Interim Results

RNS Number : 9978G

First Property Group PLC

26 November 2015

 

 

Date:	26 November 2015
On behalf of:	First Property Group plc ("First Property" or "the Group")
Embargoed:	0700hrs

First Property Group plc

Interim Results for the six months to 30 September 2015                                

First Property Group plc (AIM: FPO), the property fund manager and investor, today announces its interim results for the six months to 30 September 2015.

Financial Highlights:

	Unaudited Six months to 30 September 2015	Unaudited Six months to 30 September 2014	Percentage change	Audited Year to 31 March 2015
Income Statement:
Statutory profit before tax	£5.93m	£5.42m	+9.4%	£8.08m
Diluted earnings per share	4.13p	4.07p	+1.5%	6.93p
Dividend per share	0.385p	0.35p	+10.0%	1.35p
Average €/ £ rate used	1.386	1.250	-10.9%	1.285
Balance Sheet  at period end:
Net assets	£32.06m	£26.62m		£31.02m
Net assets per share	27.14p	22.72p		26.30p
Adjusted net assets per share*	40.29p	26.15p		35.75p
Cash Balances	£14.20m	£12.05m		£12.24m
Period-end €/ £ rate	1.357	1.283		1.382
Group Property Portfolio at period end:
Group Properties** at book value	£125.9m	£63.1m		£126.9m
Group Properties** at market value	£145.3m	£72.5m		£142.0m
Gross Debt secured against Group Properties	£108.3m	£50.7m		£107.8m
LTV%	74.5%	69.9%		75.9%
Total assets under management:	£283m	£333m		£327m
Poland	53.8%	66.9%		64.7%
United Kingdom	43.6%	30.5%		33.1%
Romania	2.6%	2.6%		2.2%

*	Calculated according to EPRA triple net valuation methodology, which includes adjustments for fair values of i) financial instruments, ii) debt, and iii) deferred taxes.
**	Excludes the Group's non-controlling interests in four other FPAM managed funds.

Operational Highlights and Explanatory Notes:

·      Interim dividend increased by 10% to 0.385 pence per share.

·      The contribution to Group profit before tax and unallocated central overhead costs from Group
Properties increased to £5.22 million (2014: £2.97 million) largely due to the contribution made by the
properties acquired in Poland and Romania by the Group and FOP between July and December 2014.

·      The contribution to Group profit before tax and unallocated central overhead costs from fund
management decreased to £1.19 million (2014: £2.90 million) due to both reduced performance fees
earned by Fprop PDR and the expiry of our fund management contract with USS. Fund management
fee income, excluding performance fees, is currently being earned at the rate of some £1.3 million per
annum but should grow from here as we continue to invest the SIPS mandate and as we win new
contracts.

·      Excluding the fair value adjustment, the impact of a weaker Euro versus Sterling resulted in profit
before tax being c£512,000 lower.

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

"I am very pleased by the continued good progress made by the Group.

"We are now reaping the rewards of the investments made by Fprop Opportunities plc and ourselves over the last two years, which contributed some £5.2 million to Group profit before tax in the first half.

"We intend to continue to invest in high income generating property, most likely in Poland and ideally in partnerships with third parties. We are currently working on several such opportunities.

"The visibility of our earnings into 2016 and beyond is good and I look to the future with confidence."                                                                                                                        

A briefing for analysts will be held at 10:30hrs today at the headquarters of First Property Group plc, 32 St James's Street, London, SW1A 1HD. Participants can also attend by telephone on [phone] (pin 617692). A copy of the accompanying investor presentation can be accessed simultaneously at http://www.fprop.com/plc-results/81/88/. A recorded copy of the audio call will subsequently be posted on the company website, www.fprop.com.

For further information please contact:

First Property Group plc	Tel: [phone]
Ben Habib (Chief Executive & Chief Investment Officer) George Digby (Group Finance Director) Jeremy Barkes (Director, Business Development)	www.fprop.com
Arden Partners	Tel: [phone]
Chris Hardie/ Ben Cryer
Redleaf Communications	Tel: [phone]
Richard Gotla/ Henry Columbine	[e-mail]

Notes to Investors and Editors:

First Property Group plc is a property fund manager and investor with operations in the United Kingdom and Central Europe. 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:

o  Management fees are levied by reference to the value of properties under management;

o  Performance fees are levied where appropriate, usually payable upon realisation of profits above an agreed hurdle. 

·      Group Properties - principal investments by the Group, to earn a return on its own capital, usually in partnership with third parties.

FPAM funds have ranked No.1 versus the Investment Property Databank (IPD) Central & Eastern Europe (CEE) universe for the annualised periods from the commencement of its operations in Poland in 2005 to the end of each of the years between 31 December 2008 and 31 December 2014.

First Property Asset Management Limited is authorised and regulated by the Financial Conduct Authority. Further information about the Company and its products can be found at: www.fprop.com.

CHIEF EXECUTIVE'S STATEMENT

Financial Results

I am pleased to report interim results for the six months ended 30 September 2015.

Revenue earned by the Group amounted to £10.95 million (2014: £7.79 million) yielding a profit before tax of £5.93 million (2014: £5.42 million). The increase in revenue and profit before tax is largely attributable to the contribution made to earnings by Group Properties, which benefitted from a full contribution during the period from the six properties it acquired in Poland and Romania between July and December 2014.

Diluted earnings per share were 4.13 pence (2014: 4.07 pence).

The Group ended the period with net assets of £32.06 million (2014: £26.62 million). Its cash balance was £14.20 million (2014: £12.05 million), of which £3.26 million (2014: £4.28 million) was held by Fprop Opportunities plc (76.2% owned by the Group) and £461,000 (2014: £481,000) was held by Corp Sp z o,o. (90% owned by the Group), the property management company for Blue Tower in Warsaw.

Dividend

The Directors have resolved to increase the interim dividend by 10% to 0.385 pence per share (2014: 0.35 pence per share) which will be paid on 31 December 2015 to shareholders on the register at 4 December 2015, with an ex-dividend date of 3 December 2015.

Review of Operations:

Property Fund Management - (First Property Asset Management Ltd or FPAM)

As at 30 September 2015 aggregate assets under management, calculated by reference to independent third party property valuations, stood at £283 million (2014: £333 million), including some £145.3 million (2014: £72.5 million) of properties held by the Group and FOP. Of these 53.8% were located in Poland, 43.6% in the UK and 2.6% in Romania. Fees are levied by FPAM by reference to the value of funds under management excluding cash.

Revenue earned by this division reduced to £1.85 million (2014: £3.55 million), resulting in a profit before tax and unallocated central overhead costs of £1.19 million (2014: £2.90 million). This represents 18.5% (2014: 49.4%) of Group profit before tax and unallocated central overhead costs. The reduction in revenue and profit before tax of this division is attributable to a reduction in performance fees earned by Fprop PDR with £0.86 million earned during the period (2014: £1.9 million), and the wind down and subsequent expiry in August of our fund management contract with USS, which yielded £301,000 in fee income during the period (2014: £908,000).

A synopsis of each of the funds managed by the Group as at 30 September 2015 is set out below:

Fund	Country of investment	Established	Fund expiry	Assets under management at market value at 30 September 2015	% of total assets  under management	Assets under management at market value at 30 September 2014
SAM Property Company Ltd (SAM)	UK	Aug 2004	Rolling	*	*	*
Regional Property Trading Ltd (RPT)	Poland	Aug 2004	Aug 2020	£6.3m	2.2%	£6.7m
5th Property Trading Ltd (5PT)	Poland	Dec  2004	Dec  2017	£7.8m	2.8%	£8.5m
USS Fprop Managed Property Portfolio LP	Poland	Aug 2005	Aug 2015	Nil	-	£140.7m
UK Pension Property Portfolio  LP (UK PPP)	UK	Feb 2010	Feb 2017	£95.1m	33.7%	£93.4m

Fprop PDR LP	UK	Oct 2013	May 2018	Nil (commitment of £42m)	-	£11.2m
SIPS Property Nominee Ltd	UK	Jan 2015	Jan 2025	£28.0m (commitment of £125m)	9.9%	Nil
Sub Total				£137.2m	48.6%	£260.5m

Fprop Opportunities plc (FOP)	Poland	Oct 2010	Oct 2020	£55.5m	19.6%	£48.8m
Group Properties (excluding FOP)	Poland & Romania	n/a	n/a	£89.8m	31.8%	£23.7m
Sub Total				£145.3m	51.4%	£72.5m

Total

£282.5m

100%

£333.0m

* Not subject to recent revaluation

Fprop PDR completed the sale of its last remaining property in July, resulting in the Group earning a performance fee of £1.87 million, of which £0.86 million was recognised during the period (2014: £1.9 million), with the balance having already been recognised in the prior period. This fund ceased making new investments in 2014.

We are making reasonable progress in investing the new SIPS mandate, awarded to us in January. At 30 September the value of the properties acquired stood at £28 million. Since the period end we have exchanged contracts and completed the purchase of a further £11 million of commercial property on its behalf, and we have a further £32 million of property under offer.

Fund management fee income, excluding performance fees, is currently being earned at a rate of some £1.3 million per annum. We expect this rate to increase as we continue to invest the SIPS fund and win more fund management contracts.

Group Properties

Group Properties comprise eleven commercial properties held by the Group, including five held by FOP (in which the Group is a 76.2% shareholder), and non-controlling interests in four of the seven funds managed by FPAM, as set out in the tables below. It is the Group's policy to carry its investments at the lower of cost or market value for accounting purposes, and to recognise dividends when received.

Directly Held Properties at 30 September 2015:

Property / Country	No. of properties	Book value	Market value	Contribution to Group profit before tax period to 30 September 2015	Contribution to Group profit before tax period to 30 September                 2014
Poland	3	£69.9m	£82.4m	£2.79m	£0.72m
Romania	3	£5.2m	£7.4m	£0.45m	£1.31m*
FOP (Poland - consolidated undertaking).	5	£50.8m	£55.5m	£1.72m	£0.80m
Total	11	£125.9m	£145.3m	£4.96m	£2.83m

*	Includes £1.123m of negative goodwill arising from the refinancing of the subsidiary.

Non-controlling interests in funds managed by FPAM at 30 September 2015:

Fund	% owned by First Property Group	Book value of First Property's share in fund	Current market value of holdings	Group's share of pre-tax profits earned by fund 30 September 2015	Group's share of pre-tax profits earned by fund 30 September 2014
Interest in associates
5th Property Trading Ltd (5PT)	37.8%	£530,000	£1,038,000	£59,000	£81,000
Regional Property Trading Ltd (RPT)	28.6%	£145,000	£193,000	£6,000	£26,000
Share of results in associates		£675,000	£1,231,000	£65,000	£107,000

Investments
UK Pension Property Portfolio LP (UK PPP)	0.9%	£903,000	£903,000	£29,000	£30,000
Fprop PDR LP	5%	£13,000	£13,000	£163,000	Nil
Sub Total		£916,000	£916,000	£192,000	£30,000

Total

£1,591,000

£2,147,000

£257,000

£137,000

Revenue from Group Properties amounted to £9.10 million (2014: £4.24 million), generating a profit before tax and unallocated central overhead costs of £5.22 million (2014: £2.97 million). This represents 81.5% (2014: 50.6%) of Group profit before tax and unallocated central overhead costs.

The increase in profit before tax earned by Group Properties resulted mainly from a full period contribution from the six properties acquired by the Group and FOP in Poland and Romania between July and December 2014, which amounted to £2.69 million (2014: £162,000).

Commercial Property Markets Outlook

Poland:

GDP growth in Poland is forecast to be 3.5% in both 2015 and 2016.

In October's general election, the incumbent Civic Platform Party (PO) was ousted by the conservative (but apparently less business friendly) Law and Justice Party (PiS), to form Poland's first non-coalition government since the fall of Communism. It has pledged to use all available monetary and fiscal policy tools to boost GDP growth towards 5%-6% per annum but has suggested the introduction of new taxes on retailers and banks. It is also expected to cut interest rates by 0.5% to 1% in the first quarter of 2016.

The Polish Zloty/Euro exchange rate remains relatively stable at around PLN 4.1-4.3, as it has been for several years. However, the Sterling/Euro rate has weakened by some 20 per cent since 2013.

Rents for offices in Warsaw have fallen in recent years due to the large development pipeline but appear to have now stabilised. Rents and occupancy levels for other asset classes remain broadly stable.

Investment demand is mainly from German, US and UK investors and is focused on prime properties of large lot sizes. The transaction volume for 2015 is expected to exceed €3 billion, a level similar to that of 2014.

United Kingdom:

GDP is now 5.9% above the pre-crisis peak reached in the first quarter of 2008 and the rate of GDP growth is forecast to average 2-3% over the next couple of years.

The growth in the economy is likely to continue the trend of increased occupational demand and increasing rents.

Investor demand remains buoyant, although there is a growing market expectation that yield stabilisation is approaching, with future gains expected from rental growth. According to IPD the average net initial yield for all commercial property is now back to its 2007 peak of 4.9%, with the implied equivalent yield (after taking into account reversionary rent levels) at 5.9%.

The temporary extension to Permitted Development Rights for the automatic conversion of offices to residential use has been made permanent, although we still await details of the terms on which this extension has taken place.

Current Trading and Prospects

I am very pleased by the continued good progress made by the Group.

We are now reaping the rewards of the investments made by Fprop Opportunities plc and ourselves over the last two years, which contributed some £5.2 million to Group profit before tax in the first half.

We intend to continue to invest in high income generating property, most likely in Poland and ideally in partnership with third parties. We are currently working on several such opportunities.

The visibility of our earnings into 2016 and beyond is good and I look to the future with confidence.

Ben Habib

Chief Executive

26 November 2015

CONDENSED CONSOLIDATED INCOME STATEMENT

for the six months to 30 September 2015 

	Notes	Six months to 30 Sept 2015 (unaudited) Total results £'000	Six months to  30 Sept 2014 (unaudited) Total results £'000	Year to 31 March 2015 (audited) Total results £'000
Revenue	2	10,947	7,785	18,523
Cost of sales		(1,773)	(910)	(3,156)
Gross profit		9,174	6,875	15,367
Recognition of negative goodwill on refinancing of subsidiary		-	1,123	1,123
Recognition of negative goodwill on the acquisition of subsidiaries		-	-	716
Fair value adjustment to investment properties		556	(89)	(876)
Operating expenses		(2,609)	(1,726)	(6,925)
Operating profit	2	7,121	6,183	9,405
Share of results in associates		65	107	185
Distribution income		192	30	694
Interest income		69	35	145
Interest expense		(1,518)	(934)	(2,346)
Profit before tax	2	5,929	5,421	8,083
Tax credit /(charge)	3	(661)	(433)	328
Profit for the period		5,268	4,988	8,411
Attributable to:
Owners of the parent		4,888	4,792	8,172
Non-controlling interest		380	196	239
		5,268	4,988	8,411
Earnings per Ordinary 1p share
-basic	4	4.28p	4.24p	7.21p
-diluted	4	4.13p	4.07p	6.93p

CONDENSED CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

for the six months to 30 September 2015

	Notes	Six months to 30 Sept 2015	Six months to 30 Sept 2014	Year to 31 March  2015
		unaudited	unaudited	audited
		£'000	£'000	£'000
Profit for the period		5,268	4,988	8,411
Other comprehensive income
Exchange difference on retranslation of foreign subsidiaries		(3,161)	(1,091)	272
Revaluation of available-for-sale financial assets		13	43	37
Taxation		-	-	-
Total comprehensive income for the period		2,120	3,940	8,720
Total comprehensive income for the period: Owners of the parent Non-controlling interest
		2,130 (10)	4,007 (67)	8,505
				215
		2,120	3,940	8,720

 

CONDENSED CONSOLIDATED BALANCE SHEET

as at 30 September 2015

	Notes	As at 30 Sept 2015 (unaudited) £'000	As at 30 Sept 2014 (unaudited) £'000	As at 31 March 2015 (audited) £'000
Non-current assets
Goodwill		153	153	153
Investment properties	5	112,956	51,026	114,262
Property, plant and equipment		162	53	43
Interest in associates	6a	675	707	671
Other financial assets	6b	916	2,400	1,531
Other receivables	7	228	349	283
Deferred tax assets		4,100	846	3,803
Total non-current assets		119,190	55,534	120,746
Current assets
Inventories - land and buildings		12,958	12,170	12,639
Current tax assets		52	55	236
Trade and other receivables	7	5,378	3,565	5,744
Cash and cash equivalents		14,202	12,048	12,240
Total current assets		32,590	27,838	30,859
Current liabilities
Trade and other payables	8	(6,398)	(2,894)	(8,134)
Financial liabilities	9	(6,101)	(2,172)	(11,788)
Current tax liabilities		(162)	(242)	(108)
Total current liabilities		(12,661)	(5,308)	(20,030)
Net current assets		19,929	22,530	10,829
Total assets less current liabilities		139,119	78,064	131,575
Non-current liabilities
Financial liabilities	9	(104,061)	(50,486)	(97,925)
Deferred tax liabilities		(3,003)	(962)	(2,631)
Net assets		32,055	26,616	31,019
Equity
Called up share capital		1,149	1,149	1,149
Share premium		5,508	5,503	5,505
Foreign Exchange Translation Reserve		(3,389)	(1,742)	(618)
Investment revaluation reserve Share-based payment reserve		(36) 218	(43) 218	(49) 203
Retained earnings		27,547	20,718	23,735
Equity attributable to the owners of the parent		30,997	25,803	29,925
Non-controlling interest		1,058	813	1,094
Total equity		32,055	26,616	31,019
Net assets per share	4	27.14p	22.72p	26.30p

CONDENSED CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

for the six months to 30 September 2015

 

	Share capital £'000	Share premium £'000	Share Based Payment Reserve £'000	Foreign Exchange Translation Reserve £'000	Purchase/Sale of own Shares £'000	Investment Revaluation Reserve £'000	Retained Earnings £'000	Non-controlling Interest £'000	TOTAL
At 1 April 2014	1,149	5,498	203	(914)	(310)	(86)	17,027	895	23,462
Profit for the period Fair value (or revaluation) gains on available- for- sale financial assets to profit or loss	- -	- -	- -	(828) -	- -	- 43	4,988 -	(263) -	3,897 43
Share based payments	-	-	15	-	-	-	-	-	15
Non-controlling interest	-	-	-	-	-	-	(196)	196	-
Treasury shares	-	5	-	-	101	-	-	-	106
Dividends paid	-	-	-	-	-	-	(892)	(15)	(907)
At 30 Sept 2014	1,149	5,503	218	(1,742)	(209)	(43)	20,927	813	26,616
Profit for the period	-	-	-	828	-	-	3,423	263	4,514
Fair value (or revaluation) gains on available- for- sale financial assets to profit or loss	-	-	-	-	-	(6)	-	-	(6)
Movement on foreign exchange	-	-	-	296	-	-	-	(24)	272
Share based payments	-	-	(15)	-	-	-	-	-	(15)
Non-controlling interest	-	-	-	-	-	-	(43)	43	-
Treasury Shares	-	2	-	-	36	-	-	-	38
Dividends paid	-	-	-	-	-	-	(399)	(1)	(400)
At 1 April 2015	1,149	5,505	203	(618)	(173)	(49)	23,908	1,094	31,019
Profit for the period Fair value (or revaluation) gains on available- for- sale financial assets to profit or loss	- -	- -	- -		- -	- 13	5,268 -	- -	5,268 13
Movement on foreign exchange	-	-	-	(2,771)	-	-	-	(390)	(3,161)
Share based payments	-	-	15	-	-	-	-	-	15
Non-controlling interest	-	-	-	-	-	-	(380)	380	-
Treasury shares	-	3	-	-	66	-	-	-	69
Dividends paid	-	-	-	-	-	-	(1,142)	(26)	(1,168)
At 30 Sept 2015	1,149	5,508	218	(3,389)	(107)	(36)	27,654	1,058	32,055

 

 

 

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

for the six months to 30 September 2015

		Six months to  30 Sept 2015 (unaudited)			Six months to 30 Sept 2014 (unaudited)	Year to 31 March 2015  (audited)
		£'000		£'000		£'000
Cash flows from operating activities	Notes
Operating profit		7,121		6,183		9,405
Adjustments for:
Depreciation of investment property, and property, plant & equipment		815		17		384
Fair value adjustment to investment properties		(556)		89		876
Negative goodwill		-		(1,123)		(1,839)
Share based payments		15		15		-
(Increase)/decrease in inventories		(141)		(70)		(258)
(Increase)/decrease in trade and other receivables		307		664		(486)
Increase/(decrease) in trade and other payables		(1,230)		(2,406)		577
Other non-cash adjustments		43		26		84
Cash generated from operations		6,374		3,395		8,743
Income taxes paid		(357)		(322)		(826)
Net cash flow from operating activities		6,017		3,073		7,917
Cash flow from investing activities
Purchase of investments Capital expenditure on investment properties Proceeds from partial disposal of available-for-sale assets		- (1,009) 627		(651) (38) -		(353) (383) 565
Purchase of property, plant and equipment		(125)		(6)		(14)
Cash paid on control/acquisition of new subsidiaries		-		(218)		(4,638)
Cash and cash equivalents received on control/acquisition of new subsidiaries		-		437		3,055
Dividends from associates		62		75		189
Distributions received		192		30		694
Interest received		69		35		145
Net cash flow from /(used in) investing activities		(184)		(336)		(740)
Cash flow from financing activities
Net repayment of shareholder loans in subsidiaries		(48)		(245)		(293)
Interest paid		(1,462)		(905)		(2,266)
Proceeds from bank loan		7,813		3,491		3,547
Repayment of finance lease/bank loans		(9,015)		(3,357)		(5,776)
Sale of shares held in Treasury		69		106		144
Dividends paid		(1,142)		(892)		(1,291)
Dividends paid to non-controlling interest		(26)		(15)		(16)
Net cash flow (used in) financing activities of continuing operations		(3,811)		(1,817)		(5,951)
Net increase in cash and cash equivalents		2,022		920		1,226
Cash and cash equivalents at the beginning of period		12,240		11,279		11,279
Currency translation gains/(losses) on cash and cash equivalents		(60)		(151)		(265)
Cash and cash equivalents at the end of the period		14,202		12,048		12,240

NOTES TO THE CONDENSED CONSOLIDATED RESULTS

for the six months ended 30 September 2015

1.   Basis of Preparation

·    These interim condensed consolidated financial statements for the six months ended 30 
September 2015 have not been audited or reviewed and do not constitute statutory accounts
within the meaning of section 435 of the Companies Act 2006. They have been prepared in
accordance with the Group's accounting policies as set out in the Group's latest annual financial
statements for the year ended 31 March 2015 and are in compliance with IAS 34 "Interim
Financial Reporting". These accounting policies are drawn up in accordance with International
Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as issued by
the International Accounting Standards Board and as adopted by the European Union (EU).

·    The comparative figures for the financial year ended 31 March 2015 are not the statutory accounts for the financial year but are abridged from those accounts prepared under IFRS which have been reported on by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified, did not include references to any matter to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section  498 (2) or (3) of the Companies Act 2006.

·    These interim financial statements were approved by a committee of the Board on 25 November 2015.

2.     Segmental Analysis 

Segment reporting six months to 30 September 2015

The parent holding company costs and related listing costs are shown separately under unallocated central costs.

	Property fund management	Group properties	Group fund properties ("FOP")	Unallocated central overheads	TOTAL
	£'000	£'000	£000	£'000	£'000
External revenue
	1,845	6,099	3,003	-	10,947
	1,845	6,099	3,003	-	10,947
Depreciation and amortisation	(13)	(747)	(55)	-	(815)
Operating profit
Existing operations	1,188	3,952	2,471	(490)	7,121
Share of results in associates	-	65	-	-	65
Dividend income	-	192	-	-	192
Interest income	-	14	45	10	69
Interest expense	-	(721)	(797)	-	(1,518)
Profit/(loss) before tax	1,188	3,502	1,719	(480)	5,929
Analysed as:
Before performance fees and related items:	324	4,324	1,242	(480)	5,410
Performance fees	864	-	-	-	864
Realised foreign currency loss	-	(105)	(79)	-	(184)
Depreciation	-	(717)	-	-	(717)
Fair value adjustments to investment properties	-	-	556	-	556
Staff incentives	-	-	-	-	-
Profit/(loss) before tax	1,188	3,502	1,719	(480)	5,929

Revenue for the six months to 30 September 2015 from continuing operations consists of revenue arising in the United Kingdom 14% (2014: 34%) and Central and Eastern Europe 86% (2014: 66%) and all relates solely to the Group's principal activities.

Segment reporting six months to 30 September 2014

	Property fund management	Group properties	Group fund properties ("FOP")	Unallocated central overheads	TOTAL
	£'000	£'000	£000	£'000	£'000
External revenue	3,550	1,582	2,653	-	7,785
	3,550	1,582	2,653	-	7,785
Depreciation and amortisation	(14)	(3)	-	-	(17)
Operating profit
-existing operations	2,903	2,218	1,525	(463)	6,183
-share of results in associates	-	107	-	-	107
-dividend income	-	30	-	-	30
-interest income	-	7	13	15	35
-interest expense	-	(192)	(742)	-	(934)
Profit/(loss) before tax	2,903	2,170	796	(448)	5,421
Analysed as:
Before performance fees and related items:	792	1,047	1,085	(448)	2,476
Performance fees	2,111	-	-	-	2,111
Realised foreign currency loss	-	-	(200)	-	(200)
Recognition of negative goodwill on refinancing of subsidiary	-	1,123	-	-	1,123
Fair value adjustments to investment properties	-	-	(89)	-	(89)
Staff incentives	-	-	-	-	-
Profit/(loss) before tax	2,903	2,170	796	(448)	5,421

Segment reporting year to 31 March 2015

	Property fund management		Group properties	Group  fund properties ("FOP")	Unallocated central overheads	TOTAL
		£'000	£'000	£'000	£'000	£'000
External revenue
-Existing operations		6,140	2,968	5,217	-	14,325
-Sale of inventory		-	-	-	-	-
-Business acquisitions		-	3,479	719	-	4,198
Total		6,140	6,447	5,936	-	18,523
Depreciation and amortisation		(18)	(360)	(6)	-	(384)
Operating profit		4,435	5,454	2,454	(2,938)	9,405
Share of results in associates		-	185	-	-	185
Distribution income		-	694	-	-	694
Interest income		-	36	89	20	145
Interest expense		-	(730)	(1,616)	-	(2,346)
Profit/(loss) before tax		4,435	5,639	927	(2,918)	8,083
Analysed as:
Before performance fees and related items		1,605	4,489	2,272	(963)	7,403
Recognition of negative goodwill on refinancing of subsidiary Recognition of negative goodwill on acquisition of subsidiaries		- -	1,123 716	- -	- -	1,123 716
Fair value adjustment to investment properties		-	-	(876)	-	(876)
Depreciation		-	(357)	-	-	(357)
Performance fees		3,365	-	-	-	3,365
Staff incentives		(535)	(194)	(184)	(1,955)	(2,868)
Realised foreign currency gain/(loss)		-	(138)	(285)	-	(423)
Profit/(loss) before tax		4,435	5,639	927	(2,918)	8,083

Assets - Group	1,633	84,478	58,522	6,301	150,934
Share of net assets of associates	-	979	-	(308)	671
Liabilities	(289)	(72,437)	(45,666)	(2,194)	(120,586)
Net Assets	1,344	13,020	12,856	3,799	31,019

Assets, liabilities and costs that relate to Group central activities (including free cash) have not been allocated to business segments.

3.     Tax Expense

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

	Sept 2015	Sept 2014	March 2015
Current  tax	(588)	(339)	(525)
Deferred tax	(73)	(94)	853
Total	(661)	(433)	328

4.     Earnings/NAV per share

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

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

	Six months ended 30 Sept 2015	Six months ended 30 Sept 2014	Year  ended 31 March 2015
Basic - pence per Share	4.28p	4.24p	7.21p
Diluted - pence per Share	4.13p	4.07p	6.93p
	Number	Number	Number
Weighted average number of ordinary shares in issue for basic	114,177,240	112,953,380	113,348,847
Share options	4,450,000	5,050,000	4,850,000
Total for diluted	118,627,240	118,003,380	118,198,847
	£'000	£'000	£'000
Basic earnings	4,888	4,792	8,172
Diluted earnings assuming full dilution	4,895	4,807	8,187

	Six months ended 30 Sept 2015	Six months ended 30 Sept 2014	Year  ended 31 March 2015
Net assets per share	27.14p	22.72p	26.30p
Adjusted net assets per share	40.29p	26.15p	35.75p

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

	Number	Number	Number
Number of shares in issue at period end	114,192,541	113,569,360	113,792,541
	£'000	£'000	£'000
Net assets excluding non- controlling interest	30,997	25,803	29,925
Adjusted net assets per share	Number	Number	Number
Number of shares in issue at period end	114,192,541	113,569,360	113,792,541
Number of share options assumed to be exercised	4,450,000	5,050,000	4,850,000
Total	118,642,541	118,619,360	118,642,541
Adjusted net assets per share	£'000	£'000	£'000
Net assets excluding non-controlling interest	30,997	25,803	29,925
Adjustments for market value of assets less deferred tax	15,801	5,010	12,267
Other adjustments	999	207	221
Total	47,797	31,020	42,413

5.  Investment Properties

	Six months ended 30 Sept 2015	Six months  ended 30 Sept 2014	Year  ended 31 March 2015
	£'000	£'000	£'000
1 April	114,262	48,759	48,759
Business acquisitions	-	5,547	75,390
Capital expenditure	1,009	38	383
Depreciation	(786)	-	(357)
Fair value adjustment	556	(89)	(876)
Foreign exchange translation	(2,085)	(3,229)	(9,037)
End of period	112,956	51,026	114,262

6.    Interest in Associates and Other Financial Assets

	Six months ended 30 Sept 2015	Six months ended 30 Sept 2014	Year ended 31 March 2015
a) Associated undertakings	£'000	£'000	£'000
Cost of investment  at beginning of period	671	675	675
Disposals		-	-
Share of associates profit after tax	66	107	185
Dividends received	(62)	(75)	(189)
Cost of investment  at end of period	675	707	671
Investments in Associated undertakings
5th Property Trading Ltd	838	868	827
Regional Property Trading Ltd	145	147	152
	983	1,015	979
Less: Group share of profit after tax withheld on sale of property to an associate in 2007	(308)	(308)	(308)
Cost of investment  at end of period	675	707	671
b) Other financial assets and investments
Cost of investment  at beginning of period	1,531	1,706	1,706
Additions Business acquisitions Disposal	- - (627)	651 - -	353 - (565)
Net increase in fair value	12	43	37
Cost of investment  at end of period	916	2,400	1,531

7.    Trade and Other Receivables

	Six months ended 30 Sept 2015	Six months ended 30 Sept 2014	Year  ended 31 March 2015
	£'000	£'000	£'000
Current assets
Trade receivables	1,756	1,088	1,655
Other receivables	2,971	2,140	3,147
Prepayments and accrued income	651	337	942
	5,378	3,565	5,744
Non-current assets	228	349	283

8.       Trade and Other Payables

	Six months ended 30 Sept 2015	Six months ended 30 Sept 2014	Year  ended 31 March 2015
	£'000	£'000	£'000
Trade payables	2,144	461	2,605
Other taxation and social security	1,336	286	580
Other payables and accruals	2,907	2,147	4,938
Deferred income	11	-	11
	6,398	2,894	8,134

9.       Financial Liabilities

	Six months ended  30 Sept 2015	Six months ended 30 Sept 2014	Year  ended 31 March  2015
a) Current liabilities	£'000	£'000	£'000
Bank loans	3,426	1,644	9,382
Finance leases	2,675	528	2,406
	6,101	2,172	11,788
b) Non-current liabilities
Loans repayable by subsidiary (FOP) to third party shareholders	1,888	1,984	1,936
Bank loans	57,413	36,828	50,610
Finance leases	44,760	11,674	45,379
	104,061	50,486	97,925
c) Total obligations under financial liabilities
Less than one year	6,101	2,172	11,788
Between two and five years	67,584	39,647	57,928
Later than five years	36,477	10,839	39,997
	110,162	52,658	109,713

Loans repayable by FOP to third party shareholders are unsecured and repayable in August 2020.

Eight bank loans and three finance leases (all denominated in Euros) totalling £108,274,000 (31 March 2015: £107,777,000) included within financial liabilities are secured against investment properties owned by the Group and Fprop Opportunities plc (FOP), and one property owned by the Group shown under inventories. These bank loans and finance leases are otherwise non-recourse to the Group's assets.

The interim results are being circulated to all shareholders and can be downloaded from the company's web site (www.fprop.com). Further copies can be obtained from the registered office at 32 St James's Street, London SW1A 1HD.

 

END

 

 

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