen Street, London SW1H, 9JA.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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