Final Results

First Property Online PLC 25 June 2001 FIRST PROPERTY ONLINE PLC PRELIMINARY RESULTS For Year Ended 31 March 2001 25 June 2001 First Property Online plc ('fprop'), which operates a web-based business-to-business property transaction platform, announces preliminary results for the year ended 31 March 2001. Corporate Highlights - Successful conversion from The Hansom Group plc, a cash shell, to a trading entity with the acquisition of the First Property Online group in December 2000 - The acquisition of Propertytrade.co.uk in April 2001 for a nominal cash consideration - The launch of three new unique products in June 2001, enabling fprop to guarantee property sales through an underwriting facility supported by bespoke property loan, valuation and legal quotes and rapid property conveyancing Financial Highlights - Cash and near cash balance of £2.9 million - Loss on ordinary activities before interest and goodwill amortisation of £547,000, in line with expectations Ben Habib, Chief Executive of fprop commented: 'The Company is well capitalised and is the only online property vehicle to benefit from a listing on the stock market. This large advantage, coupled with the strengths brought by our trade alliances and the uniquely valuable products we offer, particularly the underwriting facility, gives me confidence for the future and for the Group to deliver its growth plans.' For further information, please contact: Ben Habib Bella Pagdin / Jeremy Carey First Property Online plc Tavistock Communications Limited Tel: 020 7731 2844 Tel: 020 7600 2288 www.fprop.com CHAIRMAN'S STATEMENT The year to 31st March, 2001 has been a watershed for the Company, having successfully converted itself from The Hansom Group plc, a cash shell, to a trading entity with the acquisition of the First Property Online group in December, 2000. I am pleased to report that since this acquisition, the business has positioned itself well in its sector and we will now move positively towards revenue generation. Results The short period between the completion of the acquisition (22nd December, 2000) and 31st March, 2001 was used by the Company principally to set in place other building blocks necessary for future revenue and profit generation. As a consequence, there was no material revenue earned during the period. The Group made a loss on ordinary activities before interest and goodwill amortisation of £547,000, of which £246,000 represented costs incurred by Hansom before the acquisition, including costs incurred for the further development of our website. The Company ended the period with a cash and near cash balance of approximately £2.9 million. The Directors are not recommending the payment of a dividend. Developments since the year end On 19th April, 2001 we announced the acquisition of Propertytrade.co.uk. We also announced on 15th June, 2001 the launch of three new unique products. Propertytrade.co.uk We acquired Propertytrade.co.uk, a b2b platform for the advertising of commercial properties for sale, for a nominal cash consideration. Its website listed 1,500 freehold or long leasehold properties for sale, with contributions from some 300 agents. This acquisition enabled fprop to reach rapidly a critical mass of properties on its website and benefit from agent relationships already created by Propertytrade.co.uk. At the time of writing, fprop has 182 properties for sale online, a large proportion of which have been converted from Propertytrade.co.uk. We expect the number of properties for sale on fprop to continue to grow as more agents are converted from Propertytrade.co.uk. This critical mass of properties provides fprop with a strong base from which to develop its revenue generating products. Bespoke loan, valuation and legal services online We have entered into business agreements with a panel of leading UK commercial property lenders to provide bespoke loan quotes (to be displayed online subject to sellers' prior approval) for properties being sold through our website. The loan quotes will be made following valuation and legal consultation, and should therefore provide users of our website with a much better understanding of their ability to finance a property's purchase, its value and an efficient mechanism for the arrangement of loans. We have agreed with each of the lenders that we will share in any loan arrangement fees earned from introductions from the website. This service is due to go live later this summer. fprop's underwriting facility Given the ready access to detailed information on properties for sale on our website, an understanding of the likely financing terms available, easy access to valuations and our own expertise, fprop has the ability to offer a professional, generic underwriting service for property sales. Under this scenario sellers will be able to: - be guaranteed a sale of their property; and - retain a significant share of the upside on the sale of their property should it sell on the market at a higher price than the price at which it has been underwritten. In the first instance we will be offering two kinds of underwriting products: - a guaranteed fixed purchase price, for a limited period of time, in return for a predetermined underwriting premium, payable to us up front; and - a guaranteed fixed purchase price, for a limited period of time, in return for a share in the upside if the property sells on the market at a price higher than the underwritten price. In order to avail themselves of this underwriting product sellers will have to commit to sell their property either through our online bidding system or at conventional auction. In order to launch the service fprop will set up a ring fenced underwriting company. Funding for this company will be raised from independent sources, with fprop expected to make a minority investment. Any investment by fprop will be made having ensured that it retains sufficient funding for its existing business. The company will be managed by fprop. This service is expected to go live later this summer. Streamlined conveyancing We have developed a simple set of Enquiries before Contract and Certificates of Title. These have been designed so that the replies to enquiries can easily slot into the certificates, which are themselves based on the Law Society's standard form but altered to cater for different kinds of property so that they are specific and user friendly. Whilst there is no direct revenue generation from this product, once established it should allow sellers and buyers to use our website much more easily and allow us in turn to offer our other products efficiently and cost effectively. Strategy Now that the Company has put in place the building blocks to facilitate the generation of revenue, our strategy is to: - continue to grow the volume of properties online with an emphasis on properties being transacted through fprop; - use the properties listed on the website as a base to cross sell fprop's revenue generating products; - develop and expand the underwriting facility; - establish further trade alliances to assist fprop in the development of its business; - make, where appropriate, strategic acquisitions which allow fprop to accelerate its growth; and - tightly control its overheads, expenditure, and cash Prospects Whilst the e-commerce malaise has affected the property industry and the speed by which we might otherwise have established our business, the resultant weak capital markets have also created opportunities for us. The Company is well capitalised and is the only online property vehicle to benefit from being quoted on AIM. This large advantage, coupled with the strengths brought by our trade alliances and the uniquely valuable products we offer, gives me confidence for the future and for the Group to deliver its growth plans. Alasdair Locke Chairman 25 June 2001 CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 31st March, 2001 Results before Goodwill Total Total Goodwill Amortisation Amortisation Results Results Notes 2001 2001 2001 2000 £'000 £'000 £'000 £'000 Turnover - Continuing operations (acquisitions) - - - - - Discontinued - - - 1,625 operations Total turnover - - - 1,625 Cost of sales - - - (1,385) Gross profit - - - 240 Net operating expenses (547) (801) (1,348) (361) Operating (loss) on continuing operations (357) (357) (230) Operating (loss) on acquisitions (190) (801) (991) - (547) (801) (1,348) (230) Operating profit on discontinued operations - - - 109 Operating (loss) (547) (801) (1,348) (121) Exceptional item: profit on sale of subsidiaries - discontinued - - - 56 operations (Loss) on ordinary activities before interest (547) (801) (1,348) (65) Net interest receivable 184 - 184 128 (Loss)/profit on ordinary (363) (801) (1,164) 63 activities before taxation Taxation on (loss)/ profit onordinary activities - - - (292) (Loss) for the year 5 (363) (801) (1,164) (229) (Loss) per Ordinary 1p share - basic and diluted, before 2 (0.68p) (0.58p) goodwill amortisation (Loss) per Ordinary 1p share - basic and diluted, after goodwill 2 (2.18p) (0.58p) amortisation 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)/profit on ordinary activities before taxation and the loss for the year stated above, and their historical cost equivalents. CONSOLIDATED BALANCE SHEET at 31st March, 2001 2001 2000 Group Group Notes £'000 £'000 Fixed assets Intangible assets 3 5,607 - Tangible assets 42 - Investments 238 238 5,887 238 Current assets Debtors 337 995 Cash at bank and in hand 2,604 2,773 2,941 3,768 Creditors: amounts falling due within one year (484) (338) Net current assets 2,457 3,430 Net assets 8,344 3,668 Capital and reserves Called up share capital 4 850 403 Share premium 5 2,663 2,820 Other reserves 5 5,550 - Profit and loss account 5 (719) 445 Shareholders' funds 6 8,344 3,668 CONSOLIDATED CASH FLOW STATEMENT for the year ended 31st March, 2001 2001 2000 Notes £'000 £'000 Net cash inflow from operating activities 7 111 819 Returns on investments and servicing of finance Interest received 187 112 Interest paid (2) - Net cash inflow from returns on investments and servicing of finance 185 112 Capital expenditure and financial investment Purchase of tangible fixed assets (15) - Net cash outflow from capital expenditure and financial investment (15) - Acquisitions and disposals Acquisition expenses paid (232) - Net cash acquired with subsidiary undertaking 19 - Disposal of operations - 944 Cash disposed of with subsidiary - (154) Net cash (outflow) / inflow from acquisitions and disposals (213) 790 Cash inflow before management of liquid resources and 68 1,721 financing Management of liquid resources Decrease / (increase) in short term deposits 150 (1,865) Financing Issue of Ordinary share capital 110 110 Issue cost of shares (247) - Repayment of loans (100) - Net cash (outflow) / inflow from financing (237) 110 (Decrease) in cash in year (19) (34) Reconciliation of net cash flow to movement in net funds 2001 2000 £'000 £'000 (Decrease) in cash in year (19) (34) Movement in short term deposits (150) 1,865 Loan acquired with subsidiary (100) - Movement in loans 100 - Change in net funds resulting from cash flows (169) 1,831 Movement in net funds in year (169) 1,831 Net funds at 1 April 2000 2,773 942 Net funds at 31 March 2001 2,604 2,773 NOTES TO THE FINANCIAL STATEMENTS 1. The financial information set out in this preliminary announcement does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985, but is derived from those accounts. Statutory accounts for the year ended 31st March, 2000 have been delivered to the Registrar of Companies and those for the year ended 31st March, 2001 will be delivered following the Company's annual general meeting. The statutory accounts for the year ended 31st March, 2001 will be despatched to shareholders in August, 2001 for approval at the annual general meeting to be held on 10th September, 2001. The auditors have reported on those accounts, their reports were unqualified and did not contain statements under Section 237 (2) or (3) of the Companies Act 1985. Copies of the Annual Report and Accounts will be sent to shareholders on 9th August, 2001 and will also be available at the company's registered office: 17 Quayside Lodge, William Morris Way, London, SW6 2UZ. 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 £1,164,000 (2000: loss £229,000) and on 53,350,093 (2000: 39,065,809) Ordinary shares being the weighted average number of Ordinary shares in issue and ranking for dividend during the year. For the year ended 31st March, 2001, the inclusion of unexercised share options do not have a dilutive effect. The loss per Ordinary share before goodwill amortisation has been calculated and disclosed to be comparable with the prior year loss per Ordinary share as no goodwill amortisation occurred in that year. 3. Intangible assets Goodwill £'000 Cost at 1 April 2000 - Additions during the year 6,408 At 31st March, 2001 6,408 Amortisation At 1 April 2000 - Charge for the year (801) At 31st March, 2001 (801) Net book value at 31st March, 2001 5,607 Net book value at 31st March, 2000 - Goodwill arising on the acquisition of First Property Online Holdings Ltd (formerly First Property Online Ltd) is being amortised over a two year period. 4. Called-up share capital 2001 2000 £'000 £'000 Authorised : 120,000,000 (2000: 60,000,000) Ordinary shares of 1p each 1,200 600 Allotted, called up and fully paid: 84,979,716 (2000: 40,289,858) Ordinary shares of 1p each 850 403 The authorised share capital of the Company was increased from £600,000 to £ 1,200,000 by the creation of 60,000,000 new Ordinary shares of 1p each at an Extraordinary General Meeting of the Company held on 21st December, 2000 A total of 44,689,858 Ordinary shares of 1p each were allotted during the year in respect of the following transactions. No. of Nominal Consideration Date of Ordinary Value Allotment shares £'000 £'000 Options exercised by 26th July,2000 2,000,000 20 110 J.P Mervis Acquisition of First Property Online Holdings Ltd 22nd Dec,2000 42,689,858 427 5,976 44,689,858 447 6,086 The Company had the following options outstanding at the date of this report: Number of options Exercise price Exercisable before 4 December 2001 400,000 5.5p Exercisable before 6 April 2011 3,530,000 7.0p Under the terms of an engagement letter dated 28th November, 2000 between the Company and Granville Baird relating to the appointment of Granville Baird as nominated adviser and nominated broker to the Company, the Company has granted an option to Granville Baird to acquire 849,797 new Ordinary shares at an exercise price of 26 pence, being equal to the average closing mid-market price of the Ordinary shares in the 20 dealing days preceding the announcement of the acquisition of the First Property Online Holdings Ltd. The option is exercisable at any time to 21st December, 2003. The value of the shares allotted on the acquisition of First Property Online Holdings Ltd was £5,976,000 and the consideration received for the shares allotted under the share option scheme during the year was £110,000. 5. Share premium account and reserves Share premium Other Profit account reserves and loss account £'000 £'000 £'000 At 1 April 2000 2,820 - 445 Premium on shares issued during the year 90 - - Share issue costs (247) - - Merger reserve created on acquisition of First Property Online Holdings Ltd - 5,550 - Loss for the year - - (1,164) At 31 March 2001 2,663 5,550 (719) 6. Reconciliation of movements in equity shareholders' funds 2001 2000 £'000 £'000 Opening shareholders' funds 3,668 2,262 Loss for the financial year (1,164) (229) New share capital issued 447 110 Increase in share premium 90 - Increase in other reserves 5,550 - Share issue costs (247) - Writeback of goodwill previously written off to reserves - 1,525 Closing shareholders' funds 8,344 3,668 7. Reconciliation of operating profit to net cash inflow from operating activities 2001 2000 £'000 £'000 Operating loss (1,348) (121) Depreciation 6 25 Amortisation 801 - Decrease / (increase) in trade debtors 2 (25) Decrease in prepayments and other debtors 690 85 Increase in trade creditors 2 889 Increase / (decrease) in other taxation and social security 15 (2) Decrease in other creditors and accruals (57) (32) Net cash inflow from operating activities 111 819 8. Report circulation Copies of the interim report are available from the Company's Registered Office at 17 Quayside Lodge, William Morris Way, London SW6 2UZ.

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