REG - First Property Group - Interim Results
21/11/2024 07:00
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RNS Number : 0436N First Property Group PLC 21 November 2024
Date: 21 November 2024
On behalf of: First Property Group plc ("First Property" or the "Group" or the "Company")
Embargoed: 0700hrs
First Property Group plc
Interim results for the six months to 30 September
2024
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 ended 30 September 2024.
Highlights:
· Profit before tax: £1.16 million (30 September 2023: loss before
tax: £0.65 million);
· Successful completion of an open offer of 36,960,777 new shares
at 8 pence per share, raising £2.96 million (before expenses);
· New lease signed over 3,100 square metres at a Group Property
(Blue Tower) in Warsaw, which should contribute some £800,000 per annum to
profit before tax from December 2024;
· Cash: £5.89 million (31 March 2024: £4.63 million);
· Net debt: £18.65 million (31 March 2024: £22.99 million);
· Third party Assets Under Management ("AUM"): £186 million (31
March 2024: £222 million);
· Total AUM: £237 million (31 March 2024: £274 million);
· Weighted average unexpired fund management contract term at 30
September 2024: 3 years, 2 months (31 March 2024: 1 year, 9 months).
Financial summary:
Unaudited Unaudited Percentage change Audited
six months to six months to year to
30 Sep 2024 30 Sep 2023 31 Mar 2024
Income Statement:
Statutory profit/(loss) before tax £1.16m (£0.65m) +278.5% (£4.41m)
Diluted profit/(loss) earnings per share 0.91p (0.99p) +191.9% (4.04p)
Total dividend per share - - - -
Average €/ £ rate 1.1833 1.1590 - 1.1606
Unaudited Audited Percentage change Unaudited
as at as at as at
30 Sep 2024 31 Mar 2024 30 Sep 2023
Balance Sheet at period end:
Investment properties at book value £44.90m £45.76m -1.9% £47.13m
Investment properties at market value £50.52m £51.90m -2.7% £53.28m
Associates and investments at book value £20.66m £19.90m +3.8% £20.03m
Associates and investments at market value £20.90m £20.26m +3.2% £22.30m
Cash balances £5.89m £4.63m +27.2% £6.71m
Cash per share 3.98p*** 4.18p -4.8% 6.05p
Gross debt £24.54m £27.62m -11.2% £28.93m
Net debt £18.65m £22.99m -18.9% £22.22m
Gearing ratio at book value* 36.39% 41.47% - 42.60%
Gearing ratio at market value** 33.98% 38.28% - 39.38%
Net assets at book value £42.88m £38.98m +10.0% £41.65m
Net assets at market value £47.66m £44.53m +7.0% £49.22m
Adjusted net assets per share (EPRA basis) 31.79p 39.41p -19.3% 43.56p
Period end €/ £ rate 1.2019 1.1697 - 1.1528
* Gearing ratio = Gross debt divided by Gross assets.
** Attributable to the owners of the parent, excludes non-controlling
interest.
***Calculation includes new shares issued following completion of the open
offer on 23 September 2024.
Commenting on the results, Ben Habib, Chief Executive of First Property, said:
"I am delighted to report our swing back into profit.
"Markets in the UK remain difficult though there would appear to be a marginal
improvement in certain sub-sectors of the property market. Poland is less
liquid with access to debt for the purchase of properties remaining tight.
"Institutions are nervous of property and it is likely that we shall therefore
be trading property on a bespoke basis rather than establishing blind pools of
funds for thematic investment as we have done in the past."
Investor presentation:
A briefing for analysts and investors will be held at 11.00hrs 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 be automatically invited. A copy of the accompanying
investor presentation and a recording of the call will be posted on the
Group's website.
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)
Allenby Capital (NOMAD & Broker) Tel: + 44 (0) 20 3328 5656
Nick Naylor / Daniel Dearden-Williams (Corporate Finance)
Amrit Nahal / Tony Quirke (Sales and Corporate Broking)
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 eleven
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 six directly held properties in Poland and one in Romania,
and non-controlling interests in nine of the eleven funds managed by FPAM.
Quoted on AIM, First Property has offices in London and Warsaw. Further
information about the Group and its properties 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
2024.
Revenue earned by the Group during the period was £3.94 million (30 September
2023: £3.97 million) yielding a profit before tax of £1.16 million (30
September 2023 loss before tax: £0.65 million).
The profit was largely attributed to a £0.94 million increase in the value of
the Group's associate investment in Fprop Phoenix Ltd ("FPL") as a result of
profits it earned from the trading of properties.
In addition, the Group received a one-off advance payment of fund management
fees by SIPS Property Nominee Limited ("SIPS") which totalled £300,000. This
payment was in respect of properties sold prior to the end of the fund's life
in January 2026.
Profit before tax was also impacted by a reduction of £0.46 million in the
value of the Group's share in Fprop Opportunities plc ("FOP").
Diluted earnings per share amounted to 0.91 pence (30 September 2023: loss per
share: 0.99 pence).
The Group ended the period with net assets calculated under the cost basis of
accounting of £42.88 million (31 March 2024: £38.98 million), equating to
29.01 pence per share (31 March 2024: 35.15 pence per share). The net assets
of the Group with property values adjusted to their market value less any
deferred tax liabilities (EPRA basis) was £47.66 million, or 31.79 pence per
share (31 March 2024: £44.53 million, or 39.41 pence per share). The market
values of the Group's properties are independently assessed once a year, on 31
March.
Gross debt at the period end amounted to £24.54 million (31 March 2024:
£27.62 million), which was secured against six commercial properties in
Poland. Of this, £14.73 million was non-interest bearing and represents
deferred consideration payable for the purchase of two properties in Poland.
The debt secured on the properties and the deferred considerations are ring
fenced from the Group.
The Group's gearing ratio, calculated with its seven directly owned properties
at book value, was 36.39% (31 March 2024: 41.47%). Using market values for
these properties the gearing ratio was 33.98% (31 March 2024: 38.28%).
The Group's seven directly owned properties are held in separate non-recourse
special purpose vehicles without any cross collateralisation of the debt or
Group guarantees.
During the period the Group undertook an open offer for new shares to all
qualifying shareholders to raise £2.96 million (before expenses) via the
issue of 36,960,777 new shares at 8 pence per share. The net proceeds from
the open offer have provided the Company with additional working capital to,
inter alia, settle the deferred consideration payments due on Blue Tower, a
directly owned property in Warsaw, and to complete fit-out works in
it following the signing of a new lease, as announced on 25 July 2024. The
Board was delighted with the support from shareholders, with 83.63% of shares
taken up by qualifying shareholders. The shares not taken up by shareholders
were acquired by Alasdair Locke and myself in our capacity as underwriters of
the open offer.
Group cash balances at the period end stood at £5.89 million (31 March 2024:
£4.63 million), equivalent to 3.98 pence per share (31 March 20234: 4.18
pence per share).
During the period the Group repaid £0.42 million of its bank loans and met
its deferred consideration obligation of £1.96 million in respect of Blue
Tower.
Dividend:
The Directors have resolved not to pay a dividend in respect of the six months
to 30 September 2024 (30 September 2023: £Nil).
REVIEW OF OPERATIONS
PROPERTY FUND MANAGEMENT ("First Property Asset Management Ltd" or "FPAM")
Third party assets under management at the period end decreased by 16% to
£185.5 million (31 March 2024: £221.8 million). The decrease was
attributable mainly to the sale by five funds of twelve properties in the
United Kingdom with an aggregate value of £46.55 million, offset by the
purchase of three properties on behalf of two funds with an aggregate value of
£11.50 million.
44% of third-party assets under management were located in the UK, 52% in
Poland and 4% in Romania.
Revenue earned by this division during the period decreased to £1.17
million (30 September 2023: £1.26 million), resulting in profit before
unallocated central overheads and tax of £0.41 million (30 September
2023: £0.16 million).
During the period the Group received £300,000 in respect of a one-off advance
payment of fund management fees by SIPS Property Nominee Limited ("SIPS"), in
respect of four properties sold prior to the end of the fund's life in January
2026.
At the period end fund management fee income, excluding performance fees, was
being earned at an annualised rate of £1.42 million (as at 31 March 2024:
£2.06 million).
FPAM's weighted average unexpired fund management contract term at the period
end was 3 years, 2 months (31 March 2024: 1 year, 9 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 Apr 2024 115.01 106.76 221.77 35
Property purchases 11.50 - 11.50 3
Property sales (46.55) - (46.55) (12)
Capital expenditure 0.10 0.20 0.30 -
Property revaluation 1.88 (0.40) 1.48 -
FX revaluation - (3.05) (3.05) -
As at 30 Sep 2024 81.94 103.51 185.45 26
An overview of the value 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 Sep 2024 31 Mar 2024
£m. % £m.
FPROP OFFICES UK Rolling 33.6 3 18.1 47.4
SIPS UK Jan 2025 20.8 6 11.2 33.8
FOP Poland Oct 2030 58.3 5 31.4 60.3
FGC Poland Mar 2026 21.1 1 11.4 21.7
UKPPP UK Jan 2027 6.8 3 3.7 13.6
SPEC OPPS UK Jan 2027 9.6 3 5.2 12.7
FKR Poland Mar 2027 16.0 1 8.6 16.4
FCL Romania Jun 2028 8.1 1 4.4 8.3
FPL UK Jun 2028 - - - -
FULCRUM UK Indefinite 11.2 3 6.0 7.6
Total Third Party AUM 185.5 26 100.0 221.8
* 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 62.0 36.0 8.1 106.1 57.2
Retail warehousing 17.1 - - 17.1 9.2
Shopping centres 2.9 11.8 - 14.7 7.9
Supermarkets - 47.6 - 47.6 25.7
Total 82.0 95.4 8.1 185.5 100.0
% of Total 44.2 51.4 4.4 100.0
GROUP PROPERTIES DIVISION
At the period end the Group Properties Division comprised six directly owned
commercial properties in Poland and one in Romania, with a combined value of
£50.52 million (31 March 2024: £51.90 million), and interests in nine of the
eleven funds managed by FPAM (classified as Associates and Investments) valued
at £20.90 million (31 March 2024: £20.26 million).
The net equity invested in the Group's seven directly owned properties
totalled £25.97 million, of which £15.78 million was invested in Blue Tower,
an office tower in Central Warsaw, equating to 61% of the net equity invested
in its seven directly owned properties and 34% of its net equity in this
division.
The division contributed £1.44 million before tax and unallocated central
overheads during the period (ended 30 September 2023: profit £0.09 million).
Underlying profit for the division aligned with expectations, adjusted for the
following one-off items:
· the Group's share of profits earned by Fprop Phoenix Limited
("FPL") totalling £0.94 million (2023: £Nil);
· income from UK funds £0.26 million (2023: £0.11 million); and
· a non-cash reduction in the fair value of the Group's investment
in Fprop Opportunities plc ("FOP") of £0.44 million and Fprop Krakow Limited
("FKR") of £0.02 million. (2023: reduction of £0.82 million).
1. Directly owned properties (all accounted for under the cost model):
The book value of the Group's seven directly owned properties was £44.90
million. Their market value, as at 30 September 2024, was £50.52 million.
Country Sector Property/ fund name No. of properties as at 30 Sep Book value as at 30 Sep 2024 Market value as at 30 Sep 2024 *Contribution to Group profit before tax - *Contribution to Group profit before tax -
2024 period to period to
30 Sep 2024
30 Sep 2023
£m. £m. £m. £m.
Poland, Offices Blue Tower 1 22.92 25.98 0.48 0.46
Poland Offices Gdynia 1 9.98 9.98 (0.10) (0.14)
Poland Supermarkets Praga 1 2.00 3.01 0.04 0.05
Romania Office Dr Felix 1 2.11 3.51 0.14 0.05
Poland Multi-let 5PT 3 7.89 8.04 0.22 0.18
Total* 7 44.90 50.52 0.78 0.60
*Prior to the deduction of unallocated central overhead expenses.
Two of the Group's seven directly owned properties account for 71% (£35.96
million) of their total value. Both are office buildings in Poland. One is
Blue Tower in Warsaw (in which the Group's 80.3% share totals circa 19,000
square metres) and the other is in Gdynia (circa 14,500 square metres).
By size, 90% of the Group's seven directly owned properties (40,200 square
metres out of a total 44,900 square metres) is invested in offices. Nearly
half of this space (some 22,000 square metres) was acquired in 2021 (Gdynia,
14,500 square metres) and 2022 (32% of Blue Tower, 7,200 square metres) for
around €20 million, of which nearly all (19,000 square metres or 86%) was
vacant at purchase.
During the period, a new 15 year lease was signed with TV República for 3,100
square metres in Blue Tower, commencing in December 2024. This lease will
contribute some €935,000 (£800,000) per annum.
Following the signing of this lease, around half of the 22,000 square metres
acquired in 2021 and 2022 is now let, leaving some 11,300 square meters still
available. Once fully let, net operating income should improve by some €2.4
million per annum and capital values should also improve.
The debt secured against six of the seven properties amounted to £24.54
million (31 March 2024: £27.62 million), of which only £9.81 million was
interest bearing. The remainder £14.73 million represents deferred
consideration in respect of:
· the purchase in 2021 of the office block in Gdynia (cost: €12
million/ £9.98 million). Payment was due in June 2024. We are in discussions
with the lender to extend this date and will make further announcements as
appropriate; and
· the purchase in 2022 of an additional 32% or 7,200 square metres
in Blue Tower (cost: PLN 40.40 million/ £7.25 million). Payment is due in
phases until August 2028. The deferred consideration outstanding at 30
September 2024 was PLN 24.40 million (£4.75 million), with the next
instalment due in August 2025.
Interest costs on the £9.81 million of interest-bearing debt amounted
to £0.33 million in the period (30 September 2023: £0.37 million). This
equates to an average borrowing cost of 2.7% per annum when expressed as a
percentage of total Group debt, or 3.4% per annum if the non-interest-bearing
element is excluded. A one percentage point increase in interest rates would
impact the cost of the floating rate loans and would increase the Group's
annual interest bill by some £99,000 per annum (31 March 2024: £106,000).
All four bank loans are held in separate non-recourse special purpose vehicles
and are not guaranteed by the Group.
Directly owned Properties 30 Sep 2024 31 Mar 2024
Book value £44.90m £45.76m
Market value £50.52m £51.90m
Gross debt undiscounted (all non-recourse to the Group) £24.54m £27.62m
LTV at book value % 54.65% 60.36%
LTV at market value % 48.57% 53.22%
Average borrowing cost (including non-interest-bearing loans) 2.7% 2.8%
The vacancy rate across all seven properties is 18.06%.
The Weighted Average Unexpired Lease Term (WAULT) of the seven properties as
at 30 September 2024 was 4 years, 8 months (31 March 2024: 4 years, 10
months).
Associates and Investments ("A&I's")
The A&Is comprise non-controlling interests in nine of the eleven funds
managed by FPAM, of which five are accounted for as Associates and held at the
lower of cost or fair value (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 the A&Is during the period was £1.34 million (30 September 2023:
loss £0.19 million). The increase in contribution was largely attributable to
a £0.94 increase in the value of FPL, a fund in which the Group own's 23.38%.
The increase in value was derived from property trading.
The contribution was impacted by aggregate impairment provisions of £0.46
million in the book value of the Group's investment in FOP by £0.44 million
and in FKR by £0.02 million (30 September 2023: £0.82 million).
At the period-end the A&Is were valued at £20.90 million (31 March 2024:
£20.26 million). An overview of the A&Is is set out in the table below:
Fund Country of investment % owned by Book value of First Property's share in Current market value of holdings Group's Group's share
First Property fund share of post-tax profits earned by fund
Group of post-tax profits earned by fund 30 Sep 2023
30 Sep 2024
% £'000 £'000 £'000 £'000
a) Associates
FOP Poland 45.71 12,565 12,565 26 (374)
FGC Poland 29.09 3,071 3,196 103 92
FKR Poland 18.07 1,081 1,081 (9) 27
FPL Poland 23.38 941 941 941 (60)
FCL Romania 21.17 691 809 13 16
Sub Total 18,349 18,592 1,074 (299)
b) Investments
UK PPP UK 0.94 112 112 40 14
SPEC OPPS UK 11.06 145 145 - 82
OFFICES UK 1.64 1,698 1,698 221 18
FUL UK 2.50 353 353 - -
Sub Total 2,308 2,308 261 114
Total 20,657 20,900 1,335 (185)
Commercial Property Market Outlook
Poland:
Polish GDP is forecast to grow by 2.9% in 2024, up from 0.2% in 2023,
underpinned by a resurgence in private consumption. Unemployment has reduced
to 5.0%, the lowest since 1990. Poland has one of the lowest unemployment
rates in the European Union.
The National Bank of Poland's policy interest rate has been at 5.75% since
October 2023.
Occupational demand for commercial property remains steady and investment
demand is improving. Some €1.8 billion of commercial property was transacted
during the first half of 2024, a 75% increase on the same period in 2023.
However, access to bank debt remains difficult, with terms offered being at
low loan to values, high margins and high debt amortisation rates.
Romania:
GDP growth slowed to 0.7% year-on-year in the first six months of 2024,
leading economists to revise down their full year GDP growth forecasts from
2.0% to 1.3%.
The National Bank of Romania's policy interest rate has been cut twice in 2024
(in July and August) from 7% to 6.5%.
The total value of commercial property transactions reached €661 million in
the first half, some 20% ahead of volumes for the same period last year.
United Kingdom:
Investment volumes in 2024 have, so far, mirrored those of 2023. According to
initial figures from MSCI, year-to-date investment volumes total £29.4bn
(2023: £30.6bn for the same period). From early August, agents started to
witness a rise in the number of inspections and underbidders for assets in
core locations, and the number of buyers and sellers actively in the market
has started to pick up. However, within this overall picture, the office and
industrial sectors have experienced less demand, with volumes currently 48%
and 55% respectively of their 2023 totals.
Assuming further reductions in interest rates, agents expect an increase in
volumes and values.
Current Trading and Prospects
I am delighted to report our swing back into profit.
Markets in the UK remain difficult though there would appear to be a marginal
improvement in certain sub-sectors of the property market. Poland is less
liquid with access to debt for the purchase of properties remaining tight.
Institutions are nervous of property and it is likely that we shall therefore
be trading property on a bespoke basis rather than establishing blind pools of
funds for thematic investment as we have done in the past.
Ben Habib
Chief Executive
CONSOLIDATED INCOME STATEMENT
for the six months to 30 September 2024
Notes Six months to 30 Sep 2024 Six months to Year to
30 Sep 2023 31 Mar 2024
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Revenue 3,935 3,966 7,851
Cost of sales (1,446) (1,763) (2,884)
Gross profit 2,489 2,203 4,967
Operating expenses (2,392) (2,386) (5,156)
Operating profit/(loss) 97 (183) (189)
Share of results in associates 9a 1,536 517 1,050
Share of associates' revaluation (loss)/gain 9a (462) (816) (1,072)
Investment income 261 114 134
Interest income 3 124 95 194
Interest expense 3 (400) (379) (780)
Loss from impairment of investment properties - - (3,746)
Profit/(loss) before tax 1,156 (652) (4,409)
Tax charge 4 (55) (257) 29
Profit/(loss) for the period 1,101 (909) (4,380)
Attributable to:
Owners of the parent 1,033 (1,122) (4,582)
Non-controlling interests 68 213 202
1,101 (909) (4,380)
Earnings/(loss) per share
Basic 6 0.92p (1.01p) (4.13p)
Diluted 6 0.91p (0.99p) (4.04p)
All operations are continuing.
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
for the six months to 30 September 2024
Notes Six months to 30 Sep 2024 Six months to Year to
30 Sep 2023 31 Mar 2024
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Profit/(loss) for the period 1,101 (909) (4,380)
Other comprehensive income
Items that may subsequently be reclassified to profit or loss:
Exchange differences on retranslation of foreign subsidiaries (145) 149 946
Net (loss) on financial assets at fair value through Other Comprehensive 9b (144) (1,137) (1,465)
Income
Taxation - - -
Total comprehensive income for the period 812 (1,897) (4,899)
Total comprehensive income for the period attributable to:
805 (2,052) (5,149)
Non-controlling interests 7 155 250
812 (1,897) (4,899)
All operations are continuing.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 September 2024
Notes As at As at As at
30 Sep 2024 (unaudited) 31 Mar 2024 (audited) 30 Sep 2023
(unaudited)
£'000 £'000 £'000
Non-current assets
Investment properties 8 44,902 45,756 47,134
Right of use Asset - 17 647
Property, plant and equipment 26 40 67
Investment in associates 9a 18,349 17,275 17,056
Other financial assets at fair value through OCI 9b 2,308 2,623 2,973
Goodwill 153 153 153
Deferred tax assets 1,000 992 970
Total non-current assets 66,738 66,856 69,000
Current assets
Current tax assets 46 127 113
Right of use assets - 51 457
Trade and other receivables 10 3,513 4,145 5,354
Cash and cash equivalents 5,889 4,628 6,707
Total current assets 9,448 8,951 12,631
Current liabilities
Trade and other payables 11 (3,343) (3,788) (4,713)
Provisions (300) (125) (113)
Lease liabilities - (52) (469)
Financial liabilities 12 (5,247) (832) (1,067)
Other financial liabilities 13 (10,956) (12,244) (12,286)
Current tax liabilities (31) (48) (41)
Total current liabilities (19,877) (17,089) (18,689)
Net current assets (10,429) (8,138) (6,058)
Total assets less current liabilities 56,309 58,718 62,942
Non-current liabilities
Financial liabilities 12 (4,562) (9,690) (10,921)
Other financial liabilities 13 (3,770) (4,851) (4,660)
Lease liabilities - (17) (658)
Deferred tax liabilities (3,152) (3,229) (3,203)
Net assets 44,825 40,931 43,500
Equity
Called up share capital 5 1,536 1,166 1,166
Share premium 8,222 5,635 5,635
Share-based payment reserve 960 815 497
Foreign exchange translation reserve (1,491) (1,407) (2,204)
Purchase of own shares reserve (2,440) (2,440) (2,440)
Investment revaluation reserve (2,337) (2,193) (1,865)
Retained earnings 38,434 37,401 40,861
Equity attributable to the owners of the parent 42,884 38,977 41,650
Non-controlling interests 1,941 1,954 1,850
Total equity 44,825 40,931 43,500
Net assets per share 6 29.01p 35.15p 37.56p
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months to 30 September 2024
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 Apr 2023 1,166 5,635 179 (2,353) (2,440) (728) 41,983 2,033 45,475
Loss for the period - - - - - - (909) - (909)
Net (loss) on financial assets at fair value through other comprehensive - - - - - (1,137) - - (1,137)
income
Change in the proportion held in non-controlling interests - - - - - - - (265) (265)
Movement on foreign exchange - - - 149 - - - (58) 91
Total Comprehensive Income - - - 149 - (1,137) (909) (323) (2,220)
Share options charge - - 318 - - - - - 318
Non-controlling interests - - - - - - (213) 213 -
Dividends paid - - - - - - - (73) (73)
At 30 Sep 2023 1,166 5,635 497 (2,204) (2,440) (1,865) 40,861 1,850 43,500
Loss for the period - - - - - - (3,471) - (3,471)
Net gain/ (loss) on financial assets at fair value through other comprehensive - - - - - (328) - - (328)
income
Exchange differences arising on translations of foreign subs - - - 797 - - - 106 903
Total Comprehensive Income - - - 797 - (328) (3,471) 106 (2,896)
Share options charge - - 318 - - - - - 318
Purchase of treasury shares - - - - - - - - -
Non-controlling interests - - - - - - 11 (11) -
Dividends paid - - - - - - - 9 9
At 1 Apr 2024 1,166 5,635 815 (1,407) (2,440) (2,193) 37,401 1,954 40,931
Profit for the period - - - - - - 1,101 - 1,101
Net (loss) on financial assets at fair value through other comprehensive - - - - - (144) - - (144)
income
Exchange differences arising on translations of foreign subs - - - (84) - - - (61) (145)
Change in the proportion held in non-controlling interests - - - - - - - - -
Movement on foreign exchange - - - - - - - - -
Total Comprehensive Income - - - (84) - (144) 1,101 (61) 812
Share issue 370 2,587 - - - - - - 2,957
Share options charge - - 145 - - - - - 145
Non-controlling interests - - - - - - (68) 68 -
Dividends paid - - - - - - - (20) (20)
At 30 Sep 2024 1,536 8,222 960 (1,491) (2,440) (2,337) 38,434 1,941 44,825
CONSOLIDATED CASH FLOW STATEMENT
for the six months to 30 September 2024
Notes Six months to Six months to 30 Sep 2023 (unaudited) Year to
30 Sep 2024 (unaudited) 31 Mar 2024
(audited)
£'000 £'000 £'000
Cash flows from/ (used in) operating activities
Operating profit/(loss) 97 (183) (189)
Adjustments for:
Depreciation of property, plant & equipment 13 34 64
Share options charge 145 318 636
Decrease/(increase) in trade and other receivables 745 (1,626) 903
(Decrease)/ increase in trade and other payables (268) 1,348 (759)
Other non-cash adjustments 84 194 (64)
Cash (used in)/generated from operations 816 85 591
Income taxes paid (29) (169) (193)
Net cash flow (used in)/ from operating activities 787 (84) 398
Cash flow from/ (used in) investing activities
Capital expenditure on investment properties 8 (191) (315) (1,670)
Purchase of property, plant and equipment (15) (21) (31)
Cash paid on acquisition of new subsidiaries - - (214)
Proceeds from funds 9b 171 434 456
Proceeds from Investment in shares of associates 9a - 233 291
Interest received 3 124 95 194
Investment income 261 114 134
Net cash flow from/ (used in) investing activities 350 540 (840)
Cash flow from/ (used in) financing activities
Gross proceeds from open offer 2,957 - -
Repayment of bank loans (418) (911) (1,814)
Repayment of deferred consideration (1,960) - -
Interest paid 3 (400) (369) (780)
Dividends paid - - -
Dividends paid to non-controlling interests (20) (73) (64)
Net cash flow from/(used in) financing activities 159 (1,353) (2,658)
Net (decrease)/ increase in cash and cash equivalents 1,296 (897) (3,100)
Cash and cash equivalents at the beginning of period 4,628 7,647 7,647
Currency translation (losses)/gains on cash and cash equivalents (35) (43) 81
Cash and cash equivalents at the end of the period 5,889 6,707 4,628
NOTES TO THE ACCOUNTS
for the six months ended 30 September 2024
1. Basis of Preparation
· These interim consolidated financial statements for the six months
ended 30 September 2024 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 2024 and are in compliance with IAS 34
"Interim Financial Reporting". These accounting policies are drawn up in
accordance with UK-adopted International Accounting Standards.
· The comparative figures for the financial year ended 31 March 2024
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 21 November 2024.
2. Segmental Analysis
Segment reporting for the six months to 30 September 2024
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 - 2,014 - - 2,014
Service charge income - 747 - - 747
Asset management fees 1,174 - - - 1,174
Total revenue 1,174 2,761 - - 3,935
Depreciation and amortisation (8) (5) - - (13)
Operating profit 409 378 - (690) 97
Share of results in associates - - 1,536 - 1,536
Fair value adjustment to associate - - (462) - (462)
Investment income - - 261 - 261
Interest income - 124 - - 124
Interest expense - (400) - - (400)
Profit/ (loss) before tax 409 102 1,335 (690) 1,156
Analysed as:
Underlying profit/ (loss) before tax before adjusting for the following items: 108 83 595 (399) 387
Interest on loans to associates - - - 69 69
Share option charge - - - (145) (145)
Open offer costs - - - (184) (184)
Payment in lieu of management fees 300 - - - 300
UK fund distributions following property sales - - 261 - 261
Uplift in the Group's value of an associate following property trading - - 941 - 941
Fair value adjustment to associate - - (462) - (462)
Realised foreign currency (losses)/ gains 1 19 - (31) (11)
Profit/ (loss) before tax 409 102 1,335 (690) 1,156
Revenue for the six months to 30 September 2024 from continuing operations
consists of revenue arising in the United Kingdom 15% (30 September 2023: 18%)
and Central and Eastern Europe 85% (30 September 2023: 82%) and all relates
solely to the Group's principal activities.
Direct costs incurred by the Company relating to the cost of the Board and the
related share listing costs are shown separately under unallocated central
costs.
Segment reporting for the six months to 30 September 2023
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 - 2,030 - - 2,030
Service charge income - 673 - - 673
Asset management fees 1,263 - - - 1,263
Total revenue 1,263 2,703 - - 3,966
Depreciation and amortisation (21) (13) - - (34)
Operating profit 158 558 - (899) (183)
Share of results in associates - - 517 - 517
Fair value adjustment to associate - - (816) - (816)
Investment income - - 114 - 114
Interest income - 95 - - 95
Interest expense - (379) - - (379)
Profit/ (loss) before tax 158 274 (185) (899) (652)
Analysed as:
Underlying profit/ (loss) before tax before adjusting for the following items: 96 39 631 (570) 196
Interest on loan to associates - 63 - - 63
Share option charge - - - (318) (318)
Fair value adjustment to associate - - (816) - (816)
Realised foreign currency (losses)/ gains 62 172 - (11) 223
Profit/ (loss) before tax 158 274 (185) (899) (652)
Segment reporting for the year to 31 March 2024
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 - 3,078 - - 3,078
Service charge income - 1,826 - - 1,826
Asset management fees 2,947 - - - 2,947
Performance related fee income - - - - -
Total revenue 2,947 4,904 - - 7,851
Depreciation and amortisation (38) (26) - - (64)
Operating profit 824 586 - (1,599) (189)
Share of results in associates - - 1,050 - 1,050
Fair value adjustment on associates - - (1,072) - (1,072)
Property impairment - (3,746) - - (3,746)
Investment income - - 134 - 134
Interest income - 36 - 158 194
Interest expense - (780) - - (780)
Profit/ (loss) before tax 824 (3,904) 112 (1,441) (4,409)
Analysed as:
Underlying profit/ (loss) before tax before adjusting for the following items: 350 (87) 1,184 (1,031) 416
Interest received on loan to associate - - - 158 158
Fair value adjustment on associates - - (1,072) - (1,072)
Property impairment - (3,746) - - (3,746)
Payment in lieu of management fees due to end of life 411 - - - 411
Interest provision - (102) - - (102)
Reversal of provision in respect of rental guarantee - 130 - - 130
Share option charge - - - (636) (636)
Realised foreign currency (losses)/ gains 63 (99) - 68 32
Total 824 (3,904) 112 (1,441) (4,409)
Assets - Group 515 49,869 2,623 5,525 58,532
Share of net assets of associates - - 17,275 - 17,275
Liabilities (56) (34,820) - - (34,876)
Net assets 459 15,049 19,898 5,525 40,931
Additions to non-current assets
Property, plant and equipment - 31 - - 31
Investment properties - 1,670 - - 1,670
3. Interest Income/ (Expense)
Six months Six months Year
ended ended ended
30 Sep 2024 30 Sep 2023 31 Mar 2024
£'000 £'000 £'000
Interest income - bank deposits 46 22 62
Interest income - other 78 73 132
Total interest income 124 95 194
Six months Six months Year
ended ended ended
30 Sep 2024 30 Sep 2023 31 Mar 2024
£'000 £'000 £'000
Interest expense - property loans (334) (373) (761)
Interest expense - bank and other (66) (6) (19)
Total interest expense (400) (379) (780)
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 Sep 2024 30 Sep 2023 31 Mar 2024
£'000 £'000 £'000
Current tax (90) (146) (244)
Deferred tax 35 (111) 273
Total (55) (257) 29
5. Called-Up Share Capital
Six months Six months Year
ended ended ended
30 Sep 2024 30 Sep 2023 31 Mar 2024
£'000 £'000 £'000
Authorised
240,000,000 (2024: 240,000,000) Ordinary Shares of 1 pence each 2,400 2,400 2,400
Issued and fully paid
153,561,892 (2024: 116,601,115) Ordinary Shares of 1 pence each of issued 1,536 1,166 1,166
share capital, of which 5,718,783 Ordinary Shares (2024: 5,718,783) are held
in treasury
Ordinary Treasury Share
Shares Shares Options
Number Number Number
1 April 2024 110,882,332 5,718,783 12,560,000
Purchase of shares into treasury - - -
Exercise of share options - - -
Issue of new shares 36,960,777 - -
Issue of share options - - -
Lapse of share options - - -
30 September 2024 147,843,109 5,718,783 12,560,000
During the period the Group undertook an open offer for new shares to all
qualifying shareholders to raise £2.96 million (before related expenses) via
the issue of 36,960,777 open offer shares at 8 pence per open offer share. The
net proceeds from the open offer provided the Company with additional working
capital to, inter alia, settle the deferred consideration payment due on the
Blue Tower property and to complete fit-out works on Blue Tower following
the signing of a new lease, as announced on 25 July 2024.
6. Earnings/ NAV Per Share
Six months Six months Year
ended ended ended
30 Sep 2024 30 Sep 2023 31 Mar 2024
Basic earnings/(loss) per share 0.92p (1.01p) (4.13p)
Diluted earnings/(loss) per share 0.91p (0.99p) (4.04p)
The basic earnings per ordinary share is calculated on the profit on ordinary
activities after taxation and after excluding 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.
£'000 £'000 £'000
Basic earnings per share 1,033 (1,122) (4,582)
Notional interest on share options assumed to be exercised 8 2 16
Diluted earnings assuming full dilution 1,041 (1,120) (4,566)
Number Number Number
Weighted average number of Ordinary Shares in issue 112,296,132 110,875,483 110,875,483
(used for basic earnings per share calculation)
Number of Share options 2,110,000 2,110,000 2,110,000
Total number of Ordinary Shares used in the diluted earnings per Share 114,406,132 112,985,483 112,985,483
calculation
Six months Six months Year
ended ended ended
30 Sep 2024 30 Sep 2023 31 Mar 2024
Net assets per share 29.01p 37.56p 35.15p
Adjusted net assets per share 31.79p 43.56p 39.41p
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 Sep 2024 30 Sep 2023 31 Mar 2024
£'000 £'000 £'000
For adjusted net assets per share
Net assets excluding non-controlling interests 42,884 41,650 38,977
Uplift of investment properties at fair value net of deferred taxes 4,213 4,981 4,872
Uplift of investments in associates and other financial investments to fair 243 2,269 362
value
Other items 323 323 323
Total 47,663 49,223 44,534
7. Share Based Payments
The Company has a share-based payment arrangement scheme in place which will
be fully vested by 31 March 2026 as described below:
Date of grant 31 March 2023
Number granted 10,450,000
Contractual life 10 years to 31 March 2033
Vesting conditions The options vest as follows:
·33.3% on the first anniversary of grant;
·33.3% on the second anniversary of grant; and
· the remainder on the third anniversary of grant.
The estimated fair value of each share option granted has been calculated
using the Black-Scholes pricing model. The model inputs were the share price
at grant date and the exercise price based on the mid-market closing price
on 30 March 2023 of 23.5 pence per Ordinary Share, expected volatility of 30%,
a dividend yield of 1%, a contractual life of 10 years and a risk-free
interest rate of 4.25%.
Six months Six months Year ended
ended ended 31 March 2024
30 Sep 2024 30 Sep 2023
£'000 £'000 £'000
Expenses arising from share based payments 145 318 636
8. Investment Properties
Six months Year Six months
ended ended ended
30 Sep 2024 31 Mar 2024 30 Sep 2023
£'000 £'000 £'000
1 Apr 45,756 47,009 47,009
Property impairment - (3,746) -
Capital expenditure 191 1,670 315
Disposals - - -
Depreciation (202) (350) (134)
Foreign exchange translation (843) 1,173 (56)
Total at end of period 44,902 45,756 47,134
Investment properties owned by the Group are stated at cost less depreciation
and accumulated impairment losses.
9. Investments in associates and other financial assets and
investments
Six months ended Year Six months
30 Sep 2024 ended ended
31 Mar 2024 30 Sep 2023
£'000 £'000 £'000
a) Associates
Cost of investment at beginning of period 17,275 17,588 17,588
Additions - - -
Disposals - - -
Repayment of shareholder loan - (291) (233)
Share of associates profit/(loss) after tax 1,536 1,050 517
Share of associates revaluation gains (462) (1,072) (816)
Dividends received - - -
Cost of investment at end of period 18,349 17,275 17,056
The Group's investments in associated companies are accounted for under the
"cost model" under IAS40 whereby the
Group's share is held at cost plus its share of subsequent accumulated profits
less dividends received. It comprises the following:
Six months ended Year Six months
30 Sep 2024 ended ended
31 Mar 2024 30 Sep 2023
£'000 £'000 £'000
Investments in associates
Fprop Galeria Corso Ltd 3,071 2,968 2,918
Fprop Krakow Ltd 1,081 1,090 1,181
Fprop Cluj Ltd 691 678 652
Fprop Phoenix Ltd 941 - -
Fprop Opportunities plc 12,565 12,539 12,305
18,349 17,275 17,056
Six months ended Year Six months
30 Sep 2024 ended ended
31 Mar 2024 30 Sep 2023
£'000 £'000 £'000
b) Other financial investments
Cost of investment at 1 Apr 2,623 4,544 4,544
Additions - - -
Repayments (171) (456) (434)
(Decrease) in fair value during the period (144) (1,465) (1,137)
Cost of investment at end of period 2,308 2,623 2,973
The Group holds four unlisted investments in funds managed by FPAM. Each is
designated at fair value through "Other Comprehensive Income" (OCI) as per
IFRS 9. The Directors consider their fair value to not be materially different
from their carrying value.
Fair value has been calculated by applying the Group's percentage holding in
the investments to the fair value of their net assets.
10. Trade and Other Receivables
Six months ended Year Six months
30 Sep 2024 ended ended
31 Mar 2024 30 Sep 2023
£'000 £'000 £'000
Current assets
Trade receivables 1,655 2,077 2,534
Less provision for impairment of receivables (366) (220) (225)
Trade receivables net 1,289 1,857 2,309
Other receivables 1,728 1,804 1,852
Prepayments and accrued income 496 484 1,193
Total at end of period 3,513 4,145 5,354
11. Trade and Other Payables
Six months ended Year Six months
30 Sep 2024 ended ended
31 Mar 2024 30 Sep 2023
£'000 £'000 £'000
Current liabilities
Trade payables 922 2,040 1,824
Other taxation and social security 191 226 239
Other payables and accruals 2,119 1,405 2,462
Deferred income 111 117 188
Total at end of period 3,343 3,788 4,713
Other Payables include £1.11 million of contract liabilities in relation to
Fprop Offices which was subsequently repaid in full after the period end.
12. Financial Liabilities
Six months ended Year Six months
30 Sep 2024 ended ended
31 Mar 2024 30 Sep 2023
£'000 £'000 £'000
Current liabilities
Bank loans 5,247 832 1,067
Total at end of period 5,247 832 1,067
Non-current liabilities
Bank loans 4,562 9,690 10,921
Total at end of period 4,562 9,690 10,921
Total obligations under financial liabilities
Repayable within one year 5,247 832 1,067
Repayable within one and five years 2,118 6,948 7,890
Repayable after five years 2,444 2,742 3,031
Total at end of period 9,809 10,522 11,988
Four bank loans (all denominated in Euros) totalling £9.81 million (31 March
2024: £10.52 million), included within financial liabilities, are secured
against investment properties owned by the Group. These bank loans are
otherwise non-recourse to the Group's assets.
The interest rate profile of the Group's financial liabilities at 30 September
2024 and 31 March 2024 was as follows:
Interest bearing Non- Total
interest
bearing
£'000 £'000 £'000
Financial liabilities 9,809 - 9,809
Other financial liabilities - 14,726 14,726
At 30 Sep 2024 9,809 14,726 24,535
Financial liabilities 10,522 - 10,522
Other financial liabilities - 17,095 17,095
At 31 Mar 2024 10,522 17,095 27,617
A one percentage point increase in interest rates would increase the annual
interest rate bill by £0.10 million per annum (31 March 2024: £0.11 million
per annum).
13. Other Financial Liabilities
Six months ended Year Six months
30 Sep 2024 ended ended
31 Mar 2024 30 Sep 2023
£'000 £'000 £'000
Current liabilities 10,956 12,244 12,286
Non-current liabilities 3,770 4,851 4,660
Total at end of period 14,726 17,095 16,946
Total obligations under financial liabilities
Repayable within one year 10,956 12,244 12,286
Repayable within one and five years 3,770 4,851 4,660
Repayable after five years - - -
Total at end of period 14,726 17,095 16,946
Current liabilities include a balance of £9.98 million (debt denominated in
Euro, €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 was repayable by 11 June 2024. No interest is payable on this
current liability. This repayment was not made and the Group is in discussions
to restructure the deferred consideration and is hopeful of a positive
outcome. During the period Sterling strengthened against the Euro by 2.8%
which has reduced our liability in respect of Gdynia by £0.27 million.
Other financial liabilities also include the Group's investment in Blue Tower,
Warsaw, which was originally financed by deferred consideration totalling
£7.20 million (debt denominated in Polish Zloty, PLN 40.40 million). This
liability, which is non-interest bearing, is payable in seven instalments, the
first three instalments have been paid with the next instalment due in August
2025. During the six month period to 30 September 2024 Sterling strengthened
against the Polish Zloty by 2.1% which has reduced our liability in respect of
Blue Tower by £0.10 million.
The interim results are being circulated to all shareholders and can be
downloaded from the company's website - www.fprop.com (http://www.fprop.com) .
Further copies can be obtained from the registered office at 32 St James's
Street, London SW1A 1HD.
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