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Interim Results

Date : 11/29/2011 @ 2:00AM
Source : UK Regulatory (RNS & others)
Stock : First Property (FPO)
Quote : 27.5  0.0 (0.00%) @ 3:51AM
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Interim Results

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

IR KVLFLFFFZFBZ

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