Final Results
First Property Online PLC
24 June 2003
FIRST PROPERTY ONLINE PLC
PRELIMINARY RESULTS
For Year Ended 31 March 2003
24 June 2003
First Property Online plc ('fprop'), the online commercial property transaction
platform and property asset manager, announces preliminary results for the year
ended 31 March 2003.
Financial Highlights
• Turnover for the year of £2.3 million up from £372,000 in 2002
• Profit on ordinary activities before taxation of £102,000 as
compared to a loss of £575,000 over the similar period last year
• Maiden dividend of 0.05p per share
Corporate Highlights
• First Property Asset Management commenced trading in October 2002
• Underwriting activity continued to grow
• Name of the Company to be changed to First Property Group plc
Ben Habib, Chief Executive of fprop, said: 'The year to 31 March 2003, First
Property Online plc's second full year of trading, was a watershed for the
Group. I am pleased to report that we earned a profit for the year and we are
confident of further growth.'
'We continue to be pleased by the rate at which revenue generation is increasing
and, subject to market conditions, we would expect this growth to continue
during the year to 31 March 2004.'
For further information:
Ben Habib Jeremy Carey / Marylene Guernier
First Property Online plc Tavistock Communications Limited
Tel: 020 7731 2844 Tel: 020 7600 2288
www.fprop.com mguernier@tavistock.co.uk
CHIEF EXECUTIVE'S STATEMENT
The year to 31 March 2003, First Property Online plc's second full year of
trading, was a watershed for the Group. I am pleased to report that we earned a
profit for the year and we are confident of further growth.
Results and dividend
Turnover during the year was £2,281,000 (2002: £372,000), providing a gross
profit of £1,095,000 (2002: £352,000) and a profit on ordinary activities before
taxation and goodwill amortisation of £102,000 (2002: loss of £575,000).
I am also pleased to report that the Directors have resolved to recommend First
Property Online plc's maiden dividend of 0.05 pence per share, which, if
approved, will be paid on 19 September 2003 to shareholders on the register at
29 August 2003.
The tangible net assets in the Group's balance sheet have also been strengthened
and having written off all the goodwill generated at the time of our reverse
takeover of the Hansom Group, net assets amounted to £2,209,000 at 31 March
2003, as opposed to £2,045,000 on a comparable basis, excluding goodwill, at 31
March 2002.
Review of operations
Property transaction underwriting
Our underwriting activities have continued to grow and made a substantial
contribution during the year. Turnover from this activity amounted to £1,823,000
(2002: £84,000) producing a gross profit contribution of £592,000 (2002:
£53,000).
The underwriting business has also made a good start to the current year. In
the absence of any further material adverse change in the UK economy, we expect
this division to make a further improved contribution to profits during the year
to 31 March 2004.
First Property Asset Management
Our fund management business, FPAM, which commenced trading in October last
year, has made a promising start. FPAM now has two funds under management,
which, when fully invested, will amount to some £8 million of assets under
management. We are currently in the process of raising our third fund.
Investors in our first two funds, First Property Trading Ltd and Second Property
Trading Ltd, comprise high net worth individuals seeking superior rates of
return from commercial property. FPAM sources, purchases, finances and manages
relatively high yielding property on behalf of these funds. To boost rates of
return the funds borrow up to 80% of the value of these properties and hedge
interest rate risk by the purchase of interest rate caps.
The weighted average annualised pre-tax rates of return on equity currently
being earned purely from rental income on the properties held in our two funds
is c17.2% per annum and c18.5% per annum respectively. These rates of return
take no account of any capital gains, which we are confident in achieving.
FPAM is remunerated for the management of these funds by the payment of monthly
fees calculated by reference to the gross assets invested and super performance
fees if rates of return exceed a minimum pre-defined hurdle.
Revenue earned by FPAM during the short period from October 2002 to 31 March
2003 was £13,000. We expect this to rise significantly during the current year.
Commercial Property Database
CPD continues to trade satisfactorily in a difficult environment. This division
earned revenue of £406,000 (£255,000 for the seven months we owned the business
in the year to 31 March 2002).
Shareholders will recall that the business of CPD is to create, maintain and
host databases on behalf of commercial property agents in the UK, as well as to
provide bespoke web design and related services. The number of agent members has
stayed relatively static, as has revenue earned from web design. With the recent
contraction in the UK economy certain clients have cut their own expenditure on
such services. However, we expect the division to contribute a healthy result
for the year to 31 March 2004.
Other products and services
Our bespoke loan arrangement business has grown, albeit more slowly than we had
anticipated, but did contribute revenue of £22,750. It does, however, play a
very important role for FPAM, providing our funds with instant access to the
debt markets. As such it is proving to be valuable to the Group.
Online marketing of commercial property is now beginning to establish itself
well. We have, by combining email direct marketing campaigns and the data stored
at www.fprop.com, sold a number of properties virtually entirely online. In
revenue terms this is still small and amounted to £16,000. It is difficult to
predict the rate at which this might grow. However, as far as the Group is
concerned this service is also valuable as it allows us to market properties on
behalf of our funds and ourselves very efficiently and cost effectively.
Portfolio of products and services
Our current portfolio of products and services can be summarised as follows:
- Underwriting of property transactions
- Asset management
- CPD membership and related subscription services
- Website design and hosting services
- Online transactions at www.fprop.com
- Loan and valuation services
We are using these products extremely effectively to support each other. The
property databases provide our asset management and underwriting services with
property opportunities and information. The loan and valuation services provide
our asset management and underwriting services with instant access to the debt
markets. And our website at www.fprop.com provides an excellent means of
disposing of properties on behalf of our clients, our funds and ourselves.
Strategy
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 us to accelerate this growth
Change of name
Given the broader range of the Group's products and services, the Board has
decided that the name of the Company should be changed from First Property
Online plc to First Property Group plc. This change of name proposal will be put
to shareholders at our forthcoming Annual General Meeting on 9 September 2003
and, if approved, adopted with immediate effect on that day.
Board of directors
Jeremy Phillips will resign from the Board with effect from 31 July 2003. I
would like to thank Jeremy for his commitment and contribution to the
development of the Group since December 2000.
George Digby will replace Jeremy as finance director, with effect from that
date. George brings to the Board considerable accounting and public company
experience, being a fully qualified chartered accountant and having, for ten
years, been finance director of Fired Earth, a former publicly quoted company.
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 this growth to continue
during the year to 31 March 2004.
Ben Habib
Chief Executive
24 June 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 March 2003
2003 (unaudited) 2002 (audited)
Notes Results Goodwill Total Results Goodwill Total
before amortisation before amortisation
goodwill & results goodwill results
amorti-sation exceptional amortisation
& items
exceptio-nal
items
£'000 £'000 £'000 £'000 £'000 £'000
Turnover
- continuing
operations 2,281 - 2,281 97 - 97
- acquisitions - - - 275 - 275
Total turnover 2,281 - 2,281 372 - 372
Cost of sales (1,186) - (1,186) (20) - (20)
Gross profit 1,095 - 1,095 352 - 352
Net operating
expenses (929) (2,915) (3,844) (1,006) (3,342) (4,348)
Operating profit/
(loss)
- continuing
operations 166 (2,915) (2,749) (686) (3,204) (3,890)
- acquisitions - - - 32 (138) (106)
Total operating
profit/(loss) 166 (2,915) (2,749) (654) (3,342) (3,996)
Net interest
receivable/(payable) (64) - (64) 79 - 79
Profit/(Loss) on
ordinary activities
before taxation 102 (2,915) (2,813) (575) (3,342) (3,917)
Taxation on ordinary - 292 292 - - -
activities
Profit/(Loss) for
the year before
minority interest 102 (2,623) (2,521) (575) (3,342) (3,917)
Equity minority
interest 4 - 4 - - -
Profit/(Loss) for
the
106 (2,623) (2,517) (575) (3,342) (3,917)
year
Dividend on Ordinary
shares 3 (46) - (46) - - -
Profit/(Loss)
transferred to
reserves 7 60 (2,623) (2,563) (575) (3,342) (3,917)
Profit/(Loss) per
Ordinary 1p share -
basic and diluted,
before goodwill
amortisation 2 0.11p (0.65p)
Profit/(Loss) per
Ordinary share -
basic and diluted,
after goodwill
amortisation 2 (2.72p) (4.41p)
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.
CONSOLIDATED BALANCE SHEET
at 31 March 2003
Notes 2003 2002
(unaudited) (audited)
£'000 £'000
Fixed assets
Intangible assets 4 - 2,727
Tangible assets 19 58
Investments 25 238
44 3,023
Current assets
Stocks 3,190 1,121
Debtors 652 381
Cash at bank and in hand 314 1,649
4,156 3,151
Creditors: amounts falling due (1,316) (600)
within one year
Net current assets 2,840 2,551
Total assets less current liabilities 2,884 5,574
Creditors: amounts falling due after more (675) (802)
than one year
Net assets 2,209 4,772
Capital and reserves
Called up share capital 5 924 924
Share premium 6 2,661 2,661
Merger reserve 6 5,823 5,823
Profit and loss account 6 (7,199) (4,636)
Equity shareholders' funds 7 2,209 4,772
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March 2003
Notes 2003 2002
(unaudited) (audited)
£'000 £'000
Net cash (outflow) from operating activities 8 (2,068) (1,822)
Returns on investments and servicing of finance
- Interest received 19 132
- Interest paid (83) (36)
Net cash (outflow)/inflow from returns on investments
and servicing of finance before taxation (64) 96
Capital expenditure and financial investment
- Purchase of tangible fixed assets (6) (15)
- Sale of tangible fixed assets 8 15
- Purchase of fixed asset investments (5) -
- Sale of fixed asset investments 30 -
Net cash inflow from capital expenditure and financial
investment 27 -
Acquisitions
-Cash consideration on acquisitions - (13)
-Acquisition expenses paid - (32)
-Net cash acquired with subsidiary undertakings - 15
Net cash outflow from acquisitions - (30)
Cash (outflow) before management of liquid resources and
financing (2,105) (1,756)
Management of liquid resources
- Decrease in short term deposits 1,429 1,158
Financing
- Issue cost of shares - (2)
- Minority interest 4 -
- Bank overdraft 9 -
- Loans advanced 871 831
- Loan repayments (114) (28)
Net cash inflow from management of liquid resources and
financing 2,199 1,959
Increase in cash in the year 9 94 203
Reconciliation of net cash flow to movement in net funds
Notes 2003 2002
(unaudited) (audited)
£'000 £'000
Increase in cash in the year 94 203
Movement in short term deposits (1,429) (1,158)
Borrowings acquired with subsidiaries - (28)
Movement in loans and bank overdraft (766) (803)
Movement in net funds in the year (2,101) (1,786)
Net funds at 1 April 818 2,604
Net funds at 31 March 9 (1,283) 818
NOTES TO THE FINANCIAL STATEMENTS
1. Basis of preparation
The figures for the year ended 31 March 2003 are unaudited and are not full
financial statements. The figures for the years ended 31 March 2003 and 31 March
2002 are non-statutory. The figures for the year ended 31 March 2002 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 £2,517,000
(2002: loss £3,917,000) and on 92,441,254 (2002: 88,879,821) 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 2003 and 2002, the
inclusion of unexercised share options do not have a dilutive effect.
3. Dividend on Ordinary shares
2003 2002
£'000 £'000
Proposed Final Dividend of 0.05 pence per share payable on
19 September 2003 46 -
4. Intangible assets
Goodwill
£'000
Cost
At 1 April 2002 6,870
Additions during the year -
At 31 March 2003 6,870
Amortisation
At 1 April 2002 (4,143)
Charge for the year (2,727)
At 31 March 2003 (6,870)
Net book value
At 31 March 2003 -
At 31 March 2002 2,727
5. Called-up share capital
2003 2002
£'000 £'000
Authorised:
120,000,000 (2002: 120,000,000) Ordinary shares of 1p each 1,200 1,200
Allotted, called up and fully paid:
92,441,254 (2002: 92,441,254) Ordinary shares of 1p each 924 924
6. Share premium account and reserves
Group Share premium Other Profit
account reserves and loss
account
£'000 £'000 £'000
At 1 April 2002 2,661 5,823 (4,636)
Loss for the year - - (2,563)
At 31 March 2003 2,661 5,823 (7,199)
7. Reconciliation of movements in equity shareholders' funds
2003 2002
£'000 £'000
Opening shareholders' funds 4,772 8,344
(Loss) for the financial year (2,563) (3,917)
New share capital issued - 74
Increase in merger reserve - 273
Share issue costs - (2)
Closing shareholders' funds 2,209 4,772
8. Reconciliation of operating loss to net cash (outflow) from
operating activities
2003 2002
£'000 £'000
Operating loss (2,749) (3,996)
Depreciation and profit on disposal of fixed assets 37 39
Amortisation of goodwill 2,727 3,342
Decrease in book value of fixed asset investments 188 -
(Increase) in stocks (2,069) (1,121)
(Increase) in trade debtors (206) (104)
(Increase)/decrease in prepayments and other debtors (25) 119
Increase/(decrease) in trade creditors 2 (55)
(Decrease) in other taxation and social security (20) (4)
Increase/(decrease) in other creditors and accruals 47 (42)
Net cash (outflow) from operating activities (2,068) (1,822)
9. Reconciliation of movement in net funds
1 April Cash flow 31 March 2003
2002 £'000
£'000 £'000
Cash at bank and in hand 1,649 (1,335) 314
Short term deposits (1,442) 1,429 (13)
Cash (excluding short term deposits) 207 94 301
Short term deposits 1,442 (1,429) 13
Debt due within one year
- Bank overdraft - (9) (9)
- Property loan (29) (884) (913)
Debt due after more than one year
- Property loans (802) 127 (675)
818 (2,101) (1,283)
10. 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 2003 for approval at the Annual General Meeting to be held on 9 September
2003 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
Friday, 2nd August 2024
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