Completion of sale of Group Property in Poland

RNS Number : 8731K

First Property Group PLC

27 April 2020

 

Date:	27 April 2020
On behalf of:	First Property Group plc ("First Property", "the Company" or the "Group")
Embargoed:	07:00

First Property Group plc

Completion of sale of Group Property in Poland

Further to the announcement made by First Property Group plc (AIM: FPO) on 23 December 2019, the Company is pleased to report completion of the sale of its largest Group Property, Chałubińskiego 8 (CH8) in Warsaw, Poland.

Key metrics of the sale are set out below:

-  Sales price: €44.0 million (c£38 million) vs. a book cost of €38.8 million (c£32 million);

-  Profit on sale: €1.6 million (c£1.4 million) after costs of sale and a provision of €2.67 million (£2.3 million) in respect of a rent guarantee provided to the buyer of the property. This profit will be recognised in the financial year-ended 31 March 2020;

-  Cash generated on sale: €19.6 million (c£17million), taking Group cash as at 14 April 2020 to c£25 million, representing around two thirds of the Group's market value of £37.0 million immediately prior to this announcement;

-  Internal Rate of Return earned from the investment since its acquisition in 2014: 63% per annum.

The sale comes at an excellent time for the Group given the uncertainty created by the economic shutdowns across the Globe prompted by Covid-19. The significant cash generated by the sale underpins the Group and provides it with significant resources with which to make investments in what is likely to become an interesting investment market. It is intended for the cash to be used in partnership with clients of the Group. This should significantly increase the equity available to make investments to above £100 million which, when coupled with bank debt, should generate buying power of over £300 million.

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

"The timing of the sale of CH8 as well as the returns and free cash generated by it are testimony to the agility and skill of the Group's management team. This has been demonstrated repeatedly over the years since I established the business in 2000.

"The cash released by this sale both protects shareholder interests at a time of extreme financial uncertainty and positions the Group to make significant new investments at a time when the market should become much more interesting.

"The sale is nothing less than transformational and I am delighted by it."

-Ends-

For further information please contact:

First Property Group plc	Tel: [phone]
Ben Habib (Chief Executive Officer) George Digby (Group Finance Director) Jeremy Barkes (Director, Business Development) Przemek Kiszka (Managing Director for Poland)	[e-mail] Tel: [phone]
Arden Partners (NOMAD & Broker)	Tel: + 44 (20) 7614 5900
John Llewellyn-Lloyd (Director, Corporate Finance) Ben Cryer (Corporate Finance)
Newgate Communications (PR)	Tel: + 44 (20) 3757 6880;
Robin Tozer / Tom Carnegie	[e-mail]

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 comprise eight directly held properties in Poland and Romania, and non-controlling interests in ten of the thirteen 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 .

 

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