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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
First Property Group Plc | LSE:FPO | London | Ordinary Share | GB0004109889 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.60 | -3.06% | 19.00 | 18.50 | 19.50 | 19.60 | 19.00 | 19.60 | 119,702 | 08:18:28 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Real Estate Agents & Mgrs | 7.25M | 1.92M | 0.0173 | 10.98 | 21.07M |
TIDMFPO
RNS Number : 8390P
First Property Group PLC
11 June 2015
Date: 11 June 2015 On Behalf of: First Property Group plc ("First Property", "the Company" or "the Group") Embargoed: 0700hrs
First Property Group plc
Preliminary Results for the twelve months to 31 March 2015
First Property Group plc (AIM: FPO), the property fund manager and investor, today announces its preliminary results for the twelve months ended 31 March 2015.
Financial highlights:
Unaudited Audited Percentage Year to Year to change 31 March 31 March 2015 2014 ------------------------------------- ----------- ---------- ----------- Profit before tax GBP8.08m GBP6.60m +22.4% ===================================== =========== ========== =========== Diluted earnings per share 6.93p 4.53p +53.0% ===================================== =========== ========== =========== Total dividend per share 1.35p 1.12p +20.5% ===================================== =========== ========== =========== Profit before unallocated central overheads and tax by segment: ------------------------------------- ----------- ---------- ----------- Property fund management (FPAM) GBP4.44m GBP2.63m +68.8% ===================================== =========== ========== =========== Group Properties* GBP6.57m GBP6.32m +4.0% ------------------------------------- ----------- ---------- ----------- Average EUR/GBP rate used 1.285 1.188 -8.2% ===================================== =========== ========== =========== Net assets GBP31.02m GBP23.46m +32.2% ===================================== =========== ========== =========== Cash Balances GBP12.24m GBP11.28m +8.5% ===================================== =========== ========== =========== Group Properties* at market value GBP142.04m GBP69.08m ===================================== =========== ========== =========== Group Properties*at book value GBP126.90m GBP61.06m ===================================== =========== ========== =========== Gross Debt secured against Group Properties GBP107.78m GBP49.33m ===================================== =========== ========== =========== LTV % 75.89% 71.41% ===================================== =========== ========== =========== Net assets per share 26.30p 20.00p +31.5% ===================================== =========== ========== =========== Adjusted net assets per share** 35.75p 24.80p +44.2% ===================================== =========== ========== =========== Year-end EUR/GBP rate used 1.382 1.210 -14.2% ===================================== =========== ========== =========== Assets under management (including Group Properties) GBP327m GBP357m -8.4% ===================================== =========== ========== =========== Poland 65% 69% ===================================== =========== ========== =========== UK 33% 28% ===================================== =========== ========== =========== Romania 2% 3% ------------------------------------- ----------- ---------- ----------- * Excludes the Group's non-controlling interests in four other FPAM managed funds.
** Calculated according to EPRA triple net valuation methodology, which includes fair values of i) financial instruments ii) debt and iii) deferred taxes.
Operational Highlights (and explanatory notes):
-- The increase in profit before tax to GBP8.08 million (2014: GBP6.60 million) was largely attributable to the contribution made to earnings by:
o Fund Management - The performance fee earned by the Group of GBP3.2 million (2014: nil) on profits realised by Fprop PDR.
o Group Properties:
i. The purchase by the Group and FOP of six properties in Poland and Romania during the year which made a contribution to the Group's profit before unallocated overheads and tax of GBP2.27 million (2014: nil). These acquisitions also resulted in GBP1.84 million of negative goodwill, a non-cash item which has been credited to the Income Statement; and
ii. The full year contribution to profit before unallocated overheads and tax from the additional properties purchased by the Group and FOP in the previous year of GBP1.83 million (2014: GBP676,000).
-- Final dividend increased to 1 penny per share (2014: 0.79 pence per share), an increase of 27%, which together with the interim dividend of 0.35 pence (2014: 0.33 pence) equates to a dividend for the year of 1.35 pence per share (2014: 1.12 pence per share).
-- New fund established in January 2015 on behalf of Shipbuilding Industry Pension Scheme (SIPS) with a commitment of GBP125 million for an initial term of ten years targeting investments in the United Kingdom. The Group's UK efforts are now concentrated on investing this.
-- Funds under management in Central and Eastern Europe (CEE) once again rated by Investment Property Databank (IPD) as the best performing versus the IPD CEE universe, now for the annualised periods from 2005 to the end of each of the years between 31December 2008 and 31 December 2014.
-- The impact of a weaker Euro versus Sterling during the year resulted in profit before tax being some GBP258,000 lower than it would otherwise have been.
Commenting on the results, Ben Habib, Chief Executive of First Property Group, said:
"The financial year just ended has been transformational for the Group principally because of the six investments made by it and FOP in Poland and Romania, which should yield recurring profit before unallocated overheads and tax of just over GBP6 million per annum. These earnings will more than replace the fee income we used to earn from the USS fund which expires in August 2015 and which at its peak amounted to some GBP3 million per annum.
"The Group's future earnings are substantially underpinned, its balance sheet is strong, the economies in which we operate are growing, we have investment mandates which will result in the Group's earnings growing and we are working on new interesting transactions. I therefore look to the future with excitement and confidence."
A briefing for analysts will be held at 10.00hrs today at the Group's headquarters, 35 Old Queen Street, London, SW1H 9JA. A conference call facility will also be available on +44 (20) 7984 7578, passcode: 540877. A copy of the accompanying investor presentation can be accessed simultaneously at http://www.fprop.com/plc-results/81/88/. A recorded copy of the call will subsequently be posted on the Company website, www.fprop.com.
For further information please contact:
First Property Group plc Tel: +44 (20) 7340 0270 Ben Habib (Chief Executive www.fprop.com Officer) investor.relations@fprop.com George Digby (Group Finance Director) Jeremy Barkes (Director, Business Development) Arden Partners (NOMAD & Tel: + 44 (20) 7614 Broker) 5900 Chris Hardie (Director, Corporate Finance) Michael McNeilly (Corporate Finance) Redleaf Polhill (PR) Tel:+ 44 (20) 382 4734 Richard Gotla / Henry Columbine firstproperty@redleafpr.com
Notes to investors and editors:
First Property Group plc is a property fund manager and investor with operations in the United Kingdom and Central Europe. 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 in the UK and Central Europe;
-- Group Properties - principal investments by the Group, currently comprising:
o Six directly owned properties in Poland and Romania;
o Five properties in Poland held by Fprop Opportunities plc (FOP), an FPAM managed fund in which the Group is a 76.2% shareholder;
o Non-controlling interests in four other funds managed by FPAM.
FPAM funds have ranked No.1 versus the Investment Property Databank (IPD) Central & Eastern Europe (CEE) universe for the annualised periods from the commencement of its operations in Poland in 2005 to the end of each of the years between 31 December 2008 and 31 December 2014.
First Property Asset Management Limited is authorised and regulated by the Financial Conduct Authority. Further information about the Company and its products can be found at: www.fprop.com.
CHIEF EXECUTIVE'S STATEMENT
Financial results
I am pleased to report final results for the twelve months ended 31 March 2015.
Revenue earned by the Group increased to GBP18.52 million (2014: GBP18.05 million) yielding a profit before tax of GBP8.08 million (2014: GBP6.60 million). The increase in profit before tax is principally attributable to the contribution to earnings made by:
-- Fund Management - the performance fee earned by the Group of GBP3.2 million (2014: nil) on profits realised by Fprop PDR.
-- Group Properties:
i. The purchase by the Group and FOP of six properties in Poland and Romania during the year which made a contribution to the Group's profit before unallocated overheads and tax of GBP2.27 million (2014: nil). These acquisitions also resulted in GBP1.84 million of negative goodwill, a non-cash item which has been credited to the Income Statement; and
ii. The full year contribution to profit before unallocated overheads and tax from the additional properties purchased by the Group and FOP in the previous year of GBP1.83 million (2014: GBP676,000).
Diluted earnings per share were 6.93 pence (2014: 4.53 pence).
The Group ended the period with net assets of GBP31.02 million (2014: GBP23.46 million).
Its cash balances increased to GBP12.24 million (2014: GBP11.28 million) despite having made some GBP80 million of new, leveraged property investments. Of this cash, GBP3.26 million (2014: GBP4.14 million) was held by Fprop Opportunities plc (FOP), which is 76.2% owned by the Group and GBP573,000 (2014: GBP528,000) was held by Corp SA (90% owned by the Group), the property management company for Blue Tower in Warsaw.
Dividend
The Directors have resolved to recommend increasing the final dividend to 1 penny per share (2014: 0.79 pence per share), an increase of 27%, which together with the interim dividend of 0.35 pence per share (2014: 0.33 pence per share) equates to a dividend for the year of 1.35 pence per share (2014: 1.12 pence per share). The substantial increase in the final dividend results from the material increase in the Group's underlying recurring earnings and the Directors' confidence in the sustainability of these.
The proposed final dividend will be paid on 30 September 2015 to shareholders on the register at 21 August 2015, and is subject to shareholder approval at the forth coming annual general meeting.
REVIEW OF OPERATIONS
Key Points
The annualised earnings before unallocated overheads and tax of just over GBP6 million which the Group expects to earn from the six properties acquired by it and FOP during the year, more than replaces the fee income we used to earn from the USS fund which expires in August 2015 and which, at its peak, amounted to some GBP3 million per annum.
When the earnings from the six new property investments are combined with the Group and FOP's existing investments, the annualised recurring contribution to the Group's profit before unallocated overheads and tax will amount to some GBP9.5 million.
Our development activity in the United Kingdom, via Fprop PDR, made a contribution to the Group of GBP3.86 million and yielded investors in that fund a total return of GBP16.6 million on equity deployed of GBP30.35 million, translating into a net return on equity of 53% and an IRR of 98% per annum. Fprop PDR is likely to make a further contribution to profit before unallocated central overheads and tax of some GBP1 million for the year to 31 March 2016, resulting from transactions concluded last year. However, the Permitted Development Rights legislation is due to expire in May 2016 and we do not therefore expect any further transactions to be undertaken by Fprop PDR, unless the legislation is extended in some way.
The Group's UK efforts are now concentrated on investing the GBP125 million fund management mandate awarded to us by SIPS.
PROPERTY FUND MANAGEMENT (First Property Asset Management Ltd or FPAM)
As at 31 March 2015 aggregate assets under management, calculated by reference to independent third party valuations, stood at GBP327 million (2014: GBP357 million), including some GBP142 million (2014: GBP69 million) of properties held by the Group. Of these, 33% were located in the UK, 65% in Poland and 2% in Romania. With the exception of Fprop PDR, fees are levied by FPAM by reference to funds under management excluding cash and cash commitments.
Revenue earned by this division amounted to GBP6.14 million (2014: GBP4.27 million), resulting in a profit before unallocated central overheads and tax of GBP4.44 million (2014: GBP2.63 million) and representing 40% (2014: 29%) of Group profit before unallocated central overheads and tax.
Revenue from the USS fund reduced to GBP1.54 million (2014: GBP2.5 million) as a result of disposals by the fund. Following the expiry of the USS fund management contract FPAM's fund management fee income, excluding performance fees, will amount to some GBP1.35 million per annum.
First Property Asset Management Ltd (FPAM) now manages eight closed-end funds, having established one new fund during the year under review. A brief synopsis of the value of assets and maturity of each of these funds is set out below:
Fund Country Established Fund Assets % of total of investment Expiry under assets management under at market management value --------------------- ---------------- ------------- ---------- ----------------- ------------ SAM Property UK Aug-2004 Rolling * * Company Ltd (SAM) --------------------- ---------------- ------------- ---------- ----------------- ------------ Regional Property Trading Ltd (RPT) Poland Aug-2004 Aug-2020 GBP6.21m 1.9% --------------------- ---------------- ------------- ---------- ----------------- ------------ 5(th) Property Trading Ltd (5PT) Poland Dec-2004 Dec-2017 GBP7.68m 2.4% --------------------- ---------------- ------------- ---------- ----------------- ------------ USS Fprop Managed Property Portfolio LP Poland Aug-2005 Aug-2015 GBP62.91m 19.2% --------------------- ---------------- ------------- ---------- ----------------- ------------ UK Pension Property Portfolio LP (UK PPP) UK Feb-2010 Feb-2017 GBP94.35m 28.8% --------------------- ---------------- ------------- ---------- ----------------- ------------ GBP3.61 Fprop PDR m* (commitment LP UK Oct-2013 May-2018 of GBP42m) 1.1% --------------------- ---------------- ------------- ---------- ----------------- ------------ SIPS Property GBP10.33m Nominee (commitment Ltd UK Jan-2015 Jan-2025 of GBP125m) 3.2% --------------------- ---------------- ------------- ---------- ----------------- ------------ Sub total GBP185.09m 56.6% ------------------------------------------------------------------ ----------------- ------------ Fprop Opportunities plc (FOP) Poland Oct-2010 Oct-2020 GBP54.44m 16.6% --------------------- ---------------- ------------- ---------- ----------------- ------------ Group Properties (excluding Poland FOP) & Romania n/a n/a GBP87.60m 26.8% --------------------- ---------------- ------------- ---------- ----------------- ------------ Sub total GBP142.04m 43.4% ------------------------------------------------------------------ ----------------- ------------ Total GBP327.13m 100% ================================================================== ================= ============
*Not subject to recent revaluation
Independent fund performance analysis:
Our investments in Central and Eastern Europe (CEE) have once again been ranked No.1 by Investment Property Databank (IPD) against the IPD CEE universe, now for the annualised periods from the commencement of FPAM's operations in Poland in 2005 to the end of each of the years between 31 December 2008 and 31 December 2014.
New business:
Poland - we are in preliminary discussions with potential investors to establish a new fund targeting minimum rates of return on equity invested of 15% per annum.
TOTAL GROUP PROPERTIES
The Group increased its property holdings (including those held by FOP) from five to eleven during the year under review, as set out below:
Property No. of Book value Market Contribution properties value to Group profit before tax and overheads ---------------- ------------ ----------- ----------- ---------------- Continuing ---------------- ------------ ----------- ----------- ---------------- Blue Tower 1 GBP12.64m GBP14.18m GBP1,461,000 ---------------- ------------ ----------- ----------- ---------------- FOP 4 GBP42.76m GBP45.76m GBP1,135,000 ---------------- ------------ ----------- ----------- ---------------- Sub total 5 GBP55.40m GBP59.94m GBP2,596,000 ---------------- ------------ ----------- ----------- ---------------- New investments during the year ---------------- ------------ ----------- ----------- ---------------- Poland 2 GBP58.00m GBP66.19m GBP1,263,000(1) ---------------- ------------ ----------- ----------- ---------------- Romania 3 GBP5.08m GBP7.23m GBP634,000(2) ---------------- ------------ ----------- ----------- ---------------- FOP 1 GBP8.42m GBP8.68m GBP369,000(3) ---------------- ------------ ----------- ----------- ---------------- Sub total 6 GBP71.50m GBP82.10m GBP2,266,000 ---------------- ------------ ----------- ----------- ---------------- Total 11 GBP126.90m GBP142.04m GBP4,862,000 ================ ============ =========== =========== ================
(1) The contribution to Group profit from its two new property investments in Poland was for the period from 15 December 2014 to 31 March 2015.
(2) The contribution to Group profit from its three new property investments in Romania was for the period from 27 July 2014 to 31 March 2015.
(3) The contribution to FOP's profit (which is consolidated into the accounts of the Group) from its one new property investment in Poland was for the period from 19 September 2014 to 31 March 2015.
It is the Group's policy to carry its investments at the lower of cost or market value for accounting purposes.
Other Property Interests:
Group Properties also comprises non-controlling interests in four other funds managed by FPAM, as set out in the table below.
Non controlling interest in funds managed by FPAM at 31 March 2015:
Fund % owned Book value Current Group's by of First market share First Property's value of pre-tax Property share of holdings profit Group in earned fund by fund FY2015 -------------------- ---------- ------------- ------------- ------------ Investments -------------------- ---------- ------------- ------------- ------------ UK Pension 0.9% GBP893,000 GBP893,000 GBP64,000 Property Portfolio LP (UK PPP) -------------------- ---------- ------------- ------------- ------------ Fprop PDR LP 4.9% GBP638,000 GBP638,000 GBP630,000 -------------------- ---------- ------------- ------------- ------------ Interest in associates -------------------- ---------- ------------- ------------- ------------ 5(th) Property 37.8% GBP519,000 GBP998,000 GBP153,000 Trading Ltd (5PT) -------------------- ---------- ------------- ------------- ------------ Regional Property 25.8% GBP152,000 GBP177,000 GBP32,000 Trading Ltd (RPT) -------------------- ---------- ------------- ------------- ------------ Share of results GBP671,000 GBP1,175,000 GBP185,000 in associates -------------------- ---------- ------------- ------------- ------------ Total GBP2,202,000 GBP2,706,000 GBP879,000 ==================== ========== ============= ============= ============
Revenue from Group Properties, including FOP, amounted to GBP12.38 million (2014: GBP13.78 million), generating a profit before unallocated central overheads and tax of GBP6.57 million (2014: GBP6.32 million) and representing 60% (2014: 71%) of Group profit before unallocated central overheads and tax.
The reduction in revenue was attributable to the Group ceasing its development activities in the UK, which were instead carried out by Fprop PDR.
The increase in profit before unallocated central overheads and tax was attributable to:
i. The purchase by the Group and FOP of six properties in Poland and Romania during the year which made a contribution to the Group's profit before unallocated overheads and tax of GBP2.27 million (2014: nil). These acquisitions also resulted in GBP1.84 million of negative goodwill, a non-cash item which has been credited to the Income Statement; and
ii. The full year contribution to profit before unallocated overheads and tax from the additional properties purchased by the Group and FOP in the previous year of GBP1.83 million (2014: GBP676,000).
Commercial property markets outlook
Poland:
GDP growth in Poland, Europe's sixth largest economy, accelerated to 3.4% in 2014 and is forecast to grow by the same amount in 2015 and 2016. Rent levels for commercial property are generally sustainable, subject to location. Capital values remain largely unchanged from their credit crunch lows and yield some 2-3% more than equivalent property in Western Europe. In addition, Poland's banking sector is well capitalised and keen to lend against property at record low interest rates.
Poland is a tangential beneficiary of the quantitative easing taking place in the euro zone, which has boosted economic activity in Germany and by association Poland; some 40% of Poland's trade is with Germany. QE has also, amongst other things, suppressed euro interest rates and the value of the euro (the currency in which most Polish commercial property transacts and in which rents are paid), translating into reduced capital values for non-euro based investors. Given this confluence of circumstances, we believe the business case for property investment in Poland to be highly compelling.
United Kingdom:
The UK was the fastest growing major advanced economy in 2014, growing at 2.8%, and is forecast by the OBR to grow by 2.5% in 2015. Consumer confidence is at a twelve year high and occupier demand for commercial property is growing across the board. This is slowly manifesting itself in increasing property values and rising rents. Investment demand, including from international investors, continues to spread into the regions.
We expect the newly elected Government to continue its efforts to loosen the planning system to enable higher rates of new development. We shall be looking out in particular for any news of its intention to extend Permitted Development Rights (PDR) beyond its current scheduled expiry in May 2016.
Current Trading and Prospects
The financial year just ended has been transformational for the Group principally because of the six investments made by it and FOP in Poland and Romania, which should yield recurring profit before unallocated overheads and tax of just over GBP6 million per annum. These earnings will more than replace the fee income we used to earn from the USS fund which expires in August 2015 and which at its peak amounted to some GBP3 million per annum.
The Group's future earnings are substantially underpinned, its balance sheet is strong, the economies in which we operate are growing, we have investment mandates which will result in the Group's earnings growing and we are working on new interesting transactions. I therefore look to the future with excitement and confidence.
Ben Habib
Chief Executive
11 June 2015
CONSOLIDATED INCOME STATEMENT
for the year ended 31 March 2015
Notes Year ended Year ended 31 March 31 March 2015 (unaudited) 2014 Total (audited) results Total results GBP'000 GBP'000 -------------------------------- ------ ------------------- --------------------- Revenue - existing operations 14,325 17,004 - business acquisitions 4,198 1,041 -------------------------------- ------ ------------------- --------------------- 18,523 18,045 -------------------------------- ------ ------------------- --------------------- Cost of sales (3,156) (5,800) -------------------------------- ------ ------------------- --------------------- Gross profit 15,367 12,245 Recognition of negative 1,123 - goodwill on refinancing of subsidiary Recognition of negative 716 - goodwill on acquisition of subsidiaries Fair value adjustment (876) - to investment properties Operating expenses (6,925) (5,019) -------------------------------- ------ ------------------- --------------------- Operating profit 9,405 7,226 -------------------------------- ------ ------------------- --------------------- Share of results in associates 185 190 Distribution income 694 63 Re-classification of profit - 35 Loss on disposal of asset held for resale - (7) Interest income 145 148 Interest expense (2,346) (1,057) -------------------------------- ------ ------------------- --------------------- Profit before tax 8,083 6,598 Tax credit/(charge) 5 328 (962) -------------------------------- ------ ------------------- --------------------- Profit for the year 8,411 5,636 -------------------------------- ------ ------------------- --------------------- Attributable to: Owners of the parent 8,172 5,281 Non-controlling interest 239 355 8,411 5,636 Earnings per share: Basic 6 7.21p 4.75p Diluted 6 6.93p 4.53p -------------------------------- ------ ------------------- ---------------------
All operations are continuing.
CONSOLIDATED SEPARATE STATEMENT
OF OTHER COMPREHENSIVE INCOME
for the year ended 31 March 2015
Year ended Year ended 31 March 31 March 2015 2014 (unaudited) (audited) Total Total results results GBP'000 GBP'000 ----------------------------------- --- ------------- ----------- Profit for the year 8,411 5,636 ---------------------------------------- ------------- ----------- Other comprehensive income Exchange differences on retranslation of foreign subsidiaries 272 (128) Re-classification of profit - (35) Revaluation of available-for-sale 37 - financial assets Taxation - - ----------------------------------- --- ------------- ----------- Total comprehensive income for the year 8,720 5,473 Total comprehensive income for the year attributable to: Owners of the parent 8,505 5,327 Non-controlling interest 215 146 8,720 5,473 --------------------------------------- ------------- -----------
CONSOLIDATED BALANCE SHEETS
As at 31 March 2015
Notes As at As at 31 March 31 March 2015 2014 (unaudited) (audited) GBP'000 GBP'000 Non-current assets Goodwill 7 153 153 Investment properties 8 114,262 48,759 Property, plant and equipment 43 65 9 Interest in associates (a) 671 675 9 Other financial assets (b) 1,531 1,706 Other receivables 11 283 400 Deferred tax assets 3,803 839 ------------------------------- ------ ------------- ----------- Total non-current assets 120,746 52,597 ------------------------------- ------ ------------- ----------- Current assets Inventories - land and buildings 10 12,639 12,304 Current tax assets 236 76 Trade and other receivables 11 5,744 4,135 Cash and cash equivalents 12,240 11,279 ------------------------------- ------ ------------- ----------- Total current assets 30,859 27,794 ------------------------------- ------ ------------- ----------- Current liabilities Trade and other payables 12 (8,134) (4,224) Financial liabilities 13 (11,788) (4,349) Current tax liabilities (108) (247) ------------------------------- ------ ------------- ----------- Total current liabilities (20,030) (8,820) ------------------------------- ------ ------------- ----------- Net current assets 10,829 18,974 ------------------------------- ------ ------------- ----------- Total assets less current liabilities 131,575 71,571 ------------------------------- ------ ------------- ----------- Non-current liabilities: Deferred tax liabilities (2,631) (897) Financial liabilities 13 (97,925) (47,212) Net assets 31,019 23,462 ------------------------------- ------ ------------- ----------- Equity Called up share capital 1,149 1,149 Share premium 5,505 5,498 Foreign exchange translation reserve (618) (914) Revaluation reserve (49) (86) Share-based payment reserve 203 203 Retained earnings 23,735 16,717 ------------------------------- ------ ------------- ----------- Equity attributable to the owners of the parent 29,925 22,567 Non-controlling interest 1,094 895 ------------------------------- ------ ------------- ----------- Total equity 31,019 23,462 ------------------------------- ------ ------------- -----------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2015
Group Share Share Share-based Foreign Purchase Investment Retained Non-controlling Total capital premium payment exchange of own revaluation earnings interest reserve translation shares reserve reserve GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- -------- At 1 April 2014 1,149 5,498 203 (914) (310) (86) 17,027 895 23,462 Profit for the period - - - - - - 8,411 - 8,411 Net change in available for sale financial assets - - - - - 37 - - 37 Movement on foreign exchange - - - 296 - - - (24) 272 Sale of treasury shares - 7 - - 137 - - - 144 Non-controlling interest - - - - - - (239) 239 - Dividends paid - - - - - - (1,291) (16) (1,307) ----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- -------- At 31 March 2015 1,149 5,505 203 (618) (173) (49) 23,908 1,094 31,019 ----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- -------- At 1 April 2013 1,149 5,492 203 (995) (603) (51) 12,947 401 18,543 Profit for the period - - - - - - 5,636 - 5,636 Net change in available for sale financial assets - - - - - (35) - - (35) Movement on foreign exchange - - - 81 - - - (209) (128) Sale of treasury shares - 6 - - 293 - - - 299 Non-controlling interest - - - - - - (355) 355 - Decrease in non-controlling interest (acquisition of CORP) - - - - - - - (63) (63) Increase in non-controlling interest (FOP) - - - - - - - 507 507 Dividends paid - - - - - - (1,201) (96) (1,297) ----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- -------- At 31 March 2014 1,149 5,498 203 (914) (310) (86) 17,027 895 23,462 ----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- --------
CONSOLIDATED CASH FLOW STATEMENTS
for the year ended 31 March 2015
2015 2014 Notes Group Group GBP'000 GBP'000 ----------------------------------- ------ --------- --------- Cash flows from operating activities ----------------------------------- ------ --------- --------- Operating profit 9,405 7,226 Adjustments for: Depreciation of investment property, plant & equipment 387 31 Fair value adjustment 876 - on investment properties Negative goodwill (1,839) - Share based payments - - (Increase)/decrease in inventories (258) (4,474) (Increase)/decrease in trade and other receivables (486) (2,604) Increase/(decrease) in trade and other payables 577 1,547 Other non-cash adjustments 81 203 ----------------------------------- ------ --------- --------- Cash generated from operations 8,743 1,929 Taxes paid (826) (552) ----------------------------------- ------ --------- --------- Net cash flow from operating activities 7,917 1,377 ----------------------------------- ------ --------- --------- Cash flow from/(used in) investing activities ----------------------------------- ------ --------- --------- Purchase of investments (353) (849) Proceeds from investments 565 - Proceeds from sale of financial assets - 28 Capital expenditure investment properties (383) (46) Proceeds from sale of shares in associates - 23 Cash paid on acquisitions of new subsidiaries 4 (4,638) (4,415) Cash and cash equivalents received on acquisitions of new subsidiaries 4 3,055 786 Purchase of non-controlling interest - (126) Purchase of investment property - (555) Purchase of property, plant & equipment (14) (60) Interest received 145 148 Dividends from associates 189 107 Distributions received 694 63 ----------------------------------- ------ --------- --------- Net cash flow from investing activities (740) (4,896) ----------------------------------- ------ --------- --------- Cash flow (used in)/from financing activities Proceeds from issue of shares to non-controlling interest - 507 Proceeds from non-controlling interest shareholder loan in subsidiary - 1,206 Repayment of shareholder loan in subsidiary (293) (107) Proceeds from bank loan 3,547 3,136 Repayment of bank loan (4,574) (387) Repayment of finance lease (1,202) (463) Sale of shares held in Treasury 144 299 Interest paid (2,266) (1,029) Dividends paid (1,291) (1,201) Dividends paid to non-controlling interest (16) (96) ----------------------------------- ------ --------- --------- Net cash flow (used in)/from financing activities (5,951) 1,865 ----------------------------------- ------ --------- --------- Net increase in cash and cash equivalents 1,226 (1,654) ----------------------------------- ------ --------- --------- Cash and cash equivalents at the beginning of the year 11,279 12,979 ----------------------------------- ------ --------- --------- Currency translation gains/(losses) on cash and cash equivalents (265) (46) ----------------------------------- ------ --------- --------- Cash and cash equivalents at the year-end 12,240 11,279 ----------------------------------- ------ --------- --------- 1. Basis of preparation
-- These preliminary financial statements have not been audited and are derived from the statutory accounts within the meaning of section 434 of the Companies Act 2006. They have been prepared in accordance with the Group's accounting policies that will be applied in the Group's annual financial statements for the year ended 31 March 2015. These are consistent with the policies applied for the year ended 31 March 2014. 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). Whilst the financial information included in this preliminary statement has been prepared in accordance with IFRS, this announcement does not itself contain sufficient information to fully comply with IFRS. The comparative figures for the financial year ended 31 March 2014 are not the statutory accounts for the financial year but are derived 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 preliminary financial statements were approved by the Board of Directors on 10 June 2015.
2. Revenue
Revenue from continuing operations consists of revenue arising in the United Kingdom 20% (2014: 53%), Poland 74% (2014: 47%) and Romania 6% (2014: nil). All revenue relates solely to the Group's principal activities.
3. Segment reporting 2015 Property Group Group Unallocated Total fund properties fund central management and other properties overheads co-investments "FOP" GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 -------------------- ------------ ---------------- ------------ ------------ ---------- External revenue - Existing operations - Sale of inventory 6,140 2,968 5,217 - 14,325 - Business - - - - - acquisitions - 3,479 719 - 4,198 -------------------- ------------ ---------------- ------------ ------------ ---------- Total 6,140 6,447 5,936 - 18,523 -------------------- ------------ ---------------- ------------ ------------ ---------- Depreciation and amortisation 18 363 6 - 387 -------------------- ------------ ---------------- ------------ ------------ ---------- Operating Profit 4,435 5,454 2,454 (2,938) 9,405 -------------------- ------------ ---------------- ------------ ------------ ---------- Share of results in associates - 185 - - 185 -------------------- ------------ ---------------- ------------ ------------ ---------- Distribution income - 694 - - 694 -------------------- ------------ ---------------- ------------ ------------ ---------- Interest income - 36 89 20 145 -------------------- ------------ ---------------- ------------ ------------ ---------- Interest payable - (730) (1,616) - (2,346) -------------------- ------------ ---------------- ------------ ------------ ---------- Profit/(loss) before tax 4,435 5,639 927 (2,918) 8,083 -------------------- ------------ ---------------- ------------ ------------ ---------- Analysed as: -------------------- ------------ ---------------- ------------ ------------ ---------- Before performance fees and related items 1,605 4,489 2,272 (963) 7,403 -------------------- ------------ ---------------- ------------ ------------ ---------- Negative goodwill Felix - 1,123 - - 1,123 -------------------- ------------ ---------------- ------------ ------------ ---------- Negative goodwill Gdynia Podolska and Corktree - 716 - - 716 -------------------- ------------ ---------------- ------------ ------------ ---------- Fair value adjustment - - (876) - (876) -------------------- ------------ ---------------- ------------ ------------ ---------- Depreciation - (357) - - (357) -------------------- ------------ ---------------- ------------ ------------ ---------- Performance fees 3,365 - - - 3,365 -------------------- ------------ ---------------- ------------ ------------ ---------- Staff incentives (535) (194) (184) (1,955) (2,868) -------------------- ------------ ---------------- ------------ ------------ ---------- Realised foreign currency gain - (138) (285) - (423) -------------------- ------------ ---------------- ------------ ------------ ---------- Total 4,435 5,639 927 (2,918) 8,083 -------------------- ------------ ---------------- ------------ ------------ ---------- Assets - Group 1,633 84,478 58,522 6,301 150,934 -------------------- ------------ ---------------- ------------ ------------ ---------- Assets- associates - 979 - (308) 671 -------------------- ------------ ---------------- ------------ ------------ ---------- Liabilities (289) (72,437) (45,666) (2,194) (120,586) -------------------- ------------ ---------------- ------------ ------------ ---------- Net assets 1,344 13,020 12,856 3,799 31,019 -------------------- ------------ ---------------- ------------ ------------ ---------- Additions to non-current assets -------------------- ------------ ---------------- ------------ ------------ ---------- Property, plant and equipment 14 - - - 14 -------------------- ------------ ---------------- ------------ ------------ ---------- Investment properties - 66,909 8,864 - 75,773 -------------------- ------------ ---------------- ------------ ------------ ---------- Investments - 353 - - 353 -------------------- ------------ ---------------- ------------ ------------ ---------- Interest in - - - - - associates -------------------- ------------ ---------------- ------------ ------------ ----------
Segment reporting 2014
Property Group Group Unallocated Total fund properties fund central management and other properties overheads co-investments "FOP" GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 -------------------- ------------ ---------------- ------------ ------------ --------- External revenue - Existing operations 4,268 2,440 2,246 - 8,954 - Sale of inventory - 8,050 - - 8,050 - Business acquisitions - - 1,041 - 1,041 -------------------- ------------ ---------------- ------------ ------------ --------- Total 4,268 10,490 3,287 - 18,045 -------------------- ------------ ---------------- ------------ ------------ --------- Depreciation and amortisation (21) (7) (3) - (31) -------------------- ------------ ---------------- ------------ ------------ --------- Operating Profit - Existing operations 2,630 5,010 1,388 (2,413) 6,615 - Business acquisitions - - 611 - 611 -------------------- ------------ ---------------- ------------ ------------ --------- Total 2,630 5,010 1,999 (2,413) 7,226 -------------------- ------------ ---------------- ------------ ------------ --------- Share of results in associates - 190 - - 190 -------------------- ------------ ---------------- ------------ ------------ --------- Profit on disposal of asset held for resale - - - 28 28 -------------------- ------------ ---------------- ------------ ------------ --------- Dividend income - 63 - - 63 -------------------- ------------ ---------------- ------------ ------------ --------- Interest income - 76 40 32 148 -------------------- ------------ ---------------- ------------ ------------ --------- Interest payable - (251) (806) - (1,057) -------------------- ------------ ---------------- ------------ ------------ --------- Profit/(loss) before tax 2,630 5,088 1,233 (2,353) 6,598 -------------------- ------------ ---------------- ------------ ------------ --------- Analysed as: -------------------- ------------ ---------------- ------------ ------------ --------- Before performance fees and related items 2,592 5,157 1,288 (830) 8,207 -------------------- ------------ ---------------- ------------ ------------ --------- Performance fees 451 - - - 451 -------------------- ------------ ---------------- ------------ ------------ --------- Staff incentives (413) (69) (55) (1,523) (2,060) -------------------- ------------ ---------------- ------------ ------------ --------- Realised foreign - - - - - currency gain -------------------- ------------ ---------------- ------------ ------------ --------- Total 2,630 5,088 1,233 (2,353) 6,598 -------------------- ------------ ---------------- ------------ ------------ --------- Assets - Group 1,241 16,983 54,890 6,602 79,716 -------------------- ------------ ---------------- ------------ ------------ --------- Assets- associates - 983 - (308) 675 -------------------- ------------ ---------------- ------------ ------------ --------- Liabilities (884) (10,935) (43,587) (1,523) (56,929) -------------------- ------------ ---------------- ------------ ------------ --------- Net assets 357 7,031 11,303 4,771 23,462 -------------------- ------------ ---------------- ------------ ------------ --------- Additions to non-current assets -------------------- ------------ ---------------- ------------ ------------ --------- Property, plant and equipment 41 19 - - 60 -------------------- ------------ ---------------- ------------ ------------ --------- Investment properties - - 28,717 - 28,717 -------------------- ------------ ---------------- ------------ ------------ --------- Investments - 849 - - 849 -------------------- ------------ ---------------- ------------ ------------ --------- Interest in - - - - - associates -------------------- ------------ ---------------- ------------ ------------ ---------
Interest income from the cash that is 100% controlled is not allocated to a separate segment, because cash is managed centrally, and is netted off against unallocated central overheads. Head office costs and overheads that are common to all segments are shown separately under unallocated central overheads. Assets, liabilities and costs which relate to Group central activities have not been allocated to business segments.
The geographic location of physical non-current assets is UK GBP2,229,000 (2014: GBP2,424,000), Poland GBP109,568,000 (2014: GBP48,934,000) and Romania GBP5,080,000 (2014: GBPNil).
4. Business acquisitions
The Group directly made three acquisitions:
- On 27 July 2014 the Group took control of Felix Development SRL. Felix owns three properties located in Romania; and
- On 15 December 2014 the Group acquired a beneficial interest in the entire issued share capital in Corktree Sp z.o.o and Gdynia Podolska Sp. z.o.o. for EUR2.65m and EUR2.25m respectively. Both Corktree's and Gdynia Podolska's main assets are office buildings in Poland.
The Group's subsidiary Fprop Opportunities plc (FOP) made one further acquisition during the year. On 19 September 2014 it acquired all the share capital in Zinga Poland Sp. z.o.o for EUR378,000. Zinga's main asset is an office block in Warsaw, Central Poland.
Following all four purchases a total of GBP1.84m of negative goodwill was generated.
Felix Zinga Gydnia Corktree 31 March Podolska 2015 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ---------------------------- --------- --------- ---------- --------- --------- Acquisitions of net assets acquired at fair value Cash 437 310 1,501 807 3,055 Trade and other receivables 102 438 1,029 1,048 2,617 Share in subsidiary - - - 19 19 Investment property 5,547 8,846 33,137 27,860 75,390 Trade and other payables (369) (204) (389) (972) (1,934) Tax liabilities (53) (52) (52) 99 (58) Financial liabilities (3,566) (9,013) (32,204) (26,401) (71,184) Tenant deposits (440) (29) (885) (74) (1,428) Fair value of goodwill (1,123) (2) (392) (322) (1,839) Foreign exchange - - - - - reserve Total purchase price paid in cash 535 294 1,745 2,064 4,638 ---------------------------- --------- --------- ---------- --------- --------- (4,638) Cash paid on acquisitions (535) (294) (1,745) (2,064) 3,055 Cash and cash equivalents acquired on purchases 437 310 1,501 807 ---------------------------- --------- --------- ---------- --------- --------- Acquisitions net of cash and cash equivalents acquired (98) 16 (244) (1,257) (1,583) ---------------------------- --------- --------- ---------- --------- --------- 5. Tax expense 2015 2014 GBP'000 GBP'000 ---------------------------- --------- --------- Analysis of tax charge for the year Current tax (525) (761) Deferred tax 853 (201) Total tax charge for the year 328 (962) ---------------------------- --------- ---------
The tax charge includes actual current and deferred tax for continuing operations.
Brought forward tax losses, have been utilised and partially offset against profits arising in the UK. These tax losses were not previously recognised as a deferred tax asset due to insufficient foreseeable taxable income being earned in the UK.
As a result of the above the effective tax rate for the Group is -4.1% (2014:15%).
The deferred tax credit is largely attributable to the acquisitions of Corktree and Gdynia Podolska during the year. This has been created as a result of the nil value paid for the deferred tax asset on acquisition. The deferred tax asset has been restricted to two years worth of profits.
6. Earnings/NAV per share 2015 2014 ---------------------------- -------- -------- Basic earnings per share 7.21p 4.75p Diluted earnings per share 6.93p 4.53p GBP'000 GBP'000 ---------------------------- -------- -------- Basic earnings 8,172 5,281 Diluted earnings assuming full dilution 8,187 5,298
The following numbers of shares have been used to calculate both the basic and diluted earnings per share:
2015 2014 Number Number --------------------------------- ------------ ------------ Weighted average number of Ordinary shares in issue (used for basic earnings per share calculation) 113,348,847 111,265,093 --------------------------------- ------------ ------------ Number of share options assumed to be exercised 4,850,000 5,750,000 --------------------------------- ------------ ------------ Total number of ordinary shares used in the diluted earnings per share calculation 118,198,847 117,015,093 --------------------------------- ------------ ------------
The following earnings have been used to calculate both the basic and diluted earnings per share:
2015 2014 GBP'000 GBP'000 ---------------------------------- --------- --------- Basic earnings per share Basic earnings 8,172 5,281 ---------------------------------- --------- --------- Diluted earnings per share Basic earnings 8,172 5,281 Notional interest on share options assumed to be exercised 15 17 ---------------------------------- --------- --------- Diluted earnings 8,187 5,298 ---------------------------------- --------- --------- 2015 2014 --------------------------------- ------------ ------------ Net assets per share 26.30p 20.00p Adjusted Net assets per share 35.75p 24.80p The following numbers have been used to calculate both the net assets and adjusted net assets per share: Net assets per share Number Number --------------------------------- ------------ ------------ Number of shares in issue at year end 113,792,541 112,952,158 GBP'000 GBP'000 --------------------------------- ------------ ------------ Net assets excluding non controlling interest 29,925 22,567 Adjusted net assets per share Number Number Number of shares in issue at year end 113,792,541 112,952,158 Number of share options assumed to be exercised 4,850,000 5,750,000 Total 118,642,541 118,702,158 Adjusted net assets per share GBP'000 GBP'000 Net assets excluding non controlling interest 29,925 22,567 Adjustments for market value of assets and debt 12,488 6,869 Total 42,413 29,436 7. Goodwill 2015 2014 Group Group GBP'000 GBP'000 ------------- --------- --------- At 1 April 153 114 Additions - 39 At 31 March 153 153 ------------- --------- --------- 8. Investment properties
Investment properties owned by the Group, and indirectly via FOP are stated at cost less depreciation and accumulated impairment losses. The properties were valued by CBRE, Polish Properties and BNP Paribas at the Group's financial year-end at EUR176.73 million (2014: EUR63.96 million), the Sterling equivalent at closing foreign exchange rates being GBP127.86 million (2014: GBP52.88 million). On acquisition of the Gdynia Podolska property during the year the Directors took the decision to depreciate the property over the lease term. In the Director's opinion the property's estimated residual value at the end of the period of ownership will be lower than the carrying value. No other property has been depreciated as the estimated residual value is expected to be higher than the carrying value.
2015 2014 Group Group GBP'000 GBP'000 ------------------------------ --------- --------- Investment properties At 1 April 48,759 20,349 Business acquisitions 75,390 28,116 Capital expenditure 383 46 Purchase additions - 555 Depreciation (357) - Fair value adjustment (876) - Foreign exchange translation (9,037) (307) ------------------------------ --------- --------- At 31 March 114,262 48,759 ------------------------------ --------- --------- 9. Investment in associates and other financial assets
The Group has the following investments:
2015 2014 Group Group GBP'000 GBP'000 ---------------------------- --------- --------- a) Associates At 1 April 675 615 Disposals - (23) Share of associates profit after tax 185 190 Dividends received (189) (107) ---------------------------- --------- --------- At 31 March 671 675 ---------------------------- --------- ---------
The Group's investments in associated companies is held at cost plus its share of post-acquisition profits assuming the adoption of the cost model for accounting for investment properties under IAS40 and comprises the following:
2015 2014 Group Group GBP'000 GBP'000 ----------------------------------- --------- --------- Investments in associates 5(th) Property Trading Ltd 827 863 Regional Property Trading Ltd 152 120 ----------------------------------- --------- --------- 979 983 ----------------------------------- --------- --------- Less: Share of profit after tax withheld on sale of property to 5(th) Property Trading Ltd in 2007 (308) (308) ----------------------------------- --------- --------- 671 675 ----------------------------------- --------- ---------
If the Group had adopted the alternative fair value model for accounting for investment properties, the carrying value of the investment in associates would have increased by GBP504,000 (2014: GBP775,000) to GBP1,175,000 (2014: GBP1,450,000).
2015 2014 Group Group GBP'000 GBP'000 ------------------------------- --------- --------- b) Other financial assets and investments At 1 April 1,706 892 Additions 353 849 Disposals (565) (35) Increase in fair value during 37 - the year ------------------------------- --------- --------- At 31 March 1,531 1,706 ------------------------------- --------- ---------
The Group holds two unlisted investments in funds managed by it. Both are held at fair value. All of the assets have been classified as available for sale. In the Directors' view the fair value has been estimated to be not materially different from their carrying value. Fair value has been arrived at by applying the Group's percentage holding in the investments of the fair value of their net assets.
10. Inventories - land and buildings 2015 2014 Group Group GBP'000 GBP'000 ------------------------------- --------- --------- Group properties for resale at cost At 1 April 12,304 8,591 Purchases - 4,428 Capital expenditure 258 46 Disposals - - Foreign exchange translation 77 (761) ------------------------------- --------- --------- At 31 March 12,639 12,304 ------------------------------- --------- --------- 11. Trade and other receivables 2015 2014 Group Group GBP'000 GBP'000 -------------------------------- --------- --------- Current assets Trade receivables 1,655 3,305 Other receivables 3,147 502 Prepayments and accrued income 942 328 -------------------------------- --------- --------- 5,744 4,135 -------------------------------- --------- --------- Non-current assets -------------------------------- --------- --------- Other receivables 283 400 -------------------------------- --------- --------- 12. Trade and other payables 2015 2014 Group Group GBP'000 GBP'000 ----------------------------- --------- --------- Current liabilities Trade payables 2,605 1,139 Other taxation and social security 580 289 Other payables and accruals 4,938 2,780 Deferred income 11 16 ----------------------------- --------- --------- 8,134 4,224 ----------------------------- --------- --------- 13. Financial liabilities 2015 2014 GBP'000 GBP'000 ------------------------------------ --------- --------- Current liabilities Bank loan 9,382 3,840 Finance leases 2,406 509 ------------------------------------ --------- --------- 11,788 4,349 ------------------------------------ --------- --------- Non-current liabilities Loans repayable by subsidiary (FOP) to third party shareholders 1,936 2,229 Bank loans 50,610 32,322 Finance leases 45,379 12,661 ------------------------------------ --------- --------- 97,925 47,212 ------------------------------------ --------- --------- 2015 2014 GBP'000 GBP'000 ------------------------------- --------- --------- Total obligations under bank loans and finance leases Repayable within one year 11,788 4,349 Repayable within one and five years 57,928 35,106 Repayable after five years 39,997 12,106 ------------------------------- --------- --------- 109,713 51,561 ------------------------------- --------- ---------
Loans repayable by FOP to third party shareholders are repayable in October 2020.
Seven bank loans and three finance leases (all denominated in foreign currencies) totalling GBP107,777,000 (2014: GBP49,332,000) included within financial liabilities are secured against investment properties owned by the Group and Fprop Opportunities plc (FOP) and the property owned by the Group shown under inventories. These bank loans and finance leases are otherwise non-recourse to the Group's assets.
The preliminary results are being circulated to all shareholders and can be downloaded from the Company's web-site (www.fprop.com). Further copies can be obtained from the registered office at 35 Old Queen Street, London, SW1H 9JA.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SFIESSFISELM
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