Final Results

First Property Group PLC 23 June 2004 FIRST PROPERTY GROUP PLC PRELIMINARY RESULTS For Year Ended 31 March 2004 23 June 2004 First Property Group plc ('fprop'), the online commercial property transaction platform and property asset manager, announces preliminary results for the year ended 31 March 2004. Financial Highlights • Turnover of £3,745,000 up 64% (2003: £2,281,000) • Profit on ordinary activities before tax and goodwill amortisation of £586,000 (2003: £102,000), up 475% • Dividend per share doubled to 0.1p (2003: 0.05p) • Net assets of £2,756,000 (2003: £2,209,000) Corporate Highlights • Underwriting activities have continued to grow • First Property Asset Management currently has £13 million of assets under management divided into three funds, with a fourth fund underway and a fifth planned • Online sales of commercial property have increased as a result of efficient marketing campaigns Ben Habib, Chief Executive of fprop, said: 'Having achieved profitability we are now targeting to expand, and are therefore actively seeking acquisitions. 'We continue to be pleased by the rate of growth of the Company and, subject to market conditions, we would expect this growth to continue during the current year.' For further information: Ben Habib Jeremy Carey First Property Group plc Tavistock Communications Limited Tel: 020 7731 2844 Tel: 020 7920 3150 www.fprop.com jcarey@tavistock.co.uk CHIEF EXECUTIVE'S STATEMENT Results and dividend I am pleased to report that turnover during the year was £3,745,000 (2003: £2,281,000), providing a gross profit of £1,501,000 (2003: £1,095,000) and a profit on ordinary activities before taxation and goodwill amortisation of £586,000 (2003: £102,000). I am also pleased to report that the Directors have resolved to recommend a dividend for the year of 0.1 pence per share (2003: 0.05 pence per share), which, if approved, will be paid on 16 September 2004 to shareholders on the register at 20 August 2004. Net assets have also increased to £2,756,000 (2003: £2,209,000). Review of operations Property transaction underwriting Our underwriting activities have continued to grow and made another substantial contribution during the year. Turnover from this activity amounted to £3,186,000 (2003: £1,823,000) producing a gross profit contribution of £983,000 (2003: £592,000). The underwriting business has also made a very good start to the current year. In the absence of any 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 2005. First Property Asset Management Revenue earned by FPAM during the year amounted to £208,000 (2003: £13,000 for the seven month period from its commencement in October 2002). Of the fees earned, £139,000 (2003: nil) was in respect of the out performance of our first two funds. FPAM now has three funds under management, with a total of some £13 million of assets (2003: £8 million). We have raised a fourth fund (which, when fully invested, will amount to a further sum in the region of £4 million under management) and are in the process of raising a fifth. Investors in our funds mainly 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. The Group has proven its ability to successfully source such investments and we believe this will continue despite the property investment market being more competitive than last year. The pre-tax rates of return on equity earned by our first two funds last year, being their first full year in existence, exceeded 30%. It may not be possible to sustain such high levels of returns but we are confident of continuing to earn attractive rates. I anticipate that FPAM will go on growing its activities by launching successive funds. We are building a good track record and, in due course, we will also endeavour to offer our services to a broader investor base. Commercial Property Database CPD, our online property database and web design division, continues to trade satisfactorily. This division earned revenue of £289,000 (2003: £406,000). Whilst turnover was lower than in 2003, this was primarily caused by a difficult environment for the website design part of CPD's business. We will be releasing a new public portal in July 2004 to enhance the marketing of properties on our database. This will be a valuable service for our members and should allow us to increase membership income without resulting in any material additional hosting or other costs to the Company. As mentioned at the interim stage, we have expanded our data-entry team by employing a number of new staff in Pakistan. They have since proved to be a useful part of the team and have, together with our staff in the UK, made significant progress in ensuring that our database of commercial properties is comprehensive and up-to-date. Some six to seven hundred new properties are now added to the database each week. I view this new resource in Pakistan as a growth opportunity for the Company. Online sales of commercial property Revenue earned from the online sale of commercial properties was £63,000 (2003: £16,000). We had some notable successes with this product last year. By combining email direct marketing campaigns (to our database of over 35,000 property agents and principals) and the property data stored at www.fprop.com, we sold some £17 million of property entirely online and at excellent values. There is no doubt that the system works more effectively and efficiently than any traditional form of marketing. We have also recently assisted and worked with other agents to market their properties in this way. It remains difficult to predict the rate at which this product might grow but I am increasingly confident of it succeeding. As such, we are currently working to recruit a high calibre individual or team to exploit the inherent revenue generating potential of this product. Strategy In our report and accounts for the year to 31 March 2002, I outlined our strategy to reach profitability before attempting to expand. Having achieved the first of our goals we are now targeting the second. We are, therefore, actively seeking acquisitions. Whilst we will necessarily be somewhat opportunistic in this endeavour we are only interested in businesses which complement our existing products, operate in areas in which we have expertise and are demonstrably earnings enhancing. Specific areas of interest naturally include property services and online-based businesses. We will, at all times, also remain focused on the growth of our products and the Company's profitability. Current trading and prospects We continue to be pleased by the rate of growth of the Company and, subject to market conditions, we would expect this growth to continue during the current year. Ben Habib Chief Executive 23 June 2004 CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 31 March 2004 2004 2003 (unaudited) (audited) --------- -------- -------- --------- --------- ------ Notes Results Goodwill Total Results before Goodwill Total before amortisation Results goodwill amortisation results goodwill amortisation & exceptional amortisation & exceptional items items £'000 £'000 £'000 £'000 £'000 £'000 ------------ ------ --------- -------- -------- --------- --------- ------ Turnover - continuing operations 3,745 - 3,745 2,281 - 2,281 ------------ ------ --------- -------- -------- --------- --------- ------ Total 3,745 - 3,745 2,281 - 2,281 turnover Cost of (2,244) - (2,244) (1,186) - (1,186) sales ------ --------- -------- -------- --------- --------- ------ ------------ Gross profit 1,501 - 1,501 1,095 - 1,095 Net operating expenses (868) - (868) (929) (2,915) (3,844) ------------ ------ --------- -------- -------- --------- --------- ------ Operating profit/(loss) - continuing operations 633 - 633 166 (2,915) (2,749) ------------ ------ --------- -------- -------- --------- --------- ------ Total operating profit/(loss) 633 - 633 166 (2,915) (2,749) ------------ ------ --------- -------- -------- --------- --------- ------ Net interest receivable (payable) (47) - (47) (64) - (64) ------------ ------ --------- -------- -------- --------- --------- ------ Profit/(Loss) on ordinary activities before taxation 586 - 586 102 (2,915) (2,813) ------------ ------ --------- -------- -------- --------- --------- ------ Taxation on ordinary activities (2) - (2) - 292 292 ------------ ------ --------- -------- -------- --------- --------- ------ Profit/(Loss) for the year before minority interest 584 - 584 102 (2,623) (2,521) ------------ ------ --------- -------- -------- --------- --------- ------ Equity minority interest 34 - 34 4 - 4 ------------ ------ --------- -------- -------- --------- --------- ------ Profit/(Loss) for the year 618 - 618 106 (2,623) (2,517) Dividend on ordinary shares 3 (93) - (93) (46) - (46) ------------ ------ --------- -------- -------- --------- --------- ------ Profit/(Loss) transferred to reserves 7 525 - 525 60 (2,623) (2,563) ------------ ------ --------- -------- -------- --------- --------- ------ Profit per ordinary 1p share - basic before goodwill amortisation 2 0.67p 0.11p -diluted before goodwill amortisation 2 0.65p 0.11p ------------ ------ --------- -------- -------- --------- --------- ------ Profit/(Loss) per ordinary share - basic after goodwill amortisation 2 0.67p (2.72p) Profit/(Loss) per ordinary share - diluted after goodwill amortisation 2 0.65p (2.72p) ------------ ------ --------- -------- -------- --------- --------- ------ The Group has no recognised gains and losses other than those above and therefore no separate statement of total recognised gains and losses has been presented. CONSOLIDATED BALANCE SHEET at 31 March 2004 Notes 2004 2003 (unaudited) (audited) £'000 £'000 ------- ------------ ---------- Fixed assets Intangible assets 4 - - Tangible assets 8 19 Investments 5 25 ----------------------- ------- ------------ ---------- 13 44 ------- ------------ ---------- Current assets Stocks 3,728 3,190 Debtors 1,207 652 Cash at bank and in hand 469 314 ----------------------- ------- ------------ ---------- 5,404 4,156 ------- ------------ ---------- Creditors: amounts falling due within one year (2,661) (1,316) ----------------------- ------- ------------ ---------- Net current assets 2,743 2,840 ----------------------- ------- ------------ ---------- Total assets less current liabilities 2,756 2,884 ----------------------- ------- ------------ ---------- Creditors: amounts falling due after more than one year - (675) ----------------------- ------- ------------ ---------- Net assets 2,756 2,209 ----------------------- ------- ------------ ---------- Capital and reserves Called up share capital 5 931 924 Share premium 6 2,676 2,661 Merger reserve 6 5,823 5,823 Profit and loss account 6 (6,674) (7,199) ----------------------- ------- ------------ ---------- Equity shareholders' funds 7 2,756 2,209 ----------------------- ------- ------------ ---------- CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 March 2004 Notes 2004 2003 £'000 £'000 ------- -------- -------- Net cash (outflow) from operating activities 8 (388) (2,068) ------------------------------- ------- -------- -------- Returns on investments and servicing of finance - Dividends paid (46) - - Interest received 23 19 - Interest paid (70) (83) ------------------------------- ------- -------- -------- Net cash (outflow) from returns on investments and servicing of finance before taxation (93) (64) ------------------------------- ------- -------- -------- Capital expenditure and financial investment - Purchase of tangible fixed assets (6) (6) - Sale of tangible fixed assets - 8 - Purchase of fixed asset investments - (5) - Sale of fixed asset investments 20 30 ------------------------------- ------- -------- -------- Net cash inflow from capital expenditure and financial investment 14 27 ------------------------------- ------- -------- -------- Cash (outflow) before management of liquid resources and financing (467) (2,105) ------------------------------- ------- -------- -------- Management of liquid resources - (Increase)/decrease in short term deposits 9 (1) 1,429 Financing - Issue of shares 22 - - Minority interest 34 4 - Bank overdraft (9) 9 - Loans advanced 2,163 871 - Loan repayments (1,588) (114) ------------------------------- ------- -------- -------- Net cash inflow from management of liquid resources and financing 621 2,199 ------------------------------- ------- -------- -------- Increase in cash in the year 9 154 94 ------------------------------- ------- -------- -------- Reconciliation of net cash flow to movement in net funds Notes 2004 2003 £'000 £'000 ------------------------------- ------- -------- -------- Increase in cash in the year 154 94 Movement in short term deposits 1 (1,429) Movement in loans and bank overdraft (566) (766) ------------------------------- ------- -------- -------- Movement in net funds in the year (411) (2,101) Net funds at 1 April (1,283) 818 ------------------------------- ------- -------- -------- Net funds at 31 March 9 (1,694) (1,283) ------------------------------- ------- -------- -------- NOTES TO THE FINANCIAL STATEMENTS 1. Basis of preparation The figures for the year ended 31 March 2004 are unaudited and are not full financial statements. The figures for the years ended 31 March 2004 and 31 March 2003 are non-statutory. The figures for the year ended 31 March 2003 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 earnings per share on the net basis is based on the profit on ordinary activities after taxation, namely £618,000 (2003: loss £2,517,000) and on 92,724,244 (2003: 92,441,254) ordinary shares being the weighted average number of ordinary shares in issue and ranking for dividend during the year. The calculation of diluted earnings per share on the net basis on ordinary activities after taxation is based on an adjusted profit on ordinary activities after taxation of £627,000 (2003: £108,000) and on 96,123,302 (2003: 94,128,754) ordinary shares being the adjusted weighted average number of ordinary shares at the year end. 3. Dividend on ordinary shares 2003 2002 £'000 £'000 ------------------------------ ----------- ---------- Proposed Final Dividend of 0.10 pence per share (2003: 0.05 pence per share) payable on 16 September 2004. 93 46 4. Intangible assets Goodwill £'000 ---------- Cost At 1 April 2003 6,870 Additions during the year - --------------------------------------- ---------- At 31 March 2004 6,870 --------------------------------------- ---------- Amortisation At 1 April 2003 (6,870) Charge for the year - --------------------------------------- ---------- At 31 March 2004 (6,870) --------------------------------------- ---------- Net book value At 31 March 2004 - --------------------------------------- ---------- At 31 March 2003 - --------------------------------------- ---------- 5. Called-up share capital 2004 2003 £'000 £'000 --------- -------- Authorised: 120,000,000 (2003: 120,000,000) ordinary shares 1,200 1,200 of 1p each Allotted, called up and fully paid: 93,085,698 (2003: 92,441,254) ordinary shares of 1p each 931 924 --------- -------- 6. Share premium account and reserves Group Share premium Other Profit account reserves and loss account £'000 £'000 £'000 ----------------------- ----------- --------- --------- At 1 April 2003 2,661 5,823 (7,199) Shares issued during the year 15 - - Profit for the year - - 525 ----------------------- ----------- --------- --------- At 31 March 2004 2,676 5,823 (6,674) ----------------------- ----------- --------- --------- 7. Reconciliation of movements in equity shareholders' funds 2004 2003 £'000 £'000 Opening shareholders' funds 2,209 4,772 Profit/(Loss) for the financial year 525 (2,563) New share capital issued 7 - Share premium on new shares 15 - -------------------------------- --------- --------- Closing shareholders' funds 2,756 2,209 -------------------------------- --------- --------- 8. Reconciliation of operating profit/(loss) to net cash (outflow) from operating activities 2004 2003 £'000 £'000 Operating profit/(loss) 633 (2,749) Depreciation and profit on disposal of fixed assets 17 37 Amortisation of goodwill - 2,727 Decrease in book value of fixed asset investments - 188 (Increase) in stocks (538) (2,069) Decrease/(increase) in trade debtors 165 (206) (Increase) in prepayments and other debtors (720) (25) Increase in trade creditors 172 2 (Decrease) in taxation and social security (50) (20) (Decrease)/increase in other creditors, accruals and deferred income (67) 47 ------------------------------------ ------- -------- Net cash (outflow) from operating activities (388) (2,068) ------------------------------------ ------- -------- 9. Reconciliation of movement in net funds 1 April Cash flow 31 March 2003 2004 £'000 £'000 £'000 -------- ---------- --------- Cash at bank and in hand 314 155 469 Short term deposits (13) (1) (14) --------------------------- -------- ---------- --------- Cash (excluding short term deposits) 301 154 455 Short term deposits 13 1 14 Debt due within one year - Bank overdraft (9) 9 - - Property loan (913) (1,250) (2,163) Debt due after more than one year - Property loans (675) 675 - --------------------------- -------- ---------- --------- (1,283) (411) (1,694) -------- ---------- --------- 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 2 August 2004 for approval at the Annual General Meeting to be held on 7 September 2004 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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