REG - First Property Group - Interim Results
24/11/2021 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20211124:nRSX3373Ta&default-theme=true
RNS Number : 3373T First Property Group PLC 24 November 2021
Date: 24 November 2021
On behalf of: First Property Group plc ("First Property" or "the Group")
Embargoed: 0700hrs
First Property Group plc
Interim Results for the six months to 30 September
2021
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 2021.
Highlights:
· Profit before tax: £6.67 million (30 September 2020: £2.08
million);
· Cash reserves: £12.24 million (31 March 2021: £16.24 million);
· Substantially reduced net debt: £12.56 million (31 March 2021:
£18.85 million);
· One new fund established, Fprop Fulcrum Property LP;
· AUM: £576 million (31 March 2021: £569 million), of which £533
million managed for third parties (31 March 2021: £527 million);
· Weighted average unexpired fund management contract term: 3
years, 5 months (31 March 2021: 3 years, 11 months);
· The market value less gross debt of Group Properties amounts to
some £46.49 million, of which some 93% or £43.44 million is invested in
Poland and Romania;
· Interim dividend: 0.25 pence per share (30 September 2020: 0.45
pence per share).
Financial Summary:
Unaudited Unaudited Percentage change Audited
Six months to 30 Sept 2021 Six months to 30 Sept 2020 Year to
31 March 2021
Income Statement:
Statutory profit/ (loss) before tax £6.67m £2.08m 220.7% (£5.09m)
Diluted earnings/ (loss) per share 5.72p 0.46p 1,143.5% (6.59p)
Total dividend per share 0.25p 0.45p -44.4% 0.45p
Average €/£ rate 1.1632 1.1159 - 1.1246
Balance Sheet at period end:
Investment properties and Inventories at book value £36.87m £47.48m -22.3% £34.95m
Investment properties and Inventories at market value £42.91m £56.82m -24.5% £41.57m
Associates and investments at book value £21.63m £21.61m 0.1% £21.64m
Associates and investments at market value £28.38m £27.86m 1.9% £27.47m
Cash balances £12.24m £21.21m -42.3% £16.24m
Cash per share 11.09p 19.21p -42.3% 14.71p
Gross debt £24.80m £41.04m -39.6% £35.09m
Net debt £12.56m £19.83m -36.7% £18.85m
Gearing ratio at book value* 36.48% 46.56% - 48.82%
Gearing ratio at market value** 30.99% 40.09% - 42.05%
Net assets at book value £43.20m £47.11m -8.3% £36.79m
Net assets at market value £55.23m £61.34m -9.9% £48.36m
Adjusted net assets per share (EPRA basis) 48.88p 54.28p -9.9% 42.80p
Period end €/£ rate 1.1634 1.1025 - 1.1739
* Gearing ratio = Gross debt divided by gross debt plus net assets at book
value.
** Gearing ratio = Gross debt divided by gross debt plus net assets at market
value.
Commenting on the results, Ben Habib, Chief Executive of First Property Group,
said:
"The first half has seen a sharp turnaround in our fortunes, principally due
to the restructuring of a finance lease secured against our largest Group
Property which reduced our debt liability by some €9 million.
"Our balance sheet remains strong with some £43 million of net assets of
which some £12 million is in cash.
"Our prospects are bright - we have cash to invest, there are many investment
opportunities and occupational demand should pick up from the lockdown induced
lows with a commensurate increase in the value of our own properties."
Investor Presentation:
A briefing for existing and potential shareholders will be held at 11:00am GMT
today via Investor Meet Company. To participate it is necessary to register at
https://www.investormeetcompany.com/first-property-group-plc/register-investor
(https://www.investormeetcompany.com/first-property-group-plc/register-investor)
and select to meet the Company. Those who have already registered and selected
to meet the company will have already been invited. A copy of the accompanying
investor presentation and a recording of the call will be posted on the
company website. Questions can be submitted via the Investor Meet Company
dashboard at any time during the live presentation.
For further information please contact:
First Property Group plc Tel: +44 (20) 7340 0270
Ben Habib (Chief Executive Officer) www.fprop.com (http://www.fprop.com)
Laura James (Group Finance Director) investor.relations@fprop.com (mailto:investor.relations@fprop.com)
Jeremy Barkes (Director, Business Development)
Jill Aubrey (Company Secretary)
Arden Partners (NOMAD & Broker) Tel: + 44 (20) 7614 5900
John Llewellyn-Lloyd (Director, Corporate Finance)
Antonio Bossi (Director, Corporate Finance)
SEC Newgate (PR) Tel: + 44 7540106366
Robin Tozer/ Richard Bicknell/ Isabelle Smurfit firstproperty@secnewgate.co (mailto:firstproperty@secnewgate.co) .uk
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. 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 thirteen 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 seven directly held properties in Poland and Romania, and
non-controlling interests in eleven of the thirteen funds managed by FPAM.
Listed on AIM the Company has offices in London, Warsaw and Bucharest. Around
one third of the shares in the Company are owned by management and their
families. Further information about the Company and its products can be found
at: www.fprop.com (http://www.fprop.com) .
CHIEF EXECUTIVE'S STATEMENT
Performance:
I am pleased to report interim results for the six months ended 30 September
2021.
Revenue earned by the Group was £4.03 million (30 September 2020: £6.33
million) yielding a profit before tax of £6.67 million (30 September 2020:
£2.08 million). The reduction in revenue was mainly associated with the
expiry of the previously over-rented lease at the Group's office block in
Gdynia. The increase in profit before tax was largely attributable to a
reduction of €9 million (£7.81 million) from €25 million to €16 million
in the amount owed to ING Bank in final settlement of the finance lease
secured against the Group's office block in Gdynia, Poland. As part of the
transaction, ING was paid €4 million and the remainder of the finance lease
liability was replaced by a non-interest bearing loan of €12 million
(£10.31 million) repayable by June 2024.
Diluted earnings per share increased to 5.72 pence (30 September 2020: 0.46
pence).
It is the accounting policy of the Group to carry its properties and interests
in associates at the lower of cost or market value. Market values are
independently assessed at least once a year, on 31 March. The Group ended
the period with net assets under the cost basis of accounting of £43.20
million (31 March 2021: £36.79 million). The net assets of the Group when
adjusted to their market value less any deferred tax liabilities (EPRA basis)
at the period end was £55.23 million (31 March 2021: £48.36 million).
Gross debt at the period end amounted to £24.80 million (31 March 2021:
£35.09 million). This in turn reduced the Group's gearing ratio with
properties at book value to 36.48% (31 March 2021: 48.82%) and with properties
at market value to 30.99% (31 March 2021: 42.05%). Net debt reduced to £12.56
million (31 March 2021: £18.85 million).
Group cash balances at the period end stood at £12.24 million (31 March 2021:
£16.24 million), equivalent to 11.09 pence per share (31 March 2021: 14.71
pence per share). The reduction from the financial year end is attributable to
the payment of €4 million (£3.43 million) in part settlement of the finance
lease at the property in Gdynia.
Dividend:
In view of the marked improvement in the Group's position since the lockdown
induced set-back, the Directors have resolved to pay an interim dividend of
0.25 pence per share (30 September 2020: 0.45 pence per share). It will be
paid on 7 January 2022 to shareholders on the register at 3 December 2021,
with an ex-dividend date of 2 December 2021.
REVIEW OF OPERATIONS
PROPERTY FUND MANAGEMENT (First Property Asset Management Ltd or FPAM)
Third party assets under management at period end increased to £533 million
(31 March 2021: £527 million). There were no purchases or sales of property
in the period. Some 66% of third-party assets under management were located
in the UK, 32% in Poland and 2% in Romania.
One new fund was established in the period, Fprop Fulcrum Property LP, with an
initial equity commitment of £10 million.
After the period end the life of The U.K. Pension Property Portfolio LP was
extended by some five years to 13 January 2027. As part of this restructuring,
the Group invested a further £3.24 million, increasing its interest to 12.04%
(11.1% indirectly via Fprop UK Special Opportunities LP and 0.94% directly).
Fund management fees are generally levied monthly by reference to the value of
properties under management. In the case of Fprop Offices LP, the Group is
entitled to a share of total profits in lieu of fund management fees and to
receive annual payments on account equivalent to 10% of total cumulative
income profits and realised capital gains. Under its accounting policy the
Group will not recognise unrealised property revaluations above a given
property's original cost. These payments are adjusted annually, if necessary,
for any overpayments made in previous years up to a maximum of total past
cumulative payments received. As at 30 September 2021 this totalled £1.59
million.
Revenue earned by this division increased by 15% to £1.91 million (30
September 2020: £1.66 million), resulting in profit before unallocated
central overheads and tax of £829,000 (30 September 2020: £633,000),
representing 9% of Group profit before unallocated central overheads and tax.
The increase was primarily due to a performance fee of £206,000 in respect of
Fprop Offices LP (30 September 2020: £Nil).
At the period end FPAM's fund management fee income, excluding performance
fees and the profit share from Fprop Offices LP, was being earned at an
annualised rate of £2.89 million (31 March 2021: £2.90 million).
FPAM's weighted average unexpired fund management contract term at the period
end was 3 years, 5 months (31 March 2021: 3 years, 11 months).
The reconciliation of movement in third party funds under management during
the period is shown below:
Funds managed for third parties (including funds in which the Group is a
minority shareholder)
UK CEE Total No. of prop's
£m. £m. £m.
As at 1 April 2021 349.8 177.4 527.2 68
Purchases - - - -
New fund mandates - - - -
Property sales - - - -
Capital expenditure 0.4 0.1 0.5 -
Property revaluation 2.5 1.1 3.6 -
FX revaluation - 1.6 1.6 -
As at 30 Sept 2021 352.7 180.2 532.9 68
An overview of the value of assets and maturity of each of the funds managed
by FPAM is set out below:
Fund Country of investment Fund expiry Assets under management at market value at No of properties % of total third-party assets under management Assets under management at market value at
30 Sept 2021 31 March 2021
£m. % £m.
SAM & DHOW UK Rolling * * * *
5PT Poland Dec 2022 7.8 3 1.4 7.7
OFFICES UK Jun 2024 132.5 5 24.9 133.5
SIPS UK Jan 2025 137.3 24 25.8 134.3
FOP Poland Oct 2025 63.3 5 11.9 61.6
FGC Poland Mar 2026 21.3 1 4.0 21.1
SPEC OPPS UK Jan 2027 17.0 4 3.2 17.2
UK PPP UK Jan 2027 65.9 20 12.3 64.8
FKR Poland Mar 2027 20.9 1 3.9 20.7
FCL Romania Jun 2028 8.8 1 1.7 8.7
FPL Poland Jun 2028 58.1 4 10.9 57.6
FUL UK/Poland Indefinite - - - -
Total Third-Party AUM 532.9 68 100.0 527.2
* Not subject to recent revaluation;
The sub sector weightings of investments in FPAM funds is set out in the table
below:
UK Poland Romania Total % of Total
£m. £m. £m. £m.
Offices 199.1 103.5 8.8 311.4 58.4
Retail warehousing 92.1 - - 92.1 17.3
Supermarkets 52.2 17.5 - 69.7 13.1
Shopping centres - 50.4 - 50.4 9.4
Industrial 9.3 - - 9.3 1.8
Total 352.7 171.4 8.8 532.9 100.0
% of Total 66.2 32.2 1.6 100.0
GROUP PROPERTIES
At the period end Group Properties comprised seven directly owned commercial
properties in Poland and Romania and interests in eleven of the thirteen funds
managed by FPAM (which are invested in the UK, Poland and Romania).
The contribution to Group profit before tax and unallocated central overheads
from the Group Properties was £8.13 million (30 September 2020: £2.30
million), representing 91% of Group profit before unallocated central
overheads and tax. Approximately 96% of this was attributable to the
restructuring of the finance lease secured against the office block in Gdynia,
Poland, which resulted in the amount owed to ING Bank in final settlement
reducing by €9 million (£7.81 million) from €25 million to €16 million.
The market value less gross debt of the Group Properties amounts to some
£46.49 million, of which some 93% or £43.44 million is invested in Poland
and Romania.
1. Directly owned Group Properties (all accounted for under the cost
model):
Two of the Group's seven directly owned properties account for 72% of their
book value (£26.64 million). Both are office buildings in Poland of which one
is in Warsaw (11,000 m(2)) and the other in Gdynia (14,000 m(2)). The balance
of 28% by book value (£10.23 million) is invested in two mini-supermarkets in
Poland, a development site in Warsaw, an office block in Bucharest and a
warehouse in Tureni, Romania.
Country Sector No. of properties Book value Market value *Contribution to Group profit before tax - period to *Contribution to Group profit before tax - period to
30 Sept 2021
30 Sept 2020
£m. £m. £m. £m.
Poland, Gdynia Offices 1 13.75 13.75 **7.51 1.35
Poland, Warsaw Offices 1 12.89 15.97 0.67 0.66
Poland Supermarkets 3 6.30 6.87 ***0.02 0.08
Romania Offices and logistics 2 3.93 6.32 0.17 0.18
Total 7 36.87 42.91 8.37 2.27
*Prior to the deduction of direct overhead and unallocated central overhead
expenses.
**Includes €9 million (£7.81 million) debt reduction following
restructuring of the finance lease at Gdynia.
***Of which two are let and the third is being redeveloped, scheduled for
completion in FY2023.
The seven directly owned properties generated a profit before unallocated
central overheads and tax of £7.73 million (30 September 2020: £1.50
million). The increase was almost entirely attributable to the restructuring
of the finance lease secured against the office block in Gdynia (following the
expiry of the over-rented lease), which resulted in the amount owed to ING
Bank reducing by €9 million (£7.81 million) from €25 million to €16
million. As part of the transaction, ING was paid €4 million and the
remainder of the finance lease liability was replaced by a non-interest
bearing loan of €12 million (£10.31 million) repayable by June 2024. The
property is largely vacant (since Feb 2021) and contributed a loss of
£295,000 (30 September 2020: a profit of £1.35 million). We have agreed
terms to lease some 10% of the building and are actively marketing the
remainder.
During the period the Group leased 73% of the vacant office space in
Chałubińskiego 8 (CH8), the office tower in Warsaw which was sold at the end
of the financial year ended 31 March 2020 but on which a rent guarantee over
the vacant space was provided by the Group to the new owner, worth around £1
million per annum. The Group's maximum residual liability over the remaining
life of the rent guarantee (until April 2025) has now reduced to some €1.37
million (£1.19 million), equivalent to some €392,000 per annum. A provision
of some €532,000 (£461,000) has been made as at 30 September 2021 against
this remaining liability.
The debt secured against the seven Group Properties reduced to £24.80 million
(31 March 2021: £35.09 million), mainly as a result of the restructuring of
the finance lease secured on the office block in Gdynia. The loans secured
against the seven properties are held in separate non-recourse special purpose
vehicles. The loan secured against the property in Bucharest was increased by
€1.50 million (£1.30 million).
Directly owned Group Properties 30 Sept 2021 31 March 2021
Book value £36.87m £34.95m
Market value £42.91m £41.57m
Gross debt (all non-recourse to Group) £24.80m £35.09m
Market value less gross debt £18.11m £6.48m
LTV at book value % 67.28% 100.41%
LTV at market value % 57.81% 84.41%
Weighted average borrowing cost 1.14% 1.60%
Weighted average debt term 4 yrs 1 mths 2 yrs 0 mths
The weighted average unexpired lease term (WAULT) of all seven properties as
at 30 September 2021 was 5 years and 9 months.
2. Associates and Investments
These comprise non-controlling interests in eleven of the thirteen funds
managed by FPAM, of which seven are accounted for as associates under the cost
model, and four are accounted for as investments in funds and held at fair
value.
The contribution to Group profit before tax and unallocated central overheads
from its seven associates and four investments decreased by 49% to £406,000
(30 September 2020: £796,000). The reduction was largely attributable to the
Group's shareholding in Fprop Opportunities plc (FOP), a fund which
experienced a reduction in rent payable following the granting of two new
(material) leases during lockdown at lower rents than were previously being
received.
An overview of the Group's Associates and Investments is set out in the table
below:
Fund % owned by Book value of First Property's share in Current market value of holdings Group's share Group's share
First Property fund of post-tax profits earned by fund of post-tax profits earned by fund
Group 30 Sept 2021 30 Sept 2020
% £'000 £'000 £'000 £'000
a) Associates
5PT 40.6 1,319 1,336 72 72
FRS 24.1 - 75 47 11
FOP 43.8 11,114 11,589 175 627
FGC 28.2 2,550 2,651 71 99
FKR 18.1 1,647 1,767 56 92
FPL 23.4 1,350 7,136 (180) (219)
FCL 17.4 600 780 35 41
Sub Total 18,580 25,334 276 723
b) Investments
UK PPP 0.9 621 621 30 14
SPEC OPPS* 4.0 464 464 23 17
OFFICES 1.6 1,964 1,964 77 42
FUL** 2.5 - - - -
Sub Total 3,049 3,049 130 73
Total 21,629 28,383 406 796
* On 16 November 2021 the Group's investment in Fprop UK Special
Opportunities LP increased to 11.07%.
** New fund established - Fprop Fulcrum Property LP. As at 30 September 2021
no funds had been invested.
The contribution from Fprop Krakow Ltd (FKR), a multi-let office tower in
Krakow, was lower due to the expiry in July of the lease to its largest
tenant,representing 4,790m(2) or nearly half the net internal area.
The loss in Fprop Phoenix Ltd (FPL), which owns an office park near Krakow
Airport, narrowed slightly but is expected to increase in the second half. Its
largest tenant vacated in August. We have invested substantially in the park
both before and during the pandemic and it now offers very cost effective
office space with first class amenities - including its own railway station, a
creche and kindergarten, a gym, sports ground, BBQ area and conference centre.
The challenge now is to lease it up.
Commercial Property Market Outlook
Poland:
Poland's GDP is forecast to grow by 4.8% in 2021 and 5.0% in 2022, marginally
more than forecast inflation. The country's central bank has increased its key
policy interest rate by 40bps to 0.50% in October, and by 75bps to 1.25% in
November. It is expected to increase interest rates to 2.50% by the end of
2022.
Rents in Poland are contractually mostly linked to Eurozone inflation. We
therefore expect rental values broadly to keep pace with inflation.
Commercial property transactions are picking up as the economy reopens. Prime
yields generally range from 5-6%.
Romania:
Romania's GDP is expected to grow by some 7% in 2021 and 4% in 2022,
marginally more than forecast inflation in 2021 but behind forecast inflation
for 2022.
Rents in Romania are contractually mostly linked to Eurozone inflation. We
therefore expect rental values broadly to keep pace with inflation.
Commercial property transactions are picking up as the economy reopens. Prime
yields generally range from 7-8%.
United Kingdom:
The United Kingdom's GDP growth is rebounding, mainly based on consumption, as
restrictions to economic activity are eased. GDP is expected to return to its
pre-pandemic level in early 2022. Inflation is also increasing but at a lesser
rate than the growth in GDP.
Investor demand for commercial property is rebounding too, with capital values
for "all commercial property" increasing by 3.8% in Q3 2021, the fastest rate
since Q1 2010. Capital growth year to date is 6.4%. Rental growth is more
elusive.
Our favoured sectors remain retail warehouses and regional offices but we are
also beginning to see value on the high street. Yields for good secondary
commercial property remain attractive.
Current Trading and Prospects
The first half has seen a sharp turnaround in our fortunes, principally due to
the restructuring of a finance lease secured against our largest Group
Property which reduced our debt liability by some €9 million.
Our balance sheet remains strong with some £43 million of net assets of which
some £12 million is in cash.
Our prospects are bright - we have cash to invest, there are many investment
opportunities and occupational demand should pick up from the lockdown induced
lows with a commensurate increase in the value of our own properties.
Ben Habib
Chief Executive
CONSOLIDATED INCOME STATEMENT
for the six months to 30 September 2021
Notes Six months to 30 Sept 2021 Six months to Year to
(unaudited) 30 Sept 2020 31 Mar 2021
(unaudited) (audited)
£'000 £'000 £'000
Revenue 4,033 6,330 12,119
Cost of sales (1,298) (1,194) (4,128)
Gross profit 2,735 5,136 7,991
Profit on sale of an investment property - - 161
Debt reduction following restructuring of finance lease 7,809 - -
Recycled foreign exchange gain - - 1,163
Impairment loss to an investment property - - (7,023)
Operating expenses (4,258) (3,492) (7,363)
Operating profit 6,286 1,644 (5,071)
Share of results in associates 8a 234 723 3,467
Share of associates' revaluation gain/ (losses) 8a 42 - (2,997)
Investment income 130 73 185
Interest income 3 130 45 67
Interest expense 3 (157) (403) (740)
Profit/ (loss) before tax 6,665 2,082 (5,089)
Corporation tax 4 (129) (404) (179)
Deferred tax 4 (51) (1,140) (2,133)
Profit/ (loss) for the period 6,485 538 (7,401)
Attributable to:
Owners of the parent 6,457 515 (7,449)
Non-controlling interests 28 23 48
6,485 538 (7,401)
Earnings/ (loss) per share
Basic 5 5.85p 0.47p (6.75p)
Diluted 5 5.72p 0.46p (6.59p)
All operations are continuing.
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
for the six months to 30 September 2021
Notes Six months to 30 Sept 2021 Six months to Year to
30 Sept 2020 31 Mar 2021
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Profit/ (loss) for the period 6,485 538 (7,401)
Other comprehensive income
Items that may subsequently be reclassified to profit or loss:
Exchange differences on retranslation of foreign subsidiaries 24 (53) (685)
Foreign exchange profit recycled to the Income Statement - - (1,163)
Net (loss)/ gain on financial assets at fair value through Other Comprehensive 8b (14) (52) (119)
Income
Taxation - - -
Total comprehensive income for the period 6,495 433 (9,368)
Total comprehensive income for the period attributable to:
Owners of the parent 6,409 412 (9,440)
Non-controlling interests 86 21 72
6,495 433 (9,368)
All operations are continuing.
CONSOLIDATED BALANCE SHEET
as at 30 September 2021
Notes As at As at As at
30 Sept 2021 (unaudited) 31 Mar 2021 (audited) 30 Sept 2020 (unaudited)
£'000 £'000 £'000
Non-current assets
Goodwill 153 153 153
Investment properties 6 24,090 22,456 32,544
Property, plant and equipment 130 157 56
Investment in associates 8a 18,580 18,577 18,483
Other financial assets at fair value through OCI 8b 3,049 3,061 3,128
Other receivables 9 293 487 730
Right of use assets 686 686 584
Deferred tax assets 1,596 1,518 2,307
Total non-current assets 48,577 47,095 57,985
Current assets
Inventories - land and buildings 7 12,775 12,494 14,940
Current tax assets 5 296 133
Trade and other receivables 9 4,919 5,149 3,216
Cash and cash equivalents 12,239 16,244 21,207
Total current assets 29,938 34,183 39,496
Current liabilities
Trade and other payables 10 (4,635) (3,447) (3,638)
Provisions 11 (1,767) (2,076) (1,826)
Financial liabilities 12a (1,316) (22,637) (25,803)
Current tax liabilities (31) (12) (78)
Total current liabilities (7,749) (28,172) (31,345)
Net current assets 22,189 6,011 8,151
Total assets less current liabilities 70,766 53,106 66,136
Non-current liabilities
Financial liabilities 12b (13,173) (12,457) (15,241)
Other financial liabilities 13 (10,314) - -
Lease liabilities (686) (686) (584)
Deferred tax liabilities (3,142) (2,974) (3,049)
Net assets 43,451 36,989 47,262
Equity
Called up share capital 1,166 1,166 1,166
Share premium 5,791 5,791 5,791
Share-based payment reserve 179 179 179
Foreign exchange translation reserve (3,142) (3,108) (1,311)
Purchase of own shares reserve (2,653) (2,653) (2,653)
Investment revaluation reserve (369) (355) (288)
Retained earnings 42,225 35,768 44,228
Equity attributable to the owners of the parent 43,197 36,788 47,112
Non-controlling interests 254 201 150
Total equity 43,451 36,989 47,262
Net assets per share 5 39.13p 33.33p 42.68p
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months to 30 September 2021
Share Share Premium Share- Based Foreign Exchange Translation Reserve Purchase of own Shares Investment Retained Earnings Non-controlling Interests Total
Capital Payment Reserve Revaluation
Reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2020 1,166 5,791 179 (1,260) (2,653) (236) 45,060 157 48,204
Profit for the period - - - - - - 538 - 538
Net (loss)/ gain on financial assets at fair value through other comprehensive - - - - - (52) - - (52)
income
Movement on foreign exchange - - - (51) - - - (2) (53)
Total Comprehensive Income - - - (51) - (52) 538 (2) 433
Purchase of treasury shares - - - - - - - - -
Non-controlling interests - - - - - - (23) 23 -
Dividends paid - - - - - - (1,347) (28) (1,375)
At 30 Sept 2020 1,166 5,791 179 (1,311) (2,653) (288) 44,228 150 47,262
Profit for the period - - - - - - (7,939) - (7,939)
Net gain/ (loss) on financial assets at fair value through other comprehensive - - - - - (67) - - (67)
income
Movement on foreign exchange - - - (634) - - - 26 (608)
Foreign exchange profit recycled to the income statement - - - (1,163) - - - - (1,163)
Total Comprehensive Income - - - (1,797) - (67) (7,939) 26 (9,777)
Sale of treasury shares - - - - - - - - -
Purchase of treasury shares - - - - - - - - -
Non-controlling interests - - - - - - (25) 25 -
Dividends paid - - - - - - (496) - (496)
At 1 April 2021 1,166 5,791 179 (3,108) (2,653) (355) 35,768 201 36,989
Profit for the period - - - - - - 6,485 - 6,485
Net gain/ (loss) on financial assets at fair value through other comprehensive - - - - - (14) - - (14)
income
Movement on foreign exchange - - - (34) - - - 58 24
Total Comprehensive Income - - - (34) - (14) 6,485 58 6,495
Purchase of treasury shares - - - - - - - - -
Non-controlling interests - - - - - - (28) 28 -
Dividends paid - - - - - - - (33) (33)
At 30 Sept 2021 1,166 5,791 179 (3,142) (2,653) (369) 42,225 254 43,451
CONSOLIDATED CASH FLOW STATEMENT
for the six months to 30 September 2021
Notes Six months to Six months to 30 Sept 2020 (unaudited) Year to
30 Sept 2021 (unaudited) 31 Mar 2021
(audited)
£'000 £'000 £'000
Cash flows (used in)/ from operating activities
Operating profit / (loss) 6,286 1,644 (5,071)
Adjustments for:
Depreciation of investment property, and property, plant & equipment 38 949 1,362
Profit on the sale of investment property - - (161)
Loss on the sale of inventory - - 217
Impairment loss on an investment property - - 7,023
Debt reduction following restructuring of finance lease (7,809) - -
(Increase)/ decrease in inventories (77) 21 (129)
Decrease/ (increase) in trade and other receivables 189 41,999 38,858
Increase/ (decrease) in trade and other payables 811 (4,242) (2,607)
Other non-cash adjustments 47 23 (126)
Cash generated from operations (515) 40,394 39,366
Income taxes paid 182 (407) (640)
Net cash flow (used in)/ from operating activities (333) 39,987 38,726
Cash flow (used in)/ from investing activities
Capital expenditure on investment properties 6 (1,333) (12) (160)
Proceeds from partial disposal of financial assets held at fair value through 8a - - -
Other Comprehensive Income
Purchase of property, plant and equipment (2) - (134)
Proceeds from the sale of an investment property - - 1,505
Investment in funds 8b (2) (6) (6)
Proceeds from funds 8a 31 - 172
Investment in shares of associates 8a - (62) (605)
Interest received 3 130 45 67
Dividends from associates 8a 242 - 24
Distributions received 130 73 185
Net cash flow (used in)/ from investing activities (804) 38 1,048
Cash flow (used in)/ from financing activities
Proceeds from bank loan 1,289 - -
Repayment of bank loans (574) (23,126) (25,077)
Repayment of finance lease (3,434) (1,358) (2,970)
Purchase of new treasury shares - - -
Sale of shares held in Treasury - - -
Exercise of share options - - -
Interest paid 3 (157) (403) (740)
Dividends paid - (1,347) (1,843)
Dividends paid to non-controlling interests (33) (28) (28)
Net cash flow (used in)/ from financing activities (2,909) (26,262) (30,658)
Net (decrease)/ increase in cash and cash equivalents (4,046) 13,763 9,116
Cash and cash equivalents at the beginning of period 16,244 7,337 7,337
Currency translation gains/ (losses) on cash and cash equivalents 41 107 (209)
Cash and cash equivalents at the end of the period 12,239 21,207 16,244
NOTES TO THE ACCOUNTS
for the six months ended 30 September 2021
1. Basis of Preparation
· These interim consolidated financial statements for the six months
ended 30 September 2021 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 2021 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 2021
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 16 November 2021.
2. Segmental Analysis
Segment reporting for the six months to 30 September 2021
Direct costs incurred by First Property Group plc relating to the cost of the
Board and the related share listing costs 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 Division Group Properties Division
Property Group properties Associates and investments Unallocated central overheads TOTAL
fund management
£'000 £'000 £'000 £'000 £'000
Rental income - 1,520 - - 1,520
Service charge income - 605 - - 605
Asset management fees 1,702 - - - 1,702
Performance related fee income 206 - - - 206
Total revenue 1,908 2,125 - - 4,033
Depreciation and amortisation (25) (68) - - (93)
Operating profit 829 7,788 - (2,331) 6,286
Share of results in associates - - 234 - 234
Fair value adjustment to associate - - 42 - 42
Investment income - - 130 - 130
Interest income - 94 - 36 130
Interest expense - (157) - - (157)
Profit/ (loss) before tax 829 7,725 406 (2,295) 6,665
Analysed as:
Underlying profit/ loss before tax before adjusting for the following items: 423 25 364 (411) 401
Write down, impairment loss/ reversals - - - - -
Interest on loan to 'FOP' - 112 - - 112
Debt reduction following restructuring of finance lease - 7,809 - - 7,809
Group's share of revaluation gain on associates - - 42 - 42
Provision for rent guarantee - (184) - - (184)
Performance related fee income 206 - - - 206
One-off AM fee income from Tesco deal (FOP) 192 - - - 192
Depreciation on investment property - - - - -
Staff incentives - - - (1,850) (1,850)
Realised foreign currency (losses)/ gains 8 (37) - (34) (63)
Profit/ (loss) before tax 829 7,725 406 (2,295) 6,665
Revenue for the six months to 30 September 2021 from continuing operations
consists of revenue arising in the United Kingdom 29% (30 September 2020: 14%)
and Central and Eastern Europe 71% (30 September 2020: 86%) and all relates
solely to the Group's principal activities.
Segment reporting for the six months to 30 September 2020
Fund Management Division Group Properties Division
Property Group properties Associates and investments Unallocated central overheads TOTAL
fund management
£'000 £'000 £'000 £'000 £'000
Rental income - 4,006 - - 4,006
Service charge income - 663 - - 663
Asset management fees 1,661 - - - 1,661
Performance related fee income - - - - -
Total revenue 1,661 4,669 - - 6,330
Depreciation and amortisation (10) (976) - - (986)
Operating profit 633 1,884 - (873) 1,644
Share of results in associates - - 723 - 723
Investment income - - 73 - 73
Interest income - 21 - 24 45
Interest expense - (403) - - (403)
Profit/ (loss) before tax 633 1,502 796 (849) 2,082
Analysed as:
Underlying profit/ loss before tax before adjusting for the following items: 644 2,572 796 (680) 3,332
Write down, impairment loss/ reversals - - - - -
Profit on the sale of 'FOP' shares - - - - -
Goodwill write off on acquisition of associates - - - - -
Group's share of revaluation losses on associates - - - - -
Performance related fee income - - - - -
Depreciation on investment property - (884) - - (884)
Staff incentives - - - (397) (397)
Realised foreign currency (losses)/ gains (11) (186) - 228 31
Profit/ (loss) before tax 633 1,502 796 (849) 2,082
Segment reporting for the year to 31 March 2021
Fund Management Division Group Properties Division
Property Group properties Associates and investments Unallocated central overheads TOTAL
fund management
£'000 £'000 £'000 £'000 £'000
Rental income - 6,087 - - 6,087
Service charge income - 1,544 - - 1,544
Sale of a property held in inventory - 1,103 - - 1,103
Asset management fees 3,345 - - - 3,345
Performance related fee income 40 - - - 40
Total revenue 3,385 8,734 - - 12,119
Depreciation and amortisation (21) (1,425) - - (1,446)
Operating profit 1,304 (5,090) - (1,285) (5,071)
Share of results in associates - - 3,467 - 3,467
Fair value adjustment on associates - - (2,997) - (2,997)
Investment income - - 185 - 185
Interest income - 31 - 36 67
Interest expense - (740) - - (740)
Profit/ (loss) before tax 1,304 (5,799) 655 (1,249) (5,089)
Analysed as:
Underlying profit/ (loss) before tax before adjusting for the following items: 1,294 3,023 1,472 (1,213) 4,576
Provision in respect of rent guarantee - (1,030) - - (1,030)
Profit on the sale of group properties - 161 - - 161
Loss on the sale of a property held in inventory - (217) - - (217)
Impairment to an investment property - (7,023) - - (7,023)
One-off additional income from our share of associates (FOP) - - 2,180 - 2,180
Fair value adjustment on associates (FOP) - - (2,997) - (2,997)
Recycled foreign exchange gain - 1,163 - - 1,163
Depreciation - (1,327) - - (1,327)
Performance related fee income 40 - - - 40
Staff incentives - - - - -
Realised foreign currency (losses)/ gains (30) (549) - (36) (615)
Total 1,304 (5,799) 655 (1,249) (5,089)
Assets - Group 836 43,873 3,061 14,931 62,701
Share of net assets of associates - - 18,885 (308) 18,577
Liabilities (120) (44,001) - (168) (44,289)
Net assets 716 (128) 21,946 14,455 36,989
3. Interest Income/ (Expense)
Six months ended Six months Year
30 Sept 2021 ended ended
30 Sept 2020 31 Mar 2021
£'000 £'000 £'000
Interest income - bank deposits - 24 26
Interest income - other 130 21 41
Total interest income 130 45 67
Six months ended Six months Year
30 Sept 2021 ended ended
30 Sept 2020 31 Mar 2021
£'000 £'000 £'000
Interest expense - property loans (151) (257) (467)
Interest expense - bank and other (6) (22) (47)
Finance charges on finance leases - (124) (226)
Total interest expense (157) (403) (740)
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 ended Six months Year
30 Sept 2021 ended ended
30 Sept 2020 31 Mar 2021
£'000 £'000 £'000
Current tax (129) (404) (179)
Deferred tax (51) (1,140) (2,133)
Total (180) (1,544) (2,312)
The deferred tax charge for the year ended 31 March 2021 relates to the
reversal of a previously recognised deferred tax asset following the repayment
of the bank loan secured against the property CH8 in April 2020.
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 2021 30 Sept 2020 31 Mar 2021
Basic earnings/ (loss) per share 5.85p 0.47p (6.75p)
Diluted earnings/ (loss) per share 5.72p 0.46p (6.59p)
Number Number Number
Weighted average number of Ordinary shares in issue (used for basic earnings 110,382,332 110,953,578 110,382,332
per share calculation)
Number of share options 2,610,000 2,610,000 2,610,000
Total number of Ordinary shares used in the diluted earnings per share 112,992,332 113,563,578 112,992,332
calculation
£'000 £'000 £'000
Basic earnings 6,457 515 (7,449)
Notional interest on share options assumed to be exercised 4 4 7
Diluted earnings/ (loss) 6,461 519 (7,442)
Six months Six months Year
ended ended ended
30 Sept 2021 30 Sept 2020 31 Mar 2021
Net assets per share 39.13p 42.68p 33.33p
Adjusted net assets per share 48.88p 54.28p 42.80p
Adjusted net assets per share are calculated using the fair value of all
investments.
The following numbers have been used to calculate both the net assets and
adjusted net assets per share:
Six months Six months Year
ended ended ended
30 Sept 2021 30 Sept 2020 31 Mar 2021
Number Number Number
Number of shares in issue at period end 110,382,332 110,382,332 110,382,332
£'000 £'000 £'000
Net assets excluding Non-controlling interest 43,197 47,112 36,788
For adjusted net assets per share Number Number Number
Number of shares in issue at period end 110,382,332 110,382,332 110,382,332
Number of share options assumed to be exercised 2,610,000 2,610,000 2,610,000
Total 112,992,332 112,992,332 112,992,332
For adjusted net assets per share £'000 £'000 £'000
Net assets excluding Non-controlling interests 43,197 47,112 36,788
Investment properties at fair value net of deferred taxes 2,305 4,564 2,663
Inventories at fair value net of deferred taxes 2,590 3,034 2,701
Investments in associates at fair value 6,753 6,246 5,827
Other items 381 381 381
Total 55,226 61,337 48,360
6. Investment Properties
Six months Year Six months
ended ended ended
30 Sept 2021 31 Mar 2021 30 Sept 2020
£'000 £'000 £'000
1 April 22,456 32,537 32,537
Capital expenditure 1,333 160 12
Disposals - (241) -
Depreciation (3) (1,327) (939)
Impairment loss to an investment property - (7,023) -
Foreign exchange translation 304 (1,650) 934
Total at end of period 24,090 22,456 32,544
Investment properties owned by the Group are stated at cost less depreciation
and accumulated impairment losses.
In 2015 the Directors resolved to depreciate the value of the property in
Gdynia over the remaining term of the lease (which expired in February 2021)
to reflect its residual value. No depreciation was charged on this property
for the period to 30 September 2021. No other property has been depreciated as
their respective estimated residual values are expected to be higher than
their carrying value.
At 31 March 2021, the Directors wrote down the value of the Gdynia property by
£7.02 million to reflect the value of the final settlement agreed with the
lending bank, following the restructuring of the financing in June 2021.
7. Inventory - Land and Buildings
Six months Year Six months
ended ended ended
30 Sept 2021 31 Mar 2021 30 Sept 2020
£'000 £'000 £'000
1 April 12,494 14,558 14,558
Capital expenditure 132 213 20
Disposals - (1,320) -
Depreciation (55) (84) (31)
Foreign exchange translation 204 (873) 393
Total at end of period 12,775 12,494 14,940
The Group's total interest in Blue Tower (an office block in Warsaw) is 48.2%
of the building. The fair value of this interest is €18.58 million as at 30
September 2021 and 31 March 2021 but is stated at cost as above.
The disposal in the year ended 31 March 2021 relates to the sale of another
property related to Blue Tower. Consideration of £1.10 million was received
in respect of this sale resulting in a loss on disposal of £217,000. The fair
value of this interest as at 31 March 2021 was €2.10 million.
8. Investments in associates and other financial investments
Six months ended Year Six months
30 Sept 2021 ended ended
31 Mar 2021 30 Sept 2020
a) Associates £'000 £'000 £'000
Cost of investment at beginning of period 18,577 17,698 17,698
Additions - 605 62
Disposals - - -
Repayment of shareholder loan (31) (172) -
Share of associates profit after tax 234 3,467 723
Share of associates revaluation losses 42 (2,997) -
Dividends received (242) (24) -
Cost of investment at end of period 18,580 18,577 18,483
Six months ended Year Six months
30 Sept 2021 ended ended
31 Mar 2021 30 Sept 2020
£'000 £'000 £'000
Investments in associates
5th Property Trading Ltd 1,627 1,555 1,508
Fprop Romanian Supermarkets Ltd - 194 179
Fprop Galeria Corso Ltd 2,550 2,479 2,445
Fprop Krakow Ltd 1,648 1,592 1,543
Fprop Cluj Ltd 600 596 560
Fprop Phoenix Ltd 1,349 1,530 1,690
Fprop Opportunities plc 11,114 10,939 10,866
18,888 18,885 18,791
Less: Group share of profit after tax withheld on sale of property to an (308) (308) (308)
associate in 2007
Cost of investment at end of period 18,580 18,577 18,483
The withheld profit figure of £308,000 represents the removal of the
percentage of intercompany profit resulting from the sale of the property in
2007 to 5th Property Trading Ltd (an associate). The figure will reduce when
there is a reduction in First Property Group's stake in 5th Property Trading
Ltd.
Six months ended Year Six months
30 Sept 2021 ended ended
31 Mar 2021 30 Sept 2020
£'000 £'000 £'000
b) Other financial investments
Cost of investment at 1 April 3,061 3,174 3,174
Additions 2 6 6
Repayments - - -
Disposal - - -
(Decrease)/ increase in fair value during the period (14) (119) (52)
Cost of investment at end of period 3,049 3,061 3,128
9. Trade and Other Receivables
Six months ended Year Six months
30 Sept 2021 ended ended
31 Mar 2021 30 Sept 2020
£'000 £'000 £'000
Current assets
Trade receivables 953 1,325 1,222
Less provision for impairment of receivables (260) (281) (356)
Trade receivables net 693 1,044 866
Other receivables 3,253 3,408 1,757
Prepayments and accrued income 973 697 593
Total at end of period 4,919 5,149 3,216
Non-current assets
Other receivables 293 487 730
The other receivables balance included in non-current assets of £293,000 (31
March 2021: £487,000) relates to the deferred consideration from the sale of
an investment property located in Romania. This has been discounted to reflect
its current value.
10. Trade and Other Payables
Six months ended Year Six months
30 Sept 2021 ended ended
31 Mar 2021 30 Sept 2020
£'000 £'000 £'000
Current liabilities
Trade payables 1,108 2,052 1,841
Other taxation and social security 252 557 621
Other payables and accruals 2,906 691 993
Deferred income 369 147 183
Total at end of period 4,635 3,447 3,638
11. Provisions
Six months ended Year Six months
30 Sept 2021 ended ended
31 Mar 2021 30 Sept 2020
£'000 £'000 £'000
Current liabilities 1,767 2,076 1,826
The provision at 30 Sept 2021 represents a rent guarantee of £458,000 (31
March 2021: £786,000) and fit out costs of £1,309,000 (31 March 2021:
£1,290,000). These provisions are in respect of the guarantee given as part
of the sale of CH8 which completed in April 2020.
12. Financial Liabilities
Six months ended Year Six months
30 Sept 2021 ended ended
31 Mar 2021 30 Sept 2020
£'000 £'000 £'000
a) Current liabilities
Bank loans 1,316 1,194 1,302
Finance lease obligations - 21,443 24,501
Total at end of period 1,316 22,637 25,803
b) Non-current liabilities
Bank loans 13,173 12,457 15,241
Finance lease obligations - - -
Total at end of period 13,173 12,457 15,241
c) Total obligations under financial liabilities
Repayable within one year 1,316 22,637 25,803
Repayable within one and five years 6,835 11,116 8,833
Repayable after five years 6,338 1,341 6,408
Total at end of period 14,489 35,094 41,044
Four bank loans (all denominated in Euros) totalling £14.49 million (31 March
2021: £41.04 million), included within financial liabilities, are secured
against investment properties owned by the Group and one property owned by the
Group shown under inventories. These bank loans are otherwise non-recourse to
the Group's assets.
13. Other Financial Liabilities
Six months ended Year Six months
30 Sept 2021 ended ended
31 Mar 2021 30 Sept 2020
£'000 £'000 £'000
Non-current liabilities 10,314 - -
This non-current liability represents the balance of €12.00 million which
was a result of the restructuring of a finance lease secured against the
office tower in Gdynia. The restructuring resulted in the amount owed to ING
bank in final settlement reducing by €9.00 million (£7.81 million). As part
of the deal, the Group acquired the freehold of the property for €16.00
million of which €4.00 million has been paid and €12.00 million is owed by
June 2024. No interest is payable on this non-current liability.
The interim results are being circulated to all shareholders and can be
downloaded from the company's web site. 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 news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR BCBDBUBDDGBXRecent news on First Property
See all newsREG - First Property Group - Update re subsidiary
AnnouncementREG - First Property Group - Trading update
AnnouncementREG - First Property Group - Holding(s) in Company
AnnouncementREG - First Property Group - Interim Results
AnnouncementREG - First Property Group - Trading Update
Announcement