First Property Share Discussion Threads

[britishb] 20/11/2012 18:19

You need to know that the USS management contract expires in 2015, so that £3m profit will disappear to a much much smaller sum (close to nothing) if it's not renewed on similar terms or replaced. Company reckoned NPV of property + existing contracts was about 30p/sh when I talked to them a while back. So not bad value but wouldn't be surprised to see it trade around these levels unless they sign up more customers...and it's clearly hard work doing that in this climate.

[oregano] 20/11/2012 16:03

to be fair also, isn't some focus on the valuation of this share exactly what is required? NAV presumably over £18m by now, producing over £3m in profit and market cap of £21m.

in their last announcement they alluded to further fund raising, so hopefully the interims will confirm this.

[m1das_touch] 20/11/2012 15:16

To be fair to ST he has a very good record of drawing out value from small-caps and often holds for two years or longer. Inevitably his recommendations attract short-term traders too, but the tips usually act as a catalyst for a genuine re-rating.

[dorset64] 20/11/2012 15:10

Thats the last thing we need here, sheep following sheep. As soon as ST has made a profit he'll say he sold, and then the sheep will all sale along with him and bring the share price back down again.

[m1das_touch] 20/11/2012 15:01

Tipped online by Simon Thompson in the IC. He has a strong following, so I would expect further buying once the magazine is published Friday.

[darias] 20/11/2012 14:16

Tightly held, lots of cash, well managed and goes ex div in a couple of weeks.

Why shouldn't the share price better reflect value.

[neguss3] 20/11/2012 14:08

Whats going on why the jump in price

[blobby] 25/9/2012 16:29

Apparently the buyer was a local Polish developer and there were several reasons for the sale:

i.) The building was old and constructed using cheap materials (using a communist era East German method known as the Leipzig Method) and in need of capex going forward;

ii.) FPO had executed the business plan of letting up vacant space and achieving planning consent for change of use from commercial to residential (some 100 units). They prefer to leave it to others to develop;

iii.) FPO are eyeing new investment opportunities and intend to recycle the capital as new opportunities arise.

The 5% capital value uplift over 5 years may be less than the rate of inflation but is a good result given the purchase vintage of November 2007. Even though the Polish economy has continued to grow throughout the credit crunch, capital values for commercial properties have fallen since the onset of the credit crunch by some 20%.

[topvest] 21/9/2012 20:57

Yes, an odd disposal given it cost PLN 11.8m in 2007 and generates £344,000 of rental income. Maybe no scope for growth.

[darias] 21/9/2012 11:56

"The sale proceeds amounted to PLN 11.95 million (GBP2.30 million) which after accounting for transaction costs and foreign exchange gains, resulted in a profit of approximately GBP120,000. The property, which was not geared, generated an internal rate of return (IRR) for the Group of 12.8% per annum during the period of our ownership."

??????

The group states that the annual rate of return is 12.8% which amounts to 279040 pa yet they sell for £120,000 profit. Does the company need cash or do they see a further investment opportunity?

[marben100] 20/9/2012 15:06

Hi kimboy,

The USS fund runs for a fixed term. AIUI Assets will need to be disposed of in the run up to expiry. Of course, given that the assets offer attractive yields, one option would be to launch another fund that buys them - but that would only be possible if better prices can't be achieved in the open market.

See slide 10 of the interims presentation & look at the USS chart. IRR is low due to diminution in market values, but ROE is high due to strong rental yields. At current market prices, the properties are attractive.

Note that the asset price risk is (in the main) with participants in the USS fund, not with FPO.

Cheers,

Mark

[kimboy2] 20/9/2012 09:27

Hi Marben
How are USS planning on divesting their investment ?

[marben100] 20/9/2012 09:26

PS if you still doubt our credentials, you might want to have a look at this article from yesterday:

[marben100] 20/9/2012 09:21

The last paragraph is precisely why ShareSoc exists and what we're fighting against. We have gained some traction, with the government's Kay Review (which we participated in) , which has recommended that ALL shareholders, including those in nominee accounts are properly enfranchised and given voting rights.

We oppose intermediation between shareholders and the companies whose shares they own.

In the meantime, you can "vote with your feet" and only use brokers that DO enfranchise shareholders (or use a CREST account). See:

As I stated, ShareSoc is a not-for-profit organisation but we do need to increase our membership base (now well over 2,000) to grow the strength of our voice. Doing nothing guarantees that nothing will improve.

[lanaken] 18/9/2012 11:05

Another very good piece of work by Mark.

Holders would do well to take a look.

repo

[lanaken] 18/9/2012 11:04

Another very good piece of work by Mark.

Holders would do well to take a look.

Sharesoc also doiing great work for Pis.

repo

[marben100] 18/9/2012 10:30

Last Friday I attended First Property's AGM. I've written a 4 page report on the AGM, which is available on ShareSoc's member network, here:

To access the report, you'll need to be a member of ShareSoc, which is a not-for-profit organisation that supports individual shareholders and campaigns for shareholder rights. If you're not already a member you can join as an associate FOC here:

Once you've joined, you'll receive an invitation to register for our "members network" private social network, from where you'll be able to access the report (and reports on over 60 other AGMs). If you're already a member and have any difficulty accessing the report, please do not hesitate to contact us here:

Regards,

Mark

[judgement] 06/7/2012 16:07

Good video

[miss womble] 18/6/2012 12:15

Well said Jeff H. I am a long term holder here and plan on staying for some time. Good luck MW

[jeff h] 15/6/2012 15:38

Here's what Equity Developments John Borgars has to say about the company:-

Monday's results from First Property (FPO) were impressive with a 35% rise
in profits and a 5% rise in net assets, despite the weakness of property
markets generally and of the €uro, which depressed the £ sterling value of its
Polish properties. Its policy of buying undervalued properties in secondary
locations which have "prime" qualities (long leases to government bodies or
"blue chip" companies with good covenants) continues to pay off both for
itself and the investors in the funds that it manages.

Earnings per share rose 45% to 2.88p, so at the current price of 17p the PER is just under 6x. There are three factors that contribute to this rating which looks ridiculously low for a high-quality company:

Worries about what happens when its contract to manage the USS Property portfolio expires in 2015, the relatively small market capitalisation and liquidity of the shares, and the overvaluation of UK Property (particularly housing but also commercial property in prime locations).

As to the first, obviously I don't know (otherwise I couldn't write this!) and
my guess is that USS will want to keep FPO but negotiate as low a fee as
they can; as a precaution FPO have been building up their other funds under
management, helped by being ranked by IPD as the No 1 Central and Eastern
European Fund for each of the last four years; the USS Fund is now less than
two-thirds of AUM and may well be less than half by 2015.

The second is a circular argument.

The third is less relevant to FPO since only 22% of its AUM are in UK Property and nearly all of that is in higher-yielding secondary locations: 70% is in Poland, a non-€urozone EU country with decent GDP growth.

They have £10m cash and are looking to buy UK properties from liquidators and other "distressed sellers" on terms that they expect will allow them to recoup the initial cost during the terms of the lease to high-quality tenants – even to someone like myself who thinks UK property in general is overvalued, that does look sensible.

[jeff h] 12/6/2012 20:12

First Property - Still Undervalued ....is the view of the IC who have a Buy rec for it following the results.

[jeff h] 12/6/2012 20:10

Thanks sammy.

If you go onto the FPO website you can access the slides to the full year presentation and also there is a link to an audio of yesterdays Analyst Meeting.

A guy from Equity Development was there so perhaps we will see a new note issued from them.

Ben Habib seemed quite confident there are increased profits to come from
the wholly owned Blue Tower property in Warsaw.

[sammy_smith] 12/6/2012 15:50

Hey,

I found this interesting audio interview with Ben Habib, Group Chief Executive & Chief Investment Office of First Property Group.

Its worth a listen: