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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 | 0.00% | 19.60 | 19.20 | 20.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Real Estate Agents & Mgrs | 7.25M | 1.92M | 0.0173 | 11.33 | 21.73M |
TIDMFPO
RNS Number : 8755P
First Property Group PLC
23 June 2022
Hot Features
Premium
On Behalf of: First Property Group plc ("First Property", the "Company" or the "Group")
Embargoed: 0700hrs
First Property Group plc
Preliminary results for the twelve months to 31 March 2022
First Property Group plc (AIM: FPO), the property fund manager and investor with operations in the United Kingdom and Central Europe, today announces its preliminary results for the twelve months ended 31 March 2022.
Highlights:
-- Profit before tax of GBP7.08 million (2021: loss before tax of GBP5.09 million)
-- Value of directly owned property at market value at 31 March 2022: GBP42.24 million (31 March 2021: GBP41.57 million)
-- Net debt at 31 March 2022: GBP17.24 million (31 March 2021: GBP18.85 million)
-- Market value of shares owned by the Group in FPAM managed funds (Investments and Associates) at 31 March 2022: GBP30.60 million (31 March 2021: GBP27.47 million)
-- Cash reserves at 31 March 2022: GBP6.42 million (31 March 2021: GBP16.24 million) -- One new fund established during the year, Fprop Fulcrum Property LP -- Third party AUM at 31 March 2022: GBP516.5 million (31 March 2021: GBP527.2 million) -- Total AUM at 31 March 2022: GBP559 million (31 March 2021: GBP569 million)
-- Weighted average unexpired fund management contract term at 31 March 2022: 3 years, 3 months (31 March 2021: 3 years, 11 months)
-- Final dividend of GBP0.25 pence per share (2021: GBPnil)
Financial summary:
Unaudited Audited Percentage
year to year to change
31 March 31 March
2022 2021
-------------------------------- ---------- ----------- -----------
Income Statement:
----------------------------------------------------------------------
Statutory profit/(loss)
before tax GBP7.08m (GBP5.09m) 239.1%
Diluted earnings per share 6.01p (6.59p) 191.2%
Total dividend per share 0.50p 0.45p 11.1%
Average EUR/GBP exchange
rate 1.1754 1.1246 -
Balance Sheet at year end:
----------------------------------------------------------------------
Investment properties and
inventories at book value GBP36.20m GBP34.95m 3.6%
Investment properties and
inventories at market value GBP42.24m GBP41.57m 1.6%
Cash balances GBP6.42m GBP16.24m (60.5%)
Cash per share 5.81p 14.71p (60.5%)
Gross debt* GBP23.66m GBP35.09m (32.6%)
Net debt* GBP17.24m GBP18.85m (8.5%)
Gearing ratio at book value** 34.90% 48.82% -
Gearing ratio at market
value*** 30.69% 42.05% -
Net assets at book value GBP44.14m GBP36.79m 20.0%
Net assets at market value. GBP53.43m GBP48.36m 10.5%
Adjusted net assets per
share (EPRA basis) 47.28p 42.80p 10.5%
Year-end EUR/GBP rate 1.1834 1.1739 -
* Debt comprises Financial Liabilities and Other Financial
Liabilities and excludes Lease Liabilities
**Gearing ratio = Gross debt excluding lease
liabilities divided by gross assets at book value.
***Gearing ratio = Gross debt excluding lease
liabilities divided by gross assets at market
value.
Commenting on the results, Ben Habib, Chief Executive of First Property Group plc, said:
"The year has seen a sharp turnaround in our fortunes, principally due to the restructuring of a finance lease secured against a property owned by the Group in Gdynia, Poland, which resulted in our debt liability being reduced by some GBP7.8 million.
"Our balance sheet remains strong with some GBP44 million of net assets. Of this some GBP6 million is in cash.
"The investment environment is volatile at present but with adversity comes opportunity and we are seeing some interesting market movements. Occupational demand is picking up from the lockdown induced lows which should result in a commensurate increase in the value of our properties."
A briefing for analysts will be held at 10:30hrs 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's 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 (Group Finance Director) investor.relations@fprop.com
Jeremy Barkes (Director, Business
Development)
Jill Aubrey (Company Secretary)
Allenby Capital (NOMAD & Broker) Tel: + 44 (0) 20 3328
5656
Nick Naylor / Freddie Wooding (Corporate
Finance)
Amrit Nehal (Equity Sales)
Newgate Communications (PR) Tel: + 44 7540106366
Robin Tozer / Richard Bicknell / Max firstproperty@secnewgate.co.uk
Richardson
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 thirteen 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 seven directly held properties in Poland and Romania, and non-controlling interests in eleven of the thirteen funds.
Quoted 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 properties can be found at: www.fprop.com .
CHIEF EXECUTIVE'S STATEMENT
Financial performance
I am pleased to report the Company's preliminary results for the year ended 31 March 2022.
Revenue earned during the year by the Group was GBP8.65 million (31 March 2021: GBP12.12 million) yielding a profit before tax of GBP7.08 million (31 March 2021: loss before tax of GBP5.09 million).
The reduction in revenue was mainly due to the expiry, in February 2021, of the lease at our office block in Gdynia, Poland, which resulted in a GBP3.20 million reduction in rental income from this property in the year.
Paradoxically the increase in profit before tax largely came from the same property, where a restructuring of the finance lease resulted in a reduction of EUR9.0 million (GBP7.81 million) in the amount owed to the lending bank (from EUR25.0 million to EUR16.0 million). As part of the transaction EUR4.0 million of this debt was settled by the Group, leaving a residual liability of EUR12.0 million to be paid by June 2024 on which no interest is payable.
The Group ended the year with net assets, excluding non-controlling interests, of GBP44.14 million (2021: GBP36.79 million), equating to 40.00 pence per share (2021: 33.33 pence per share). It is the accounting policy of the Group to carry its properties and interests in associates at the lower of cost or market value.
The net assets of the Group, when adjusted to their market value less any deferred tax liabilities (EPRA basis), was GBP53.43 million or 47.28 pence per share (31 March 2021: GBP48.36 million or 42.80 pence per share).
Gross debt at the year end reduced by 32.6% to GBP23.66 million (31 March 2021: GBP35.09 million). Net debt reduced to GBP17.24 million (31 March 2021: GBP18.85 million). This in turn reduced the Group's gearing ratio to 34.90% with properties at their book value (31 March 2021: 48.82%) and to 30.69% with properties at their market value (31 March 2021: 42.05%).
Group cash balances at the year-end stood at GBP6.42 million (31 March 2021: GBP16.24 million, 31 March 2020: GBP7.34 million), equivalent to 5.81 pence per share (31 March 2021: 14.71 pence per share, 31 March 2020: 6.65 pence per share). The reduction was mainly attributable to the payment of GBP3.43 million (EUR4 million) in part settlement of the debt secured on Gdynia and new investments of GBP3.63 million in two UK funds, Fprop UK Special Opportunities LP and Fprop Fulcrum Property LP. Other exceptional uses of cash included GBP1.93 million in respect of a rent guarantee granted over CH8, an office building in Warsaw, as a condition of its sale, and GBP1.76 million in capital expenditure, mainly to develop a mini supermarket in Wawer, a suburb of Warsaw.
Diluted net profit per share was 6.01 pence (2021: a diluted net loss of 6.59 pence).
Dividend
In view of the marked improvement in the Group's position since the Covid lockdown induced set-back, the Directors have resolved to pay a final dividend of 0.25 pence per share (2021: nil), which together with the interim dividend of 0.25 pence per share (2021: 0.45 pence per share), equates to a dividend for the year of 0.50 pence per share.
The proposed final dividend will be paid on 29 September 2022 to shareholders on the register at 26 August 2022 and is subject to shareholder approval at the forthcoming annual general meeting on 27 September 2022.
The full year's dividend is covered 12 times.
REVIEW OF OPERATIONS
PROPERTY FUND MANAGEMENT
Third party assets under management ended the year at GBP516.5 million (31 March 2021: GBP527.2 million). The decrease was attributable to sales of properties valued at some GBP32.7 million offset by purchases of properties worth some GBP10.0 million and an increase in the value of the remainder of the portfolio of some GBP12.0 million.
One new fund was raised during the year, Fprop Fulcrum Property LP, which had invested GBP10.0 million by year end, purchasing two properties in the UK. The fund is open ended and further subscriptions and investments are expected. Notices for redemptions may not be given before August 2024, with redemptions taking place 12 months after any such notices are served.
During the year two other funds managed by FPAM sold, for GBP39.2 million, eight properties in the UK which had been valued at GBP32.7 million.
One fund, Fprop Romanian Supermarkets Ltd, was closed during the year having earned an internal rate of return over its seven-year life of 42% per annum.
Fund management fees are generally levied monthly by reference to the value of properties. 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. These payments are adjusted annually, if necessary, for any overpayments made in previous years up to a maximum of total past cumulative payments received.
Revenue earned by this division increased by 19% to GBP4.04 million (2021: GBP3.39 million), resulting in profit before unallocated central overheads and tax increasing by 11% to GBP1.44 million (2021: GBP1.30 million). The increase was primarily due to an increase in performance fees to GBP578,000 (2021: GBP40,000) in the form of profit share earned from Fprop Offices LP.
At the year end fund management fee income, excluding performance fees and the profit share from Fprop Offices LP, was being earned at an annualised rate of GBP2.66 million (31 March 2021: GBP2.90 million).
The weighted average unexpired fund management contract term at the year-end was 3 years, 3 months (31 March 2021: 3 years, 11 months).
The reconciliation of movement in third party funds under management during the year 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 properties
---------------------- ---------- -------- --------- ----------------
As at 1 April 2021 349.8 177.4 527.2 68
---------------------- ---------- -------- --------- ----------------
Purchases 10.0 - 10.0 2
Property sa les (32.7) - (32.7) (8)
Capital expenditure 3.3 2.2 5.5 -
Property revaluation 15.1 (7.3) 7.8 -
FX revaluation - (1.3) (1.3) -
---------------------- ---------- -------- --------- ----------------
As at 31 March 2022 345.5 171.0 516.5 62
---------------------- ---------- -------- --------- ----------------
An overview of the value of assets and maturity of each of the funds is set out below:
Fund Country Fund Assets No. of % of total Assets
of investment expiry under properties third-party under
management assets management
at market under at market
value at management value at
31 March 31 March
2022 2021
---------------- ---------------- ------------- --------------- ------------ ---------------- ----------------
GBPm. GBPm.
---------------------------------- ------------ ---------------- ------------ ---------------- ----------------
SAM & DHOW UK Rolling * * * *
5PT Poland Dec 2022 7.7 3 1.5 7.7
OFFICES UK Jun 2024 136.4 5 26.4 133.5
SIPS UK Jan 2025 140.6 24 27.2 134.3
FOP Poland Oct 2025 64.5 5 12.5 61.6
FRS Romania Jan 2026 ** ** ** **
FGC Poland Mar 2026 21.3 1 4.1 21.1
UK PPP UK Jan 2027 41.5 12 8.0 64.8
SPEC OPPS UK Jan 2027 17.0 4 3.3 17.2
FKR Poland Mar 2027 19.4 1 3.8 20.7
FCL Romania Jun 2028 8.5 1 1.7 8.7
FPL Poland Jun 2028 49.6 4 9.6 57.6
FULCRUM UK Indefinite 10.0 2 1.9 -
---------------- ---------------- ------------- --------------- ------------ ---------------- ----------------
Total Third-Party
AUM 516.5 62 100.0 527.2
------------------------------------------------- --------------- ------------ ---------------- ----------------
* Not subject to recent revaluation.
** Fund closed during the year and in the process of being liquidated.
The sub sector weightings of investments by funds is set out in the table below:
UK Poland Romania Total % of Total
------------------------ ------ ------- -------- ------- -----------
GBPm. GBPm. GBPm. GBPm.
------------------------ ------ ------- -------- ------- -----------
Offices 204.2 93.2 8.6 306.0 59.2
Retail warehousing 93.3 - - 93.3 18.1
Supermarkets 48.0 17.9 - 65.9 12.8
Shopping centres - 51.3 - 51.3 9.9
Industrial - - - - -
------------------------ ------ ------- -------- ------- -----------
Total 345.5 162.4 8.6 516.5 100.0
------------------------ ------ ------- -------- ------- -----------
% of Total Third-Party
AUM 66.9% 31.4% 1.7% 100.0%
------------------------ ------ ------- -------- ------- -----------
GROUP PROPERTIES
Group Properties comprised seven directly owned commercial properties in Poland and Romania valued at GBP42.24 million (31 March 2021: seven valued at GBP41.57 million) and interests in eleven of the thirteen funds (classified as Associates and Investments) in which the Group's share is valued at GBP30.60 million (31 March 2021: GBP27.47 million).
The contribution to Group profit before tax and unallocated central overheads from this division was GBP8.60 million (2021: loss GBP5.14 million) representing 85.70% of Group profit before unallocated central overheads and tax. The increase was mainly driven by the restructuring of the finance lease secured against our office property in Gdynia, Poland, which resulted in the amount owed reducing by EUR9.00 million (GBP7.81 million), as previously described.
1. Directly owned Group Properties (all accounted for under the cost model):
Two of the Group's seven directly owned properties account for 68% by market value (GBP28.84 million) of their total value. Both are office buildings in Poland of which one is in Warsaw (11,000 m(2) ) and the other in Gdynia (13,500 m(2) ). The other five properties, representing 32% by market value (GBP13.40 million), comprise three mini-supermarkets in Poland (one recently developed), an office block in Bucharest and a warehouse in Tureni, Romania.
Country Sector No. of Book Market No. of Market *Contribution *Contribution
properties value value properties value to Group to Group
as at as as at as at as profit profit
31 March at 31 March 31 March at before before
2022 31 2022 2021 31 tax tax
March March 31 March 31 March
2022 2021 2022 2021
--------- ---------------- ------------ ------- ---------- ------------ ------- -------------- --------------
GBPm. GBPm. GBPm. GBPm. GBPm.
Poland Offices 2 25.87 28.84 2 29.46 **8.14 (4.59)
Poland Supermarkets 3 6.42 7.47 3 5.85 ***0.20 0. 12
Office
Romania and logistics 2 3.92 5.93 2 6.26 0.37 0. 32
Total 7 36.21 42.24 7 41.57 8.71 (4.15)
--------------------------- ------------ ------- ---------- ------------ ------- -------------- --------------
*Prior to the deduction of direct overhead and unallocated central overhead expenses.
**Includes EUR9.00 million (GBP7.81 million) debt reduction following restructuring of the finance lease at Gdynia.
***Of which two are let and the third is being redeveloped, scheduled for completion in FY2023.
The seven directly owned properties generated a profit before unallocated central overheads and tax of GBP7.48 million (31 March 2021: loss of GBP5.80 million). The increase was almost entirely attributable to the restructuring of the finance lease secured against the office block in Gdynia, as already described. This debt restructuring is the main explanation for the reduction in Group debt by 33% to GBP23.66 million (31 March 2021: GBP35.09 million. The loans secured against the seven properties are held in separate non-recourse special purpose vehicles.
Interest costs on the Group's debt amounted to GBP0.33 million (2021: GBP0.74 million) in the year. This equates to an average borrowing cost of 1.39% per annum when expressed as a percentage of total outstanding Group debt of GBP23.66 million, or 2.44% if the deferred consideration of EUR12.00 million (GBP10.14 million) in respect of the Group property in Gdynia, on which no interest is payable, is excluded.
Of the Group's interest-bearing loans, the interest rate is fixed on 25% (2021: 27%) and is floating on the balance of 75% (2021: 73%). A one percentage point increase in interest rates would impact the cost of the floating rate loans and would increase the Group's annual interest bill by GBP0.10 million per annum (2021: GBP0.31 million). The fixed rate loans expire in 2025 (GBP2.79 million) and 2029 (GBP0.62 million).
31 March 2022 31 March 2021
GBPm. GBPm.
Book value of directly owned
properties 36.21 34.95
Market value of directly owned
properties 42.24 41.57
Gross debt (all non-recourse
to Group) 23.66 35.09
LTV at book value 65.34% 100.41%
LTV at market value 56.01% 84.41%
Weighted average borrowing cost 1.39% 1.60%
--------------------------------- -------------- --------------
The average vacancy rate across all seven properties is 35%. If the office property in Gdynia were to be excluded, due to its high level of vacancy, the vacancy rate would reduce to 5%. As announced on 13 May 2022, the property in Gdynia is now 20% let and we expect the new main tenant, the District Court in Gdynia, to attract other tenants to the building.
The weighted average unexpired lease term (WAULT) as at 31 March 2022 was 5 years, 7 months (2021: 4 years, 9 months).
2. Associates and Investments
These comprise non-controlling interests in eleven of the thirteen funds managed by FPAM and are valued at GBP30.60 million (31 March 2021: GBP27.47 million). Of these, seven are accounted for as Associates and held at the lower of cost or fair value (the "cost model"), and four are accounted for as Investments in funds and held at fair value.
The contribution to Group profit before tax and unallocated central overheads from its seven Associates and four Investments increased by 71% to GBP1.12 million (31 March 2021: GBP0.66 million) mainly due to an increase in the value of the Group's 44% share in Fprop Opportunities plc (FOP).
Fprop Phoenix Ltd made a loss after tax of which the Group's share amounted to GBP0.62 million (2021: loss of GBP0.38 million). This is a turnaround investment which has been impacted by a combination of lockdowns and corresponding working from home, together with a near 50% increase in the supply of office space in Krakow since we first acquired the park out of administration in 2017. We have done much to improve the asset during our ownership: we have resolved legacy legal issues including obtaining clean title over parts which were deficient and upgraded the rental proposition to include first class amenities such as a creche, kindergarten, gym, sports ground, BBQ area and conference centre, amongst other things. However, it is 80% vacant and with a 16% office vacancy rate in Krakow, we expect it will take some time to lease up. We do however expect this investment to generate substantial profits in due course.
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
31 March 31 March
2022 2021
--------------- ---------- ------------ ---------- ------------- --------------
% GBP'000 GBP'000 GBP'000 GBP'000
--------------- ---------- ------------ ---------- ------------- --------------
a) Associates
5PT 40.6 1,344 1,344 97 119
FRS 24.1 - - 47 50
FOP 43.8 11,983 11.983 1,044 256
FGC 28.2 2,700 2.826 221 179
FKR 18.1 1,580 1,580 (12) 166
FPL 23.4 913 4,619 (617) (378)
FCL 17.4 615 798 67 78
--------------- ---------- ------------ ---------- ------------- --------------
Sub Total 19,135 23,150 847 470
--------------------------- ------------ ---------- ------------- --------------
b) Investments
UK PPP 0.9 431 431 100 54
FULCRUM 2.5 262 262 - -
SPEC OPPS 11.1 4,754 4,754 23 34
OFFICES 1.6 1,998 1,998 148 97
----------- ----- ------ ------ ---- ----
Sub Total 7,445 7,445 271 185
------------------ ------ ------ ---- ----
Total 26,580 30,595 1,118 655
------- ------- ------- ------ ----
Commercial Property Markets Outlook
Poland:
GDP is expected to grow by 4% in 2022. The annual rate of inflation reached 13.9% in May but is expected to moderate to around 6% in 2023. The National Bank of Poland has led interest rate rises in Europe, with its benchmark reference rate now standing at 6.0%. It has also indicated that it is closer to the end of its interest rate raising cycle than the beginning, and that it may start to reverse increases in interest rates by the end of 2023.
Investment demand for commercial property has abated but continued economic growth and an influx of refugees and businesses from Ukraine should sustain occupational demand. Meanwhile, the effects of inflation, in particular in the cost of building materials and labour (which far exceeds the general rate of inflation), should curtail new supply forcing rents to rise.
Rental values in Poland are contractually mostly linked to Eurozone inflation, which also offers protection from inflation as long as the economy remains buoyant.
Prime commercial yields generally range from 5-6% but may soften as interest rates rise.
United Kingdom:
The UK is forecast to fall into recession. Inflation is running at over 10% per annum. The Bank of England base interest rate is still low at 1.25%, having risen from 0.1% in December 2021. Further increases in interest rates are expected. The yield curve currently flattens out at just under 3%.
Investor demand for commercial property polarised during the lockdown induced lows, between those sectors which benefit from online trading and could operate during lockdowns, such as logistics and essential retailers, and other sectors such as offices, hotels and non-essential retailers which depend on physical trading. The disparity in valuations between sectors is still wide.
The values of offices have been adversely impacted by changing working habits. However, the supply of offices has also reduced due to conversions to alternative uses and a substantial increase in building costs. Any increase in tenant demand should therefore result in rental growth.
Current Trading and Prospects
The year has seen a sharp turnaround in our fortunes, principally due to the restructuring of a finance lease secured against a property owned by the Group in Gdynia, Poland, which resulted in our debt liability being reduced by some GBP7.8 million.
Our balance sheet remains strong with some GBP44 million of net assets. Of this some GBP6 million is in cash.
The investment environment is volatile at present but with adversity comes opportunity and we are seeing some interesting market movements. Occupational demand is picking up from the lockdown induced lows which should result in a commensurate increase in the value of our properties.
Ben Habib
Chief Executive
23 June 2022
FINANCE DIRECTOR'S REVIEW
Profit before tax for the year was GBP7.08 million (2021: loss before tax GBP5.09 million).
The results were dominated by an exceptional gain of EUR9.00 million (GBP7.81 million) from the restructuring in June 2021 of the finance lease secured against the Group's office block in Gdynia, Poland. The loss in the prior year was mainly due to the recognition of an impairment of GBP7.02 million in the value of this property following the expiry of the lease to its sole tenant.
The contribution from Associates and Investments increased to GBP1.12 million (2021: GBP0.65 million). The explanation for this increase is in the 'Share of results in associates' section below.
Group net assets excluding non-controlling interests increased by 20.0% to GBP44.14 million (31 March 2021: GBP36.79 million) mainly due to the reduction in borrowings which resulted from the restructuring of the finance lease at Gdynia.
Gross debt excluding IFRS 16 lease liabilities reduced to GBP23.66 million (31 March 2021: GBP35.09 million) mainly due to the restructuring of the finance lease at Gdynia . Of this GBP10.14 million is deferred consideration on which no interest is payable. Net debt excluding IFRS 16 lease liabilities reduced to GBP17.24 million (31 March 2021: GBP18.85 million).
GOING CONCERN
Information on our approach and the result of our assessment is included in note 1 of the Financial Statements.
INCOME STATEMENT
A review of the operating and financial performance of the two trading divisions are included in the Chief Executive's Statement.
Revenue and Gross Profit
Revenue for the year reduced by GBP3.47 million or 29% to GBP8.65 million (2021: GBP12.12 million) mainly due to the expiry in February 2021 of the sole lease at the Group's office block in Gdynia. The contribution to rental income from this property reduced by GBP3.20 million in the year.
Gross profit (revenue less the cost of sales) reduced by GBP2.27 million or 28.4% to GBP5.72 million (2021: GBP7.99 million) due mainly to the property in Gdynia making a loss of GBP0.56 million (2021: profit GBP2.85 million).
Performance fee income
Performance fees totalled GBP0.56 million (2021: GBP0.04 million) and were entirely attributable to Fprop Offices LP (2021: GBPnil). Accumulated income in respect of this fund amounts to GBP1.97 million (2021: GBP1.38 million), all of which is subject to clawback in the event of losses by the Limited Partnership.
Operating expenses
Operating expenses increased by GBP0.10 million or 1% to GBP7.46 million (2021: GBP7.36 million) .
Share of results in associates
The contribution from the Group's seven associates amounted to GBP0.85 million (2021: GBP0.47 million). The increase was mainly attributable to the Group's 44% share in Fprop Opportunities plc (FOP), which benefitted from an increase of GBP0.91 million in the fair value of the Group's interest (2021: decreased by GBP2.99 million).
Fprop Phoenix Ltd, in which the Group owns 23.4%, made a loss after tax of which the Group's share amounted to GBP0.62 million (2021: loss of GBP0.38 million).
Investment income (from other financial assets and investments)
Investment income from the Group's four investments in four (of the five) UK funds managed by FPAM increased by 42% to GBP0.27 million. (2021: GBP0.19 million).
Financing costs
Finance costs reduced to GBP0.33 million (2021: GBP0.74 million) mainly due to lower Group debt following restructuring of the financing of the property in Gdynia. All bank loans are denominated in Euros and all are used to finance properties valued in Euros.
Current tax
The current tax charged reduced marginally to GBP0.17 million (2021: GBP0.18 million).
The charge includes Polish and Romanian corporation tax where headline rates remain at 19% and 16% respectively.
STATEMENT OF FINANCIAL POSITION
Investment Properties and Property held as Inventory (all held using the cost model)
The Group has adopted the "cost model" of valuation whereby investment properties are accounted for at the lower of cost less accumulated depreciation and impairments or fair market value.
The book value of the Group's seven directly owned properties at the year-end was GBP36.20 million (31 March 2021: GBP34.95 million). Their fair market value was GBP42.24 million (31 March 2021: GBP41.57 million).
Capital expenditure incurred on the Group's seven directly owned properties amounted to GBP1.76 million (2021: GBP0.37 million).
Foreign exchange revaluations amounted to GBP0.32 million (2021: GBP2.52 million).
Borrowings
Bank and other borrowings reduced to GBP23.66 million (31 March 2021: GBP35.09 million) mainly due to the restructuring of a debt secured on our property in Gdynia, whereby a payment of EUR16.00 million was agreed to be made in final settlement of the debt of EUR25.00 million. Of this EUR4.00 million was paid during the year and the remaining EUR12.00 million was deferred, interest free, for payment by June 2024. The EUR9.00 million reduction in the face value of the loan from EUR25.00 million down to EUR16.00 million was credited to the Income Statement.
The ratio of debt to gross assets at their market value (the gearing ratio) reduced to 30.69% (31 March 2021: 42.05%).
All bank loans are denominated in Euros and are non-recourse to the Group's assets.
Deposits of EUR0.65 million (31 March 2021: EUR0.75million) are held by lending banks in respect of four bank loans (31 March 2021: five) as security for Debt Service Cover Ratio (DSCR) covenants, of which EUR62,000 (31 March 2021: EUR98,000) are accounted for as prepayments.
Trade and Other Receivables
Trade and other receivables decreased by 16% to GBP4.33 million (31 March 2021: GBP5.15 million) due to a reduction in a tenant deposit at the property in Gdynia, following the expiry of the lease to its former tenant.
Provisions
Provisions decreased to GBP0.92 million (31 March 2021: GBP2.08 million) and are entirely in respect of the guaranteed space at CH8, Warsaw. Payments of GBP1.93 million in respect of fit out and rent guarantee costs were made in the year. The reduction in the provision is due to some 73% of the office space which is subject to the guarantee having been leased, as announced by RNS on 23 September 2021. The provision represents our best estimate of the Group's remaining liability over the life of the rent guarantee (until April 2025).
Non-controlling Interests
The value of the Group's two non-controlling interests (10% of the share capital of Corp Sp. z o. o., the property management company to Blue Tower, Warsaw, and 23% of the share capital of E and S Estates Ltd, a fund invested in three properties in Poland) increased to GBP0.23 million (31 March 2021: GBP0.20 million).
Investment Revaluation Reserve
The investment revaluation reserve increased by GBP1.04 million to GBP0.68 million (2021: decreased by GBP0.36 million) mainly due to an increase of GBP0.90 million in the value of the Group's investment in Fprop UK Special Opportunities LP. In addition, the value of the Group's share in the other investments increased by GBP0.14 million of which the largest increase is in UK PPP LP, which increased by GBP0.10 million.
Foreign Exchange Translation Reserve
A weakening of the Polish Zloty against Sterling to PLN/ GBP 5.4868 (31 March 2021: PLN/ GBP 5.4443) resulted in the deficit in the foreign exchange translation reserve increasing to GBP3.30 million (31 March 2021: GBP3.11 million).
CASH and CASH FLOW
The Group's cash balance reduced to GBP6.42 million (31 March 2021: GBP16.24 million: 31 March 2020 GBP7.34 million) mainly as a result of investing and financing activities.
Net cash flow by activity in the year was:
-- Operating activities: -GBP1.44 million (2021: GBP38.73 million) -- Investing activities: -GBP4.27 million (2021: GBP1.05 million) -- Financing activities: -GBP4.08 million (2021: -GBP30.66 million) -- Currency translation: loss of -GBP0.03 million (2021: loss of -GBP0.21 million) -- Net cash flow: -GBP9.82 million (2021: GBP8.91 million)
The significant cash outflows in the year were:
-- GBP3.63 million: Investment in two UK funds (Fprop Special Opportunities LP and Fprop Fulcrum Property LP).
-- GBP3.43 million (EUR4 million): Debt restructuring at Group property in Gdynia;
-- GBP1.76 million: Capital expenditure, mainly at one of the Group's mini supermarkets held in the consolidated entity, E and S Estates Sp. z o.o.;
-- GBP1.30 million: Scheduled bank loan repayments; -- GBP 0.28 million: Interim dividend.
Significant cash inflows in the year included:
-- GBP1.29 million: Refinancing of the bank loan secured against the Group's two directly owned properties in Romania;
-- GBP1.08 million: Partial repayment of shareholder loan by FOP and payment of corresponding interest;
Laura James
Group Finance Director
CONSOLIDATED INCOME STATEMENT
for the year ended 31 March 2022
Year ended Year ended
31 March 31 March
2022 2021
Notes
Total results Total results
GBP'000 GBP'000
---------------------------------------- -------- --------------- ---------------
Revenue 2 8,645 12,119
Cost of sales (2,928) (4,128)
---------------------------------------- -------- --------------- ---------------
Gross profit 5,717 7,991
Debt reduction following restructuring
of finance lease 3 7,809 -
Profit on sale of an investment
property - 161
Recycled foreign exchange gain - 1,163
Impairment loss to an investment
property 7 - (7,023)
Operating expenses (7,464) (7,363)
---------------------------------------- -------- --------------- ---------------
Operating profit/ (loss) 6,062 (5,071)
---------------------------------------- -------- --------------- ---------------
Share of associates' (loss)/profit
after tax 9 (29) 3,467
Share of associates' revaluation
gains/ (losses) 9 876 (2,997)
Investment income 271 185
Interest income 4 230 67
Interest expense 4 (330) (740)
---------------------------------------- -------- --------------- ---------------
Profit/ (loss) before tax 7,080 (5,089)
Tax charge 5 (245) (2,312)
---------------------------------------- -------- --------------- ---------------
Profit/ (loss) for the year 6,835 (7,401)
---------------------------------------- -------- --------------- ---------------
Attributable to:
Owners of the parent 6,779 (7,449)
Non-controlling interests 56 48
---------------------------------------- -------- --------------- ---------------
6,835 (7,401)
---------------------------------------- -------- --------------- ---------------
Earnings/ (loss) per share:
Basic 6 6.14p (6.75p)
Diluted 6 6.01p (6.59p)
---------------------------------------- -------- --------------- ---------------
All operations are continuing.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March 2022
Year ended Year ended
31 March 31 March
2022 2021 Total
Total results results
GBP'000 GBP'000
Profit/ (loss) for the year 6,835 (7,401)
--------------------------------------- --------------- ------------
Other comprehensive income
Items that may subsequently be
reclassified to profit or loss
Exchange differences on retranslation
of foreign subsidiaries (189) (685)
Foreign exchange profit recycled
to the Income Statement - (1,163)
Net profit/ (loss) on financial
assets at fair value through other
comprehensive income 1,039 (119)
Taxation - -
--------------------------------------- --------------- ------------
Total comprehensive income for
the year 7,685 (9,368)
Total comprehensive income for
the year attributable to:
Owners of the parent 7,623 (9,440)
Non-controlling interests 62 72
--------------------------------------- --------------- ------------
7,685 (9,368)
--------------------------------------- --------------- ------------
All operations are continuing.
STATEMENT OF FINANCIAL POSITION
First Property Group plc
Registered No. 02967020
As at 31 March 2022
2022 2021
Notes Group Group
GBP'000 GBP'000
------------------------------ -------- --------- ---------
Non-current assets
Investment properties 7 23,849 22,456
Right of use assets 8 1,018 686
Property, plant and
equipment 128 157
Investment in Group - -
undertakings
Investment in associates 9 19,135 18,577
Other financial assets
at fair value through
OCI 9 7,445 3,061
Other receivables 13 95 487
Goodwill 10 153 153
Deferred tax assets 11 1,599 1,518
------------------------------ -------- --------- ---------
Total non-current assets 53,422 47,095
------------------------------ -------- --------- ---------
Current assets
Inventories - land and
buildings 12 12,352 12,494
Current tax assets 14 296
Right of use assets 8 446 -
Trade and other receivables 13 4,329 5,149
Cash and cash equivalents 6,419 16,244
------------------------------ -------- --------- ---------
Total current assets 23,560 34,183
------------------------------ -------- --------- ---------
Current liabilities
Trade and other payables 14 (3,388) (3,447)
Provisions 15 (922) (2,076)
Lease Liabilities 8 (410) -
Financial liabilities 16 (4,212) (22,637)
Current tax liabilities (20) (12)
------------------------------ -------- --------- ---------
Total current liabilities (8,952) (28,172)
------------------------------ -------- --------- ---------
Net current assets 14,608 6,011
------------------------------ -------- --------- ---------
Total assets less current
liabilities 68,030 53,106
------------------------------ -------- --------- ---------
Non-current liabilities
Financial liabilities 16 (9,309) (12,457)
Other financial liabilities 17 (10,141) -
Lease Liabilities 8 (1,098) (686)
Deferred tax liabilities 11 (3,112) (2,974)
------------------------------ -------- --------- ---------
Net assets 44,370 36,989
------------------------------ -------- --------- ---------
Equity
Called up share capital 1,166 1,166
Share premium 5,791 5,791
Share-based payment
reserve 179 179
Foreign exchange translation
reserve (3,297) (3,108)
Purchase of own shares
reserve (2,653) (2,653)
Investment revaluation
reserve 684 (355)
Retained earnings 42,271 35,768
------------------------------ -------- --------- ---------
Equity attributable
to the owners of the
parent 44,141 36,788
Non-controlling interests 229 201
------------------------------ -------- --------- ---------
Total equity 44,370 36,989
------------------------------ -------- --------- --------- Net assets per share 6 40.00p 33.33p ------------------------------ -------- --------- ---------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2022
Group Share Share Share-based Foreign Purchase Investment Retained Non-controlling Total
capital premium payment exchange of own revaluation earnings interests
reserve translation shares reserve
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- --------
At 1 April
2021 1,166 5,791 179 (3,108) (2,653) (355) 35,768 201 36,989
Profit for
the year - - - - - - 6,835 - 6,835
Net profit
on financial
assets at
fair value
through other
comprehensive
income - - - - - 1,039 - - 1,039
Exchange
differences
arising on
translation
of foreign
subsidiaries - - - (189) - - - 6 (183)
Foreign exchange - - - - - - - - -
profit recycled
to the Income
Statement
----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- --------
Total
comprehensive
income - - - (189) - 1,039 6,835 6 7,691
Sale of treasury - - - - - - - - -
shares
Purchase of - - - - - - - - -
treasury shares
Exercise of - - - - - - - - -
Share Options
Non-controlling
interests - - - - - - (56) 56 -
Dividends
paid - - - - - - (276) (34) (310)
----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- --------
At 31 March
2022 1,166 5,791 179 (3,297) (2,653) 684 42,271 229 44,370
----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- --------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2021
Group Share Share Share-based Foreign Purchase Investment Retained Non-controlling Total
capital premium payment exchange of own revaluation earnings interests
reserve translation shares reserve
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- --------
At 1 April
2020 1,166 5,791 179 (1,260) (2,653) (236) 45,060 157 48,204
Loss for the
year - - - - - - (7,401) - (7,401)
Net (loss)
on financial
assets at
fair value
through other
comprehensive
income - - - - - (119) - - (119)
Exchange
differences
arising on
translation
of foreign
subsidiaries - - - (685) - - - 24 (661)
Foreign exchange
profit recycled
to the Income
Statement - - - (1,163) - - - - (1,163)
----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- --------
Total
comprehensive
income - - - (1,848) - (119) (7,401) 24 (9,344)
Sale of treasury - - - - - - - - -
shares
Purchase of - - - - - - - - -
treasury shares
Exercise of - - - - - - - - -
Share Options
Non-controlling
interests - - - - - - (48) 48 -
Dividends
paid - - - - - - (1,843) (28) (1,871)
----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- --------
At 31 March
2021 1,166 5,791 179 (3,108) (2,653) (355) 35,768 201 36,989
----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- --------
Foreign Exchange Translation Reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign Group companies. This reserve is non distributable.
Share Based Payment Reserve
The Group grants certain of its employees' rights to its equity instruments as part of its share-based payment incentive plans. The value of these rights has been charged to the Income Statement and has been credited to the share-based payment reserve (which is a distributable reserve).
Purchase of Own Ordinary Shares
The cost of the Company's Ordinary Shares purchased by the Company for treasury purposes is held in this reserve. The reserve is non distributable.
Investment Revaluation Reserve
The change in fair value of the Group's financial assets measured at fair value through Other Comprehensive Income is held in this reserve and is non distributable.
CASH FLOW STATEMENTS
for the year ended 31 March 2022
2022 2021
Notes Group Group
GBP'000 GBP'000
---------------------------------------- ------ --------- ---------
Cash flows from operating activities
Operating profit/(loss) 6,062 (5,071)
Adjustments for:
Depreciation of investment property
and property, plant & equipment 90 1,362
Debt reduction following restructuring
of finance lease 3 (7,809) -
Profit on the sale of investment
property - (161)
Loss on the sale of inventory - 217
Impairment loss on an investment
property - 7,023
Decrease/(increase) in inventories 38 (129)
Decrease/ (increase) in trade
and other receivables 1,208 38,858
(Decrease)/ increase in trade
and other payables (1,213) (2,607)
Other non-cash adjustments 65 (126)
---------------------------------------- ------ --------- ---------
Cash generated from operations (1,559) 39,366
---------------------------------------- ------ --------- ---------
Taxes paid 118 (640)
---------------------------------------- ------ --------- ---------
Net cash flow from operating
activities (1,441) 38,726
---------------------------------------- ------ --------- ---------
Cash flow (used in)/ from investing
activities
Capital expenditure on investment
properties 7 (1,642) (160)
Proceeds from partial disposal - -
of financial assets held at fair
value through Other Comprehensive
Income
Purchase of property, plant &
equipment 2 (33) (134)
Proceeds from the sale of investment
property - 1,505
Investment in shares of new associates - (605)
Investment in funds 9b) (3,633) -
Proceeds from funds 9b) 290 -
Proceeds from investments in
associates 9a) 48 172
Interest received 187 67
Dividends from associates 9a) 241 24
Distributions received 266 179 ---------------------------------------- ------ --------- --------- Net cash flow (used in)/ from investing activities (4,276) 1,048 ---------------------------------------- ------ --------- --------- Cash flow (used in)/ from financing activities ---------------------------------------- ------ --------- --------- Proceeds from bank loan 1,289 - Repayment of bank loans (1,297) (25,077) Repayment of finance lease (3,434) (2,970) Sale of shares held in treasury - - Purchase of new treasury shares - - Exercise of share options - - Interest paid 4 (330) (740) Dividends paid (276) (1,843) Dividends paid to non-controlling interests (34) (28) ---------------------------------------- ------ --------- --------- Net cash flow (used in)/ from financing activities (4,082) (30,658) Net (decrease)/increase in cash and cash equivalents (9,799) 9,116 ---------------------------------------- ------ --------- --------- Cash and cash equivalents at the beginning of the year 16,244 7,337 ---------------------------------------- ------ --------- --------- Currency translation (losses) on cash and cash equivalents (26) (209) ---------------------------------------- ------ --------- --------- Cash and cash equivalents at the year end 6,419 16,244 ---------------------------------------- ------ --------- ---------
Basis of Preparation
These preliminary financial statements have not been audited and are derived from the statutory accounts within the meaning of section 434 of the Companies Act 2006. They have been prepared in accordance with the Group's accounting policies that will be applied in the Group's annual financial statements for the year ended 31 March 2022. The policies have been consistently applied to all years presented unless otherwise stated below. These accounting policies are drawn up in accordance with UK-adopted International Accounting Standards ('IFRS'). Whilst the financial information included in this preliminary statement has been prepared in accordance with IFRS, this announcement does not itself contain sufficient information to fully comply with IFRS. The comparative figures for the financial year ended 31 March 2021 are not the statutory accounts for the financial year but are derived from those accounts prepared under IFRS which have been reported on by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified, did not include references to any matter to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
Going Concern
In a financial year impacted by COVID-19 and the economic adversity brought about by governments' policy responses to it, the Directors have carried out an analysis to support their view that the Group is a going concern and under which basis these financial statements have been prepared.
Analysis and scenario testing, was carried out on the Group's main divisional income streams, being asset management fees from the asset management division, rental income from its seven directly owned group properties and cash returns from its associates and investments.
a) Asset Management Fee Income
Asset management fee income is primarily derived from its UK funds (53%), four of which are limited partnerships whose limited partners are a mix of pension funds and registered charities.
With one exception, fees are invoiced monthly and are calculated based on a percentage of the latest valuation, which for the UK funds is performed quarterly. In the one fund from which fees are not levied by reference to the properties valuation (Fprop Offices LP) a 7% decrease in property values in this fund would trigger a clawback of a proportion of the fees received. A 27% decrease would trigger the maximum clawback of fees recognised to date of GBP1.97 million.
In the two UK funds with borrowing there is headroom of 14% on current property values within the LTV covenant agreed with the lenders. The Directors believe all funds have access to adequate resources to remedy the remote possibility of any loan covenant breaches.
Asset management fees on the Group's Polish and Romanian managed funds are also levied as a percentage of funds under management, with reference to the most recent valuations, again with one exception where the fee is fixed (Fprop Phoenix Ltd). These funds are set up under the ownership of a UK limited company which in turn owns the company domiciled in the country that owns the property. Each of these local companies has borrowing secured on the property and is therefore ring fenced from the Group.
The longevity of this asset management fee income is determined by the fund's life which is fixed by agreement when each fund is first established. The weighted average unexpired fund management contract term is 3 years, 3 months.
b) Rental Income from Group Properties
All seven Group Properties are located in Poland or Romania. These properties consist of three office blocks, a logistics warehouse, two mini-supermarkets and one plot of land currently under development into a mini-supermarket. All were independently valued on 31 March 2022 at GBP42.24 million (31 March 2021: GBP41.57 million).
The rental income has been reviewed and evaluated and no significant falls in collection rates are expected. The tenants are of good quality, as proven by excellent cash collection rates through and after the lockdown periods. Any renegotiation of rental payment terms that have been agreed are reflected in the analysis. Exposure to non-food retailers is very limited.
The property in Gdynia, Poland, was 97% vacant at 31 March 2022. As at 23 June 2022 it was 20% let however it could be a couple of years before this property again yields a significant income.
c) Income from Associates and Investments
Analysis was also conducted on the returns from the Group's investment in its seven Associates. All funds invested in Poland and Romania have temporarily suspended distributions to shareholders and consequently no income for the Group was assumed from this source for the purposes of this test. All bank loan covenants were reviewed and tested against future decreases in valuation and net operating income.
Dividend income from the Group's UK investments was also stress tested and found not to have a significant impact.
Going Concern Statement
Based on the results of the analysis conducted as outlined above the Board believes that the Group has the ability to continue its business for at least twelve months from the date of approval of the financial statements and therefore has adopted the going concern basis in the preparation of this financial information.
New Standards and Interpretations
These preliminary financial statements have not been audited and are derived from the statutory accounts within the meaning of section 434 of the Companies Act 2006. They have been prepared in accordance with the Group's accounting policies that will be applied in the Group's annual financial statements for the year ended 31 March 2022. On 31 December 2020, IFRS as adopted by the European Union at that date was brought into UK law and became UK-adopted International Accounting Standards, with future changes being subject to endorsement by the UK Endorsement Board. The Group transitioned to UK-adopted International Accounting Standards in its consolidated financial statements on 1 April 2022. This change constitutes a change in accounting framework however, there is no impact on recognition, measurement or disclosure.
The financial statements have been prepared in accordance with UK-adopted International Accounting Standards, (the 'applicable framework'), and have been prepared in accordance with the provisions of the Companies Act 2006 (the 'applicable legal requirements'). The policies have been consistently applied to all years presented unless otherwise stated below. Whilst the financial information included in this preliminary statement has been prepared in accordance with IFRS, this announcement does not itself contain sufficient information to fully comply with IFRS. The comparative figures for the financial year ended 31 March 2021 are not the statutory accounts for the financial year but are derived from those accounts prepared under IFRS which have been reported on by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified, did not include references to any matter to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
New standards impacting the Group have been adopted in the preliminary financial statements for the year ended 31 March 2022. These have given rise to the following changes in the Group's accounting policies, which have not had a material impact on the financial statements for the year ending 31 March 2022:
-- IFRS 16 (amended) - Covid-19-related Rent Concessions;
-- IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 (amended) - Interest Rate Benchmark Reform - Phase 2.
The Group has not adopted any new IFRSs that are issued but not yet effective and it does not expect any of these changes to impact the group.
These preliminary financial statements were approved by the Board of Directors on 22 June 2022.
1. Revenue
Revenue from continuing operations consists of revenue arising in the United Kingdom 27% (2021: 20%), Poland 59% (2021: 71%) and Romania 14% (2021: 9%). All revenue relates solely to the Group's principal activities.
2. Segment Reporting 2022
Fund Group Properties
Management Division
Division
---------------------------------------------
Property Group Associates Unallocated Total
fund properties and central
management investments overheads
----------------------- --------------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ---------------------- ---------------------- ----------------------- ----------------------- --------------------
Rental income - 2,926 - - 2,926
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Service charge
income - 1,678 - - 1,678
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Sale of a - - - - -
property
held in
inventory
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Asset
management
fees 3,463 - - - 3,463
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Performance
related
fee income 578 - - - 578
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Total revenue 4,041 4,604 - - 8,645
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Depreciation
and
amortisation (36) (24) - - (60)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Operating
profit 1,437 7,781 - (3,156) 6,062
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Share of
results
in associates - - (29) - (29)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Fair value
adjustment
on associates - - 876 - 876
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Investment
income - - 271 - 271
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Interest income - 29 - 201 230
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Interest
payable - (330) - - (330)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Profit/(loss)
before
tax 1,437 7,480 1,118 (2,955) 7,080
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Analysed as:
Underlying
profit/(loss)
before tax
before
adjusting for
the
following
items: 1,182 401 242 (1,449) 376
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Provision in
respect
of rent
guarantee - (629) - - (629)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Debt reduction
following
restructuring
of
finance lease - 7,809 - - 7,809
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Interest
received
on loan to FOP
@12% - 202 - - 202
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Fair value
adjustment
on associates - - 876 - 876
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Performance
related
fee income 578 - - - 578
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Staff
incentives (305) (251) - (1,472) (2,028)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Realised
foreign
currency
(losses)/gains (18) (52) - 34 (104)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Total 1,437 7,480 1,118 (2,955) 7,080
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Assets - Group 891 44,693 7,445 4,818 57,847
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Share of net
assets
of associates - 19,135 - 19,135
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Liabilities (143) (31,922) - (547) (32,612)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Net assets 748 12,771 26,580 4,271 44,370
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Additions to non-current assets
Property, plant
and
equipment 5 28 33
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Investment
properties - 1,642 - - 1,642
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Trading stock - 119 - - 119
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Segment Reporting 2021
Fund Group Properties
Management Division
Division
---------------------------------------------
Property Group Associates Unallocated Total
fund properties and central
management investments overheads
----------------------- --------------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ---------------------- ---------------------- ----------------------- ----------------------- --------------------
Rental income - 6,087 - - 6,087
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Service charge
income - 1,544 - - 1,544
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Sale of a
property
held in
inventory - 1,103 - - 1,103
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Asset
management
fees 3,345 - - - 3,345
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Performance
related
fee income 40 - - - 40
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Total revenue 3,385 8,734 - - 12,119
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Depreciation
and
amortisation (21) (1,425) - - (1,446)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Operating
profit 1,304 (5,090) - (1,285) (5,071)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Share of
results
in associates - - 3,467 - 3,467
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Fair value
adjustment
on associates - - (2,997) - (2,997)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Investment
income - - 185 - 185
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Interest income - 31 - 36 67
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Interest
payable - (740) - - (740)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Profit/(loss)
before
tax 1,304 (5,799) 655 (1,249) (5,089)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Analysed as:
Underlying
profit/(loss)
before tax
before
adjusting for
the
following
items: 1,294 3,023 1,472 (1,213) 4,576
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Provision in
respect
of rent
guarantee - (1,030) - - (1,030)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Profit on the
sale
of a Group
Property - 161 - - 161
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Loss on the
sale
of a Group
Property
held in
inventory - (217) - - (217)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Impairment to
investment
property - (7,023) - - (7,023)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
One-off
additional
income from
our
share of an
associate
(FOP) - - 2,180 - 2,180
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Fair value
adjustment
on associates
(FOP) - - (2,997) - (2,997)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Recycled
foreign
exchange gain - 1,163 - - 1,163
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Depreciation - (1,327) - - (1,327)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Performance
related
fee income 40 - - - 40
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Staff - - - - -
incentives
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Realised
foreign
currency
(losses)/gains (30) (549) - (36) (615)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Total 1,304 (5,799) 655 (1,249) (5,089)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Assets - Group 836 43,873 3,061 14,931 62,701
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Share of net
assets
of associates - - 18,885 (308) 18,577
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Liabilities (120) (44,001) - (168) (44,289)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Net assets 716 (128) 21,946 14,455 36,989
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Additions to non-current assets
Property, plant
and equipment 27 110 - - 137
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Investment
properties - 160 - - 160
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Trading stock - 213 - - 213
---------------------- ---------------------- ----------------------- ----------------------- --------------------
3. Debt reduction following restructuring of finance lease
The results reflect the reduction of EUR9.00 million (GBP7.81 million) in the amount owed to ING Bank ( from EUR25 million to EUR16 million) in final settlement of the finance lease secured against the Group's directly held property in Gdynia. As part of the transaction ING was paid EUR4.00 million in June 2021. The remainder of the finance lease liability was replaced by an interest free deferred consideration of EUR12.00 million (GBP10.14 million) repayable by June 2024. The deferred consideration is reflected as an Other Financial Liability in the Statement of Financial Position.
4. Interest Income
2022 2021
Group Group
GBP'000 GBP'000
Interest income - bank deposits - 26
Interest income - other 230 41
-------------------------------------------- -------------------- --------------------
Total interest income 230 67
-------------------------------------------- -------------------- --------------------
2022 2021
Group Group
GBP'000 GBP'000
---------------------------------------------- -------------------- --------------------
Interest expense - property loans (326) (467)
Interest expense - bank and other (4) (47)
Finance charges on finance leases - (226)
---------------------------------------------- -------------------- --------------------
Total interest expense (330) (740)
---------------------------------------------- -------------------- --------------------
5. Tax Expense
2022 2021
Group Group
GBP'000 GBP'000
------------------------------------------------ -------------------- --------------------
Analysis of tax charge for the year
Current tax (172) (179)
Deferred tax (73) (2,133)
------------------------------------------------ -------------------- --------------------
Total tax charge for the year (245) (2,312)
------------------------------------------------ -------------------- --------------------
The tax charge includes current and deferred tax for continuing operations.
The deferred tax charge in 2021 arose mainly as a result of the reversal of a previously recognised deferred tax asset following the repayment of the bank loan secured against the property CH8 in April 2020.
As in prior years, brought forward and current UK tax losses have not been recognised as a deferred tax asset due to insufficient foreseeable taxable income being earned in the UK.
6. Earnings/NAV per Share
2022 2021
Basic earnings per share 6.14p (6.75p)
Diluted earnings per share 6.01p (6.59p)
The following earnings have been used
to calculate both the basic and diluted
earnings per share:
GBP'000 GBP'000
Basic earnings 6,779 (7,449)
Notional interest on share options
assumed to be exercised 7 7
Diluted earnings assuming full dilution 6,786 (7,442)
The following numbers of shares have been used to calculate the basic and diluted earnings per share and the net assets and adjusted net assets per share:
2022 2021
Number Number
-------------------------------------- ------------ ------------
Weighted average number of Ordinary
shares in issue
(used for basic earnings per share
calculation) 110,382,332 110,382,332
-------------------------------------- ------------ ------------
Number of share options 2,610,000 2,610,000
-------------------------------------- ------------ ------------
Total number of Ordinary shares used
in the diluted earnings per share
calculation 112,992,332 112,992,332
-------------------------------------- ------------ ------------
2022 2021
Net assets per share 40.00p 33.33p
Adjusted net assets per share 47.28p 42.80p
------------------------------- ------- -------
The following numbers have been used to calculate both
the net assets and adjusted net assets per share:
2022 2021
------------------------------------------- --------- ------------
GBP'000 GBP'000
------------------------------------------- --------- ------------
For net assets per share
------------------------------------------- --------- ------------
Net assets excluding non-controlling
interests 44,141 36,788
GBP'000 GBP'000
For adjusted net assets per share
Net assets excluding non-controlling
interests 44,141 36,788
Investment properties at fair value
net of deferred tax 2,486 2,663
Inventories at fair value net of deferred
tax 2,403 2,701
Investments in associates and other
financial investments 4,016 5,827
Other items 381 381
------------------------------------------- --------- ------------
Total 53,427 48,360
------------------------------------------- --------- ------------
7. Investment Properties
2022 2021
Group Group
GBP'000 GBP'000
------------------------------------------------------ -------------------- --------------------
Investment properties
At 1 April 22,456 32,537
Capital expenditure 1,642 160
Disposal - (241)
Depreciation (30) (1,327)
Impairment loss to an investment property - (7,023)
Foreign exchange translation (219) (1,650)
------------------------------------------------------ -------------------- --------------------
At 31 March 23,849 22,456
------------------------------------------------------ -------------------- --------------------
Investment properties owned by the Group are stated at cost less depreciation and any accumulated impairment in value. The properties were valued at the Group's financial year end at EUR31.85 million (31 March 2021: EUR30.22 million), the Sterling equivalent at closing foreign exchange rates being GBP26.92 million (31 March 2021: GBP25.74 million).
In 2015 the Directors resolved to depreciate the value of the property in Gdynia over the remaining term of the lease, (which expired in February 2021) to reflect its residual value. No other property has been depreciated as their respective estimated residual values are expected to be higher than their carrying value.
An impairment in value of GBP7.02 million was recognised in 2021 in respect of the property in Gdynia.
Amounts recognised in the income statement:
2022 2021
Group Group
GBP'000 GBP'000
------------------------------------------------ -------------------- --------------------
Rental income from operating leases 2,926 6,087
i. Leasing arrangements where the group is a lessor:
2022 2021
Group Group
GBP'000 GBP'000
--------------------------------------------------------- -------------------- --------------------
Minimum lease receipts under non-cancellable
operating leases to be received:
Not later than one year 2,043 1,898
Later than one year and not later
than five years 6,790 5,366
Later than five years 3,758 3,866
--------------------------------------------------------- -------------------- --------------------
12,591 11,130
--------------------------------------------------------- -------------------- --------------------
Investment properties and property held within stock are comprised of commercial properties that are leased to third parties. The Group has approximately 38 leases granted to its tenants. These vary depending on the individual tenant and the respective property and demise but typically are let for a term of five years. The weighted average lease length of the leases granted was 5 years and 7 months (2021: 4 years and 9 months). No contingent rents are charged.
8. Right of Use Assets and Lease Liabilities
This note provides information for leases where the group is a lessee. For leases where the group is a lessor, see note 7.
The amounts recognised in the financial statements in relation to the leases are as follows:
i. Amounts recognised in the balance sheet:
31 Mar 2022 31 Mar 2021
GBP'000 GBP'000
-------------------------------- ----------------------- -----------------------
Right of use assets
Current 446 -
Non-current 1,018 686
-------------------------------- ----------------------- -----------------------
31 Mar 2022 31 Mar 2021
GBP'000 GBP'000
------------------------------ ----------------------- -----------------------
Lease Liabilities
Current 410 -
Non-current 1,098 686
------------------------------ ----------------------- -----------------------
There was one addition of GBP754,000 (2021: GBPnil) to the right of use assets and one addition to the lease liability of GBP767,999 (2021: GBPnil) during the financial year.
ii. Amounts recognised in the Income Statement:
2022 2021
GBP'000 GBP'000
--------------------------------------- -------- --------
Depreciation/ Rent charge of right-of
use-assets
Buildings 446 197
--------------------------------------- -------- --------
446 197
--------------------------------------- -------- --------
2022 2021
GBP'000 GBP'000
------------------ -------- --------
Interest expense
Buildings 186 20
------------------ -------- --------
186 20
------------------ -------- --------
iii. Summary of the groups leasing activity:
The Group has reviewed the terms of its leases and has identified:
The lease of the UK office on St. James's Street, London, SW1A 1HD which commenced on 2 July 2020. A discount rate of 2.00% has been applied.
The lease by First Property Poland Sp. z o. o. (FPP), a subsidiary entity leasing office space from 5th Property Trading Poland Sp. z o. o. (a related party to the Group) which terminates on 31 March 2025. A discount rate of 2.75% has been applied representing its incremental borrowing rate.
The lease by First Property Poland Sp. z o. o. (FPP), a subsidiary entity leasing office space from Lublin Zana (a related party to the Group) which terminates on 31 December 2024
As at 31 March 2022 the Group has recognised a lease liability under IFRS 16 of GBP1.51 million (31 March 2021: GBP0.69 million) and a right of use asset of GBP1.46 million (2021: GBP0.69 million). The net credit to the Income Statement was GBP44,000. Rental contracts are typically made for fixed periods of six months to four years but may have extension options.
9. Investment in Associates and Other Financial Assets and Investments
The Group has the following investments:
2022 2021
Group Group
GBP'000 GBP'000
---------------------------------------------------- -------------------- --------------------
a) Associates
At 1 April 18,577 17,698
Additions - 605
Disposals - -
Shareholder loan repayments (48) (172)
Share of associates' profit (loss)
after tax (29) 3,467
Share of associates' revaluation gains/
(losses) 876 (2,997)
Dividends received (241) (24)
---------------------------------------------------- -------------------- --------------------
At 31 March 19,135 18,577
---------------------------------------------------- -------------------- --------------------
The Group's investments in associated companies are accounted for under the "cost model" under IAS40 whereby the Group's share is held at cost plus its share of subsequent accumulated profits less dividends received. It comprises the following:
2022 2021
Group Group
GBP'000 GBP'000
----------------------------------------------------- -------------------- --------------------
Investment in associates
5th Property Trading Ltd 1,652 1,555
Fprop Romanian Supermarkets Ltd - 194
Fprop Galeria Corso Ltd 2,700 2,479
Fprop Krakow Ltd 1,580 1,592
Fprop Cluj Ltd 615 596
Fprop Phoenix Ltd 913 1,530
Fprop Opportunities plc 11,983 10,939
----------------------------------------------------- -------------------- --------------------
19,443 18,885
----------------------------------------------------- -------------------- --------------------
Less: Share of profit after tax withheld
on sale of property to 5th Property
Trading Ltd in 2007 (308) (308)
----------------------------------------------------- -------------------- --------------------
19,135 18,577
----------------------------------------------------- -------------------- --------------------
If the Group had adopted the alternative "fair value" model for accounting for investment properties, the carrying value of the investments in associates would be GBP23.15 million (31 March 2021: GBP24.41 million).
The withheld profit figure of GBP0.31 million (2021: GBP0.31 million) 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.
2022 2021
Group Group
GBP'000 GBP'000
------------------------------------------------------ -------------------- --------------------
b) Other financial assets and investments
At 1 April 3,061 3,174
Additions 3,633 6
Disposals - -
Repayments (290) -
Increase/ (decrease) in fair value
during the year 1,041 (119)
------------------------------------------------------ -------------------- --------------------
At 31 March 7,445 3,061
------------------------------------------------------ -------------------- --------------------
The Group holds four (2021: three) unlisted investments in funds managed by it. Each is designated at fair value through "Other Comprehensive Income" (OCI) as per IFRS 9. The Directors' consider their fair value to be not materially different from their carrying value. Fair value has been calculated by applying the Group's percentage holding in the investments to the fair value of their net assets.
During the year the Group invested GBP0.25 million in a new fund that was established in association with Fulcrum Asset Management (Fprop Fulcrum Property LP) and also increased its investment by GBP3.38 million in the Group managed fund - Fprop UK Special Opportunities LP, increasing the Group's equity stake to 11.1%.
10. Goodwill
2022 2021
Group Group
GBP'000 GBP'000
------------------------ -------------------- --------------------
At 1 April 153 153
------------------------ -------------------- --------------------
At 31 March 153 153
------------------------ -------------------- --------------------
The Directors have conducted an annual impairment test and concluded that no impairment was necessary because the estimated value in use was higher than the value stated.
11. Deferred Tax
Deferred tax assets and liabilities are attributable to the following items:
2022 2022 2022 2021 2021 2021
Group Group Group Group Group Group
net assets assets liabilities net assets assets liabilities
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ------------ --------- ------------- ------------ --------- -------------
Accrued interest
payable 117 117 - (1,021) 118 (1,139)
Accrued income (4) - (4) (13) - (13)
Foreign bank
loan (212) 203 (415) 899 902 (3)
Investment properties
and inventories (1,476) 1,119 (2,595) (1,331) 427 (1,758)
Other temporary
differences 62 160 (98) 10 71 (61)
----------------------- ------------ --------- ------------- ------------ --------- -------------
At 31 March (1,513) 1,599 (3,112) (1,456) 1,518 (2,974)
----------------------- ------------ --------- ------------- ------------ --------- -------------
12. Inventories - Land and Buildings
2022 2021
Group Group
GBP'000 GBP'000
------------------------------------------------ -------------------- --------------------
Group properties for resale at cost
At 1 April 12,494 14,558
Capital expenditure 119 213
Disposal - (1,320)
Depreciation (157) (84)
Foreign exchange translation (104) (873)
------------------------------------------------ -------------------- --------------------
At 31 March 12,352 12,494
------------------------------------------------ -------------------- --------------------
The Group's total interest in Blue Tower (an office block in Warsaw) is 48.2% of the building. The fair value of this interest is EUR18.13 million (GBP15.32 million) down from EUR18.58 million (GBP15.83 million) at 31 March 2021 but is stated at cost as above.
The disposal in 2021 relates to the sale of another property related to Blue Tower. Consideration of GBP1.10 million was received in respect of this sale resulting in a loss on disposal of GBP0.22 million.
13. Trade and Other Receivables
2022 2021
Group Group
GBP'000 GBP'000
--------------------------------------------------------- -------------------- --------------------
Current assets
Trade receivables 1,003 1,325
Less provision for impairment of receivables (73) (281)
--------------------------------------------------------- -------------------- --------------------
Trade receivables net 930 1,044
Other receivables 2,299 3,408
Prepayments and accrued income 1,100 697
--------------------------------------------------------- -------------------- --------------------
At 31 March 4,329 5,149
--------------------------------------------------------- -------------------- --------------------
2022 2021
Group Group
Non-current assets GBP'000 GBP'000
------------------------------- ------------------- -------------------
Other receivables 95 487
------------------------------- ------------------- -------------------
Other receivables, under non-current assets, relates to the deferred consideration from the sale of an investment property located in Romania. This has been discounted to reflect its current value.
14. Trade and Other Payables
2022 2021
Group Group
GBP'000 GBP'000
----------------------------------------------- -------------------- --------------------
Current liabilities
Trade payables 1,105 2,052
Other taxation and social security 313 557
Other payables and accruals 1,917 691
Deferred income 53 147
----------------------------------------------- -------------------- --------------------
At 31 March 3,388 3,447
----------------------------------------------- -------------------- --------------------
15. Provisions
2022 2021
Group Group
Current liabilities GBP'000 GBP'000
-------------------------------- ------------------- -------------------
At 31 March 922 2,076
-------------------------------- ------------------- -------------------
The provision at 31 March 2022 represents a rent guarantee of GBP0.52 million (31 March 2021: GBP0.79 million) and fit-out costs of GBP0.40 million (31 March 2021: GBP1.29 million). These provisions are in respect of the rent guarantee given as part of the sale of CH8 which completed in April 2020.
16. Financial Liabilities
2022 2021
Group Group
GBP'000 GBP'000
------------------------- --------- ---------
Current liabilities
Bank loan 4,212 1,194
Finance leases - 21,443
------------------------- --------- ---------
At 31 March 4,212 22,637
------------------------- --------- ---------
Non-current liabilities
Bank loans 9,309 12,457
Finance leases - -
------------------------- --------- ---------
At 31 March 9,309 12,457
------------------------- --------- ---------
2022 2021
Group Group
GBP'000 GBP'000
------------------------------------- --------- ---------
Total obligations under bank loans
and finance leases
Repayable within one year 4,212 22,637
Repayable within one and five years 7,364 11,116
Repayable after five years 1,945 1,341
------------------------------------- --------- ---------
At 31 March 13,521 35,094
------------------------------------- --------- ---------
Four bank loans all denominated in Euros and totalling GBP13.52 million (31 March 2021: GBP35.09 million), 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 the finance lease are otherwise non-recourse to the Group's assets.
During the year to 31 March 2022, terms were agreed with the Bank to restructure the financing of Gdynia for a final repayment of EUR16.00 million, of which EUR4.00 million was paid with the balance of EUR12.00 million due in June 2024. This deferred consideration is shown as an Other Financial Liability in the Statement of Financial Position.
The interest rate profile of the Group's financial liabilities at 31 March 2022 and 31 March 2021 was as follows:
Floating Fixed Non- Total
rate rate interest
financial financial bearing
liabilities liabilities GBP'000 GBP'000
GBP'000 GBP'000
----------------------------- ------------- ------------- ---------- ---------
Bank loans 10,109 3,412 - 13,521
Finance lease obligations - - - -
Other financial liabilities - - 10,141 10,141
----------------------------- ------------- ------------- ---------- ---------
At 31 March 2022 10,109 3,412 10,141 23,662
Bank loans 9,903 3,748 - 13,651
Finance lease obligations 21,443 - - 21,443
Other financial liabilities - - - -
----------------------------- ------------- ------------- ---------- ---------
At 31 March 2021 31,346 3,748 - 35,094
----------------------------- ------------- ------------- ---------- ---------
In order to mitigate potential interest rate increases, 57.3% of the loans are interest free or we have fixed the interest rate of these interest-bearing loans. A one percentage point increase in interest rates would increase the annual interest bill on the floating rate loans by GBP0.10 million per annum (2021: GBP0.31 million).
17. Other Financial Liabilities
2022 2021
Group Group
GBP'000 GBP'000
------------------------ --------- ---------
Non-current liabilities 10,141 -
------------------------ --------- ---------
This non-current liability represents the balance of EUR12.00 million which was a result of the restructuring of a finance lease secured against the office tower in Gdynia. The restructuring resulted in the amount owed to ING bank in final settlement reducing by EUR9.00 million (GBP7.81 million). As part of the deal, the Group acquired the freehold of the property for EUR16.00 million of which EUR4.00 million has been paid and EUR12.00 million is repayable by June 2024. No interest is payable on this non-current liability. The deferred consideration is reflected as an Other Financial Liability in the Statement of Financial Position.
The preliminary results are being circulated to all shareholders and can be downloaded from the Company's web-site ( www.fprop.com ). Further copies can be obtained from the registered office at 32 St James's Street, London, SW1A 1HD.
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