Sale of Group Property in Poland

RNS Number : 7898X

First Property Group PLC

23 December 2019

 

Date:	23 December 2019
On behalf of:	First Property Group plc ("First Property", "the Company" or the "Group")
Embargoed:	07:00

First Property Group plc

Sale of Group Property in Poland

First Property Group plc (AIM: FPO), the property fund manager and investor, is pleased to announce that it has entered into a contract for the sale of one of its Group Properties, a 50.3% interest in Chałubińskiego 8 (CH8), an office tower in Warsaw, Poland, at a price of €44 million. Completion of the contract is deferred until the treatment of VAT relating to the sale has been approved by the Polish tax authorities, which is expected by 31 March 2020.

The sale price is at a premium of €5.2 million (13.4%) to the value at which the property is held in the accounts and a premium of €4.0 million (10.0%) to its independently assessed market value.

As a condition of the sale the Group has guaranteed the rental and service charge income and fit-out costs on the residual vacant space, amounting to some €1.2 million per annum and €1.5 million respectively. After making a provision for the potential cost of this guarantee, the sale should result in a profit before tax of some £3 million at current exchange rates after accounting for the foreign exchange gains held in the foreign exchange reserve. This profit should be recognised in the financial year ending 31 March 2020. 

The net cash proceeds payable to the Group after tax and after the repayment of the bank loan secured against the property should amount to some €19.6 million (£16.7 million). As at 30 September 2019 the Group had cash balances of £8.55 million, resulting in pro forma Group cash resources of some £25 million, equivalent to some 22 pence per share.

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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 (General Manager 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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