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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
  0.00 0.0% 30.75 30.00 31.50 30.75 30.75 30.75 159,308 07:30:26
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Real Estate Investment & Services 12.1 -5.1 -6.8 - 34

First Property Group PLC Interim Results

26/11/2020 7:00am

UK Regulatory (RNS & others)


TIDMFPO

RNS Number : 5451G

First Property Group PLC

26 November 2020

 
 Date:        26 November 2020 
 On behalf    First Property Group plc ("First Property" or 
  of:          "the Group") 
 Embargoed:   0700hrs 
 

First Property Group plc

Interim Results for the six months to 30 September 2020

First Property Group plc (AIM: FPO), the award-winning property fund manager and investor with operations in the United Kingdom and Central Europe, today announces its interim results for the six months to 30 September 2020.

Highlights:

   --      Significant cash reserves at period end: GBP21.21 million (31 March 2020: GBP7.34 million); 
   --      Substantially reduced net debt: GBP19.83 million (31 March 2020: GBP57.19 million); 

-- Well positioned to weather the crisis and make judicious investments as the UK, Poland and Romania emerge from it;

   --      Fund management division AUM: GBP557 million (31 March 2020: GBP567 million); 

-- Weighted average unexpired fund management contract term: 4 years, 5 months (31 March 2020: 5 years, 0 months);

   --      Interim dividend maintained at 0.45 pence per share. 

Financial Summary:

 
                              Unaudited     Unaudited   Percentage         Audited 
                             Six months    Six months       change         Year to 
                             to 30 Sept    to 30 Sept                     31 March 
                                   2020          2019                         2020 
-------------------------  ------------  ------------  -----------  -------------- 
 Income Statement: 
-------------------------  ------------  ------------  -----------  -------------- 
 Statutory profit before       GBP2.08m      GBP2.98m      -30.20%        GBP5.52m 
  tax 
 Diluted earnings per 
  share                           0.46p         2.07p      -77.78%           4.29p 
 Total dividend per 
  share                           0.45p         0.45p            -           1.67p 
 Average EUR/GBP rate            1.1159        1.1246            -          1.1453 
 
 Balance Sheet at period 
  end: 
-------------------------  ------------  ------------  -----------  -------------- 
 Investment properties        GBP47.48m     GBP82.98m      -42.78%       GBP47.10m 
  and Inventories at 
  book value 
 Investment properties        GBP56.82m     GBP96.26m      -40.97%       GBP56.30m 
  and Inventories at 
  market value 
 
 Cash balances                GBP21.21m      GBP8.55m     +148.07%        GBP7.34m 
 Cash per share                  19.21p         7.72p     +148.83%           6.65p 
 
 Gross debt                   GBP41.04m     GBP67.50m      -39.20%       GBP64.53m 
 Net debt                     GBP19.83m     GBP58.95m      -66.36%      GBP57.19m* 
 
 Gearing ratio at book 
  value**                        46.56%        59.24%            -          57.32% 
 Gearing ratio at market 
  value***                       40.09%        49.93%            -          50.94% 
 
 Net assets at book           GBP47.11m     GBP46.45m       +1.42%       GBP48.05m 
  value 
 Net assets at market         GBP61.34m     GBP67.68m       -9.37%       GBP62.15m 
  value 
 Adjusted net assets 
  per share (EPRA basis)         54.28p        59.65p       -9.00%          55.00p 
 
 Period end EUR/GBP 
  rate                           1.1025        1.1303            -          1.1301 
 
 * Prior to completion of the sale of CH8 in April 2020. 
  ** Gearing ratio = Gross debt divided by gross debt plus 
  net assets at book value. 
  *** Gearing ratio = Gross debt divided by gross debt plus 
  net assets at market value. 
 
 

Commenting on the results, Ben Habib, Chief Executive of First Property Group, said:

"The sale of Cha ubińskiego 8 (CH8) in April released some GBP17 million in cash and put the Group in a strong position from which to navigate the economic fallout of the COVID pandemic.

"As a consequence of the sale there has been a reduction in rental income, which is the primary reason for the reduction in earnings reported today.

"This reduction should be temporary and last only until we reinvest the cash. We expect to do so in association with clients of the Group. Our aim is to invest some 10-20% of the equity required in any acquisition which, when coupled with bank debt, should enable us to acquire up to some GBP300 million in property.

"There is a great deal of flux in the market at the moment and we expect interesting opportunities to emerge next year. "

A briefing for analysts will be held at 11:00hrs today via Investor Meet Company. To participate it is necessary to register at https://www.investormeetcompany.com/first-property-group-plc/register-investor and select to meet the Company. Those who have already registered and selected to meet the company will be automatically invited. A copy of the accompanying investor presentation and a recording of the call will be posted on the company website.

For further information please contact:

 
 First Property Group plc                    Tel: +44 (20) 7340 
                                              0270 
 Ben Habib (Chief Executive Officer)         www.fprop.com 
  Laura James (Interim Group Finance          investor.relations@fprop.com 
  Director) 
  Jeremy Barkes (Director, Business 
  Development) 
  Jill Aubrey (Company Secretary) 
 
 Arden Partners (NOMAD & Broker)             Tel: + 44 (20) 7614 
                                              5900 
 John Llewellyn-Lloyd (Director, Corporate 
  Finance) 
  Ben Cryer (Corporate Finance) 
 
 Newgate Communications (PR)                 Tel: + 44 7540106366 
 Robin Tozer / Tom Carnegie / Isabelle       firstproperty@newgatecomms.com 
  Smurfit 
 

Notes to Investors and Editors :

First Property Group plc is an award-winning property fund manager and investor with operations in the United Kingdom and Central Europe. Its focus is on higher yielding commercial property with sustainable cash flows. The company is flexible and takes an active approach to asset management. Its earnings are derived from:

-- Fund Management - via its FCA regulated and AIFMD approved subsidiary, First Property Asset Management Ltd (FPAM), which earns fees from investing for third parties in property. FPAM currently manages twelve funds which are invested across the United Kingdom, Poland and Romania.

-- Group Properties - principal investments by the Group, to earn a return on its own capital, usually in partnership with third parties. Investments include eight directly held properties in Poland and Romania, and non-controlling interests in ten of the twelve funds managed by FPAM.

Listed on AIM the Company has offices in London, Warsaw and Bucharest. Around one third of the shares in the Company are owned by management and their families. Further information about the Company and its products can be found at: www.fprop.com .

CHIEF EXECUTIVE'S STATEMENT

Performance:

I am pleased to report interim results for the six months ended 30 September 2020.

Revenue earned by the Group was GBP6.33 million (30 September 2019: GBP8.08 million) yielding a profit before tax of GBP2.08 million (30 September 2019: GBP2.98 million).

The decrease in profit before tax was mainly attributable to:

-- A loss incurred by Cha ubińskiego 8 (CH8) which reduced profit before tax by GBP135,000 following completion of its sale on 24 April 2020 (30 September 2019: profit GBP600,000);

-- Reduced contribution from Associates and investments of GBP796,000 (30 September 2019: GBP1.27 million), a decrease of GBP475,000 mainly due to:

a) a loss incurred by Fprop Phoenix Ltd of which the Group's share amounted to GBP219,000 (30 September 2019: profit GBP8,000); and

b) Foregone rent and service charge in Fprop Opportunities plc (FOP) and Fprop Galeria Corso (FGC) from rent holidays granted to tenants by the Polish government during the first lockdown, of which the Group's share amounted to GBP132,000.

-- No performance fees earned by our fund management division (FPAM) (30 September 2019: GBP247,000).

Diluted earnings per share decreased to 0.46 pence (30 September 2019: 2.07 pence), more than the decrease in profit before tax, due to a deferred tax charge of GBP1.14 million (30 September 2019: GBP27,000) resulting from the write-off of a previously recognised deferred tax asset following the repayment of the loan secured against CH8 in April 2020. The subsidiary company which held the property retains the benefit of the crystallised tax loss to relieve future taxable profits if earned.

It is the accounting policy of the Group to carry its properties and interests in associates at the lower of cost or market value. Market values are independently assessed at least once a year, on 31 March. The Group ended the period with net assets under the cost basis of accounting of GBP47.11 million (31 March 2020: GBP48.05 million). The net assets of the Group when adjusted to their market value less any deferred tax liabilities (EPRA basis) at the period end was GBP61.34 million (31 March 2020: GBP62.15 million).

Gross debt at the period end amounted to GBP41.04 million (31 March 2020: GBP64.53 million), the reduction being due to the completion of the sale of CH8 and the repayment of the corresponding bank loan. This in turn reduced the Group's gearing ratio at book value from 57.32% at 31 March 2020 to 46.56%, and at market value from 50.94% at 31 March 2020 to 40.09%. Net debt reduced to GBP19.83 million (31 March 2020: GBP57.19 million).

Group cash balances at the period end stood at GBP21.21 million (31 March 2020: GBP7.34 million prior to the completion of the sale of CH8 in April 2020). This represents 19.21 pence per share (31 March 2020: 6.65 pence per share).

Dividend:

The Directors have resolved to maintain the interim dividend at 0.45 pence per share (30 September 2019: 0.45 pence per share) which will be paid on 8 January 2021 to shareholders on the register at 4 December 2020, with an ex-dividend date of 3 December 2020.

REVIEW OF OPERATIONS

PROPERTY FUND MANAGEMENT (First Property Asset Management Ltd or FPAM)

Third party assets under management at period end amounted to GBP557 million (31 March 2020: GBP567 million). This 1.8% decrease was primarily attributable to reductions in the value of properties held by our UK property funds. Some 65% of third-party assets under management were located in the UK, 33% in Poland, and 2% in Romania. A further GBP80 million of committed but as yet un-invested equity remains available to be drawn by funds managed by FPAM.

Fund management fees are generally levied monthly by FPAM by reference to the value of properties under management. In the case of Fprop Offices LP, the Group is entitled to a share of total profits in lieu of fund management fees and to receive annual payments on account equivalent to 10% of total cumulative income profits and realised capital gains. Under its accounting policy the Group will not recognise unrealised property revaluations above a given property's original cost. These payments are adjusted annually, if necessary, for any overpayments made in previous years up to a maximum of total past cumulative payments received (totalling GBP1.38 million as at 30 September 2020).

Revenue earned by this division decreased by 18% to GBP1.66 million, resulting in profit before unallocated central overheads and tax of GBP633,000 (30 September 2019: GBP1.00 million), representing 22% of Group profit before unallocated central overheads and tax. The decrease was primarily due to no performance fees being earned in the period (30 September 2019: GBP247,000).

At the period end FPAM's fund management fee income, excluding performance fees and the profit share from Fprop Offices LP, was being earned at an annualised rate of GBP3.02 million (31 March 2020: GBP3.13 million).

FPAM's weighted average unexpired fund management contract term at the period end was 4 years, 5 months (31 March 2020: 5 years, 0 months).

The reconciliation of movement in third party funds under management during the period is shown below:

 
                                  Funds managed for third parties 
                                    (including funds in which the 
                                 Group is a minority shareholder) 
-----------------------  ---------------------------------------- 
                                UK       CEE     Total     No. of 
                              GBPm      GBPm      GBPm     prop's 
-----------------------  ---------  --------  --------  --------- 
 As at 1 April 2020          375.7     191.3     567.0         69 
-----------------------  ---------  --------  --------  --------- 
 Purchases                       -         -         -          - 
 New fund mandates               -         -         -          - 
 Property sales                  -         -         -          - 
 Capital expenditure           0.1         -       0.1          - 
 Property depreciation           -         -         -          - 
 Property revaluation       (14.7)     (0.6)    (15.3)          - 
 FX revaluation                  -       4.8       4.8          - 
 As at 30 Sept 2020          361.1     195.5     556.6         69 
-----------------------  ---------  --------  --------  --------- 
 

An overview of the value of assets and maturity of each of the funds managed by FPAM is set out below:

 
 Fund                  Country        Fund        Assets         No of     % of total              Assets 
                 of investment      expiry         under    properties    third-party    under management 
                                              management                       assets           at market 
                                               at market                        under            value at 
                                                   value                   management            31 March 
                                                      at                                             2020 
                                                 30 Sept 
                                                    2020 
------------  ----------------  ----------  ------------  ------------  -------------  ------------------ 
 Fund management division                          GBPm.                                            GBPm. 
------------------------------  ----------  ------------  ------------  -------------  ------------------ 
 SAM & DHOW          UK           Rolling              *             *              *                   * 
 UK PPP              UK          Feb 2022           67.1            20           12.0                70.3 
 5PT               Poland        Dec 2022            8.2             3            1.5                 8.0 
 OFFICES             UK          Jun 2024          139.5             5           25.1               143.4 
 SIPS                UK          Jan 2025          136.9            24           24.6               143.4 
 FOP               Poland        Oct 2025           72.5             5           13.0                71.3 
 FRS               Romania       Jan 2026            1.0             1            0.2                 1.0 
 FGC               Poland        Mar 2026           22.9             1            4.1                22.4 
 SPEC OPPS           UK          Jan 2027           17.7             4            3.2                18.6 
 FKR               Poland        Mar 2027           23.6             1            4.2                23.0 
 FCL               Romania       Jun 2028            8.0             1            1.5                 7.8 
 FPL               Poland        Jun 2028           59.2             4           10.6                57.8 
------------  ----------------  ----------  ------------  ------------  -------------  ------------------ 
 Total Third-Party 
  AUM                                              556.6            69          100.0               567.0 
------------------------------  ----------  ------------  ------------  -------------  ------------------ 
 

* Not subject to recent revaluation;

The sub sector weightings of investments in FPAM funds is set out in the table below:

 
                          UK   Poland   Romania    Total   % of Total 
--------------------  ------  -------  --------  -------  ----------- 
                       GBPm.    GBPm.     GBPm.    GBPm. 
--------------------  ------  -------  --------  -------  ----------- 
 Offices               209.3    108.1       8.0    325.4        58.4% 
 Retail warehousing     92.8        -         -     92.8        16.7% 
 Supermarkets           50.8     20.0       1.0     71.8        12.9% 
 Shopping centres          -     58.4         -     58.4        10.5% 
 Industrial              8.2        -         -      8.2         1.5% 
--------------------  ------  -------  --------  -------  ----------- 
 Total                 361.1    186.5       9.0    556.6       100.0% 
--------------------  ------  -------  --------  -------  ----------- 
 % of Total 
  Third-Party 
  AUM                  64.9%    33.5%      1.6%   100.0% 
--------------------  ------  -------  --------  -------  ----------- 
 

Average rent collection rates by funds managed by FPAM in the six months to 30 September 2020 were as follows:

 
                                        UK               Poland            Romania 
                                                                      ----------------- 
 Rent collected as 
  a percentage of what 
  would have been invoiced 
  prior to COVID related 
  concessions                         92.3%              90.1%              98.03% 
------------------------------  -----------------  -----------------  ----------------- 
                                 Offices   Retail   Offices   Retail   Offices   Retail 
                                  95.9%     88.3%    97.2%     75.4%    100.0%    85.9% 
------------------------------  --------  -------  --------  -------  --------  ------- 
 Rent collected after                 95.1%*            98.1%**           98.03%*** 
  adjustments for concessions 
  granted due to COVID 
------------------------------  -----------------  -----------------  ----------------- 
                                 Offices   Retail   Offices   Retail   Offices   Retail 
                                  96.3%     93.2%    99.1%     95.7%    100.0%    85.9% 
------------------------------  --------  -------  --------  -------  --------  ------- 
 

*In the UK no rent discounts were granted, only deferrals of payment;

**After adjusting for rent waivers statutorily imposed upon landlords of non-essential retail outlets during the first lockdown and for cash concessions granted to tenants in return for lease extensions;

***In Romania no rent discounts were granted, only deferrals of payment.

GROUP PROPERTIES

At the period end Group Properties comprised eight directly owned commercial properties in Poland and Romania and interests in ten of the twelve funds managed by FPAM (which are invested in the UK, Poland and Romania).

The contribution to Group profit before tax and unallocated central overheads from the Group Properties division was GBP2.30 million (30 September 2019: GBP3.10 million), representing 78% of Group profit before unallocated central overheads and tax. Approximately 65% of this contribution was from the eight directly owned properties and 35% was from the Group's Associates and other investments.

   1.     Directly owned Group Properties (all accounted for under the cost model): 

Two of the Group's eight directly owned properties account for 80% of the value (GBP37.8 million). Both are office buildings in Poland of which one is in Warsaw (11,000 m(2) ) and the other in Gdynia (15,500 m(2) ). The balance of 20% by value (GBP9.6 million) is invested in three mini-supermarkets in Poland, a development site in Warsaw, an office block in Bucharest and a warehouse in Romania.

 
 Country    Sector                 No. of     Book   Market   *Contribution   *Contribution 
                               properties    value    value        to Group        to Group 
                                                                     profit          profit 
                                                                     before          before 
                                                               tax - period    tax - period 
                                                                         to              to 
                                                                    30 Sept         30 Sept 
                                                                       2020            2019 
---------  ----------------  ------------  -------  -------  --------------  -------------- 
                                             GBPm.    GBPm.           GBPm.           GBPm. 
 Poland     Offices                     2     37.8     43.9             1.9             2.6 
 Poland     Supermarkets                4      5.4      6.1             0.1             0.1 
            Office 
 Romania     and logistics              2      4.2      6.8             0.2             0.1 
 Total                                  8     47.4     56.8             2.2             2.8 
---------------------------  ------------  -------  -------  --------------  -------------- 
 

*Prior to the deduction of direct overhead and unallocated central overhead expenses.

The eight directly owned properties generated a profit before unallocated central overheads and tax of GBP1.50 million (30 September 2019: GBP1.83 million). The decrease was almost entirely attributable to completion in April 2020 of the sale of Cha ubińskiego 8 (CH8), an office tower in Warsaw, resulting in no further rental contributions from this property. The impact from COVID was minimal, mainly because none of the remaining eight properties are shopping centres (see next section, "Associates and Investments" for fuller details).

Free cash generation of the eight directly owned properties for the six months to 30 September 2020 was EUR973,000 (30 September 2019: EUR829,000).

 
                                  6 months      6 months      12 months 
                                to 30 Sept    to 30 Sept    to 31 March 
                                      2020         2019*          2020* 
----------------------------  ------------  ------------  ------------- 
                                   EUR'000       EUR'000        EUR'000 
----------------------------  ------------  ------------  ------------- 
 Net operating income 
  (NOI)                              3,945         3,979          8,024 
 Interest expense on 
  bank loans/ finance 
  leases                             (356)         (397)          (775) 
----------------------------  ------------  ------------  ------------- 
 NOI after interest expense          3,589         3,582          7,249 
----------------------------  ------------  ------------  ------------- 
 
 Current tax                         (430)         (600)        (1,110) 
 Debt amortisation                 (2,174)       (2,096)        (4,368) 
 Capital expenditure                  (12)          (57)          (566) 
----------------------------  ------------  ------------  ------------- 
 Free Cash                           973**           829          1,205 
----------------------------  ------------  ------------  ------------- 
 

*Excluding CH8;

**of which EUR881,000 was from the property in Gdynia.

The average rent collection rates across the eight properties in the six months to 30 September 2020 are shown in the table below. The high collection rate is testament both to the quality of our properties and our asset management capabilities.

 
                                             Poland   Romania 
------------------------------------------  -------  -------- 
 Rent collected as a percentage of what 
  would have been invoiced prior to COVID 
  related concessions                         98.8%     94.2% 
------------------------------------------  -------  -------- 
 Rent collected after adjustments for 
  concessions granted due to COVID            98.8%     94.5% 
------------------------------------------  -------  -------- 
 

The debt secured against the eight Group Properties reduced to GBP41.04 million (31 March 2020: GBP64.53 million) following the sale of CH8. The loans secured against the eight properties are held in separate non-recourse special purpose vehicles.

 
                                         30 Sept 2020    30 Sept 2019 
                                                 GBPm            GBPm 
 Book value                                      47.4           49.4* 
 Market value                                    56.8           60.9* 
 Gross debt (all non-recourse 
  to Group)                                      41.0           44.1* 
 LTV at book value %                            86.5%           89.3% 
 LTV at market value %                          72.2%           72.4% 
 Weighted average borrowing cost                1.70%           1.84% 
 Weighted average debt term excluding    4 yrs 7 mths   5 yrs 10 mths 
  Gdynia 
 Weighted average debt term including    1 yr 10 mths   2 yrs 11 mths 
  Gdynia 
 

*Comparable figure has been adjusted to exclude the property CH8 and the associated bank loan.

The Group has been depreciating the value of the Gdynia property in anticipation of the near simultaneous expiry of both the over rented lease to its sole tenant and the bank financing (on 21 February 2021). The Group is now in negotiations with the lending bank about terms on which to renew/ restructure the financing. We are also in discussions with the tenant.

When the Group sold Cha ubińskiego 8 (CH8) at the end of the last financial year, it guaranteed the rent and service charge income on the residual vacant space until March 2025 as a condition of the sale (amounting to EUR1.34 million per annum), and undertook to pay fit out costs associated with new lettings of up to circa EUR1.50 million. An accrual was recognised in the year ended 31 March 2020 for one year's worth of this rent guarantee and the full fit-out costs, totalling EUR2.85 million (GBP2.52 million).

The weighted average vacancy rate across all eight properties is 10%. The weighted average unexpired lease term (WAULT) of all eight properties as at 30 September 2020 was 1 year and 3 months.

   2.     Associates and Investments 

These comprise non-controlling interests in ten of the twelve funds managed by FPAM, of which seven are accounted for as associates under the cost model, and three are accounted for as investments in funds and held at fair value.

The contribution to Group profit before tax and unallocated central overheads from its seven associates and three investments decreased by 37% to GBP796,000 million (30 September 2019: GBP1.27 million). This contribution represents 27% of Group profit before unallocated central overheads and tax and 35% of the contribution by Group Properties. The reduction was largely attributable to the loss generated by Fprop Phoenix Ltd, of which the Group's 23.4% share amounted to GBP219,000 (30 September 2019: profit GBP8,000) and also the impact of COVID on the two funds which own shopping centres, Fprop Opportunities plc (FOP) and Fprop Galeria Corso (FGC).

During the first lockdown in Poland, which lasted from 14 March to 4 May, all shops except for food retailers and pharmacies were forcibly closed and tenants absolved from paying rent, subject to those tenants wishing to benefit from the rent holiday extending their leases on the same terms by the period of the ban plus a further six months. The two funds affected suffered a total loss of rent and service charge income of GBP589,000, of which the Group's share amounted to GBP204,000. In the six months to 30 September the impact was GBP132,000, with the balance having been already recognised in the financial year ended 31 March 2020. Further rent concessions on top of these government-imposed rent holidays were granted in exchange for lease extensions. These amounted to GBP465,000 for the six months to 30 September 2020 in terms of cash flow but their impact on profit before tax is minimal due to the rent reductions being amortised over the remaining life of the respective leases.

The rent collection rate amongst the Group's associates and investments is shown in a table in the fund management section of this report. With the exception of Fprop Phoenix Ltd (FPL), which is a turnaround, these funds are invested in well let commercial property.

An overview of the Group's Associates and Investments is set out in the table below:

 
 Fund               % owned    Book value     Current        Group's         Group's 
                         by      of First      market          share           share 
                      First    Property's    value of    of post-tax     of post-tax 
                   Property      share in    holdings        profits         profits 
                      Group          fund                  earned by       earned by 
                                                                fund            fund 
                                                             30 Sept         30 Sept 
                                                                2020            2019 
---------------  ----------  ------------  ----------  -------------  -------------- 
                          %       GBP'000     GBP'000        GBP'000         GBP'000 
---------------  ----------  ------------  ----------  -------------  -------------- 
 a) Associates 
 5PT                  37.8%         1,200       1,299             72              73 
 FRS                  24.1%           179         269             11              11 
 FOP                  40.4%        10,866      10,936            627             751 
 FGC                  28.2%         2,445       2,784             99             156 
 FKR                  18.1%         1,543       1,986             92              97 
 FPL                  23.4%         1,690       6,900          (219)               8 
 FCL                  17.4%           560         558             41              43 
---------------  ----------  ------------  ----------  -------------  -------------- 
 Sub Total                         18,483      24,732            723           1,139 
---------------------------  ------------  ----------  -------------  -------------- 
 
 
 b) Investments 
 UK PPP       0.9%     656     656   14    33 
 SPEC OPPS    4.8%     502     502   17    32 
 OFFICES      1.6%   2,002   2,002   42    67 
-----------  -----  ------  ------  ---  ---- 
 Sub Total           3,160   3,160   73   132 
------------------  ------  ------  ---  ---- 
 
 
 Total    21,643   27,892   796   1,271 
-------  -------  -------  ----  ------ 
 

Commercial Property Markets Outlook

Poland:

Poland is likely to be one of the least affected in the EU by the pandemic with GDP forecast to have returned to pre-pandemic levels by early 2022. Government debt as a percentage of GDP remains low by western European standards (at around 55%), making its COVID-19 stimulus package affordable. Like elsewhere, the retail and hospitality sectors have suffered more than others from COVID. But our own experience of rent collection has been good, as evidenced in the divisional reports above. Capital value reductions have been limited and transaction volumes are only down by around 10% year to date, although the percentage of transactions in industrial and logistics property has increased.

Romania:

Similar to Poland, Romania is expected to return to pre-pandemic levels of economic growth early in 2022. Like Poland, Romania benefits from low government debt as a ratio of GDP (at around 41%), giving it fiscal headroom to help speed its recovery. Commercial property turnover in 2020 is likely to be less than the EUR1 billion of recent years.

United Kingdom:

According to Bank of England analysis of independent forecasts, GDP will have shrunk by around 10% in 2020 but will grow by 7% next year. In the meantime, the occupier market for commercial property is suffering. Notwithstanding this, office tenants are generally continuing to pay rent (unless their business has been directly impacted) but rent collection rates amongst retail and hospitality tenants is lower. Overall, this is bound to exert downward pressure on rent levels, more so in some sub-sectors than others. It should also exert downward pressure on capital values, but renewed quantitative easing and zero percent interest rates have reduced the impact, and in some cases served to boost capital values. The market is in a state of flux.

Current Trading and Prospects

The sale of Cha ubińskiego 8 (CH8) in April released some GBP17 million in cash and put the Group in a strong position from which to navigate the economic fallout of the COVID pandemic.

As a consequence of the sale there has been a reduction in rental income, which is the primary reason for the reduction in earnings reported today.

This reduction should be temporary and last only until we reinvest the cash. We expect to do so in association with clients of the Group. Our aim is to invest some 10-20% of the equity required in any acquisition which, when coupled with bank debt, should enable us to acquire up to some GBP300 million in property.

There is a great deal of flux in the market at the moment and we expect interesting opportunities to emerge next year.

Ben Habib

Chief Executive

CONSOLIDATED INCOME STATEMENT

for the six months to 30 September 2020

 
                                    Notes      Six months      Six months         Year to 
                                               to 30 Sept              to 
                                                     2020 
                                              (unaudited)         30 Sept     31 Mar 2020 
                                                                     2019 
                                                              (unaudited)       (audited) 
---------------------------------  ------  --------------  --------------  -------------- 
                                            Total results   Total results   Total results 
---------------------------------  ------  --------------  --------------  -------------- 
                                                  GBP'000         GBP'000         GBP'000 
 
 Revenue                                            6,330           8,077          16,287 
---------------------------------  ------  --------------  --------------  -------------- 
 Cost of sales                                    (1,194)         (1,705)         (3,969) 
 Gross profit                                       5,136           6,372          12,318 
 Profit on sale of an investment 
  property                                              -               -           1,527 
 Operating expenses                               (3,492)         (4,006)         (8,612) 
 Operating profit                                   1,644           2,366           5,233 
 Share of results in associates       7               723           1,139           1,220 
 Investment income                                     73             132             324 
 Interest income                      3                45              42              80 
 Interest expense                     3             (403)           (696)         (1,338) 
 Profit before tax                                  2,082           2,983           5,519 
 Corporation tax                      4             (404)           (586)           (974) 
 Deferred tax                         4           (1,140)            (27)             360 
---------------------------------  ------  --------------  --------------  -------------- 
 Profit for the period                                538           2,370           4,905 
 
 Attributable to: 
 Owners of the parent                                 515           2,350           4,859 
 Non-controlling interests                             23              20              46 
                                                      538           2,370           4,905 
 
 Earnings per share 
 Basic                                5             0.47p           2.11p           4.38p 
 Diluted                              5             0.46p           2.07p           4.29p 
---------------------------------  ------  --------------  --------------  -------------- 
 

All operations are continuing.

CONDENSED CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

for the six months to 30 September 2020

 
                                             Six months      Six months     Year to 
                                             to 30 Sept              to      31 Mar 
                                                   2020         30 Sept        2020 
                                                                   2019 
                                            (unaudited)     (unaudited)   (audited) 
---------------------------------------  --------------  --------------  ---------- 
                                          Total results   Total results       Total 
                                                                            results 
---------------------------------------  --------------  --------------  ---------- 
                                                GBP'000         GBP'000     GBP'000 
---------------------------------------  --------------  --------------  ---------- 
 
 Profit for the period                              538           2,370       4,905 
---------------------------------------  --------------  --------------  ---------- 
 
 Other comprehensive income 
---------------------------------------  --------------  --------------  ---------- 
 Items that may subsequently 
  be reclassified to profit 
  or loss 
 Exchange differences on retranslation 
  of foreign subsidiaries                          (53)           (451)       (502) 
 Net gain/(loss) on financial 
  assets at fair value through 
  Other Comprehensive Income                       (52)            (52)       (195) 
 Taxation                                             -               -           - 
---------------------------------------  --------------  --------------  ---------- 
 Total comprehensive income 
  for the period                                    433           1,867       4,208 
---------------------------------------  --------------  --------------  ---------- 
 
 Total comprehensive income 
  for the period attributable 
  to: 
 Owners of the parent                               412           1,847       4,135 
---------------------------------------  --------------  --------------  ---------- 
 Non-controlling interests                           21              20          73 
---------------------------------------  --------------  --------------  ---------- 
                                                    433           1,867       4,208 
---------------------------------------  --------------  --------------  ---------- 
 

All operations are continuing.

CONDENSED CONSOLIDATED BALANCE SHEET

as at 30 September 2020

 
                                  Notes               As at             As at               As at 
                                                    30 Sept            31 Mar             30 Sept 
                                           2020 (unaudited)    2020 (audited)    2019 (unaudited) 
-------------------------------  ------  ------------------  ----------------  ------------------ 
                                                    GBP'000           GBP'000             GBP'000 
 
 Non-current assets 
 Goodwill                                               153               153                 153 
 Investment properties              6                32,544            32,537              67,956 
 Property, plant and equipment                           56                64                  61 
 Investment in associates          7a                18,483            17,698              17,937 
 Other financial assets 
  at fair value through OCI        7b                 3,128             3,174               3,306 
 Other receivables                  8                   730               922               1,133 
 Right of use assets                                    584               584                   - 
 Deferred tax assets                                  2,307             2,659               2,828 
-------------------------------  ------  ------------------  ----------------  ------------------ 
 Total non-current assets                            57,985            57,791              93,374 
 
 Current assets 
 Inventories - land and 
  buildings                                          14,940            14,558              15,025 
 Current tax assets                                     133               122                  29 
 Trade and other receivables        8                 3,216            44,845               4,890 
 Cash and cash equivalents                           21,207             7,337               8,553 
-------------------------------  ------  ------------------  ----------------  ------------------ 
 Total current assets                                39,496            66,862              28,497 
 
 Current liabilities 
 Trade and other payables           9               (5,464)           (9,158)             (4,923) 
 Financial liabilities             10a             (25,803)          (49,073)             (6,749) 
 Current tax liabilities                               (78)              (71)               (193) 
-------------------------------  ------  ------------------  ----------------  ------------------ 
 Total current liabilities                         (31,345)          (58,302)            (11,865) 
-------------------------------  ------  ------------------  ----------------  ------------------ 
 Net current assets                                   8,151             8,560              16,632 
-------------------------------  ------  ------------------  ----------------  ------------------ 
 Total assets less current 
  liabilities                                        66,136            66,351             110,006 
-------------------------------  ------  ------------------  ----------------  ------------------ 
 
 Non-current liabilities 
 Financial liabilities             10b             (15,241)          (15,461)            (60,745) 
 Lease liabilities                                    (584)             (584)                   - 
 Deferred tax liabilities                           (3,049)           (2,102)             (2,712) 
 Net assets                                          47,262            48,204              46,549 
-------------------------------  ------  ------------------  ----------------  ------------------ 
 
 Equity 
 Called up share capital                              1,166             1,166               1,166 
 Share premium                                        5,791             5,791               5,791 
 Share-based payment reserve                            179               179                 179 
 Foreign exchange translation 
  reserve                                           (1,311)           (1,260)             (1,180) 
 Purchase of own shares 
  reserve                                           (2,653)           (2,653)             (2,462) 
 Investment revaluation 
  reserve                                             (288)             (236)                (93) 
 Retained earnings                                   44,228            45,060              43,046 
-------------------------------  ------  ------------------  ----------------  ------------------ 
 Equity attributable to 
  the owners of the parent                           47,112            48,047              46,447 
 Non-controlling interests                              150               157                 102 
-------------------------------  ------  ------------------  ----------------  ------------------ 
 Total equity                                        47,262            48,204              46,549 
-------------------------------  ------  ------------------  ----------------  ------------------ 
 
 Net assets per share               5                42.68p            43.53p              41.90p 
-------------------------------  ------  ------------------  ----------------  ------------------ 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months to 30 September 2020

 
                      Share     Share    Share-       Foreign   Purchase    Investment   Retained   Non-controlling     Total 
                    Capital   Premium     Based      Exchange     of own   Revaluation   Earnings         Interests 
                                        Payment   Translation     Shares       Reserve 
                                        Reserve       Reserve 
-----------------  --------  --------  --------  ------------  ---------  ------------  ---------  ----------------  -------- 
                    GBP'000   GBP'000   GBP'000       GBP'000    GBP'000       GBP'000    GBP'000           GBP'000   GBP'000 
-----------------  --------  --------  --------  ------------  ---------  ------------  ---------  ----------------  -------- 
 At 1 April 2019      1,166     5,791       179         (731)    (2,248)          (41)     42,056               114    46,286 
-----------------  --------  --------  --------  ------------  ---------  ------------  ---------  ----------------  -------- 
 Profit for the 
  period                  -         -         -             -          -             -      2,370                 -     2,370 
 Net gain/ (loss) 
  on financial 
  assets at fair 
  value through 
  other 
  comprehensive 
  income                  -         -         -             -          -          (52)          -                 -      (52) 
 Movement on 
  foreign 
  exchange                -         -         -         (449)          -             -          -               (2)     (451) 
 Total 
  Comprehensive 
  Income                  -         -         -         (449)          -          (52)      2,370               (2)     1,867 
 Purchase of 
  treasury shares         -         -         -             -      (214)             -          -                 -     (214) 
 Non-controlling 
  interests               -         -         -             -          -             -       (20)                20         - 
 Dividends paid           -         -         -             -          -             -    (1,360)              (30)   (1,390) 
 At 30 Sept 2019      1,166     5,791       179       (1,180)    (2,462)          (93)     43,046               102    46,549 
-----------------  --------  --------  --------  ------------  ---------  ------------  ---------  ----------------  -------- 
 Profit for the 
  period                  -         -         -             -          -             -      2,535                 -     2,535 
 Net gain/ (loss) 
  on financial 
  assets at fair 
  value through 
  other 
  comprehensive 
  income                  -         -         -             -          -         (143)          -                 -     (143) 
 Movement on 
  foreign 
  exchange                -         -         -          (80)          -             -          -                29      (51) 
-----------------  --------  --------  --------  ------------  ---------  ------------  ---------  ----------------  -------- 
 Total 
  Comprehensive 
  Income                  -         -         -          (80)          -         (143)      2,535                29     2,341 
 Sale of treasury 
  shares                  -         -         -             -         12             -          -                 -        12 
 Purchase of 
  treasury shares         -         -         -             -      (203)             -          -                 -     (203) 
 Non-controlling 
  interests               -         -         -             -          -             -       (26)                26         - 
 Dividends paid           -         -         -             -          -             -      (495)                 -     (495) 
-----------------  --------  --------  --------  ------------  ---------  ------------  ---------  ----------------  -------- 
 At 1 April 2020      1,166     5,791       179       (1,260)    (2,653)         (236)     45,060               157    48,204 
-----------------  --------  --------  --------  ------------  ---------  ------------  ---------  ----------------  -------- 
 Profit for the 
  period                  -         -         -             -          -             -        538                 -       538 
 Net gain/ (loss) 
  on financial 
  assets at fair 
  value through 
  other 
  comprehensive 
  income                  -         -         -             -          -          (52)          -                 -      (52) 
 Movement on 
  foreign 
  exchange                -         -         -          (51)          -             -          -               (2)      (53) 
 Total 
  Comprehensive 
  Income                  -         -         -          (51)          -          (52)        538               (2)       433 
 Purchase of              -         -         -             -          -             -          -                 -         - 
 treasury shares 
 Non-controlling 
  interests               -         -         -             -          -             -       (23)                23         - 
 Dividends paid           -         -         -             -          -             -    (1,347)              (28)   (1,375) 
-----------------  --------  --------  --------  ------------  ---------  ------------  ---------  ----------------  -------- 
 At 30 Sept 2020      1,166     5,791       179       (1,311)    (2,653)         (288)     44,228               150    47,262 
-----------------  --------  --------  --------  ------------  ---------  ------------  ---------  ----------------  -------- 
 

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

for the six months to 30 September 2020

 
                                            Notes           Six months          Six months       Year to 
                                                                    to          to 30 Sept 
                                                                          2019 (unaudited) 
                                                               30 Sept                            31 Mar 
                                                      2020 (unaudited)                              2020 
                                                                                               (audited) 
-----------------------------------------  ------  -------------------  ------------------  ------------ 
                                                               GBP'000             GBP'000       GBP'000 
-----------------------------------------  ------  -------------------  ------------------  ------------ 
 Cash flows from operating activities 
 Operating profit                                                1,644               2,366         5,233 
 Adjustments for: 
 Depreciation of investment 
  property, and property, plant 
  & equipment                                                      949               1,057         2,178 
 Profit on the sale of investment 
  property                                                           -                   -       (1,527) 
 (Increase)/decrease in inventories                                 21                (48)         (258) 
 (Increase)/decrease in trade 
  and other receivables                                         41,999               1,301         1,040 
 (Decrease)/increase in trade 
  and other payables                                           (4,242)             (2,193)         (483) 
 Other non-cash adjustments                                         23                 153           168 
 Cash generated from operations                                 40,394               2,636         6,351 
 Income taxes paid                                               (407)               (473)       (1,013) 
-----------------------------------------  ------  -------------------  ------------------  ------------ 
 Net cash flow from operating 
  activities                                                    39,987               2,163         5,338 
-----------------------------------------  ------  -------------------  ------------------  ------------ 
 
 Cash flow (used in)/from investing 
  activities 
 Capital expenditure on investment 
  properties                                  6                   (12)               (777)       (1,258) 
 Proceeds from partial disposal 
  of financial assets held at 
  fair value through Other Comprehensive 
  Income                                     7a                      -                 256           576 
 Purchase of property, plant 
  and equipment                                                      -                 (6)          (42) 
 Investment in funds                         7b                    (6)                   -          (48) 
 Proceeds from funds                         7b                      -                 218           218 
 Investment in shares of associates          7a                   (62)                   -             - 
 Interest received                            3                     45                  42            80 
 Dividends from associates                   7a                      -                   -             - 
 Distributions received                                             73                  95           276 
 Net cash flow (used in)/from 
  investing activities                                              38               (172)         (198) 
-----------------------------------------  ------  -------------------  ------------------  ------------ 
 
 Cash flow (used in)/from financing 
  activities 
 Proceeds from bank loan                                             -               1,769         1,769 
 Repayment of bank loans                                      (23,126)             (1,458)       (3,054) 
 Repayment of finance lease                                    (1,358)             (1,291)       (2,562) 
 Purchase of new treasury shares                                     -               (214)         (417) 
 Sale of shares held in Treasury                                     -                   -            12 
 Exercise of share options                                           -                   -             - 
 Interest paid                                3                  (403)               (656)       (1,338) 
 Dividends paid                                                (1,347)             (1,360)       (1,855) 
 Dividends paid to non-controlling 
  interests                                                       (28)                (30)          (30) 
-----------------------------------------  ------  -------------------  ------------------  ------------ 
 Net cash flow (used in)/from 
  financing activities                                        (26,262)             (3,240)       (7,475) 
 
 Net (decrease)/increase in 
  cash and cash equivalents                                     13,763             (1,249)       (2,335) 
-----------------------------------------  ------  -------------------  ------------------  ------------ 
 Cash and cash equivalents at 
  the beginning of period                                        7,337               9,738         9,738 
-----------------------------------------  ------  -------------------  ------------------  ------------ 
 Currency translation gains/(losses) 
  on cash and cash equivalents                                     107                  64          (66) 
-----------------------------------------  ------  -------------------  ------------------  ------------ 
 Cash and cash equivalents at 
  the end of the period                                         21,207               8,553         7,337 
-----------------------------------------  ------  -------------------  ------------------  ------------ 
 

NOTES TO THE ACCOUNTS

for the six months ended 30 September 2020

   1.     Basis of Preparation 

-- These interim consolidated financial statements for the six months ended 30 September 2020 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 2020 and are in compliance with IAS 34 "Interim Financial Reporting". These accounting policies are drawn up in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and as adopted by the European Union (EU).

-- The comparative figures for the financial year ended 31 March 2020 are not the full statutory accounts for the financial year but are abridged from those accounts prepared under IFRS which have been reported on by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified, did not include references to any matter to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

-- These interim financial statements were approved by a committee of the Board on 18 November 2020.

   2.     Segmental Analysis 

Segment reporting for the six months to 30 September 2020

Direct costs incurred by First Property Group plc relating to the cost of the Board and the related share listing costs are shown separately under unallocated central costs. The staff incentive accrual is included under unallocated central costs but will be reallocated across all segments at the year end.

 
                              Fund Management                 Group Properties 
                                     Division                         Division 
--------------------------  -----------------  -------------------------------  ------------  -------- 
                                     Property         Group         Associates   Unallocated     TOTAL 
                              fund management    properties    and investments       central 
                                                                                   overheads 
--------------------------  -----------------  ------------  -----------------  ------------  -------- 
                                      GBP'000       GBP'000            GBP'000       GBP'000   GBP'000 
--------------------------  -----------------  ------------  -----------------  ------------  -------- 
 Rental income                              -         4,006                  -             -     4,006 
 Service charge 
  income                                    -           663                  -             -       663 
 Asset management 
  fees                                  1,661             -                  -             -     1,661 
 Performance related                        -             -                  -             -         - 
  fee income 
--------------------------  -----------------  ------------  -----------------  ------------  -------- 
 Total revenue                          1,661         4,669                  -             -     6,330 
--------------------------  -----------------  ------------  -----------------  ------------  -------- 
 
 Depreciation and 
  amortisation                           (10)         (976)                  -             -     (986) 
--------------------------  -----------------  ------------  -----------------  ------------  -------- 
 
 Operating profit                         633         1,884                  -         (873)     1,644 
 
 Share of results 
  in associates                             -             -                723             -       723 
 Investment income                          -             -                 73             -        73 
 Interest income                            -            21                  -            24        45 
 Interest expense                           -         (403)                  -             -     (403) 
 Profit/(loss) before 
  tax                                     633         1,502                796         (849)     2,082 
--------------------------  -----------------  ------------  -----------------  ------------  -------- 
 
 Analysed as: 
 Underlying profit/loss 
  before tax before 
  adjusting for the 
  following items:                        644         2,572                796         (680)     3,332 
 
 Write down, impairment                     -             -                  -             -         - 
  loss/reversals 
 Profit on the sale                         -             -                  -             -         - 
  of 'FOP' shares 
 Goodwill write                             -             -                  -             -         - 
  off on acquisition 
  of associates 
 Group's share of                           -             -                  -             -         - 
  revaluation losses 
  on associates 
 Performance related                        -             -                  -             -         - 
  fee income 
 Depreciation on 
  investment property                       -         (884)                  -             -     (884) 
 Staff incentives                           -             -                  -         (397)     (397) 
 Realised foreign 
  currency (losses)/gains                (11)         (186)                  -           228        31 
 Profit/(loss) before 
  tax                                     633         1,502                796         (849)     2,082 
--------------------------  -----------------  ------------  -----------------  ------------  -------- 
 

Revenue for the six months to 30 September 2020 from continuing operations consists of revenue arising in the United Kingdom 14% (30 September 2019: 12%) and Central and Eastern Europe 86% (30 September 2019: 88%) and all relates solely to the Group's principal activities.

Segment reporting for the six months to 30 September 2019

 
                              Fund Management                 Group Properties 
                                     Division                         Division 
--------------------------  -----------------  -------------------------------  ------------  -------- 
                                     Property         Group         Associates   Unallocated     TOTAL 
                              fund management    properties    and investments       central 
                                                                                   overheads 
--------------------------  -----------------  ------------  -----------------  ------------  -------- 
                                      GBP'000       GBP'000            GBP'000       GBP'000   GBP'000 
--------------------------  -----------------  ------------  -----------------  ------------  -------- 
 Rental income                              -         5,484                  -             -     5,484 
 Service charge 
  income                                    -           567                  -             -       567 
 Asset management 
  fees                                  1,779             -                  -             -     1,779 
 Performance related 
  fee income                              247             -                  -             -       247 
--------------------------  -----------------  ------------  -----------------  ------------  -------- 
 Total revenue                          2,026         6,051                  -             -     8,077 
--------------------------  -----------------  ------------  -----------------  ------------  -------- 
 
 Depreciation and 
  amortisation                           (15)         (899)                  -             -     (914) 
--------------------------  -----------------  ------------  -----------------  ------------  -------- 
 
 Operating profit                       1,003         2,492                  -       (1,129)     2,366 
 
 Share of results 
  in associates                             -             -              1,139             -     1,139 
 Investment income                          -             -                132             -       132 
 Interest income                            -            36                  -             6        42 
 Interest expense                           -         (696)                  -             -     (696) 
 Profit/(loss) before 
  tax                                   1,003         1,832              1,271       (1,123)     2,983 
--------------------------  -----------------  ------------  -----------------  ------------  -------- 
 
 Analysed as: 
 Underlying profit/loss 
  before tax before 
  adjusting for the 
  following items:                        748         2,853              1,271         (476)     4,396 
 
 Write down, impairment                     -             -                  -             -         - 
  loss/reversals 
 Profit on the sale                         -             -                  -             -         - 
  of 'FOP' shares 
 Goodwill write                             -             -                  -             -         - 
  off on acquisition 
  of associates 
 Group's share of                           -             -                  -             -         - 
  revaluation losses 
  on associates 
 Performance related 
  fee income                              247             -                  -             -       247 
 Depreciation on 
  investment property                       -         (879)                  -             -     (879) 
 Staff incentives                           -             -                  -         (656)     (656) 
 Realised foreign 
  currency (losses)/gains                   8         (142)                  -             9     (125) 
 Profit/(loss) before 
  tax                                   1,003         1,832              1,271       (1,123)     2,983 
--------------------------  -----------------  ------------  -----------------  ------------  -------- 
 

Segment reporting year to 31 March 2020

 
                              Fund Management                 Group Properties 
                                     Division                         Division 
--------------------------  -----------------  -------------------------------  ------------  --------- 
                                     Property         Group         Associates   Unallocated      TOTAL 
                              fund management    properties    and investments       central 
                                                                                   overheads 
--------------------------  -----------------  ------------  -----------------  ------------  --------- 
                                      GBP'000       GBP'000            GBP'000       GBP'000    GBP'000 
--------------------------  -----------------  ------------  -----------------  ------------  --------- 
 Rental income                              -        10,403                  -             -     10,403 
 Service charge 
  income                                    -         1,986                  -             -      1,986 
 Asset management 
  fees                                  3,483             -                  -             -      3,483 
 Performance related 
  fee income                              415             -                  -             -        415 
--------------------------  -----------------  ------------  -----------------  ------------  --------- 
 Total revenue                          3,898        12,389                  -             -     16,287 
--------------------------  -----------------  ------------  -----------------  ------------  --------- 
 
 Depreciation and 
  amortisation                           (35)       (2,443)                  -             -    (2,478) 
--------------------------  -----------------  ------------  -----------------  ------------  --------- 
 
 Operating profit                       1,335         5,962                  -       (2,064)      5,233 
 Share of results 
  in associates                             -             -              1,879             -      1,879 
 Fair value adjustment 
  on associates                             -             -              (659)             -      (659) 
 Investment income                          -             -                324             -        324 
 Interest income                            -            74                  -             6         80 
 Interest expense                           -       (1,338)                  -             -    (1,338) 
 Profit/(loss) before 
  tax                                   1,335         4,698              1,544       (2,058)      5,519 
--------------------------  -----------------  ------------  -----------------  ------------  --------- 
 
 Analysed as: 
 Underlying profit/(loss) 
  before tax before 
  adjusting for the 
  following items:                      1,344         6,549              2,203       (1,023)      9,073 
 
 Profit on the sale 
  of investment property                    -         1,527                  -             -      1,527 
 Fair value adjustment 
  on associates                             -             -              (659)             -      (659) 
 Depreciation                            (35)       (2,443)                  -             -    (2,478) 
 Performance related 
  fee income                              415             -                  -             -        415 
 Staff incentives                       (383)         (325)                  -       (1,101)    (1,809) 
 Realised foreign 
  currency (losses)/gains                 (6)         (610)                  -            66      (550) 
 Total                                  1,335         4,698              1,544       (2,058)      5,519 
--------------------------  -----------------  ------------  -----------------  ------------  --------- 
 
 Assets - Group                         1,078        98,591              3,174         4,032    106,875 
 Share of net assets 
  of associates                             -             -             18,006         (308)     17,698 
 Liabilities                            (338)      (74,793)                  -       (1,238)   (76,369) 
--------------------------  -----------------  ------------  -----------------  ------------  --------- 
 Net assets                               740        23,798             21,180         2,486     48,204 
--------------------------  -----------------  ------------  -----------------  ------------  --------- 
 
   3.     Interest Income/(Expense) 
 
                                                Six months              Six months                      Year 
                                                     ended                   ended                     ended 
                                                   30 Sept                 30 Sept               31 Mar 2020 
                                                      2020                    2019 
----------------------------------  ----------------------  ----------------------  ------------------------ 
                                                   GBP'000                 GBP'000                   GBP'000 
            Interest income - 
             bank deposits                              24                      11                        26 
            Interest income - 
             other                                      21                      31                        54 
            Total interest income                       45                      42                        80 
----------------------------------  ----------------------  ----------------------  ------------------------ 
 
 
                                                 Six months              Six months                      Year 
                                                      ended                   ended                     ended 
                                                    30 Sept                 30 Sept               31 Mar 2020 
                                                       2020                    2019 
-----------------------------------  ----------------------  ----------------------  ------------------------ 
                                                    GBP'000                 GBP'000                   GBP'000 
            Interest expense 
             - property loans                         (257)                   (519)                   (1,009) 
            Interest expense 
             - bank and other                          (22)                    (29)                      (53) 
            Finance charges on 
             finance leases                           (124)                   (148)                     (276) 
-----------------------------------  ----------------------  ----------------------  ------------------------ 
            Total interest expense                    (403)                   (696)                   (1,338) 
-----------------------------------  ----------------------  ----------------------  ------------------------ 
 
   4.     Tax Expense 

The tax charge is based on a combination of actual current and deferred tax charged at an effective rate that is expected to apply to the profits for the full year.

 
                                       Six months              Six months                      Year 
                                            ended                   ended                     ended 
                                          30 Sept                 30 Sept               31 Mar 2020 
                                             2020                    2019 
-------------------------  ----------------------  ----------------------  ------------------------ 
                                          GBP'000                 GBP'000                   GBP'000 
            Current tax                     (404)                   (586)                     (974) 
            Deferred tax                  (1,140)                    (27)                       360 
-------------------------  ----------------------  ----------------------  ------------------------ 
            Total                         (1,544)                   (613)                     (614) 
-------------------------  ----------------------  ----------------------  ------------------------ 
 

The deferred tax charge relates to the reversal of a previously recognised deferred tax asset following the repayment of the bank loan secured against the property CH8 in April 2020 .

   5.     Earnings/NAV Per Share 

The basic earnings per ordinary share is calculated on the profit on ordinary activities after taxation and after non-controlling interests on the weighted average number of ordinary shares in issue, during the period.

Figures in the table below have been used in the calculations.

 
                                                     Six months                   Six months                      Year 
                                                          ended                        ended                     ended 
                                                        30 Sept                      30 Sept               31 Mar 2020 
                                                           2020                         2019 
--------------------------------------  -----------------------  ---------------------------  ------------------------ 
            Basic earnings per share                      0.47p                        2.11p                     4.38p 
            Diluted earnings per share                    0.46p                        2.07p                     4.29p 
--------------------------------------  -----------------------  ---------------------------  ------------------------ 
 
                                                         Number                       Number                    Number 
--------------------------------------  -----------------------  ---------------------------  ------------------------ 
            Weighted average number of 
             Ordinary shares in issue 
             (used for basic earnings 
             per share calculation)                 110,953,578                  111,318,482               110,953,578 
            Number of share options                   2,610,000                    2,610,000                 2,610,000 
--------------------------------------  -----------------------  ---------------------------  ------------------------ 
            Total number of Ordinary 
             shares used in the 
             diluted 
             earnings per share 
             calculation                            113,563,578                  113,928,482               113,563,578 
--------------------------------------  -----------------------  ---------------------------  ------------------------ 
 
                                                        GBP'000                      GBP'000                   GBP'000 
--------------------------------------  -----------------------  ---------------------------  ------------------------ 
            Basic earnings                                  516                        2,350                     4,859 
            Notional interest on share 
             options assumed to be 
             exercised                                        4                            8                         8 
--------------------------------------  -----------------------  ---------------------------  ------------------------ 
            Diluted earnings                                520                        2,358                     4,867 
--------------------------------------  -----------------------  ---------------------------  ------------------------ 
 
 
                                                        Six months              Six months                      Year 
                                                             ended                   ended                     ended 
                                                           30 Sept                 30 Sept               31 Mar 2020 
                                                              2020                    2019 
------------------------------------------  ----------------------  ----------------------  ------------------------ 
            Net assets per share                            42.68p                  41.90p                    43.53p 
            Adjusted net assets per share                   54.28p                  59.65p                    55.00p 
------------------------------------------  ----------------------  ----------------------  ------------------------ 
 

Adjusted net assets per share are calculated using the fair value of all investments.

The following numbers have been used to calculate both the net assets and adjusted net assets per share:

 
                                                         Six months               Six months                      Year 
                                                              ended                    ended                     ended 
                                                            30 Sept                  30 Sept               31 Mar 2020 
                                                               2020                     2019 
------------------------------------------  -----------------------  -----------------------  ------------------------ 
                                                             Number                   Number                    Number 
------------------------------------------  -----------------------  -----------------------  ------------------------ 
            Number of shares in issue 
             at period end                              110,383,332              110,854,001               110,382,332 
------------------------------------------  -----------------------  -----------------------  ------------------------ 
 
                                                            GBP'000                  GBP'000                   GBP'000 
------------------------------------------  -----------------------  -----------------------  ------------------------ 
            Net assets excluding 
             Non-controlling 
             interest                                        47,112                   46,447                    48,047 
 
            For adjusted net assets per                      Number                   Number                    Number 
             share 
------------------------------------------  -----------------------  -----------------------  ------------------------ 
            Number of shares in issue 
             at period end                              110,382,332              110,854,001               110,382,332 
            Number of share options 
             assumed 
             to be exercised                              2,610,000                2,610,000                 2,610,000 
------------------------------------------  -----------------------  -----------------------  ------------------------ 
            Total                                       112,992,332              113,464,001               112,992,332 
------------------------------------------  -----------------------  -----------------------  ------------------------ 
 
            For adjusted net assets per                     GBP'000                  GBP'000                   GBP'000 
             share 
------------------------------------------  -----------------------  -----------------------  ------------------------ 
            Net assets excluding 
             Non-controlling 
             interests                                       47,112                   46,447                    48,047 
            Investment properties at 
             fair value net of deferred 
             taxes                                            4,564                    5,925                     4,520 
            Inventories at fair value 
             net of deferred taxes                            3,034                    5,837                     2,939 
            Investments in associates 
             and other financial 
             investments                                      6,246                    9,088                     6,260 
            Other items                                         381                      381                       381 
------------------------------------------  -----------------------  -----------------------  ------------------------ 
            Total                                            61,337                   67,678                    62,147 
------------------------------------------  -----------------------  -----------------------  ------------------------ 
 
   6.     Investment Properties 
 
                                                           Six months                  Year              Six months 
                                                                ended                 ended                   ended 
                                                              30 Sept           31 Mar 2020                 30 Sept 
                                                                 2020                                          2019 
---------------------------------------------  ----------------------  --------------------  ---------------------- 
                                                              GBP'000               GBP'000                 GBP'000 
---------------------------------------------  ----------------------  --------------------  ---------------------- 
            1 April                                            32,537                67,348                  67,348 
            Capital expenditure                                    12                 1,258                     777 
            Disposals                                               -              (33,192)                       - 
            Additions through acquisitions                          -                     -                       - 
            Depreciation                                        (939)               (2,055)                 (1,021) 
            Impairment loss to an investment                        -                     -                       - 
             property 
            Foreign exchange translation                          934                 (822)                     852 
            Total at end of period                             32,544                32,537                  67,956 
---------------------------------------------  ----------------------  --------------------  ---------------------- 
 

Investment properties owned by the Group are stated at cost less depreciation and accumulated impairment losses.

   7.     Investments in associates and other financial investments 
 
                                    Six months           Year   Six months 
                                         ended          ended        ended 
                                       30 Sept    31 Mar 2020      30 Sept 
                                          2020                        2019 
---------------------------------  -----------  -------------  ----------- 
 a) Associates                         GBP'000        GBP'000      GBP'000 
 
 Cost of investment at beginning 
  of period                             17,698         17,054       17,054 
 Additions                                  62              -            - 
 Disposals                                   -              -            - 
 Repayment of shareholder 
  loan                                       -          (576)        (256) 
 Share of associates profit 
  after tax                                723          1,879        1,139 
 Share of associates revaluation             -          (659)            - 
  losses 
 Dividends received                          -              -            - 
 Cost of investment at end 
  of period                             18,483         17,698       17,937 
---------------------------------  -----------  -------------  ----------- 
 
 
                                  Six months           Year   Six months 
                                       ended          ended        ended 
                                     30 Sept    31 Mar 2020      30 Sept 
                                        2020                        2019 
-------------------------------  -----------  -------------  ----------- 
                                     GBP'000        GBP'000      GBP'000 
-------------------------------  -----------  -------------  ----------- 
 Investments in associates 
-------------------------------  -----------  -------------  ----------- 
 5th Property Trading Ltd              1,508          1,436        1,361 
 Fprop Romanian Supermarkets 
  Ltd                                    179            168          161 
 Fprop Galeria Corso Ltd               2,445          2,346        2,214 
 Fprop Krakow Ltd                      1,543          1,451        1,379 
 Fprop Cluj Ltd                          560            519          501 
 Fprop Phoenix Ltd                     1,690          1,908        2,057 
 Fprop Opportunities plc (FOP)        10,866         10,178       10,572 
-------------------------------  -----------  -------------  ----------- 
                                      18,791         18,006       18,245 
-------------------------------  -----------  -------------  ----------- 
 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                           18,483         17,698       17,937 
-------------------------------  -----------  -------------  ----------- 
 

The withheld profit figure of GBP308,000 represents the removal of the percentage of intercompany profit resulting from the sale of the property in 2007 to 5th Property Trading Ltd (an associate). The figure will reduce when there is a reduction in First Property Group's stake in 5th Property Trading Ltd.

 
                                   Six months           Year   Six months 
                                        ended          ended        ended 
                                      30 Sept    31 Mar 2020      30 Sept 
                                         2020                        2019 
--------------------------------  -----------  -------------  ----------- 
                                      GBP'000        GBP'000      GBP'000 
--------------------------------  -----------  -------------  ----------- 
 b) Other financial investments 
--------------------------------  -----------  -------------  ----------- 
 Cost of investment at 1 April          3,174          3,539        3,539 
 Additions                                  6             48           37 
 Repayments                                 -          (218)        (218) 
 Disposal                                   -              -            - 
 (Decrease)/increase in fair 
  value during the period                (52)          (195)         (52) 
--------------------------------  -----------  -------------  ----------- 
 Cost of investment at end 
  of period                             3,128          3,174        3,306 
--------------------------------  -----------  -------------  ----------- 
 
   8.     Trade and Other Receivables 
 
                                   Six months           Year   Six months 
                                        ended          ended        ended 
                                      30 Sept    31 Mar 2020      30 Sept 
                                         2020                        2019 
--------------------------------  -----------  -------------  ----------- 
                                      GBP'000        GBP'000      GBP'000 
 Current assets 
 Trade receivables                      1,222          1,423        1,128 
 Less provision for impairment 
  of receivables                     (356)             (330)        (320) 
--------------------------------  -----------  -------------  ----------- 
 Trade receivables net                866          1,093          808 
 Other receivables                   1,757            42,343        2,910 
 Prepayments and accrued income           593          1,409        1,172 
                                        3,216         44,845        4,890 
--------------------------------  -----------  -------------  ----------- 
 Non-current assets 
--------------------------------  -----------  -------------  ----------- 
 Other receivables                        730            922        1,133 
--------------------------------  -----------  -------------  ----------- 
 

Other receivables, under current assets, as at 31 March 2020 included GBP38.93 million relating to the sale proceeds following the sale of CH8, which were received in full on 24 April 2020.

Other receivables receivable after one year include a balance of GBP730,000 (31 March 2020: GBP922,000) relating to the deferred consideration from the sale of an investment property located in Romania. This has been discounted to reflect its current value.

   9.     Trade and Other Payables 
 
                                Six months           Year   Six months 
                                     ended          ended        ended 
                                   30 Sept    31 Mar 2020      30 Sept 
                                      2020                        2019 
-----------------------------  -----------  -------------  ----------- 
                                   GBP'000        GBP'000      GBP'000 
 Current liabilities 
 Trade payables                      1,841          2,591        2,296 
 Other taxation and social 
  security                             621          1,030          938 
 Other payables and accruals         2,819          5,354        1,343 
 Deferred income                       183            183          346 
                                     5,464          9,158        4,923 
-----------------------------  -----------  -------------  ----------- 
 
   10.   Financial Liabilities 
 
                               Six months           Year   Six months 
                                    ended          ended        ended 
                                  30 Sept    31 Mar 2020      30 Sept 
                                     2020                        2019 
----------------------------  -----------  -------------  ----------- 
                                  GBP'000        GBP'000      GBP'000 
 a) Current liabilities 
 Bank loans                         1,302         23,829        4,079 
 Finance leases                    24,501         25,244        2,670 
                                   25,803         49,073        6,749 
----------------------------  -----------  -------------  ----------- 
 
 b) Non-current liabilities 
----------------------------  -----------  -------------  ----------- 
 Bank loans                        15,241         15,461       36,864 
 Finance leases                         -              -       23,881 
----------------------------  -----------  -------------  ----------- 
                                   15,241         15,461       60,745 
----------------------------  -----------  -------------  ----------- 
 
 c) Total obligations under 
  financial liabilities 
 Repayable within one year         25,803         49,073        6,749 
 Repayable within one and 
  five years                        8,833          8,770       53,247 
 Repayable after five years         6,408          6,691        7,498 
----------------------------  -----------  -------------  ----------- 
                                   41,044         64,534       67,494 
----------------------------  -----------  -------------  ----------- 
 

Five bank loans and one finance lease (all denominated in Euros) totalling GBP41.04 million (31 March 2020: GBP64.53 million which includes the bank loan relating to CH8 which was not repaid until April 2020) included within financial liabilities are secured against investment properties owned by the Group and one property owned by the Group shown under inventories. These bank loans and this finance lease 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. Further copies can be obtained from the registered office at 32 St James's Street, London SW1A 1HD.

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