TIDMFPO
RNS Number : 2913X
First Property Group PLC
23 November 2017
Date: 23 November 2017
On behalf First Property Group plc ("First
of: Property" or "the Group")
Embargoed: 0700hrs
First Property Group plc
Interim Results for the six months to 30 September 2017
First Property Group plc (AIM: FPO), the award winning property
fund manager and investor with operations in the United Kingdom and
Central Europe, today announces its interim results for the six
months to 30 September 2017.
Financial Highlights:
-- Profit before tax up 11% to GBP4.98 million (2016: GBP4.47 million);
-- Contribution to profit by Group Properties was GBP6.08
million (2016: GBP5.84 million) prior to deduction of unallocated
central overheads and tax;
-- Fund management fee revenue up 63% to GBP1.49 million (2016: GBP0.92 million);
-- Cash reduced to GBP10.00 million (2016: GBP14.12 million) due
to investments and capital expenditure of GBP5.14 million;
-- Interim dividend up 5% to 0.42 pence per share (2016: 0.40 pence per share);
-- Adjusted NAV per share up 12% to 51.25 pence per share (2016: 45.86 pence per share);
-- Growth in adjusted NAV, together with dividends paid, since
2006 has equated to 26% per annum on an annualised basis.
Operational Highlights:
-- Total assets under management up 37% to GBP554 million (2016: GBP405 million);
-- Third party assets under management up 63% to GBP382 million (2016: GBP235 million);
-- Weighted average unexpired fund management contract term: 6.08 years (2016: 6.42 years);
-- New fund management contract, Fprop Offices LP: GBP182
million in equity (of which GBP51 million has been invested so far)
to be invested in office properties in England.
Financial Summary:
Unaudited Unaudited Percentage Audited
Six months Six months change Year to
to 30 to 31 March
Sept 2017 30 Sept 2017
2016
-------------------------- ------------ ------------ ----------- ----------
Income Statement:
-------------------------- ------------ ------------ ----------- ----------
Revenue GBP12.09m GBP11.12m +8.7% GBP23.66m
Statutory profit GBP4.98m GBP4.47m +11.4% GBP9.14m
before tax
Diluted earnings
per share 2.84p 2.40p +18.3% 6.61p
Dividend per share 0.42p 0.40p +5.0% 1.55p
Average GBP/EUR
rate 0.881 0.822 +7.2% 0.841
-------------------------- ------------ ------------ ----------- ----------
Balance Sheet
at period end:
-------------------------- ------------ ------------ ----------- ----------
Net assets per
share 35.68p 29.50p +21.0% 34.84p
Adjusted net assets
per share (EPRA
basis) 51.25p 45.86p +11.8% 47.64p
Cash Balances GBP10.00m GBP14.12m -29.2% GBP15.95m
Period end GBP/EUR
rate 0.881 0.865 +1.8% 0.855
-------------------------- ------------ ------------ ----------- ----------
Group Property
portfolio at period
end:
-------------------------- ------------ ------------ ----------- ----------
Group Properties GBP146.3m GBP144.3m +1.4% GBP143.5m
at book value
Group Properties GBP171.9m GBP170.3m +0.9% GBP164.5m
at market value
Gross Debt (non-recourse GBP117.8m GBP122.0m -3.4% GBP117.5m
to the Group)
LTV% 68.6% 71.6% 71.5%
-------------------------- ------------ ------------ ----------- ----------
Total assets under GBP554m GBP405m +36.8% GBP477m
management:
-------------------------- ------------ ------------ ----------- ----------
Poland 40.8% 48.6% 45.4%
United Kingdom 57.0% 46.6% 51.4%
Romania 2.2% 4.8% 3.2%
Commenting on the results, Ben Habib, Chief Executive of First
Property Group, said:
"This has been another excellent six months for First
Property.
"All our funds under management and the properties we own are
performing well and third party assets under management have
increased by 63% since last year.
"Our prospects are excellent, underpinned by our bedrock of
recurring income streams and the opportunities open to us in the
various markets in which we operate.
"We look forward to delivering continued growth and increasing
levels of profitability for our clients and shareholders."
A briefing for analysts will be held at 10:30hrs today at the
headquarters of First Property Group plc, 32 St James's Street,
London, SW1A 1HD. Participants can also attend by telephone on +44
330 336 9104, passcode 787807. A copy of the accompanying investor
presentation can be accessed simultaneously at
http://www.fprop.com/media-news/presentations/. An audio recording
of the call will subsequently be posted on the company website,
www.fprop.com/audio/.
For further information please contact:
First Property Group plc Tel: 020 7340
0270
Ben Habib (Chief Executive www.fprop.com
& Chief Investment Officer)
George Digby (Group Finance
Director)
Jeremy Barkes (Director,
Business Development)
Arden Partners Tel: 020 7614
5900
Chris Hardie/ Ben Cryer
Redleaf Communications Tel: 020 7382
4747
Robin Tozer/ Elisabeth Cowell firstproperty@redleafpr.com
Notes to Investors and Editors:
First Property Group plc is an award winning property fund
manager and investor with operations in the United Kingdom and
Central Europe. Around one third of the shares in the Company are
owned by management and their families.
Its focus is on higher yielding commercial property with
sustainable cash flows. The company is flexible and takes an active
approach to asset management. Its earnings are derived from:
-- Fund management - via its FCA regulated and AIFMD approved
subsidiary, First Property Asset Management Ltd (FPAM), which earns
fees from investing for third parties in property. FPAM currently
manages twelve funds which are invested across the United Kingdom,
Poland and Romania.
-- Group Properties - principal investments by the Group, to
earn a return on its own capital, usually in partnership with third
parties. Investments include ten directly held properties in Poland
and Romania (including five held by Fprop Opportunities plc [FOP],
in which the Group is currently the majority shareholder), and
non-controlling interests in nine other funds managed by FPAM.
Listed on AIM the Company has offices in London, Warsaw and
Bucharest. Further information about the Company and its products
can be found at: www.fprop.com.
CHIEF EXECUTIVE'S STATEMENT
Performance:
I am pleased to report interim results for the six months ended
30 September 2017.
Revenue earned by the Group amounted to GBP12.09 million (2016:
GBP11.12 million) yielding a profit before tax of GBP4.98 million
(2016: GBP4.47 million). Diluted earnings per share were 2.84 pence
(2016: 2.40 pence).
The Euro was on average 7.2% stronger versus Sterling during the
period at an average rate of GBP0.881 (2016: GBP0.822). This
resulted in Group profit before tax being GBP392,000 higher than it
would have been on a constant currency basis.
The Group ended the period with reported net assets of GBP44.91
million (2016: GBP36.43 million). It is the accounting policy of
the Group to carry its properties and interests in associates at
the lower of cost or market value. The net assets of the Group when
adjusted to their market value less any deferred tax liabilities,
stood at GBP60.84 million (2016: GBP54.43 million). The growth in
adjusted net assets, together with dividends paid, since 2006 has
equated to 26% per annum on an annualised basis.
Group cash balances stood at GBP10.00 million (2016: GBP14.12
million) at the period end. The reduction in cash balances was
primarily attributable to investments of GBP3.48 million and
capital expenditure of GBP1.66 million. Of the cash held, GBP2.83
million (2016: GBP5.34 million) was held by FOP (67.3% owned by the
Group) and GBP750,000 was held by Corp Sp. z o.o. (90% owned by the
Group), the property management company for Blue Tower in
Warsaw.
Dividend:
The Directors have resolved to increase the interim dividend by
5% to 0.42 pence per share (2016: 0.40 pence per share) which will
be paid on 30 December 2017 to shareholders on the register at 2
December 2017, with an ex-dividend date of 1 December 2017.
Review of Operations:
PROPERTY FUND MANAGEMENT - (First Property Asset Management Ltd
or FPAM)
As at 30 September 2017 aggregate assets under management,
calculated by reference to independent third party property
valuations, stood at GBP554 million (2016: GBP405 million),
including some GBP172 million (2016: GBP170 million) of properties
held by the Group and FOP. Of these 57% were located in the UK, 41%
in Poland, and 2% in Romania.
Fund management fees are generally levied monthly by FPAM by
reference to the value of properties under management. In the case
of Fprop Offices LP the Group does not receive any fees but instead
shares in the profits earned by the fund.
Revenue earned from fund management amounted to GBP1.49 million
(2016: GBP0.92 million), resulting in a profit before unallocated
central overheads and tax of GBP804,000 (2016: GBP273,000). This
represents 11.7% (2016: 4.5%) of Group profit before unallocated
central overheads and tax.
At the period end FPAM's fund management fee income, excluding
performance fees, was being earned at an annualised rate of GBP2.64
million (2016: GBP1.90 million), a year on year increase of
38.9%.
FPAM's weighted average unexpired fund management contract term
at the period end was 6.08 years (2016: 6.42 years).
Third party funds under management grew by some 22% since 31
March 2017 to GBP382 million, and by some 63% since 30 September
2016.
During the period we were awarded a new fund management contract
by Fprop Offices LP, to invest in office properties in England. The
fund received equity commitments of GBP182 million and is entitled
to borrow up to a further GBP80 million enabling it to invest up to
GBP262 million in property. Of this amount we have thus far
invested GBP51 million, leaving a further GBP211 million to be
invested.
The reconciliation of movement in funds under management during
the period is shown below:
Funds managed Group Totals
for third parties Properties
(including funds (including
in which the Group FOP)
is a minority
shareholder)
---------------- ----------------------------------- ----------------- -----------------
UK CEE Total No. All No. AUM No.
GBPm. GBPm. GBPm. of CEE of GBPm. of
prop's GBPm. prop's prop's
---------------- ------- ------- ------- -------- ------- -------- ------- --------
As at 1
April 2017 245.3 67.7 313.0 63 164.5 10 477.5 73
---------------- ------- ------- ------- -------- ------- -------- ------- --------
Purchases 15.4 - 15.4 3 - - 15.4 3
New fund
mandates 51.1 - 51.1 3 - - 51.1 3
Property
sales - (3.7) (3.7) (3) - - (3.7) (3)
Capital
expenditure - - - - 1.8 - 1.8 -
Property
depreciation - - - - (1.1) - (1.1) -
Property
revaluation 4.1 - 4.1 - 1.6 - 5.7 -
FX revaluation - 2.0 2.0 - 5.1 - 7.1 -
As at 30
Sept 2017 315.9 66.0 381.9 66 171.9 10 553.8 76
---------------- ------- ------- ------- -------- ------- -------- ------- --------
FPAM now manages twelve (2016: nine) closed-end funds. A brief
synopsis of the value of assets and maturity of each of these
vehicles is set out below:
Fund Country Fund Assets % of Assets
of investment expiry under total under
management assets management
at market under at market
value management value
at at
30 Sept 30 Sept
2017 2016
----------- --------------- -------- ------------- ------------ ------------
SAM & DHOW UK Rolling * * *
RPT Poland Aug GBP7.1m 1.3% GBP7.0m
2020
5PT Poland Dec GBP8.7m 1.6% GBP8.5m
2022
UK PPP UK Feb GBP93.3m 16.9% GBP93.1m
2022
PDR UK May Nil - Nil
2018
SIPS UK Jan GBP156.1m 28.2% GBP95.3m
2025
FRS Romania Sept GBP6.7m 1.2% GBP10.2m
2025
FGC Poland Aug GBP21.2m 3.8% GBP20.4m
2024
FKR Poland Apr GBP22.3m 4.0% -
2024
SPEC OPPS UK Jan GBP15.4m 2.8% -
2027
OFFICES UK Jun GBP51.1m 9.2% -
2024 (Commitment
of GBP182m)
Sub Total GBP381.9m 69.0% GBP234.5m
----------- --------------- -------- ------------- ------------ ------------
FOP Poland Oct GBP73.9m 13.3% GBP67.0m
2025
GRP PROPS Poland n/a GBP98.0m 17.7% GBP103.3m
& Romania
----------- --------------- -------- ------------- ------------ ------------
Sub Total GBP171.9m 31.0% GBP170.3m
----------- --------------- -------- ------------- ------------ ------------
Total GBP553.8m 100% GBP404.8m
----------- --------------- -------- ------------- ------------ ------------
* Not subject to recent revaluation
GROUP PROPERTIES
Group Properties comprises ten commercial properties in Poland
and Romania, five of which are held by FOP (in which the Group is
currently the majority shareholder), and non-controlling interests
in nine of the twelve funds managed by FPAM, as set out in the
tables below.
It is the Group's policy to carry its properties and interests
in associates at the lower of cost or market value for accounting
purposes, and to recognise dividends when received.
1. Directly held properties (including five held by FOP) held at 30 September 2017:
Country No. Book Market Contribution Contribution
of properties value value to Group to Group
profit profit
before before
tax tax
period period
to to
30 Sept 30 Sept
2017 2016
------------ --------------- ---------- ---------- --------------- ------------------
Poland 3 GBP79.6m GBP92.5m GBP3.46m GBP3.15m
Romania 2 GBP4.2m GBP5.5m GBP0.46m GBP0.58m
FOP (all 5 GBP62.5m GBP73.9m GBP1.90m GBP1.92m
in Poland)
------------ --------------- ---------- ------------ ------------- ------------------
Total 10 GBP146.3m GBP171.9m GBP5.82m GBP5.65m
------------ --------------- ---------- ------------ ------------- ------------------
2. Non-controlling interests in funds and joint ventures managed by FPAM at 30 September 2017:
Fund % owned Book Current Group's Group's
by value market share share
First of First value of pre-tax of pre-tax
Property Property's of holdings profits profits
Group share earned earned
in by fund by fund
fund 30 Sept 30 Sept
2017 2016
----- ---------- ------------- ------------- ------------ ------------
Interest in associates
5PT 37.8% GBP664,000 GBP1,151,000 GBP56,000 GBP61,000
RPT 28.6% GBP218,000 GBP270,000 GBP27,000 GBP26,000
FRS 24.1% GBP649,000 GBP803,000 GBP482,000 GBP83,000
FGC 28.2% GBP1,784,000 GBP1,987,000 GBP134,000 GBP101,000
FKR 18.1% GBP1,160,000 GBP1,598,000 GBP41,000 -
----- ---------- ------------- ------------- ------------ ------------
Sub Total GBP4,475,000 GBP5,809,000 GBP740,000 GBP271,000
----------------- ------------- ------------- ------------ ------------
Investments
UK PPP 0.9% GBP884,000 GBP884,000 GBP33,000 GBP18,000
PDR 5.0% GBP13,000 GBP13,000 - -
SPEC OPPS 4.8% GBP760,000 GBP760,000 - -
OFFICES 1.6% GBP908,000 GBP908,000 - -
OTHER GBP693,000 GBP693,000 - -
----------------- ------------- ------------- ---------- ----------
Sub Total GBP3,258,000 GBP3,258,000 GBP33,000 GBP18,000
----------------- ------------- ------------- ---------- ----------
Total GBP7,733,000 GBP9,067,000 GBP773,000 GBP289,000
------ ------------- ------------- ----------- -----------
Revenue from Group Properties amounted to GBP10.60 million
(2016: GBP10.20 million), generating a profit before unallocated
central overheads and tax of GBP6.08 million (2016: GBP5.84
million) and representing 88.3% (2016: 95.5%) of Group profit
before unallocated central overheads and tax.
The contribution to earnings by the Group's ten properties,
including the five held by FOP (in which the Group held 67.3%), is
detailed below. The table below excludes the Group's
non-controlling interests in funds managed by FPAM. The reduction
in net operating income is very largely as a result of the sale of
a Group property located in Ploiesti, Romania in March 2017.
Six months to Six months
30 Sept 2017 to
30 Sept
2016
EURm. EURm.
--------------------- -------------- -----------
Net operating
income (NOI) 9.41 9.66
Interest expense
on bank loans/
finance leases (1.59) (1.67)
--------------------- -------------- -----------
NOI after interest
expense 7.82 7.99
Current tax (0.71) (0.61)
Debt amortisation (3.66) (3.60)
Capital expenditure (2.10) (0.46)
--------------------- -------------- -----------
Free cash 1.35 3.32
--------------------- -------------- -----------
Market value
of properties EUR195.08 EUR196.87
Average yield
on market value 9.6% 9.8%
Bank loans/ finance
leases outstanding EUR133.74 EUR141.00
Loan to value
(LTV) 68.6% 71.6%
Weighted average 3.13 yrs 3.73 yrs
unexpired lease
term (WAULT)
Vacancy rate 1.5% 1.8%
--------------------- -------------- -----------
The loans secured against these ten properties are each held in
separate non-recourse special purpose vehicles.
In order to mitigate the effects of potential interest rate
rises we have fixed the interest rate on around 40% of the loans. A
one percentage point increase from current market interest rates
would increase the annual interest bill by GBP563,000 per annum
(2016: GBP602,000). The current weighted average borrowing cost is
2.46% (2016: 2.59%) per annum.
Fprop Opportunities plc (FOP):
The contribution by FOP to Group profit before tax amounted to
GBP1.51 million (2016: GBP1.65 million).
Galeria Ostrowiec, FOP's largest asset, was revalued by CBRE at
EUR35.1 million, an uplift of EUR7.1 million (GBP6.26 million) from
its previous appraised value, following the completion of the works
to create some 4,800 m(2) of additional retail space at the centre.
Capital expenditure incurred to date in this development amounted
to GBP3.2 million, all of which has been capitalised. The net
uplift in value is not reflected in the Group's accounts because of
the Group's accounting policy to hold its assets at the lower of
cost or market value. The new tenants are now completing their
respective fit-outs and are expected to commence trading over the
next few months. FOP's net operating income will increase as a
result of this expansion and the new tenancies.
The Group has continued to sell shares held by it in FOP because
it is not the Group's business model to be a controlling
shareholder in funds which it manages and to simplify the Group's
structure. Sales of shares in FOP during the period resulted in a
capital profit for the Group of GBP101,000 (2016: GBP144,000). At
the period end the Group held 67.3% (31 March 2017: 69.2%) of the
issued share capital in FOP.
Associates and Investments:
The Group's non-controlling interests in funds managed by FPAM
contributed GBP740,000 (2016: GBP271,000) to Group profit before
tax prior to the deduction of unallocated central overheads. The
bulk of this increase (GBP397,000) was received from Fprop Romanian
Supermarkets Ltd, which sold three of its nine properties and
distributed the profit to shareholders.
Commercial Property Markets Outlook
Poland:
GDP growth in Poland is expected to exceed 4% in 2017 and
continues to exceed that of most other EU nations. Inflation has
picked up but at just over 2% per annum is manageable. Government
debt remains low by international standards at some 54% of GDP.
Investor demand for commercial property remains high. Volumes
are expected to match or exceed that of 2016 (around EUR5 billion),
itself the second highest year on record. Rental growth has been
more elusive, particularly in some sub sectors, such as offices in
Warsaw, where there has been considerable new development in recent
years. Capital values for good secondary property remain
attractive, yielding around one third more than equivalent property
in Western Europe at around 7-9% per annum.
Romania:
The economic outlook for Romania is at its best since before the
credit crunch. GDP growth accelerated to 8.8% year on year in the
third quarter just ended and is comfortably set to exceed 4% for
the year.
Investor demand for commercial property continues to improve but
volumes remain slim. Around EUR1 billion of commercial property is
expected to transact in 2017. The occupier market is picking up
too, as the economy continues to expand but, as in Poland, rental
growth remains elusive given the scale of new development.
Bank lending margins are beginning to reduce, which should boost
investment demand for commercial property.
United Kingdom:
The Bank of England's recent decision to raise interest rates by
0.25% should have little impact on the commercial property market
given the Bank's continued loose monetary policy program, and the
continued limited availability of bank debt.
The buying window for commercial property which we identified
last year following the UK's referendum on its membership of the EU
remains opens for specific kinds of property, in particular the
larger institutional lot sizes.
We therefore remain bullish about the prospects of the UK
commercial property market and particularly Fprop Offices LP which
is currently in the process of investing its capital
commitments.
Current Trading and Prospects
This has been another excellent six months for First
Property.
All our funds under management and the properties we own are
performing well and third party assets under management have
increased by 63% since last year.
Our prospects are excellent, underpinned by our bedrock of
recurring income streams and the opportunities open to us in the
various markets in which we operate.
We look forward to delivering continued growth and increasing
levels of profitability for our clients and shareholders.
Ben Habib
Chief Executive
23 November 2017
CONSOLIDATED INCOME STATEMENT
for the six months to 30 September 2017
Six months Six months Year to
to 30 to
Sept 2017
(unaudited) 30 Sept 31 March
2016 2017
(unaudited) (audited)
-------------------------- --- ------------- ------------- -----------
Total Total Total
results results results
-------------------------- --- ------------- ------------- -----------
GBP'000 GBP'000 GBP'000
Revenue 12,089 11,121 23,663
-------------------------- --- ------------- ------------- -----------
Cost of sales (2,179) (1,893) (5,065)
Gross profit 9,910 9,228 18,598
Profit on sale of
an investment property - - 890
Profit on sale of
FOP shares 101 144 552
Reversal of impairment
loss /(impairment
loss) to
investment properties 6 167 142 (219)
Operating expenses (4,415) (3,897) (8,207)
Operating profit 5,763 5,617 11,614
Share of results in
associates 7 740 271 519
Distribution income 33 18 60
Interest income 3 75 81 135
Interest expense 3 (1,631) (1,514) (3,191)
Profit before tax 4,980 4,473 9,137
Tax charge 4 (1,122) (1,220) (547)
-------------------------- --- ------------- ------------- -----------
Profit for the period 3,858 3,253 8,590
Attributable to:
Owners of the parent 3,364 2,849 7,833
Non-controlling interest 494 404 757
3,858 3,253 8,590
Earnings per share
Basic 5 2.90p 2.46p 6.75p
Diluted 5 2.84p 2.40p 6.61p
-------------------------- --- ------------- ------------- -----------
CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
for the six months to 30 September 2017
Six months Six months Year to
to 30 to 31 March
Sept 2017 30 Sept 2017
2016
(unaudited) (unaudited) (audited)
----------------------------------- ------------ ------------ ----------
GBP'000 GBP'000 GBP'000
----------------------------------- ------------ ------------ ----------
Profit for the period 3,858 3,253 8,590
------------------------------------ ------------ ------------ ----------
Other comprehensive
income
Exchange difference
on retranslation of
foreign subsidiaries (1,245) 286 2,008
Revaluation of available-for-sale
financial assets - - (29)
Taxation - - -
Total comprehensive
income for the period 2,613 3,539 10,569
------------------------------------ ------------ ------------ ----------
Total comprehensive
income for the period:
Owners of the parent 2,306 3,321 9,974
Non-controlling interest 307 218 595
------------------------------------ ------------ ------------ ----------
2,613 3,539 10,569
----------------------------------- ------------ ------------ ----------
All operations are continuing.
CONDENSED CONSOLIDATED BALANCE SHEET
as at 30 September 2017
Notes As at As at As at
30 Sept 30 Sept 31 March
2017 (unaudited) 2016 (unaudited) 2017
(audited)
------------------------------ ------ ------------------ ------------------ -----------
GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill 153 153 153
Investment properties 6 130,892 129,333 128,428
Property, plant and
equipment 78 181 97
Interest in associates 7a 4,475 3,098 4,347
Other financial assets 7b 3,258 918 897
Other receivables 8 1,905 139 2,108
Deferred tax assets 4,213 3,430 4,341
------------------------------ ------ ------------------ ------------------ -----------
Total non-current
assets 144,974 137,252 140,371
Current assets
Inventories - land
and buildings 15,391 14,998 15,115
Current tax assets 78 123 160
Trade and other receivables 8 5,308 5,307 4,890
Cash and cash equivalents 9,998 14,115 15,946
------------------------------ ------ ------------------ ------------------ -----------
Total current assets 30,775 34,543 36,111
Current liabilities
Trade and other payables 9 (7,283) (7,685) (9,848)
Financial liabilities 10a (8,861) (8,383) (19,641)
Current tax liabilities (165) (187) (314)
------------------------------ ------ ------------------ ------------------ -----------
Total current liabilities (16,309) (16,255) (29,803)
------------------------------ ------ ------------------ ------------------ -----------
Net current assets 14,466 18,288 6,308
------------------------------ ------ ------------------ ------------------ -----------
Total assets less
current liabilities 159,440 155,540 146,679
------------------------------ ------ ------------------ ------------------ -----------
Non-current liabilities
Financial liabilities 10b (111,104) (115,519) (100,043)
Deferred tax liabilities (3,423) (3,593) (3,208)
Net assets 44,913 36,428 43,428
------------------------------ ------ ------------------ ------------------ -----------
Equity
Called up share capital 1,166 1,166 1,166
Share premium 5,785 5,777 5,781
Share-based payment
reserve 203 203 203
Foreign exchange translation
reserve (1,039) (1,679) 19
Investment revaluation
reserve (67) (38) (67)
Retained earnings 35,343 28,789 33,311
------------------------------ ------ ------------------ ------------------ -----------
Equity attributable
to the owners of the
parent 41,391 34,218 40,413
Non-controlling interest 3,522 2,210 3,015
------------------------------ ------ ------------------ ------------------ -----------
Total equity 44,913 36,428 43,428
------------------------------ ------ ------------------ ------------------ -----------
Net assets per share 5 35.68p 29.50p 34.84p
------------------------------ ------ ------------------ ------------------ -----------
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
for the six months to 30 September 2017
Share Share Share Foreign Purchase Investment Retained Non-controlling Total
Capital Premium Based Exchange of own Revaluation Earnings Interest
Payment Translation Shares Reserve
Reserve Reserve
-------------------- -------- -------- -------- ------------ --------- ------------ --------- ---------------- --------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- -------- -------- -------- ------------ --------- ------------ --------- ---------------- --------
At 1 April 2016 1,166 5,773 203 (2,151) (103) (38) 27,334 1,906 34,090
-------------------- -------- -------- -------- ------------ --------- ------------ --------- ---------------- --------
Profit for the
period - - - - - - 3,253 - 3,253
Fair value (or - - - - - - - - -
revaluation) gains
on
available-for-sale
financial assets to
profit or loss
Movement on foreign
exchange - - - 472 - - - (186) 286
Total comprehensive
income - - - 472 - - 3,253 (186) 3,539
Change in
proportion held by
non-controlling
interests - - - - - - - 100 100
Sale of treasury
shares - 4 - - 2 - - - 6
Non-controlling
interest - - - - - - (404) 404 -
Dividends paid - - - - - - (1,293) (14) (1,307)
At 30 Sept 2016 1,166 5,777 203 (1,679) (101) (38) 28,890 2,210 36,428
-------------------- -------- -------- -------- ------------ --------- ------------ --------- ---------------- --------
Profit for the
period - - - - - - 5,337 - 5,337
Fair value (or
revaluation) gains
on
available-for-sale
financial assets
to profit or loss - - - - - (29) - - (29)
Movement on foreign
exchange - - - 1,698 - - - 24 1,722
-------------------- -------- -------- -------- ------------ --------- ------------ --------- ---------------- --------
Total comprehensive
income - - - 1,698 - (29) 5,337 24 7,030
Change in
proportion held by
non-controlling
interests - - - - - - - 456 456
Sale of treasury
shares - 4 - - 2 - - - 6
Non-controlling
interest - - - - - - (353) 353 -
Dividends paid - - - - - - (464) (28) (492)
-------------------- -------- -------- -------- ------------ --------- ------------ --------- ---------------- --------
At 1 April 2017 1,166 5,781 203 19 (99) (67) 33,410 3,015 43,428
-------------------- -------- -------- -------- ------------ --------- ------------ --------- ---------------- --------
Profit for the
period - - - - - - 3,858 - 3,858
Fair value (or - - - - - - - - -
revaluation) gains
on
available-for-sale
financial assets to
profit or loss
Movement on foreign
exchange - - - (1,058) - - - (187) (1,245)
Total comprehensive
income - - - (1,058) - - 3,858 (187) 2,613
Change in
proportion held by
non-controlling
interests - - - - - - - 224 224
Sale of treasury
shares - 4 - - 2 - - - 6
Non-controlling
interest - - - - - - (494) 494 -
Dividends paid - - - - - - (1,334) (24) (1,358)
-------------------- -------- -------- -------- ------------ --------- ------------ --------- ---------------- --------
At 30 Sept 2017 1,166 5,785 203 (1,039) (97) (67) 35,440 3,522 44,913
-------------------- -------- -------- -------- ------------ --------- ------------ --------- ---------------- --------
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
for the six months to 30 September 2017
Six months Six months Year to
to to 30
30 Sept
2016 (unaudited)
30 Sept 31 March
2017 (unaudited) 2017
(audited)
----------------------------------- ------ ------------------- ------------------ ------------
Notes GBP'000 GBP'000 GBP'000
----------------------------------- ------ ------------------- ------------------ ------------
Cash flows from operating
activities
Operating profit 5,763 5,617 11,614
Adjustments for:
Depreciation of investment
property, and property,
plant & equipment 1,138 976 1,960
Profit on the sale of
an investment property - - (890)
Profit on the sale of
FOP shares (101) (144) (552)
(Reversal of impairment
loss)/ impairment loss
to investment properties 6 (167) (142) 219
(Increase)/ decrease
in inventories (149) (135) (130)
(Increase)/ decrease
in trade and other receivables (122) (122) 305
(Decrease)/ increase
in trade and other payables (2,649) (364) 1,637
Other non-cash adjustments 86 (112) 615
Cash generated from
operations 3,799 5,574 14,778
Income taxes paid (727) (667) (1,156)
----------------------------------- ------ ------------------- ------------------ ------------
Net cash flow from operating
activities 3,072 4,907 13,622
----------------------------------- ------ ------------------- ------------------ ------------
Cash flow from investing
activities
Capital expenditure
on investment properties (1,663) (176) (1,990)
Proceeds from partial
disposal of available-for-sale
assets 612 153 239
Purchase of property,
plant and equipment (13) (16) (26)
Consideration from the
sale of FOP shares 326 244 1,108
Purchase of investments (2,361) - -
Investment in shares
of new associates - - (1,119)
Interest received 3 75 81 135
Dividends from associates 7a - 64 96
Distributions received 33 18 64
Net cash flow (used
in)/ from investing
activities (2,991) 368 (1,493)
----------------------------------- ------ ------------------- ------------------ ------------
Cash flow from financing
activities
Net repayment of shareholder
loans in subsidiaries (158) (75) (227)
Proceeds from bank loan - - -
Repayment of finance
leases/ bank loans (3,243) (2,958) (6,075)
Repayment from the sale
of FOP shareholder loan 131 152 534
Short term loan to an
associate - 5,083 5,083
Sale of shares held
in Treasury 6 6 12
Interest paid (1,486) (1,455) (3,100)
Dividends paid (1,334) (1,293) (1,757)
Dividends paid to non-controlling
interest (24) (14) (42)
----------------------------------- ------ ------------------- ------------------ ------------
Net cash flow (used
in)/ from financing
activities of continuing
operations (6,108) (554) (5,572)
Net (decrease)/ increase
in cash and cash equivalents (6,027) 4,721 6,557
----------------------------------- ------ ------------------- ------------------ ------------
Cash and cash equivalents
at the beginning of
period 15,946 8,975 8,975
----------------------------------- ------ ------------------- ------------------ ------------
Currency translation
gains/ (losses) on cash
and cash equivalents 79 419 414
----------------------------------- ------ ------------------- ------------------ ------------
Cash and cash equivalents
at the end of the period 9,998 14,115 15,946
----------------------------------- ------ ------------------- ------------------ ------------
NOTES TO THE ACCOUNTS
for the six months ended 30 September 2017
1. Basis of Preparation
-- These interim consolidated financial statements for the six
months ended 30 September 2017 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 2017 and are in compliance with IAS 34 "Interim Financial
Reporting". These accounting policies are drawn up in accordance
with International Accounting Standards (IAS) and International
Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board and as adopted by the European Union
(EU).
-- The comparative figures for the financial year ended 31 March
2017 are not the full statutory accounts for the financial year but
are abridged from those accounts prepared under IFRS which have
been reported on by the Group's auditors and delivered to the
Registrar of Companies. The report of the auditors was unqualified,
did not include references to any matter to which the auditors drew
attention by way of emphasis without qualifying their report and
did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
-- These interim financial statements were approved by a
committee of the Board on 22 November 2017.
2. Segmental Analysis
Segment reporting six months to 30 September 2017
Head office costs and overheads that are common to all segments
are shown separately under unallocated central costs. The staff
incentive accrual is included under unallocated central costs but
will be reallocated across all segments at the year end.
Fund Management Group Properties Division
Division
--------------------- --------------------- --------------------------------------- --------------------- --------
Property Group properties Group fund Unallocated central TOTAL
fund management properties ("FOP") overheads
--------------------- --------------------- ----------------- -------------------- --------------------- --------
GBP000 GBP000 GBP000 GBP'000 GBP'000
Rental income - 6,262 3,000 - 9,262
Service charge
income - 626 708 - 1,334
Asset management
fees 1,304 - - - 1,304
Performance fees 189 - - - 189
Total Revenue 1,493 6,888 3,708 - 12,089
Depreciation and
amortisation (19) (997) (122) - (1,138)
--------------------- --------------------- ----------------- -------------------- --------------------- --------
Operating profit 804 4,526 2,334 (1,901) 5,763
Share of results in
associates - 740 - - 740
Distribution income - 33 - - 33
Interest income - 21 54 - 75
Interest expense - (749) (882) - (1,631)
--------------------- --------------------- ----------------- -------------------- --------------------- --------
Profit/ (loss)
before tax 804 4,571 1,506 (1,901) 4,980
--------------------- --------------------- ----------------- -------------------- --------------------- --------
Analysed as:
Underlying profit/
(loss) before tax
before adjusting
for the following
items: 615 5,111 1,465 (486) 6,705
Sale of FOP shares - 101 - - 101
FPG's share in an
associates profit
from the sale of
investment
properties - 397 - - 397
Reversal of
impairment loss to
investment
properties - - 167 - 167
Performance and
related fees 189 - - - 189
Depreciation - (870) - - (870)
Staff incentive
accrual - - - (1,256) (1,256)
Realised foreign
currency (losses)/
gains - (168) (126) (159) (453)
Profit/ (loss)
before tax 804 4,571 1,506 (1,901) 4,980
--------------------- --------------------- ----------------- -------------------- --------------------- --------
Revenue for the six months to 30 September 2017 from continuing
operations consists of revenue arising in the United Kingdom 8%
(2016: 6%) and Central and Eastern Europe 92% (2016: 94%) and all
relates solely to the Group's principal activities.
Segment reporting six months to 30 September 2016
Fund Group Properties
Management Division
Division
--------------------- ------------ -------------------------- ------------ --------
Property Group Group Unallocated TOTAL
fund properties fund central
management properties overheads
("FOP")
--------------------- ------------ ------------ ------------ ------------ --------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Rental income - 5,960 2,640 - 8,600
Service charge
income - 840 763 - 1,603
Asset management
fees 918 - - - 918
Performance - - - - -
fees
--------------------- ------------ ------------ ------------ ------------ --------
Total revenue 918 6,800 3,403 - 11,121
--------------------- ------------ ------------ ------------ ------------ --------
Depreciation
and amortisation (17) (864) (95) - (976)
--------------------- ------------ ------------ ------------ ------------ --------
Operating profit 273 4,566 2,427 (1,649) 5,617
Share of results
in associates - 271 - - 271
Distribution
income - 18 - - 18
Interest income - 51 20 10 81
Interest expense - (719) (795) - (1,514)
Profit/ (loss)
before tax 273 4,187 1,652 (1,639) 4,473
--------------------- ------------ ------------ ------------ ------------ --------
Analysed as:
Underlying
profit/ (loss)
before tax
before adjusting
for the following
items: 273 5,091 1,576 (445) 6,495
Reversal of
impairment
loss to investment
properties - - 142 - 142
Sale of FOP
shares - 144 - - 144
Performance - - - - -
and related
fees
Depreciation - (812) - - (812)
Provision - - - - -
Staff incentive
accrual - - - (1,113) (1,113)
Realised foreign
currency gains/
(losses) - (236) (66) (81) (383)
Profit/ (loss)
before tax 273 4,187 1,652 (1,639) 4,473
--------------------- ------------ ------------ ------------ ------------ --------
Segment reporting year to 31 March 2017
Fund Group Properties
Management Division
Division
----------------------- ------------ -------------------------- ------------ ----------
Property Group Group Unallocated TOTAL
fund properties fund central
management properties overheads
("FOP")
----------------------- ------------ ------------ ------------ ------------ ----------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Rental income - 12,165 5,229 - 17,394
Service charge
income - 2,464 1,759 - 4,223
Asset management
fees 2,046 - - - 2,046
Performance - - - - -
fees
----------------------- ------------ ------------ ------------ ------------ ----------
Total revenue 2,046 14,629 6,988 - 23,663
----------------------- ------------ ------------ ------------ ------------ ----------
Depreciation
and amortisation (41) (1,786) (133) - (1,960)
----------------------- ------------ ------------ ------------ ------------ ----------
Operating profit 404 10,192 3,866 (2,848) 11,614
Share of results
in associates - 519 - - 519
Distribution
income - 60 - - 60
Interest income - 37 48 50 135
Interest expense - (1,535) (1,656) - (3,191)
Profit/ (loss)
before tax 404 9,273 2,258 (2,798) 9,137
----------------------- ------------ ------------ ------------ ------------ ----------
Analysed as:
Underlying
profit/ (loss)
before tax
before adjusting
for the following
items: 907 9,993 2,791 (857) 12,834
Impairment
loss to investment
properties - - (219) - (219)
Sale of FOP
shares - 552 - - 552
Sale of property - 890 - - 890
Performance - - - - -
and related
fees
Depreciation - (1,662) - - (1,662)
Provision - - - (44) (44)
Staff incentive
accrual (503) (172) (173) (1,922) (2,770)
Realised foreign
currency gain/
(loss) - (328) (141) 25 (444)
Profit/ (loss)
before tax 404 9,273 2,258 (2,798) 9,137
----------------------- ------------ ------------ ------------ ------------ ----------
Assets - Group 792 95,923 67,026 8,394 172,135
Share of net
assets of associates - 4,655 - (308) 4,347
Liabilities (189) (79,817) (50,652) (2,396) (133,054)
----------------------- ------------ ------------ ------------ ------------ ----------
Net assets 603 20,761 16,374 5,690 43,428
----------------------- ------------ ------------ ------------ ------------ ----------
3. Interest Income/ (Expense)
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
----------------------- ----------- ----------- ----------
GBP'000 GBP'000 GBP'000
Interest income -
bank deposits 14 18 35
Interest income -
other 61 63 100
Total interest income 75 81 135
----------------------- ----------- ----------- ----------
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
------------------------ ----------- ----------- ----------
GBP'000 GBP'000 GBP'000
Interest expense -
property loans (1,049) (982) (2,192)
Interest expense -
bank and other (87) (100) (160)
Finance charges on
finance leases (495) (432) (839)
------------------------ ----------- ----------- ----------
Total interest expense (1,631) (1,514) (3,191)
------------------------ ----------- ----------- ----------
4. Tax Expense
The tax charge is based on a combination of actual current and
deferred tax charged at an effective rate that is expected to apply
to the profits for the full year.
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
-------------- ----------- ----------- ----------
GBP'000 GBP'000 GBP'000
Current tax (687) (575) (1,155)
Deferred tax (435) (645) 608
-------------- ----------- ----------- ----------
Total (1,122) (1,220) (547)
-------------- ----------- ----------- ----------
5. Earnings/ NAV Per Share
The basic earnings per ordinary share is calculated on the
profit on ordinary activities after taxation and after
non-controlling interests on the weighted average number of
ordinary shares in issue, during the period.
Figures in the table below have been used in the
calculations.
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
--------------------------- ------------ ------------ ------------
Basic - pence per
share 2.90p 2.46p 6.75p
Diluted - pence per
share 2.84p 2.40p 6.61p
--------------------------- ------------ ------------ ------------
Number Number Number
--------------------------- ------------ ------------ ------------
Weighted average number
of ordinary shares
in issue for basic 115,992,763 115,967,888 115,975,959
Share options 2,700,000 2,700,000 2,700,000
--------------------------- ------------ ------------ ------------
Total for diluted 118,692,763 118,667,888 118,675,959
--------------------------- ------------ ------------ ------------
GBP'000 GBP'000 GBP'000
--------------------------- ------------ ------------ ------------
Basic earnings 3,364 2,849 7,833
--------------------------- ------------ ------------ ------------
Notional interest
on share options assumed
to be exercised 4 4 8
Diluted earnings 3,368 2,853 7,841
--------------------------- ------------ ------------ ------------
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
---------------------- ----------- ----------- ----------
Net assets per share 35.68p 29.50p 34.84p
Adjusted net assets
per share 51.25p 45.86p 47.64p
---------------------- ----------- ----------- ----------
The following numbers have been used to calculate both the net
assets and adjusted net assets per share.
Number Number Number
--------------------------- ------------ ------------ ------------
Number of shares in
issue at period end 116,004,464 115,980,040 115,992,699
--------------------------- ------------ ------------ ------------
GBP'000 GBP'000 GBP'000
--------------------------- ------------ ------------ ------------
Net assets excluding
non-controlling interest 41,391 34,218 40,413
Adjusted net assets Number Number Number
per share
--------------------------- ------------ ------------ ------------
Number of shares in
issue at period end 116,004,464 115,980,040 115,992,699
Number of share options
assumed to be exercised 2,700,000 2,700,000 2,700,000
--------------------------- ------------ ------------ ------------
Total 118,704,464 118,680,040 118,692,699
--------------------------- ------------ ------------ ------------
Adjusted net assets GBP'000 GBP'000 GBP'000
per share
--------------------------- ------------ ------------ ------------
Net assets excluding
non-controlling interest 41,391 34,218 40,413
Investment properties
at fair value net
of deferred taxes 13,315 17,350 10,740
Inventories at fair
value net of deferred
taxes 4,409 2,009 4,128
Other adjustments 1,726 850 1,267
--------------------------- ------------ ------------ ------------
Total 60,841 54,427 56,548
--------------------------- ------------ ------------ ------------
6. Investment Properties
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
------------------------------ ----------- ----------- ----------
GBP'000 GBP'000 GBP'000
------------------------------ ----------- ----------- ----------
1 April 128,428 120,718 120,718
Capital expenditure 1,663 176 1,990
Disposals - - (1,711)
Depreciation (1,105) (947) (1,891)
Fair value adjustment 167 142 (219)
Foreign exchange translation 1,739 9,244 9,541
End of period 130,892 129,333 128,428
------------------------------ ----------- ----------- ----------
Investment properties owned by the Group, and indirectly via FOP
are stated at cost less depreciation and accumulated impairment
losses.
7. Interest in Associates and Other Financial Assets
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
----------------------------- ----------- ----------- ----------
a) Associated undertakings GBP'000 GBP'000 GBP'000
Cost of investment
at beginning of period 4,347 3,044 3,044
Additions - - 1,119
Disposals (612) (153) (239)
Share of associates
profit after tax 740 271 519
Dividends received - (64) (96)
Cost of investment
at end of period 4,475 3,098 4,347
----------------------------- ----------- ----------- ----------
Investments in associated
undertakings
----------------------------- ----------- ----------- ----------
5(th) Property Trading
Ltd 972 868 916
Regional Property
Trading Ltd 218 185 192
Fprop Romanian Supermarkets
Ltd 649 766 750
Fprop Galeria Corso
Ltd 1,784 1,587 1,678
Fprop Krakow Ltd 1,160 - 1,119
----------------------------- ----------- ----------- ----------
4,783 3,406 4,655
Less: Group share
of profit after tax
withheld on sale of
property to an associate
in 2007 (308) (308) (308)
----------------------------- ----------- ----------- ----------
Cost of investment
at end of period 4,475 3,098 4,347
----------------------------- ----------- ----------- ----------
The withheld profit figure of GBP308,000 represents
the removal of the percentage of intercompany
profit resulting from the sale of the property
in 2007 to 5(th) Property Trading Ltd (an
associate). The figure will reduce when there
is a reduction in First Property Group's stake
in 5(th) Property Trading Ltd.
-------------------------------------------------------------------
b) Other financial
assets and investments
----------------------------- ----------- ----------- ----------
Cost of investment
at beginning of period 897 914 914
Additions 2,361 4 12
Disposal - - -
(Decrease)/increase
in fair value during
the period - - (29)
----------------------------- ----------- ----------- ----------
Cost of investment
at end of period 3,258 918 897
----------------------------- ----------- ----------- ----------
8. Trade and Other Receivables
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
---------------------------- ----------- ----------- ----------
GBP'000 GBP'000 GBP'000
Current assets
Trade receivables 2,514 2,392 2,003
Less provision for
impairment of receivables (490) (634) (626)
---------------------------- ----------- ----------- ----------
Trade receivables
net 2,024 1,758 1,377
Other receivables 2,426 3,159 2,435
Prepayments and accrued
income 858 390 1,078
5,308 5,307 4,890
---------------------------- ----------- ----------- ----------
Non-current assets 1,905 139 2,108
---------------------------- ----------- ----------- ----------
Other receivables include a balance of GBP1.88 million relating
to the deferred consideration from the sale of an investment
property located in Romania, which is receivable after one year.
This has been discounted to reflect its current value.
9. Trade and Other Payables
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
-------------------- ----------- ----------- ----------
GBP'000 GBP'000 GBP'000
Trade payables 3,457 2,787 2,941
Other taxation and
social security 891 673 799
Other payables and
accruals 2,272 4,214 5,275
Deferred income 663 11 833
7,283 7,685 9,848
-------------------- ----------- ----------- ----------
10. Financial Liabilities
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
---------------------------- ----------- ----------- ----------
GBP'000 GBP'000 GBP'000
a) Current liabilities
Loans repayable by
subsidiary (FOP) to
third party shareholders 2,121 1,918 2,148
Bank loans 3,470 3,340 3,180
Finance leases 3,270 3,125 14,313
8,861 8,383 19,641
---------------------------- ----------- ----------- ----------
b) Non-current liabilities
---------------------------- ----------- ----------- ----------
Bank loans 63,757 66,022 63,850
Finance leases 47,347 49,497 36,193
---------------------------- ----------- ----------- ----------
111,104 115,519 100,043
---------------------------- ----------- ----------- ----------
c) Total obligations under financial liabilities
Repayable within one
year 8,861 8,383 19,642
Repayable within one
and five years 78,099 99,041 65,725
Repayable after five
years 33,005 16,478 34,317
---------------------------- ----------- ----------- ----------
119,965 123,902 119,684
---------------------------- ----------- ----------- ----------
Loans repayable by Fprop Opportunities plc (FOP) to third party
shareholders are unsecured and repayable on demand.
Eight bank loans and three finance leases (all denominated in
Euros) totalling GBP117.84 million (31 March 2017: GBP117.54
million) included within financial liabilities are secured against
investment properties owned by the Group and Fprop Opportunities
plc (FOP), and one property owned by the Group shown under
inventories. These bank loans and finance leases are otherwise
non-recourse to the Group's assets.
The interim results are being circulated to all shareholders and
can be downloaded from the company's web site (www.fprop.com).
Further copies can be obtained from the registered office at 32 St
James's Street, London SW1A 1HD.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BLLLLDFFZFBE
(END) Dow Jones Newswires
November 23, 2017 02:00 ET (07:00 GMT)
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