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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 | 100,395 | 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 : 8863P
First Property Group PLC
23 November 2016
Date: 23 November 2016 On behalf First Property Group plc ("First of: Property" or "the Group") Embargoed: 0700hrs
First Property Group plc
Interim Results for the six months to 30 September 2016
First Property Group plc (AIM: FPO), the property fund manager and investor, today announces its interim results for the six months to 30 September 2016.
Highlights:
-- Profit before tax of GBP4.47m in line with the prior year despite a significant reduction in one-off non-recurring items to GBP290,000 (2015: GBP1.58 million);
-- Total assets under management up 43% to GBP405 million (2015: GBP283 million);
-- Adjusted NAV per share up 20% to 45.86 pence per share (2015: 38.27 pence per share restated);
-- Annualised fund management fee income at the period end, excluding performance fees, increased by 46% to some GBP1.9 million (2015: GBP1.3 million);
-- Weighted average unexpired fund management contract term increased to 6.42 years (2015: 3.75 years);
-- Interim dividend up 3.9% to 0.40 pence per share (2015: 0.385 pence per share).
Financial performance summary:
Unaudited Unaudited Percentage Audited Six months Six months change Year to to 30 to 31 March September 30 September 2016 2016 2015 Restated* ----------------------- ------------ ---------------- ----------- ---------- Income Statement: ----------------------- ------------ ---------------- ----------- ---------- Statutory profit GBP4.47m GBP4.46m +0.2% GBP7.35m before tax Non-recurring GBP0.29m GBP1.58m -81.6% GBP1.76m items Diluted earnings per share 2.40p 2.89p -17.0% 4.28p Dividend per share 0.400p 0.385p +3.9% 1.50p Average EUR/GBP rate used 1.217 1.386 1.363 ----------------------- ------------ ---------------- ----------- ---------- Balance Sheet at period end: ----------------------- ------------ ---------------- ----------- ---------- Net assets GBP36.43m GBP30.58m +19.1% GBP34.09m Net assets per share 29.50p 25.86p +14.1% 27.75p Adjusted net assets GBP54.43m GBP45.40m +19.9% GBP51.03m EPRA NNNAV per share** 45.86p 38.27p +19.8% 43.01p Cash Balances GBP14.12m GBP14.20m -0.6% GBP8.98m Period-end EUR/GBP rate 1.156 1.357 1.261 ----------------------- ------------ ---------------- ----------- ---------- Group Property Portfolio at period end: ----------------------- ------------ ---------------- ----------- ---------- Group Properties GBP144.3m GBP125.9m +14.6% GBP134.5m at book value*** Group Properties GBP170.3m GBP145.3m +17.2% GBP156.9m at market value Gross Debt secured GBP122.0m GBP108.3m +12.7% GBP114.8m against Group properties LTV% 71.6% 74.5% 73.2% ----------------------- ------------ ---------------- ----------- ---------- Total assets under GBP405m GBP283m +43.1% GBP353m management: ----------------------- ------------ ---------------- ----------- ---------- Poland 48.6% 53.8% 51.5% United Kingdom 46.6% 43.6% 43.8% Romania 4.8% 2.6% 4.7% * 2015 restated in order to provide a like for like prior year comparison to the period ** just ended, in which a provision has been made for staff incentives pro-rated in line with the full year's charge EPRA - European Public Real Estate Association providers of industry standards of NAV calculations. *** It is the Group's policy to hold assets at the lower of cost or value adjusted for prevailing FX rates.
Commenting on the results, Ben Habib, Chief Executive of First Property Group, said:
"I am very pleased by the continued good progress made by the Group.
"Assets under management have grown by 43% since the prior year and we have additional commitments which, once invested, will result in further growth.
"The quality of our earnings has continued to improve with very nearly all our profits being earned from activities of a recurring nature.
"The assets we own and manage are performing well, as are the economies in which we operate and we expect continued earnings growth.
"The contribution to earnings from Group Properties has increased substantially in recent years as a result of us taking advantage of opportunities for which we had no fund management mandates. Going forward, we expect the relative contribution from fund management to rise. The synergies between these two activities further balance the business.
"We are confident that our strong balance sheet, operational gearing and experienced team will continue to drive the Group's growth and look forward to taking advantage of the in-built opportunities available to us."
A briefing for analysts will be held at 10:30hrs today at the headquarters of First Property Group plc, 32 St James's Street, London, SW1A 1HD. Participants can also attend by telephone on +44 (20) 3043 2014 (pin 013555). 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 audio call will subsequently be posted on the company website, www.fprop.com.
For further information please contact:
First Property Group plc Tel: 020 7340 0270 Ben Habib (Chief Executive www.fprop.com & Chief Investment Officer) George Digby (Group Finance Director) Jeremy Barkes (Director, Business Development) Arden Partners Tel: 020 7614 5900 Chris Hardie/ Ben Cryer Redleaf Communications Tel: 020 7382 4747 Rebecca Sanders-Hewett/ Susie firstproperty@redleafpr.com Hudson / Henry Columbine
Notes to Investors and Editors:
First Property Group plc is an award winning property fund manager and investor with operations in the United Kingdom and Central Europe. Around one third of the shares in the Company are owned by management and their families.
Its focus is on higher yielding commercial property with sustainable cash flows. The company is flexible and takes an active approach to asset management. Its earnings are derived from:
-- Fund management - via its FCA regulated and AIFMD approved subsidiary, First Property Asset Management Ltd (FPAM), which earns fees from investing for third parties in property. FPAM currently manages nine funds which are invested across the United Kingdom, Poland and Romania. FPAM funds rank No.1 versus MSCI's Investment Property Databank (IPD) Central & Eastern Europe (CEE) universe for the ten years from the commencement of its operations in Poland in 2005 to 31 December 2015, and for the annualised periods from 2005 to the end of each of the years between 31 December 2008 and 31 December 2015.
-- Group Properties - principal investments by the Group, to earn a return on its own capital, usually in partnership with third parties. Investments include eleven directly held properties in Poland and Romania (including five held by Fprop Opportunities plc [FOP], in which the Group is currently the majority shareholder), and interests in six other funds managed by FPAM.
Listed on AIM the Company has offices in London and Warsaw. 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 interim results for the six months ended 30 September 2016.
Revenue earned by the Group amounted to GBP11.12 million (2015: GBP10.95 million) yielding a profit before tax of GBP4.47 million (2015: GBP4.46 million restated). Profit before tax was maintained without any contribution from performance fees (2015: GBP864,000) or from development profits from Fprop PDR (2015: GBP163,000) and despite the discontinuation of the fund management contract with Universities Superannuation Scheme (USS) last year (2015: GBP301,000).
The main new sources of income which replaced this non-recurring income were:
-- Foreign exchange gains - the Euro was on average some 12% stronger versus Sterling during the period at EUR1.217 (2015: EUR1.386). This resulted in Group profit before tax being GBP620,000 higher than if on a constant currency basis;
-- Additional income from co-investments - our share of results in associates increased to GBP271,000 (2015: GBP65,000) mainly due to our co-investment in two new funds established in Poland and in Romania in the last financial year;
-- Fund management fees of GBP253,000 from increased investment by the Shipbuilding Industries Pension Scheme (SIPS) and from the establishment of the two new funds referred to above; and
-- A realised profit of GBP144,000 from the strategic sale of shares in Fprop Opportunities plc (FOP).
Diluted earnings per share were 2.40 pence (2015: 2.89 pence restated). The reduction was mainly due to a higher provision for deferred tax liabilities of GBP645,000 (2015: GBP73,000) resulting from the impact of foreign exchange movements and changes in accounting treatment under UK GAAP.
The Group ended the period with reported net assets of GBP36.43 million (2015: GBP30.58 million restated). It is the accounting policy of the Group to carry its properties and interests in associates at the lower of cost or market value. The net assets of the Group when adjusted to their market value less any deferred tax liabilities, stood at GBP54.43 million (2015: GBP45.40 million restated). The increase in net assets is attributable mainly to a stronger Euro versus Sterling at the period end.
Group cash balances stood at GBP14.12 million (2015: GBP14.20 million) at the period end. Of this GBP5.34 million (2015: GBP3.26 million) was held by FOP (74% owned by the Group) and GBP326,000 (2015: GBP461,000) was held by Corp Sp z o,o. (90% owned by the Group), the property management company for Blue Tower in Warsaw. Our cash reserves enable us to take advantage of opportunities as they arise as well as to co-invest in new funds established by FPAM.
Dividend
The Directors have resolved to increase the interim dividend by 3.9% to 0.40 pence per share (2015: 0.385 pence per share) which will be paid on 30 December 2016 to shareholders on the register at 2 December 2016, with an ex-dividend date of 1 December 2016.
Review of Operations:
PROPERTY FUND MANAGEMENT - (First Property Asset Management Ltd or FPAM)
As at 30 September 2016 aggregate assets under management, calculated by reference to independent third party property valuations, stood at GBP405 million (2015: GBP283 million), including some GBP170.3 million (2015: GBP145.3 million) of properties held by the Group and FOP. Of these 48.6% were located in Poland, 46.6% in the UK and 4.8% in Romania.
Fund management fees are levied monthly by FPAM by reference to the value of properties under management.
The reconciliation of movement in funds under management during the period is shown below:
Funds managed Group Totals for third parties Properties (including funds (including in which the Group FOP) is a minority shareholder) ---------------- ----------------------------------- ----------------- ----------------- UK CEE Total No. All No. AUM No. GBPm. GBPm. GBPm. of CEE of GBPm. of prop's GBPm. prop's prop's ---------------- ------- ------- ------- -------- ------- -------- ------- -------- As at 1 April 2016 154.7 41.5 196.2 50 156.9 11 353.1 61 ---------------- ------- ------- ------- -------- ------- -------- ------- -------- Purchases 37.7 - 37.7 6 - - 37.7 6 Sales - - - - - - - Property Depreciation - - - - (0.8) - (0.8) - Property Revaluation (4.0) 0.7 (3.3) - (0.1) - (3.4) - FX Revaluation - 3.9 3.9 - 14.3 - 18.2 - As at 30 Sept 2016 188.4 46.1 234.5 56 170.3 11 404.8 67 ---------------- ------- ------- ------- -------- ------- -------- ------- --------
Revenue earned by this division amounted to GBP918,000 (2015: GBP1.85 million), resulting in a profit before unallocated central overheads and tax of GBP273,000 (2015: GBP1.19 million) and representing 4.5% (2015: 18.5%) of Group profit before unallocated central overheads and tax.
The decline in revenue, in spite of the increase in assets under management, was due to the absence of performance fees (2015: GBP864,000) and the expiry last year of FPAM's fund management contract with USS (2015: GBP301,000).
FPAM now manages nine (2015: eight) closed-end funds. A brief synopsis of the value of assets and maturity of each of these vehicles is set out below:
Fund Country Fund Assets % of total Assets of investment expiry under assets under management under management at market management at market value value at at 30 September 30 September 2016 2015 -------------------- --------------- -------- -------------- ------------ -------------- SAM Property UK Rolling * * * Company Ltd (SAM) Regional Poland Aug GBP7.0m 1.7% GBP6.3m Property 2020 Trading Ltd (RPT) 5(th) Property Poland Dec GBP8.5m 2.1% GBP7.8m Trading Ltd 2022 (5PT) UK Pension UK Feb GBP93.1m 23% GBP95.1m Property 2017 Portfolio LP (UK PPP) Fprop PDR UK May Nil - Nil LP 2018 (commitment of GBP42m) SIPS Property UK Jan GBP95.3m 23.6% GBP28.0m Nominee Ltd 2025 (commitment (SIPS) of GBP170m) Fprop Romanian Romania Jan GBP10.2m 2.5% - Supermarkets 2026 Ltd (FRS) Fprop Galeria Poland Jan GBP20.4m 5.0% - Corso Ltd 2026 (FGC) -------------------- --------------- -------- -------------- ------------ -------------- Sub Total GBP234.5 57.9% GBP137.2m m -------------------- --------------- -------- -------------- ------------ -------------- Fprop Opportunities Poland Oct GBP67.0m 16.6% GBP55.5m plc (FOP) 2020 Group Properties Poland n/a GBP103.3m 25.5% GBP89.8m & Romania -------------------- --------------- -------- -------------- ------------ -------------- Sub Total GBP170.3m 42.1% GBP145.3m -------------------- --------------- -------- -------------- ------------ -------------- Total GBP404.8m 100% GBP282.5m -------------------- --------------- -------- -------------- ------------ --------------
* Not subject to recent revaluation
We have made good progress in investing the SIPS fund, awarded to us in January 2015. At 30 September the value of the properties acquired by it stood at GBP95.3 million. We have since completed the purchase of a further GBP14.6 million of commercial property on its behalf, and have a further GBP47.1 million of property under offer. In October 2016 SIPS increased its minimum commitment to the fund from GBP125 million to GBP170 million. We expect this fund to be fully invested before the financial year-end.
At the period end FPAM's fund management fee income, excluding performance fees, was being earned at an annualised rate of GBP1.9 million (2015: GBP1.3 million), a year on year increase of 46%. We expect this rate to increase as we continue to invest on behalf of SIPS and as we win new contracts. FPAM's weighted average unexpired fund management contract term increased to 6.42 years (2015: 3.75 years).
GROUP PROPERTIES
Group Properties comprises eleven commercial properties in Poland and Romania, including five held by FOP (in which the Group is currently the majority shareholder), and non-controlling interests in six of the nine funds managed by FPAM, as set out in the tables below. New investments by Group Properties are expected to be non-controlling interests.
It is the Group's policy to carry its properties and interests in associates at the lower of cost or market value for accounting purposes, and to recognise dividends when received.
1. Properties held at 30 September 2016: Country No. Book Market Contribution Contribution of properties value value to Group to Group profit profit before before tax period tax period to 30 to 30 September September 2016 2015 ------------ --------------- ---------- ---------- ------------- ------------------- Poland 3 GBP79.6m GBP94.0m GBP3.15m GBP2.79m Romania 3 GBP6.0m GBP9.3m GBP0.58m GBP0.45m FOP (All 5 GBP58.7m GBP67.0m GBP1.92m GBP1.72m in Poland) ------------ --------------- ---------- ---------- ------------- ------------------- Total 11 GBP144.3m GBP170.3m GBP5.65m GBP4.96m ------------ --------------- ---------- ---------- ------------- ------------------- 2. Non-controlling interests in funds and joint ventures managed by FPAM at 30 September 2016: Fund % owned Book Current Group's Group's by value market share share First of First value of pre-tax of pre-tax Property Property's of holdings profits profits Group share earned earned in by fund by fund fund 30 September 30 September 2016 2015 ----- ---------- ------------- ------------- -------------- -------------- Interest in associates 5PT 37.8% GBP560,000 GBP1,012,000 GBP61,000 GBP59,000 RPT 28.6% GBP185,000 GBP220,000 GBP26,000 GBP6,000 FRS 24.1% GBP766,000 GBP764,000 GBP83,000 - FGC 28.2% GBP1,587,000 GBP1,661,000 GBP101,000 - ----- ---------- ------------- ------------- -------------- -------------- Sub Total GBP3,098,000 GBP3,657,000 GBP271,000 GBP65,000 ----------------- ------------- ------------- -------------- -------------- Investments UK PPP 0.9% GBP905,000 GBP905,000 GBP18,000 GBP29,000 Fprop 5% GBP13,000 GBP13,000 - GBP163,000 PDR LP -------- ----- ----------- ----------- ---------- ----------- Sub Total GBP918,000 GBP918,000 GBP18,000 GBP192,000 --------------- ----------- ----------- ---------- ----------- Total GBP4,016,000 GBP4,575,000 GBP289,000 GBP257,000 ------ ------------- ------------- ----------- -----------
Revenue from Group Properties amounted to GBP10.20 million (2015: GBP9.10 million), generating a profit before unallocated central overheads and tax of GBP5.84 million (2015: GBP5.22 million) and representing 95.5% (2015: 81.5%) of Group profit before unallocated central overheads and tax.
The contribution to Group earnings by the Group's eleven properties, but excluding its non-controlling interests in funds managed by FPAM, is detailed below:
Six months to Six months to 30 Sep 2016 30 Sep 2015 EURm. EURm. --------------------- -------------- -------------- Net operating income (NOI) 9.66 9.69 Interest expense on bank loans / finance leases (1.67) (1.92) --------------------- -------------- -------------- NOI after interest expense 7.99 7.77 Current tax (0.61) (0.53) Debt amortisation (3.60) (3.47) Capital expenditure (0.46) (1.38) --------------------- -------------- -------------- Free cash 3.32 2.39 --------------------- -------------- -------------- Market value of properties EUR196.87 EUR197.16 Average yield on market value 9.8% 9.8% Bank loans/ finance leases outstanding EUR141.00 EUR146.96 Loan to value (LTV) 71.6% 74.5% Weighted average 3.73yrs 4.39yrs unexpired lease term (WAULT) Vacancy rate 1.8% 4.0% --------------------- -------------- --------------
The loans secured against these eleven properties are each held in separate non-recourse special purpose vehicles.
In order to mitigate potential interest rate rises we have fixed the interest rate on a proportion of the loans. A one percentage point increase from current market interest rates would increase the annual interest bill by GBP602,000 per annum. The current weighted average borrowing cost is 2.59% (2015: 2.87%) per annum.
The income return from our four associate shareholdings in funds managed by FPAM contributed GBP271,000 (2015: GBP65,000) to Group profit before tax prior to the deduction of unallocated central overheads, representing 4.6% of the contribution by Group Properties. This represents a net increase of GBP206,000 from the same period last year and is primarily a result of the new investments in Fprop Romanian Supermarkets Ltd and Fprop Galeria Corso Ltd, both made in the second half of the last financial year.
Now that FOP is fully invested and generating the kind of returns we had hoped of it at its establishment in 2010, the Group has begun to sell some of its shareholding. During the period it sold GBP370,000 of shares and loan notes, resulting in a profit of GBP144,000. It is the Group's long term aim to continue to reduce its interest in FOP until it ceases to be consolidated in the Group's results, following which the Group will recognise only its share of FOP's profits and FPAM will recognise fund management fees earned from it.
Commercial Property Markets Outlook
Poland:
GDP growth in Poland continues to exceed that of most other EU nations, and is forecast to be 3.7% in 2016 and 3.6% in 2017. Inflation has been negative since the second half of 2014 but is expected to turn positive in the next few months. Government debt remains low by international standards at some 54% of GDP. There are concerns that economic growth may slow in due course due to the populist policies of the new government (elected Oct-2015) but the government is showing pragmatism by implementing its policies on generally milder terms than first proposed.
Rent levels for office property in Warsaw and other main cities have generally softened over the past couple of years, as the pace of new development has increased. Capital values for prime property have increased but for good secondary property, of the sort we favour, values remain largely unchanged from their credit crunch lows, yielding around one third more than equivalent property in Western Europe.
Investment demand from international investors remains high and transaction volumes in 2016 are expected to exceed the EUR4 billion recorded in 2015, which was the second highest year on record in Poland and the highest since the onset of the credit crunch.
Government plans to introduce REIT legislation in Poland should lead to increased domestic demand for commercial property in due course.
Romania:
The economic backdrop in Romania is favourable for property investment. Growth in GDP is expected to top 4% this year.
Occupier demand as well as investor demand for commercial property is picking up albeit from a relatively low level.
Meanwhile bank lending margins, which started the year at more than twice those available in Poland, are beginning to reduce, which should boost investment demand for commercial property.
United Kingdom:
Economic growth in the UK following the Referendum has been much stronger than very nearly all economists and the Bank of England predicted. The UK remains on track to finish 2016 as the fastest growing G7 nation (with GDP growth of around 2%).
Growth in GDP is expected to slow in 2017 but the forecast rate is still a respectable 1.5% and is likely to exceed expectations again.
Commercial property values fell in the wake of the Referendum, in particular for properties with shorter leases, or requiring asset management. Prime properties with longer leases were less affected, apart from in Scotland, due to heightened fears of a second referendum on Scottish independence.
It is our view that values will recover. The occupier market remains robust and the Bank of England's decision in August to cut the base rate from 0.5% to 0.25% and institute a further round of QE will provide substantial support.
Current Trading and Prospects
I am very pleased by the continued good progress made by the Group.
Assets under management have grown by 43% since the prior year and we have additional commitments which, once invested, will result in further growth.
The quality of our earnings has continued to improve with very nearly all our profits being earned from activities of a recurring nature.
The assets we own and manage are performing well, as are the economies in which we operate and we expect continued earnings growth.
The contribution to earnings from Group Properties has increased substantially in recent years as a result of our taking advantage of opportunities for which we had no fund management mandates. Going forward, we expect the relative contribution from fund management to rise. The synergies between these two activities further balance the business.
We are confident that our strong balance sheet, operational gearing and experienced team will continue to drive the Group's growth and look forward to taking advantage of the in-built opportunities available to us.
Ben Habib
Chief Executive
23 November 2016
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months to 30 September 2016
Notes Six months Six months Year to to to 30 Sept 30 Sept 31 March 2016 (unaudited) 2015 (unaudited) 2016 Restated (audited) Total Total Total results results results -------------------------- ------ ------------------- ------------------- ----------- GBP'000 GBP'000 GBP'000 Revenue 2 11,121 10,947 21,955 -------------------------- ------ ------------------- ------------------- ----------- Cost of sales (1,893) (1,773) (4,255) Gross profit 9,228 9,174 17,700 Reversal of impairment loss to investment properties 142 556 462 Operating expenses (3,897) (4,080) (8,404) Operating profit 2 5,473 5,650 9,758 Profit on sale of 144 - - subsidiary investment Share of results in associates 271 65 170 Distribution income 18 192 223 Interest income 3 81 69 126 Interest expense 3 (1,514) (1,518) (2,931) Profit before tax 2 4,473 4,458 7,346 Tax charge 4 (1,220) (661) (1,687) -------------------------- ------ ------------------- ------------------- ----------- Profit for the period 3,253 3,797 5,659 Attributable to: Owners of the parent 2,849 3,417 5,008 Non-controlling interest 404 380 651 3,253 3,797 5,659 Earnings per Ordinary 1p share -basic 5 2.46p 2.99p 4.37p -diluted 5 2.40p 2.89p 4.28p -------------------------- ------ ------------------- ------------------- -----------
CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
for the six months to 30 September 2016
Notes Six months Six months Year to to 30 to 31 March Sept 2016 30 Sept 2016 2015 unaudited unaudited audited ----------------------------------- ------- ----------- ----------- ---------- GBP'000 GBP'000 GBP'000 ----------------------------------- ------- ----------- ----------- ---------- Profit for the period 3,253 3,797 5,659 -------------------------------------------- ----------- ----------- ---------- Other comprehensive income Exchange difference on retranslation of foreign subsidiaries 286 (3,161) (1,346) Revaluation of available-for-sale financial assets - 13 11 Taxation - - - Total comprehensive income for the period 3,539 649 4,324 -------------------------------------------- ----------- ----------- ---------- Total comprehensive income for the period: Owners of the parent 3,321 659 3,486 Non-controlling interest 218 (10) 838 -------------------------------------------- ----------- ----------- ---------- 3,539 649 4,324 ------------------------------------------- ----------- ----------- ----------
CONDENSED CONSOLIDATED BALANCE SHEET
as at 30 September 2016
Notes As at As at As at 30 Sept 30 Sept 31 March 2016 (unaudited) 2015 (unaudited) 2016 (audited) Restated ------------------------------ ------ ------------------ ------------------ ---------------- GBP'000 GBP'000 GBP'000 Non-current assets Goodwill 153 153 153 Investment properties 6 129,333 112,956 120,718 Property, plant and equipment 181 162 186 Interest in associates 7a 3,098 675 3,044 Other financial assets 7b 918 916 914 Other receivables 8 139 228 186 Deferred tax assets 3,430 4,100 3,016 ------------------------------ ------ ------------------ ------------------ ---------------- Total non-current assets 137,252 119,190 128,217 Current assets Inventories - land and buildings 14,998 12,958 13,894 Current tax assets 123 52 56 Trade and other receivables 8 5,307 5,378 10,128 Cash and cash equivalents 14,115 14,202 8,975 ------------------------------ ------ ------------------ ------------------ ---------------- Total current assets 34,543 32,590 33,053 Current liabilities Trade and other payables 9 (7,685) (7,869) (7,938) Financial liabilities 10a (8,383) (6,101) (7,668) Current tax liabilities (187) (162) (200) ------------------------------ ------ ------------------ ------------------ ---------------- Total current liabilities (16,255) (14,132) (15,806) ------------------------------ ------ ------------------ ------------------ ---------------- Net current assets 18,288 18,458 17,247 ------------------------------ ------ ------------------ ------------------ ---------------- Total assets less current liabilities 155,540 137,648 145,464 ------------------------------ ------ ------------------ ------------------ ---------------- Non-current liabilities Financial liabilities 10b (115,519) (104,061) (108,992) Deferred tax liabilities (3,593) (3,003) (2,382) Net assets 36,428 30,584 34,090 ------------------------------ ------ ------------------ ------------------ ---------------- Equity Called up share capital 1,166 1,149 1,166 Share premium 5,777 5,508 5,773 Foreign Exchange Translation Reserve (1,679) (3,389) (2,151) Investment revaluation reserve (38) (36) (38) Share-based payment reserve 203 218 203 Retained earnings 28,789 26,076 27,231 ------------------------------ ------ ------------------ ------------------ ---------------- Equity attributable to the owners of the
parent 34,218 29,526 32,184 Non-controlling interest 2,210 1,058 1,906 ------------------------------ ------ ------------------ ------------------ ---------------- Total equity 36,428 30,584 34,090 ------------------------------ ------ ------------------ ------------------ ---------------- Net assets per share 5 29.50p 25.86p 27.75p ------------------------------ ------ ------------------ ------------------ ----------------
CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
for the six months to 30 September 2016
Share Share Share Foreign Purchase/Sale Investment Retained Non-controlling TOTAL capital premium Based Exchange of own Shares Revaluation Earnings Interest Restated Payment Translation Reserve Restated Reserve Reserve ------------------ -------- -------- -------- ------------ -------------- ------------ --------- ---------------- --------- GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ------------------ -------- -------- -------- ------------ -------------- ------------ --------- ---------------- --------- At 1 April 2015 1,149 5,505 203 (618) (173) (49) 23,908 1,094 31,019 ------------------ -------- -------- -------- ------------ -------------- ------------ --------- ---------------- --------- Profit for the period Fair value (or revaluation) gains on - - - - - - 3,797 - 3,797 available- for- sale assets - - - - - 13 - - 13 Movement on foreign exchange - - - (2,771) - - - (390) (3,161) Share based payments - - 15 - - - - - 15 New shares issued - - - - - - - - - Non-controlling interest - - - - - - (380) 380 - Sale of treasury shares - 3 - - 66 - - - 69 Dividends paid - - - - - - (1,142) (26) (1,168) At 30 Sept 2015 1,149 5,508 218 (3,389) (107) (36) 26,183 1,058 30,584 ------------------ -------- -------- -------- ------------ -------------- ------------ --------- ---------------- --------- Profit for the period - - - - - - 1,862 - 1,862 Fair value (or revaluation) gains on available- for- sale assets - - - - - (2) - - (2) Movement on foreign exchange - - - 1,238 - - - 577 1,815 Share based payments - - (15) - - - - - (15) New shares issued 17 258 - - - - - - 275 Non-controlling interest - - - - - - (271) 271 - Sale of treasury Shares - 7 - - 4 - - - 11 Dividends paid - - - - - - (440) - (440) ------------------ -------- -------- -------- ------------ -------------- ------------ --------- ---------------- --------- At 1 April 2016 1,166 5,773 203 (2,151) (103) (38) 27,334 1,906 34,090 ------------------ -------- -------- -------- ------------ -------------- ------------ --------- ---------------- --------- Profit for the period Change in proportion held by non - - - - - - 3,253 - 3,253 controlling interest - - - - - - - 100 100 Movement on foreign exchange - - - 472 - - - (186) 286 Share based - - - - - - - - - payments Non-controlling interest - - - - - - (404) 404 - Sale of treasury shares - 4 - - 2 - - - 6 Dividends paid - - - - - - (1,293) (14) (1,307) ------------------ -------- -------- -------- ------------ -------------- ------------ --------- ---------------- --------- At 30 Sept 2016 1,166 5,777 203 (1,679) (101) (38) 28,890 2,210 36,428 ------------------ -------- -------- -------- ------------ -------------- ------------ --------- ---------------- ---------
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
for the six months to 30 September 2016
Six months Six months Year to to to 30 Sept 2015 (unaudited) 30 Sept Restated 31 March 2016 (unaudited) 2016 (audited) ----------------------------------- ------ ------------------- ------------- ------------ Notes GBP'000 GBP'000 GBP'000 ----------------------------------- ------ ------------------- ------------- ------------ Cash flows from operating activities Operating profit 5,473 5,650 9,758 Adjustments for: Depreciation of investment property, and property, plant & equipment 976 815 1,704 Reversal of impairment loss to investment properties 6 (142) (556) (462) Share based payments - 15 - (Increase)/decrease in inventories (135) (141) (291) (Increase)/decrease in trade and other receivables (122) 307 903 Increase/(decrease) in trade and other payables (364) 241 (356) Other non-cash adjustments 40 43 460 Cash generated from operations 5,726 6,374 11,716 Income taxes paid (667) (357) (922) ----------------------------------- ------ ------------------- ------------- ------------ Net cash flow from operating activities 5,059 6,017 10,794 ----------------------------------- ------ ------------------- ------------- ------------ Cash flow from investing activities Capital expenditure on investment properties (176) (1,009) (1,216) Proceeds from partial disposal of available-for-sale assets 153 627 628 Purchase of property, plant and equipment (16) (125) (197) Consideration from the 244 - - sale of FOP shares Investment in shares of new associates - - (2,293) Dividends from associates 7a 64 62 90 Distributions received 18 192 223 Interest received 3 81 69 126 ----------------------------------- ------ ------------------- ------------- ------------ Net cash flow from /(used in) investing activities 368 (184) (2,639)
----------------------------------- ------ ------------------- ------------- ------------ Cash flow from financing activities Net repayment of shareholder loans in subsidiaries (75) (48) (95) Interest paid 3 (1,455) (1,462) (2,825) Proceeds from bank loan - 7,813 8,993 Repayment of finance leases/bank loans (2,958) (9,015) (11,787) Short term loan to an associate 5,083 - (4,729) Sale of shares held in Treasury 6 69 80 Proceeds from the issue of share capital - - 275 Dividends paid (1,293) (1,142) (1,582) Dividends paid to non-controlling interest (14) (26) (26) ----------------------------------- ------ ------------------- ------------- ------------ Net cash flow (used in) financing activities of continuing operations (706) (3,811) (11,696) Net increase/(decrease) in cash and cash equivalents 4,721 2,022 (3,541) ----------------------------------- ------ ------------------- ------------- ------------ Cash and cash equivalents at the beginning of period 8,975 12,240 12,240 ----------------------------------- ------ ------------------- ------------- ------------ Currency translation gains/(losses) on cash and cash equivalents 419 (60) 276 ----------------------------------- ------ ------------------- ------------- ------------ Cash and cash equivalents at the end of the period 14,115 14,202 8,975 ----------------------------------- ------ ------------------- ------------- ------------
NOTES TO THE CONDENSED CONSOLIDATED RESULTS
for the six months ended 30 September 2016
1. Basis of Preparation
-- These interim condensed consolidated financial statements for the six months ended 30 September 2016 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 2016 and are in compliance with IAS 34 "Interim Financial Reporting". These accounting policies are drawn up in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and as adopted by the European Union (EU).
-- The comparative figures for the half year ended 30 September 2015 have been restated from those previously reported. The restated figures include one adjustment for GBP1,471,000 being an accrual for staff incentives pro-rated in line with the full year's charge. There has been no re-statement for the comparative figure for the full year ended 31 March 2016. See note 5 for a reconciliation of the restated earnings and net assets.
-- The comparative figures for the financial year ended 31 March 2016 are not the statutory accounts for the financial year but are abridged from those accounts prepared under IFRS which have been reported on by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified, did not include references to any matter to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
-- These interim financial statements were approved by a committee of the Board on 22 November 2016.
2. Segmental Analysis
Segment reporting six months to 30 September 2016
The parent holding company costs and related listing costs are shown separately under unallocated central costs.
Property fund Group properties Group fund Unallocated central TOTAL management properties ("FOP") overheads --------------------- --------------------- ----------------- -------------------- --------------------- -------- GBP'000 GBP'000 GBP000 GBP'000 GBP'000 Total Revenue 918 6,800 3,403 - 11,121 Depreciation and amortisation (17) (864) (95) - (976) --------------------- --------------------- ----------------- -------------------- --------------------- -------- Operating profit Existing operations 273 4,422 2,427 (1,649) 5,473 Profit on sale of subsidiary investment - 144 - - 144 Share of results in associates - 271 - - 271 Distribution income - 18 - - 18 Interest income - 51 20 10 81 Interest expense - (719) (795) - (1,514) --------------------- --------------------- ----------------- -------------------- --------------------- -------- Profit/(loss) before tax 273 4,187 1,652 (1,639 ) 4,473 --------------------- --------------------- ----------------- -------------------- --------------------- -------- Analysed as: Before performance fees and related items: 273 5,235 1,576 (445) 6,639 Performance fees - - - - - Reversal of impairment loss to investment properties - - 142 - 142 Depreciation - (812) - - (812) Staff incentives - - - (1,113) (1,113) Realised foreign currency loss - (236) (66) (81) (383) Profit/(loss) before tax 273 4,187 1,652 (1,639) 4,473 --------------------- --------------------- ----------------- -------------------- --------------------- --------
Revenue for the six months to 30 September 2016 from continuing operations consists of revenue arising in the United Kingdom 6% (2015: 14%) and Central and Eastern Europe 94% (2015: 86%) and all relates solely to the Group's principal activities.
Segment reporting six months to 30 September 2015 as restated
Property fund Group properties Group fund Unallocated TOTAL management properties ("FOP") central overheads As restated -------------------- -------------------- ----------------- ------------------- ------------------- ------------- GBP'000 GBP'000 GBP000 GBP'000 GBP'000 Total Revenue 1,845 6,099 3,003 - 10,947 Depreciation and amortisation (13) (747) (55) - (815) -------------------- -------------------- ----------------- ------------------- ------------------- ------------- Operating profit Existing operations 1,188 3,952 2,471 (1,961) 5,650 Share of results in associates - 65 - - 65 Distribution income - 192 - - 192 Interest income - 14 45 10 69 Interest expense - (721) (797) - (1,518) -------------------- -------------------- ----------------- ------------------- ------------------- ------------- Profit/(loss) before tax 1,188 3,502 1,719 (1,951) 4,458 -------------------- -------------------- ----------------- ------------------- ------------------- ------------- Analysed as: Before performance fees and related items: 324 4,324 1,242 (480) 5,410 Performance fees 864 - - - 864 Reversal of impairment loss to investment
properties - - 556 - 556 Depreciation - (717) - - (717) Staff incentives as restated - - - (1,471) (1,471) Realised foreign currency loss - (105) (79) - (184) Profit/(loss) before tax 1,188 3,502 1,719 (1,951) 4,458 -------------------- -------------------- ----------------- ------------------- ------------------- -------------
Segment reporting year to 31 March 2016
Property Group Group Unallocated TOTAL fund properties fund central management properties overheads ("FOP") ----------------------- ------------ ------------ ------------ ------------ ---------- GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ----------------------- ------------ ------------ ------------ ------------ ---------- Total revenue 2,895 12,894 6,166 - 21,955 ----------------------- ------------ ------------ ------------ ------------ ---------- Depreciation and amortisation (31) (1,535) (138) - (1,704) ----------------------- ------------ ------------ ------------ ------------ ---------- Operating profit 1,384 7,316 3,962 (2,904) 9,758 Share of results in associates - 170 - - 170 Distribution income - 223 - - 223 Interest income - 101 5 20 126 Interest expense - (1,424) (1,507) - (2,931) Profit/(loss) before tax 1,384 6,386 2,460 (2,884) 7,346 ----------------------- ------------ ------------ ------------ ------------ ---------- Analysed as: Before performance fees and related items 783 8,268 2,321 (899) 10,473 Performance fees 1,131 - - - 1,131 Reversal of impairment loss to investment properties - - 462 - 462 Depreciation - (1,450) - - (1,450) Provision (49) (17) (17) (663) (746) Staff incentives (481) (169) (164) (1,610) (2,424) Realised foreign currency gain/(loss) - (246) (142) 288 (100) Profit/(loss) before tax 1,384 6,386 2,460 (2,884) 7,346 ----------------------- ------------ ------------ ------------ ------------ ---------- Assets - Group 497 88,670 62,283 6,776 158,226 Share of net assets of associates - 3,352 - (308) 3,044 Liabilities (249) (76,454) (48,132) (2,345) (127,180) ----------------------- ------------ ------------ ------------ ------------ ---------- Net Assets 248 15,568 14,151 4,123 34,090 ----------------------- ------------ ------------ ------------ ------------ ----------
Assets, liabilities and costs that relate to Group central activities (including free cash) have not been allocated to business segments.
3. Interest income/(expense) Sept 2016 Sept 2015 March 2016 ----------------------- ---------- ---------- -------- GBP'000 GBP'000 GBP'000 Interest income - bank deposits 18 18 36 Interest income - other 63 51 90 Total interest income 81 69 126 ----------------------- ---------- ---------- -------- Sept 2016 Sept 2015 March 2016 ------------------------ ---------- ---------- -------- GBP'000 GBP'000 GBP'000 Interest expense - property loans (1,141) (1,153) (2,254) Interest expense - bank and other (59) (51) (106) Finance charges on finance leases (314) (314) (571) ------------------------ ---------- ---------- -------- Total interest expense (1,514) (1,518) (2,931) ------------------------ ---------- ---------- -------- 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.
Sept 2016 Sept 2015 March 2016 -------------- ---------- ---------- -------- GBP'000 GBP'000 GBP'000 Current tax (575) (588) (1,203) Deferred tax (645) (73) (484) -------------- ---------- ---------- -------- Total (1,220) (661) (1,687) -------------- ---------- ---------- -------- 5. Earnings/NAV per share
The basic earnings per ordinary share is calculated on the profit on ordinary activities after taxation and after non-controlling interests on the weighted average number of ordinary shares in issue, during the period.
Figures in the table below have been used in the calculations.
Six months Six months Year ended ended ended 30 Sept 30 Sept 31 March 2016 2015 Restated 2016 --------------------------- ------------ --------------- ------------ Basic - pence per Share 2.46p 2.99p 4.37p Diluted - pence per Share 2.40p 2.89p 4.28p --------------------------- ------------ --------------- ------------ Number Number --------------------------- ------------ --------------- ------------ Weighted average number of ordinary shares in issue for basic 115,967,888 114,177,240 114,543,523 Share options 2,700,000 4,450,000 2,700,000 --------------------------- ------------ --------------- ------------ Total for diluted 118,667,888 118,627,240 117,243,523 --------------------------- ------------ --------------- ------------ GBP'000 GBP'000 GBP'000 --------------------------- ------------ --------------- ------------ Basic earnings as previously reported 2,849 4,888 5,008 Restatement for staff - (1,471) - incentive --------------------------- ------------ --------------- ------------ Basic earnings as restated 2,849 3,417 5,008 --------------------------- ------------ --------------- ------------ Adjustment for dilution 4 7 8 Diluted earnings assuming full dilution 2,853 3,424 5,016 --------------------------- ------------ --------------- ------------ Six months Six months Year ended ended ended 30 Sept 30 Sept 31 March 2016 2015 2016 Restated ---------------------- ----------- ----------- ---------- Net assets per share 29.50p 25.86p 27.75p Adjusted net assets per share 45.86p 38.27p 43.01p ---------------------- ----------- ----------- ----------
The following numbers have been used to calculate both the net assets and adjusted net assets per share.
Number Number Number ---------------------------- ------------ ------------ ------------ Number of shares in issue at period end 115,980,040 114,192,541 115,967,111 ---------------------------- ------------ ------------ ------------ GBP'000 GBP'000 GBP'000 Restated ---------------------------- ------------ ------------ ------------ Net assets excluding non- controlling interest 34,218 29,526 32,184 Adjusted net assets Number Number Number per share ---------------------------- ------------ ------------ ------------ Number of shares in issue at period end 115,980,040 114,192,541 115,967,111 Number of share options assumed to be exercised 2,700,000 4,450,000 2,700,000 ---------------------------- ------------ ------------ ------------
Total 118,680,040 118,642,541 118,667,111 ---------------------------- ------------ ------------ ------------ Adjusted net assets GBP'000 GBP'000 GBP'000 per share ---------------------------- ------------ ------------ ------------ Net assets excluding non-controlling interest 34,218 30,997 32,184 Restatement of net - (1,471) - assets Adjustments for market value of assets less deferred tax 19,359 14,814 18,133 Other adjustments 850 1,059 716 ---------------------------- ------------ ------------ ------------ Total 54,427 45,399 51,033 ---------------------------- ------------ ------------ ------------
6. Investment Properties
Six months Six months Year ended ended ended 30 Sept 30 Sept 31 March 2016 2015 2016 ------------------------------ ----------- ----------- ---------- GBP'000 GBP'000 GBP'000 ------------------------------ ----------- ----------- ---------- 1 April 120,718 114,262 114,262 Capital expenditure 176 1,009 1,216 Depreciation (947) (786) (1,654) Fair value adjustment 142 556 462 Foreign exchange translation 9,244 (2,085) 6,432 End of period 129,333 112,956 120,718 ------------------------------ ----------- ----------- ---------- 7. Interest in Associates and Other Financial Assets Six months Six months Year ended ended ended 30 Sept 30 Sept 31 March 2016 2015 2016 ----------------------------- ----------- ----------- ---------- a) Associated undertakings GBP'000 GBP'000 GBP'000 Cost of investment at beginning of period 3,044 671 671 Additions - - 2,293 Disposals (153) - - Share of associates profit after tax 271 66 170 Dividends received (64) (62) (90) Cost of investment at end of period 3,098 675 3,044 ----------------------------- ----------- ----------- ---------- Investments in associated undertakings 5(th) Property Trading Ltd 868 838 871 Regional Property Trading Ltd 185 145 159 Fprop Romanian Supermarkets Ltd 766 - 737 Fprop Galeria Corso Ltd 1,587 - 1,585 ----------------------------- ----------- ----------- ---------- 3,406 983 3,352 Less: Group share of profit after tax withheld on sale of property to an associate in 2007 (308) (308) (308) ----------------------------- ----------- ----------- ---------- Cost of investment at end of period 3,098 675 3,044 ----------------------------- ----------- ----------- ---------- b) Other financial assets and investments ----------------------------- ----------- ----------- ---------- Cost of investment at beginning of period 914 1,531 1,531 Additions 4 - - Disposal - (627) (628) Net increase in fair value - 12 11 ----------------------------- ----------- ----------- ---------- Cost of investment at end of period 918 916 914 ----------------------------- ----------- ----------- ---------- 8. Trade and Other Receivables Six months Six months Year ended ended ended 30 Sept 30 Sept 31 March 2016 2015 2016 ------------------------- ----------- ----------- ---------- GBP'000 GBP'000 GBP'000 Current assets Trade receivables 1,758 1,756 1,684 Other receivables 3,159 2,971 7,554 Prepayments and accrued income 390 651 890 5,307 5,378 10,128 ------------------------- ----------- ----------- ---------- Non-current assets 139 228 186 ------------------------- ----------- ----------- ---------- 9. Trade and Other Payables Six months Six months Year ended ended ended 30 Sept 30 Sept 31 March 2016 2015 2016 -------------------- ----------- ----------- ---------- GBP'000 GBP'000 GBP'000 Trade payables 2,787 2,144 2,189 Other taxation and social security 673 1,336 575 Other payables and accruals 4,214 4,378 5,163 Deferred income 11 11 11 7,685 7,869 7,938 -------------------- ----------- ----------- ---------- 10. Financial Liabilities Six months Six months Year ended ended ended 30 Sept 30 Sept 31 March 2016 2015 2016 ---------------------------- ----------- ----------- ---------- GBP'000 GBP'000 GBP'000 a) Current liabilities Loans repayable by subsidiary (FOP) to third party shareholders 1,918 - 1,841 Bank loans 3,340 3,426 3,014 Finance leases 3,125 2,675 2,813 8,383 6,101 7,668 ---------------------------- ----------- ----------- ---------- b) Non-current liabilities Loans repayable by - 1,888 - subsidiary (FOP) to third party shareholders Bank loans 66,022 57,413 62,038 Finance leases 49,497 44,760 46,954 ---------------------------- ----------- ----------- ---------- 115,519 104,061 108,992 ---------------------------- ----------- ----------- ---------- c) Total obligations under financial liabilities Repayable within one year 8,383 6,101 7,668 Repayable within one and five years 99,041 67,584 93,150 Repayable after five years 16,478 36,477 15,842 ---------------------------- ----------- ----------- ---------- 123,902 110,162 116,660 ---------------------------- ----------- ----------- ----------
Loans repayable by Fprop Opportunities plc (FOP) to third party shareholders are unsecured and repayable on demand.
Eight bank loans and three finance leases (all denominated in Euros) totalling GBP121,984,000 (31 March 2016: GBP114,819,000) included within financial liabilities are secured against investment properties owned by the Group and Fprop Opportunities plc (FOP), and one property owned by the Group shown under inventories. These bank loans and finance leases are otherwise non-recourse to the Group's assets.
The interim results are being circulated to all shareholders and can be downloaded from the company's web site (www.fprop.com). Further copies can be obtained from the registered office at 32 St James's Street, London SW1A 1HD.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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November 23, 2016 02:00 ET (07:00 GMT)
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