Final Results

First Property Online PLC 25 June 2002 FIRST PROPERTY ONLINE PLC PRELIMINARY RESULTS For Year Ended 31 March 2002 25 June 2002 First Property Online plc ('fprop'), which provides financial and Internet services to the property sector, announces preliminary results for the year ended 31 March 2002. Financial Highlights • Turnover for the year of £372,000 (2001: nil) with the majority generated in the second half. • Loss on ordinary activities before taxation and goodwill amortisation of £575,000 (2001: £363,000, representing only three months of trading). Corporate Highlights • Integration of Commercial Property Database (CPD), a commercial property database and website design specialist, into fprop. This significantly reduced CPD's total overheads. The division generated revenues of £255,000 for the period. • Commercial property underwriting activities generated £84,000 for the Group. Alasdair Locke, Chairman of fprop commented: 'Our strengthening trading position, coupled with our strong balance sheet, ensures that fprop will be a long term participant in the online property market. We are well positioned and I look forward to the future with confidence.' Ben Habib, Chief Executive of fprop added: 'As predicted at the time of our last annual results, the Group has generated significant revenues and is moving positively towards profitability. We consider the outlook for commercial property in the UK to be buoyant and are positive about fprop's prospects.' For further information: Ben Habib Bella Pagdin / Marylene Guernier First Property Online plc Tavistock Communications Limited Tel: 020 7731 2844 Tel: 020 7600 2288 www.fprop.com bpagdin@tavistock.co.uk CHAIRMAN'S STATEMENT I am delighted to present our preliminary results for the year to 31 March 2002. During the year the Group concentrated determinedly on revenue generation. Turnover for the year was £372,000 (nil in the prior year). The Group has also protected its capital resources during this important growth phase. Further details of the Group's operating performance are set out in the Chief Executive's statement on page 3. We have made a good start to the current year. The Commercial Property Database division is trading well and our property underwriting business has secured a number of good opportunities. I am therefore pleased that, in a comparatively short period of time, the Group has turned the corner towards profitability. Our sound trading position, coupled with our strong balance sheet, ensures that fprop will be a long term participant in the online property market. We are well positioned and I look forward to the future with confidence. Alasdair Locke Chairman 25 June 2002 CHIEF EXECUTIVE'S STATEMENT The year to 31 March 2002 has witnessed the progression of the Company from a start-up towards an established business. Results I am pleased to report that, as predicted at the time of our last annual results, the Group has generated significant revenues and is moving positively towards profitability. Turnover for the year was £372,000 (nil in the year to 31 March 2001). The majority of this income was generated in the second half of the year. The Group made a loss on ordinary activities before taxation and goodwill amortisation of £575,000 (against a loss of £363,000 in the year to 31 March 2001, which represented only 3 months of trading activity). The Group's balance sheet remains strong. Net assets amounted to £4.8 million at 31 March 2002, including £2.6 million of net current assets. Review of Operations Commercial Property Database On 31 August 2001 we completed our acquisition of Commercial Property Database Ltd and CPD Ltd ('CPD'), providers of a range of database hosting and website design services. Since then these businesses have been integrated with fprop and CPD now trades as a division of First Property Online.com Ltd. This integration has allowed us to cut substantially the trading overheads of the CPD businesses. The division is now trading profitably (before goodwill amortisation) and generated revenues of £255,000 in the reporting period. CPD has made a promising start to the year which commenced on 1 April 2002 and is trading ahead of the comparable period last year (before it was acquired by fprop). Property transaction underwriting Our underwriting activities commenced in August 2001 and are providing a substantial and growing revenue stream for fprop. During the reporting period these activities generated revenues of £84,000 for the Group. The underwriting business has also made a good start to the current year. In the absence of a material change in the UK economy, we expect this division to make a good contribution to profits during the year to 31 March 2003. Bespoke loan and valuation services online Our loan arrangement business, which went live in August 2001, is gathering pace. Up to the time of writing, we have received loan quote requests on an aggregate value of over £135 million of property and have organised, or are in the process of organising, loans for properties collectively worth some £7.5 million. Propertytrade.co.uk As previously announced, we acquired Propertytrade.co.uk in April 2001 to increase rapidly the number of properties available on the fprop website. This aim has been met and at the time of writing fprop has over 400 investment properties for sale online, plus 12,500 properties for sale or lease on the CPD database. The Propertytrade website has therefore now been closed and we will not report separately on this business in future. Portfolio of products and services Our current portfolio of products and services can be summarised as follows: - CPD membership and related subscription services - Website design and hosting services - Online transactions at www.fprop.com - Loan and valuation services - Underwriting of property transactions Sales of our high margin/ low volume products are being accelerated by the penetration of our lower margin/ higher volume products. This provides the Group with a healthy, relatively stable, mixed and growing income stream. Strategy We remain focussed on the profitability of the Group, rather than on non revenue-generating online measures of success such as clickthrough rates or page impressions. Our strategy remains substantially the same as set out in our annual report last year. We are concentrating on: • growing revenues from our existing product range and cross selling these wherever possible • growing our product range in those areas which complement our existing products and can be implemented using our existing infrastructure • making, where appropriate, strategic acquisitions which allow fprop to accelerate this growth • reaching profitability and cash generation as quickly as possible We have not been actively selling our more transformational products (such as our online bidding system), which require time and marketing resources in order to fully penetrate the market. Whilst these products remain live and on offer, we have concluded that it is more important, at this stage of our development, to concentrate on overall profitability rather than fully establishing these products. It is our intention to concentrate on these products, in due course, once the Group is trading profitably and market conditions are right for their cost-effective promotion. Neither are we offering further shareholdings at nominal value to establish further trade alliances. The aim of forging trade alliances in this way was to build up a body of allies that could accelerate fprop's initial growth. As discussed, growing revenue streams have been established and we therefore will not be pursuing this particular strategy any longer. Current trading and prospects We continue to be pleased by the rate at which revenue generation is increasing and, subject to market conditions, we would expect a strong performance in the year to 31 March 2003. We consider the outlook of the economic environment in the UK on the whole to be buoyant, particularly for commercial property. As a result, we are positive about fprop's prospects and look forward to the coming year. Ben Habib Chief Executive 25 June 2002 CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 31 March 2002 2002 (unaudited) 2001 (audited) Notes Results Goodwill Total Results Goodwill Total before Amortisation Results before Amortisation Results Goodwill Goodwill Amortisation Amortisation £'000 £'000 £'000 £'000 £'000 £'000 Turnover - continuing operations 97 - 97 - - - - acquisitions 275 - 275 - - - Total turnover 372 - 372 - - - Cost of sales (20) - (20) - - - Gross profit 352 - 352 - - - Net operating expenses (1,006) (3,342) (4,348) (547) (801) (1,348) Operating profit/ (loss) - continuing operations (686) (3,204) (3,890) (547) (801) (1,348) - acquisitions 32 (138) (106) - - - Total operating loss (654) (3,342) (3,996) (547) (801) (1,348) Net interest receivable 79 - 79 184 - 184 Loss on ordinary activities before taxation (575) (3,342) (3,917) (363) (801) (1,164) Taxation on loss on ordinary activities - - - - - - Loss for the year 5 (575) (3,342) (3,917) (363) (801) (1,164) Loss per Ordinary 1p share - basic and diluted, before goodwill amortisation 2 (0.65p) (0.68p) Loss per Ordinary share - basic and diluted, after goodwill amortisation 2 (4.41p) (2.18p) The Group has no recognised gains and losses other than the losses above and therefore no separate statement of total recognised gains and losses has been presented. There is no difference between the loss on ordinary activities before taxation and the loss for the year stated above, and their historical cost equivalents. CONSOLIDATED BALANCE SHEET at 31 March 2002 Notes 2002 2001 (unaudited) (audited) £'000 £'000 Fixed assets Intangible assets 3 2,727 5,607 Tangible assets 58 42 Investments 238 238 3,023 5,887 Current assets Stocks 1,121 - Debtors 381 337 Cash at bank and in hand 1,649 2,604 3,151 2,941 Creditors: amounts falling due within one year (600) (484) Net current assets 2,551 2,457 Total assets less current liabilities 5,574 8,344 Creditors: amounts falling due after more than one year (802) - Net assets 4,772 8,344 Capital and reserves Called up share capital 4 924 850 Share premium 5 2,661 2,663 Merger reserve 5 5,823 5,550 Profit and loss account 5 (4,636) (719) Equity shareholders' funds 6 4,772 8,344 CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 March 2002 Notes 2002 2001 (unaudited) (audited) £'000 £'000 Net cash (outflow)/ inflow from operating activities 7 (1,822) 111 Returns on investments and servicing of finance - Interest received 132 187 - Interest paid (36) (2) Net cash inflow from return on investments and servicing of finance 96 185 Capital expenditure and financial investment - Purchase of tangible fixed assets (15) (15) - Sale of tangible fixed assets 15 - Net cash outflow from capital expenditure and financial investment - (15) Acquisitions - Cash considerations on acquisitions (13) - - Acquisition expenses paid (32) (232) - Net cash acquired with subsidiary undertakings 15 19 Net cash outflow from acquisitions (30) (213) Cash (outflow)/ inflow before management of liquid resources and financing (1,756) 68 Management of liquid resources - Decrease in short term deposits 1,158 150 Financing - Issue of Ordinary share capital - 110 - Issue cost of shares (2) (247) - Loans advanced 831 - - Loan repayments (28) (100) Net cash inflow/ (outflow) from management of liquid resources and financing 1,959 (237) Increase/ (decrease) in cash in the year 203 (19) Reconciliation of net cash flow to movement in net funds Notes 2002 2001 (unaudited) (audited) £'000 £'000 Increase/ (decrease) in cash in the year 203 (19) Movement in short term deposits (1,158) (150) Borrowings acquired with subsidiaries (28) (100) Movement in loans (803) 100 Movement in net funds in the year (1,786) (169) Net funds at 1 April 2,604 2,773 Net funds at 31 March 818 2,604 NOTES TO THE FINANCIAL STATEMENTS 1. Basis of preparation The figures for the year ended 31 March 2002 are unaudited and are not full financial statements. The figures for the years ended 31 March 2002 and 31 March 2001 are non-statutory. The figures for the year ended 2001 are extracts from the full financial statements delivered to the Registrar of Companies. The report of the auditors on those financial statements was unqualified and contained no statements under either Section 237(2) or 237(3) of the Companies Act 1985. 2. Earnings per share The calculation of basic and diluted earnings per share on the net basis is based on the loss on ordinary activities after taxation, namely £3,917,000 (2001: loss £1,164,000) and on 88,879,821 (2001: 53,350,093) Ordinary shares being the weighted average number of Ordinary shares in issue and ranking for dividend during the year. For the year ended 31 March 2002, the inclusion of unexercised share options do not have a dilutive effect. 3. Intangible assets Goodwill £'000 Cost At 1 April 2001 6,408 Additions during the year 462 At 31 March 2002 6,870 Amortisation At 1 April 2001 (801) Charge for the year (3,342) At 31 March 2002 (4,143) Net book value At 31 March 2002 2,727 At 31 March 2001 5,607 Goodwill arising on all acquisitions is being amortised over a two year period. 4. Called-up share capital 2002 2001 £'000 £'000 Authorised: 120,000,000 (2001: 120,000,000) Ordinary shares of 1p each 1,200 1,200 Allotted, called up and fully paid: 92,441,254 (2001: 84,979,716) Ordinary shares of 1p each 924 850 A total of 7,461,538 Ordinary shares of 1p each were allotted during the year in respect of the following transactions: Date of Number of Nominal Consideration Allotment Ordinary shares Value £'000 £'000 Acquisition of Commercial Property Database Ltd and CPD Ltd - initial consideration 3 Sept 2001 6,000,000 60 300 - final consideration 5 Dec 2001 1,461,538 14 47 7,461,538 74 347 The above shares were issued in return for the share capital of the CPD companies. No cash consideration was received for the shares issued. 5. Share premium account and reserves Group Share premium Other reserves Profit account and loss account £'000 £'000 £'000 At 1 April 2001 2,663 5,550 (719) Share issue costs (2) - - Merger reserve created on acquisition of Commercial Property Database Ltd and CPD Ltd - 273 - Loss for the year - - (3,917) At 31 March 2002 2,661 5,823 (4,636) 6. Reconciliation of movements in equity shareholders' funds 2002 2001 £'000 £'000 Opening shareholders' funds 8,344 3,668 (Loss)/ profit for the financial year (3,917) (1,164) New share capital issued 74 447 Increase in share premium - 90 Increase in merger reserve 273 5,550 Share issue costs (2) (247) Closing shareholders' funds 4,772 8,344 7. Reconciliation of operating loss to net cash (outflow)/ inflow from operating activities 2002 2001 £'000 £'000 Operating loss (3,996) (1,348) Depreciation and profit on disposal of fixed assets 39 6 Amortisation 3,342 801 (Increase) in stocks (1,121) - (Increase)/ decrease in trade debtors (104) 2 Decrease in prepayments and other debtors 119 690 (Decrease)/ increase in trade creditors (55) 2 (Decrease)/ increase in other taxation and social security (4) 15 (Decrease) in other creditors and accruals (42) (57) Net cash (outflow)/ inflow from operating activities (1,822) 111 8. Reconciliation of movement in net funds 1 April 2001 Cash flow Acquisition 31 March (excluding cash) 2002 £'000 £'000 £'000 £'000 Cash at bank and in hand 2,604 (955) - 1,649 Short term deposits (2,600) 1,158 - (1,442) Cash (excluding short term deposits) 4 203 - 207 Short term deposits 2,600 (1,158) - 1,442 Debt due within one year - Bank loan - 15 (15) - - Property loan - (29) - (29) - Hire purchase agreements - 13 (13) - Debt due after more than one year - Property loans - (802) - (802) 2,604 (1,758) (28) 818 9. Report circulation Copies of this preliminary results announcement are available from the Company's registered office at 17 Quayside Lodge, William Morris Way, London SW6 2UZ. Copies of the Annual Report and Accounts will be sent to shareholders by 7 August 2002 for approval at the Annual General Meeting to be held on 5 September 2002 and will also be available at the company's registered office. This information is provided by RNS The company news service from the London Stock Exchange

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