Preliminary Results

RNS Number : 3031G
First Property Group PLC
05 June 2013
 



Date:                     5 June 2013

On Behalf of:        First Property Group plc ("First Property", "the Company" or "the Group")

Embargoed:         0700hrs

 

First Property Group plc

Preliminary Results for the twelve months to 31 March 2013

 

First Property Group plc (AIM: FPO), the commercial property fund management group, today announces its preliminary results for the 12 months ended 31 March 2013.

 

 

Financial highlights:


Unaudited

Year to

31 March 2013

Audited

Year to

31 March 2012

Percentage change





Profit before tax  

1£3.54m

2£3.97m

-10.8%

Diluted earnings per share

2.18p

2.73p

-20.1%

Total dividend

1.08p

1.08p

-





 

Profit before tax and central overheads by segment:




Property fund management (FPAM)

£2.84m

£3.07m

-7.5%

Group Properties (incl FOP)

£2.07m

£2.54m

-18.5%





Average €/£ rate used

1.226

1.161

-5.6%

Year-end €/£ rate used

1.183

1.200

+1.4%

Net assets

£18.54m

£17.36m

+6.8%

Cash Balances

£12.98m

£9.98m

+30.1%

Assets under management

£353m

£365m

-3.3%

          Poland

71%

70%


          UK

26%

27%


          Romania

3%

3%


 

Notes:

1.   Impact of foreign currency translation on profit before tax: £228,000 decrease.

2.   Profit before tax in 2012 benefitted from a one-off foreign currency exchange gain of £213,000.

 

Operational highlights:

 

 

·     Assets under management reduced marginally during the year as a result of a reduction in values of properties managed, offset by £3.9 million foreign currency translation gains.

·     There was one property acquired by funds managed by the Group for a total consideration of £4 million.

·     There were no properties sold by the funds managed and one property sold by the Group for a total consideration of some PLN 11,950,000 (£2,309,000).

·     Funds under management in Central and Eastern Europe once again rated by Investment Property Databank (IPD) as the best performing versus the IPD Central & Eastern European universe, now for the seven years to 31 December 2012.

 

 

  

 

 

 

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

 

"Last year was a year dominated by the turbulence created by the European sovereign debt crisis and the general weakness in the UK and European economies. Given this uncertainty we only made one property investment.

 

"The investment landscape has improved considerably since then and we are actively targeting new investment purchases both in the UK and Poland. We anticipate reporting on these as the current year unfolds.

 

"We are proud of the fact that within all this turbulence our funds have, once again, been ranked as the best performing versus the IPD Central & Eastern European universe, now for the seven year period to 31 December 2012."

 

A briefing and conference call for analysts will be held at 09.30hrs today at the Group's headquarters, 35 Old Queen Street, London, SW1H 9JA. A conference call facility will also be available on +44 (20) 3139 4830 (PIN number 33971633#). A recorded copy of the call will subsequently be posted on the Company website, www.fprop.com.

 

 

For further information please contact:

 

First Property Group plc  

Tel: +44 (20) 7340 0270

Ben Habib (Chief Executive Officer)

Jeremy Barkes (Director, Business Development)

www.fprop.com

investor.relations@fprop.com



Arden Partners (NOMAD & Broker)

Tel: + 44 (20) 7614 5900

Chris Hardie (Director, Corporate Finance)




Redleaf Polhill (PR)

Tel:+ 44 (20) 382 4763

George Parrett/ Henry Columbine

firstproperty@redleafpolhill.com

 

 

Notes to investors and editors:

 

First Property Group plc is a co-investing direct commercial property fund manager with operations in the United Kingdom and Central Europe. Its business model is to:

 

·     Raise third party funds to invest in income producing commercial property;

 

·     Co-invest in these funds and thereby earn a return on its own capital invested;

 

·     Earn fees for the management of these funds. Fees earned are a function of the value of assets under management as well as the performance of the funds.

 

The investment performance of its funds under management in Poland and in Central Europe has again been ranked No.1 versus the Investment Property Databank (IPD) universe for Central & Eastern Europe (CEE), now for the seven years to 31 December 2012. The Group's performance had previously been ranked No.1 versus the IPD CEE universe over the three, four, five and six years to 31 December 2008, 2009, 2010 & 2011 respectively.



CHIEF EXECUTIVE'S STATEMENT

               

Financial results

 

I am pleased to report final results for the twelve months ended 31 March 2013.

 

Revenue earned by the Group increased to £10.64 million (2012: £9.34 million) yielding a profit before tax of £3.54 million (2012: £3.97 million). The reduction in the Group's profit before tax can largely be attributed to a weaker Euro, which resulted in a reduction of £228,000 and the fact that the prior year's profit before tax included a one-off foreign exchange gain of £213,000. Diluted earnings per share were 2.18 pence (2012: 2.73 pence), a reduction of some 20%, even though the profit before tax only reduced by some 11%, because of an increased corporation tax charge for the year.

 

The Group ended the period with net assets of £18.54 million (2012: £17.36 million) and a cash balance of £12.98 million (2012: £9.98 million). Of this, £4.76 million (2012: £4.76 million) was held by Fprop Opportunities plc (84.1% owned by the Group at 31 March) and £642,000 (2012: £669,000) was held by Corp SA (68.3% owned by the Group), the property management company for Blue Tower in Warsaw.

 

Dividend

 

The Directors have resolved to recommend maintaining the final dividend at 0.75 pence (2012: 0.75 pence), which together with the interim dividend of 0.33 pence (2012: 0.33 pence) equates to a dividend for the year of 1.08 pence (2012: 1.08 pence). The final dividend, if approved, will be paid on 27 September 2013 to shareholders on the register at 30 August 2013.

 

Review of operations

 

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

 

As of 31 March 2013 aggregate assets under management were £353 million (2012: £365 million). Of these, 26% were located in the UK and 71% in Poland. There were no sales of properties made by funds under management and only one purchase of £4.0 million.

 

Revenue earned by this division reduced by 7.3% to £4.02 million (2012: £4.34 million), resulting in a profit before tax of £2.84 million (2012: £3.07 million). This represents 58% (2012: 55%) of Group profit before tax and unallocated central overheads. The decline in our fund management fee income of some £319,000 is primarily due to adverse movements in the foreign exchange rate from an average of €1.2260/£1 during the period compared to €1.161/£1 during the same period last year.

 

We currently manage six closed-end funds. A brief synopsis of the value of assets and maturity of each of these funds is set out below:

 

Established

Fund Life

Assets under management

% of total assets

 under management

SAM Property Company Ltd (SAM)

August  2004

Rolling

*

*

Regional Property Trading Ltd (RPT)

August  2004

5 years to August 2009, extended to August 2012 then August 2015

£7.3 m

2.1%

5th Property Trading Ltd (5PT)

December  2004

7 years to December 2011, extended to December  2014

£9.1 m

2.6%

USS Fprop Managed Property Portfolio LP

August 2005

10 years to August  2015

£224.3 m

63.5%

 

UK Pension Property Portfolio  LP (UK PPP)

February 2010

7 years to February  2017

£90.3 m

25.6%

Fprop Opportunities plc (FOP)

October  2010

10 years to October  2020

£22.0 m

6.2%

Total



£353.0 m

100%

 

* Not subject to recent revaluation

 

Our UK fund, UK PPP mainly targets retail warehousing and properties let to discount retailers, ideally where rents have been established post the onset of the credit crunch. Of the properties owned by the fund some 42% by value are retail warehousing, of which 60% by value are let to discount retailers and 40% by value are subject to leases renewed or entered into after 2009. The weighted average unexpired lease term of the properties owned by the fund is over 10 years and the vacancy level is only 0.6%. UK PPP is generating an un-geared return on equity of 6.45% per annum for its investors and is nearly fully invested. We continue to seek to raise a new fund to mimic this investment strategy but the fund raising market remains difficult.

 

At 31 March 2013 Fprop Opportunities plc (FOP) held some £4.76 million of cash available for investment. Following the year-end FOP raised an additional £3.71 million, including a subscription by the Group of £2.0 million. As a result of this new fund raising the Group's interest in FOP has reduced to 76.2% from 84.1% last year. FOP is working on the acquisition of a number of new investments, on which we hope to report later in the year.

 

As shareholders will be aware, the USS Fprop Managed Property Portfolio, our largest fund under management, will expire in 2015. We have therefore begun to work on a resolution to that fund in advance of 2015 whilst protecting the overall fee income of First Property. We are confident that these plans and the investment of the Group's cash balances will go a long way towards mitigating any reduction in fee income.

 

Our funds under management have once again been ranked by Investment Property Databank (IPD) as the best performing against the Central & Eastern European universe, now for the seven years to 31 December 2012.  

 

 

Group Properties

 

Group Properties comprise a 28% interest in an office building, Blue Tower, located in Warsaw's central business district and shareholdings in four of the six funds managed by FPAM (as set out in the table below). Our interests in these funds are accounted for, in the case of UK PPP as "dividend income", in the cases of 5th Property Trading Ltd and Regional Property Trading Ltd as "shares in associates", and in the case of Fprop Opportunities plc (FOP), on a consolidated basis because of the Group's majority shareholding. It is the Group's policy to carry its investments at the lower of book or market value for accounting purposes.

 

Our interest in the Blue Tower building was acquired by the Group in December 2008 for £8.3 million (USD12.9 million) and is now valued at some £12.85 million (USD19.5 million). The investment contributed £962,000 to pre-tax profit during the year to 31 March 2013, representing a return on equity invested of 48% over the year. Our investment in this property has proven to be an excellent one and it is our intention to acquire a greater interest in the building if the opportunity should arise.

 

 

Co-investments in FPAM managed funds at the year-end:

 

 

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 profit

earned by fund

Return on equity invested 1

 

Investments






UK Pension Property Portfolio LP (UK PPP)

0.9%

£856,000

£856,000

£58,0002

6.4%

Other quoted investment

N/A

£36,000

£36,000

N/A

N/A

Interest in associates












5th Property Trading Ltd (5PT)

37.8%

£686,000

£1,203,000

£104,000

8.5%

Regional Property Trading Ltd (RPT)

28.6%

£237,000

£273,000

£41,000

15.6%

Share of results in associates




£145,000








Consolidated undertaking






Fprop Opportunities plc (FOP)

84.1%

£6.27 m

£8.69 m

£840,0003

12.1%

Total


£8.09 m

£11.06 m

£1.04m

N/A

 

 1pre-tax income return divided by the amount of equity invested

 2 represents dividend received

 3 after non-controlling interest



 

Revenue from Group Properties, including FOP, was £4.3 million (2012: £5.0 million), excluding the sale proceeds of £2.3 million from the sale of Bacha, resulting in a profit before central overhead costs of £2.1 million, representing 42% of Group profit before central overhead costs.  The reduction in revenue was largely attributable to the sale of the Bacha property in September 2012 and the adverse effect of the average foreign exchange rate during the year.

 

The results of FOP, of which 84.1% was owned by the Group at the year-end, are consolidated in these accounts. FOP's revenue and profit before tax for the year to 31 March 2013 amounted to £2.1 million (2012: £2.33 million) and £1.0 million (2012: £1.22 million) respectively, whereas the Group's 84.1% share of these amounted to £1.77 million (2012: £1.96 million) and £0.84 million (2012: £1.03 million) respectively. Profit before tax from FOP for the year ended 31 March 2012 benefited from a one-off realised foreign exchange gain of £213,000. Since the year-end the Group has invested a further £2.0 million in FOP. The net effect of this new subscription, which was part of £3.71 million of new equity raised by FOP, is to reduce the Group's majority shareholding from 84.1% to 76.2%.

 

Our shareholdings in our two other Polish funds, 5th Property Trading and Regional Property Trading, contributed £145,000 (2012: £182,000) to the Group's profit before tax. We do not have a controlling interest in these funds and they are accounted for as "shares in associates".

 

Our co-investment in UK PPP contributed £58,000 (2012: £63,000) of dividend income to the Group and is accounted for as a separate line item in our Income Statement.

 

Fund raising

 

The market for fund raising remains challenging. However, as reported in the review of our fund management activities, we raised an additional £3.71 million for FOP since the year-end. FOP now has  £8.5 million of equity available to it for new investments. We expect to raise additional funds for FOP once we have invested the majority of its equity.

 

 In the UK we are seeking investors interested in our UK PPP investment strategy, described above and which is delivering a return on equity to investors of 6.45% per annum based on funds invested.

 

Commercial property markets outlook

 

The euro zone economies remain weak even though capital markets have recovered and investment appetite seems to be on an upswing. There is still a long way to go before government and consumer balance sheets are repaired and we therefore expect continued economic weakness and low interest rates for the foreseeable future.

 

Poland:

 

Poland's growth in GDP in 2012 was some 2%, down from 4.3% in 2011. GDP growth is expected to slow further in the current year to 1.2% before picking up again in 2014 to 2.2%. Even so, such a GDP growth rate would still leave Poland close to, if not at, the top of EU member countries. Interest rates in Poland are also likely to remain low for some time. This factor, coupled with Poland's faster rate of economic growth and the higher yields available in its investment property market, should result in Polish commercial property continuing to deliver attractive rates of return.

 

Turnover in the Polish commercial property investment market in 2012 was €2.6 billion versus a low of €600 million in 2009 and a previous high in 2006 of €5.2 billion. It would appear that investor appetite for Polish property has therefore increased but the bulk of this turnover is made up by large property transactions. Investors continue to target prime investment property and the gap between prime and secondary property remains large.

 

United Kingdom:

 

The UK's growth in GDP in 2012 was better than expected at 0.2%. There was widespread speculation of a triple dip recession but GDP growth in the first quarter of 2013 came in at 0.3%.

 

Turnover in the UK commercial property investment market in 2012 was £40.8 billion versus £37.8 billion in 2011. Of this, £22.8 billion comprised investments in Central London. The gap between Central London and the rest of the UK remains large, with property values in London rising by about 7.3% but otherwise generally declining by some 3.6% in 2012. It would appear that investors are beginning to look outside London to seek higher returns and a number of commentators are expecting a pickup in values of regional property later this year.  

 

Current Trading and Prospects

Last year was a year dominated by the turbulence created by the European sovereign debt crisis and the general weakness in the UK and European economies. Given this uncertainty we only made one property investment.

 

The investment landscape has improved considerably since then and we are actively targeting new investment purchases both in the UK and Poland. We anticipate reporting on these as the current year unfolds.

 

We are proud of the fact that within all this turbulence our funds have, once again, been ranked as the best performing versus the IPD Central & Eastern European universe, now for the seven year period to 31 December 2012.

 

 

Ben Habib

Chief Executive

 

5 June 2013



 

CONSOLIDATED INCOME STATEMENT

for the year ended 31 March 2013

 


Notes

Year ended

31 March 2013 (unaudited)

Total results

Year ended

31 March 2012  

(audited)

Total results

Continuing operations


£'000

£'000





Revenue

2

10,636

9,342

Cost of sales


(3,244)

(1,308)

Gross profit


7,392

8,034

Operating expenses


(3,421)

(3,604)

Operating profit


3,971

4,430

Share of results in associates


145

182

Dividend income


64

63

Interest income


182

131

Interest expense


(819)

(837)

Profit on ordinary activities before taxation

3

3,543

3,969

Tax expense

4

(762)

(527)

Profit for the year from continuing operations


2,781

3,442

 

Continuing operations




Profit for the year


2,781

3,442

Attributable to:




Owners of the parent


2,568

3,196

Non-controlling interest


213

246



2,781

3,442





 

Earnings per share




Basic




-from continuing operations

5

2.31p

2.88p

Diluted




-from continuing operations

5

2.18p

2.73p

 

 

 

 


CONSOLIDATED SEPARATE STATEMENT OF

OTHER COMPREHENSIVE INCOME

for the year ended 31 March 2013

 



Year ended

31 March

2013

(unaudited)

Year ended

31 March

2012

(audited)



Total

results

Total

results







£'000

£'000





Profit for the year


2,781

3,442





Other comprehensive income




Exchange differences on retranslation of foreign subsidiaries


(291)

(1,531)

Revaluation of available-for-sale financial assets


(51)

-

Taxation


-

-

Total comprehensive income for the year


2,439

1,911









Total comprehensive income for the year attributable to:




Owners of the parent


2,237

1,803

Non-controlling interests


202

108



2,439

1,911

 

 



 

CONSOLIDATED BALANCE SHEETS

As at 31 March 2013

 






Notes

As at 31

March 2013

(unaudited)

£'000

As at 31

March 2012

(audited)

£'000





Non-current assets




Goodwill


114

114

Investment properties

6

20,349

20,161

Property, plant and equipment


36

67

Interest in associates

7(a)

615

499

Other financial assets

7(b)

892

903

Other receivables

9

436

432

Deferred tax assets


173

259

Total non-current assets


22,615

22,435





Current assets




Inventories - land and buildings

8

8,591

10,714

Current tax assets


38

53

Trade and other receivables

9

1,212

1,256

Cash and cash equivalents


12,979

9,975

Total current assets


22,820

21,998





Current liabilities




Trade and other payables

10

(2,011)

(2,160)

Financial liabilities

11

(637)

(608)

Current tax liabilities


-

-

Total current liabilities


(2,648)

(2,768)

Net current assets


20,172

19,230

Total assets less current liabilities


42,787

41,665

Non-current liabilities:




Financial liabilities

11

(24,244)

(24,310)

Net assets


18,543

17,355





Equity




Called up share capital


1,149

1,149

Share premium


5,492

5,491

Foreign exchange translation reserve


(995)

(715)

Revaluation reserve


(51)

-

Share-based payment reserve


203

195

Retained earnings


12,344

10,967

Equity attributable to the owners of the parent


18,142

17,087

Non-controlling interest


401

268

Total equity


18,543

17,355



 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 March 2013

 

Group

Share capital

 

 

 

£'000

Share premium

 

 

 

£'000

Share-based payment reserve

 

£'000

Foreign exchange translation reserve

 

£'000

Purchase of own shares

 

 

£'000

Investment revaluation

reserve

 

 

£'000

Retained earnings

 

 

 

£'000

Non-controlling interest

 

 

£'000

Total

 

 

 

 

£'000

At 1 April

2012

1,149

5,491

195

(715)

(612)

-

11,579

268

17,355

Profit for the period

-

-

-

-

-

-

2,781

-

2,781

Decrease in fair value of available for sale financial assets

-

-

-

-

-

(51)

-

-

(51)

Issue of new shares

-

-

-

-

-

-

-

-

-

Movement on foreign exchange

-

-

-

(280)

-

-

-

(11)

(291)

Sale of treasury shares

-

1

-

-

9

-

-

-

10

Issue of share options

-

-

8

-

-

-

-

-

8

Non-controlling interest

-

-

-

-

-

-

(213)

213

-

Dividends

paid

-

-

-

-

-

-

(1,200)

(69)

(1,269)

At 31 March 2013

1,149

5,492

203

(995)

(603)

(51)

12,947

401

18,543





















At 1 April

2011

1,146

5,463

140

678

(621)

-

9,571

 

194

16,571

Profit for the period

-

-

-

-

-

-

3,442

-

3,442

Issue of new shares

3

27

-

-

-

-

-

-

30

Movement on foreign exchange

-

-

-

(1,393)

-

-

-

(138)

(1,531)

Sale of treasury shares

-

1

-

-

9

-

-

-

10

Issue of share options

-

-

55

-

-

-

-

-

55

Non-controlling interest

-

-

-

-

-

-

(246)

246

-

Dividends

paid

-

-

-

-

-

-

(1,188)

(34)

(1,222)

At 31 March 2012

1,149

5,491

195

(715)

(612)

-

11,579

268

17,355













 

CONSOLIDATED CASH FLOW STATEMENTS 

for the year ended 31 March 2013







2013

2012


Notes

Group

£'000

Group

£'000

Cash flows from operating activities




Operating profit


3,971

4,430

Adjustments for:




Depreciation of property, plant & equipment


41

41

(Profit)/loss on sale of property, plant & equipment


-

(3)

Share based payments


8

55

Decrease/(increase) in inventories


2,152

(113)

Decrease in trade and other receivables


47

256

(Decrease)/increase in trade and other payables


(160)

291

Other non-cash adjustments


-

-

Cash generated from operations


6,059

4,957

Taxes paid


(619)

(791)

Net cash flow from operating activities


5,440

4,166





Cash flow from/(used in) investing activities




Purchase of investments

7

(40)

(192)

Proceeds from sale of property, plant & equipment


1

3

Purchase of investment properties


6

-

Purchase of property, plant & equipment


(10)

(33)

Interest received


182

131

Dividends from associates

7

29

60

Dividends received


64

63

Net cash flow from investing activities


232

32





Cash flow (used in)/from financing activities




Proceeds from issue of shares


1

31

Repayment of shareholder loan in subsidiary


(66)

(71)

Proceeds from bank loan


-

3,197

Repayment of bank loan


(95)

(64)

Repayment of finance lease


(454)

(447)

Sale of shares held in Treasury


9

9

Interest paid


(819)

(837)

Dividends paid


(1,200)

(1,188)

Dividends paid to non-controlling interest


(69)

(34)

Net cash flow (used in)/from financing activities


(2,693)

596





Net increase in cash and cash equivalents


2,979

4,794

Cash and cash equivalents at the beginning of the year


9,975

5,441

Currency translation gains/(losses) on cash and cash equivalents


25

(260)

Cash and cash equivalents at the year-end


12,979

9,975



 

1.             Basis of preparation

 

 

·      These preliminary financial statements have not been audited and are derived from the statutory accounts within the meaning of section 434 of the Companies Act 2006. They have been prepared in accordance with the Group's accounting policies that will be applied in the Group's annual financial statements for the year ended 31 March 2013.These are consistent with the policies applied for the year ended 31 March 2012. 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). Whilst the financial information included in this preliminary statement has been prepared in accordance with IFRS, this announcement does not itself contain sufficient information to fully comply with IFRS. The comparative figures for the financial year ended 31 March 2012 are not the statutory accounts for the financial year but are derived 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 preliminary financial statements were approved by the Board of Directors on 3 June 2013.

 

 

 

2.             Revenue

 

Revenue from continuing operations consist of revenue arising in the United Kingdom 10% (2012: 10%) and Poland 90% (2012: 90%), and all relates solely to the Group's principal activities.

3.             Segment reporting 2013

 


Property fund management

Group properties and other co-investments

Group fund properties "FOP"

Unallocated central overheads

Total


£'000

£'000

£'000

£'000

£'000

External revenue

- Sale of  inventory

- Existing operations

 

-

 

4,022

 

2,309

 

2,167

 

-

 

2,138

 

-

 

-

 

2,309

 

8,327

Total

4,022

4,476

2,138

-

10,636







Depreciation and amortisation

(29)

(12)

-

-

(41)

Operating Profit - existing operations

2,841

1,024

1,564

(1,458)

3,971

Share of results in associates

-

145

-

-

145

Dividend income

-

64

-

-

64

Interest income

-

27

60

95

182

Interest payable

-

(198)

(621)

-

(819)

Profit/(loss) before tax

2,841

1,062

1,003

(1,363)

3,543







Analysed as:






Before performance  fees and related items

2,987

1,104

1,022

(795)

4,318

Performance fees

-

-

-

-

-

Staff incentives

(146)

(42)

(19)

(568)

(775)

Realised foreign currency gain

-

-

-

-

-

Total

2,841

1,062

1,003

(1,363)

3,543







Assets - Group

576

10,634

25,969

7,641

44,820

Assets- associates

-

923

-

(308)

615

Liabilities

(387)

(7,669)

(18,177)

(659)

(26,892)

Net assets

189

3,888

7,792

6,674

18,543

Additions to

non-current assets






Property, plant and equipment

7

3

-

-

10

Investment properties

-

-

6

-

6

Investments

-

40

-

-

40

Interest in associates

-

145

-

-

145



 

Segment reporting 2012

 


Property fund management

Group properties and other co-investments

Group fund properties "FOP"

Unallocated central overheads

Total


£'000

£'000

£'000

£'000

£'000

External revenue - Existing operations

4,341

2,671

2,330

-

9,342

Depreciation and amortisation

(28)

(13)

-

-

(41)

Operating Profit - existing operations

3,072

1,247

1,829

(1,718)

4,430

Share of results in associates

-

182

-

-

182

Dividend income

-

63

-

-

63

Interest income

-

11

45

75

131

Interest payable

-

(184)

(653)

-

(837)

Profit/(loss) before tax

3,072

1,319

1,221

(1,643)

3,969







Analysed as:






Before performance  fees and related items

3,232

1,344

1,028

(941)

4,663

Performance fees

-

-

-

-

-

Staff incentives

(160)

(25)

(20)

(702)

(907)

Realised foreign currency gain

-

-

213

-

213

Total

3,072

1,319

1,221

(1,643)

3,969







Assets - Group

608

12,853

25,855

4,618

43,934

Assets- associates

-

807

-

(308)

499

Liabilities

(352)

(7,050)

(18,868)

(808)

(27,078)

Net assets

256

6,610

6,987

3,502

17,355

Additions to

non-current assets






Property, plant and equipment

23

10

-

-

33

Investment properties

-

-

-

-

-

Investments

-

192

-

-

192

Interest in associates

-

182

-

-

182

 

 

Fprop Opportunities plc (FOP) a pan European fund was launched in October 2010. The Group owned 84.1% of this fund (as at 31 March 2013) through seed capital with the intention of raising further third party investment from co-investees, thereby diluting its stake to associate status. Management has concluded that it does not suit the criteria for existing segments and that for purposes of transparency and clarity it should be reported as a separate segment.

 

Interest income from the cash that is 100% controlled, is not allocated to a separate segment, because all cash is managed centrally, and is netted off against unallocated central overheads. Head office costs and overheads that are common to all segments are shown separately under unallocated central overheads. Assets, liabilities and costs which relate to Group central activities have not been allocated to business segments.

 

The geographic location of non-current assets is UK £1,526,000 (2012: £1,442,000) and Poland £20,480,000 (2012: £20,302,000).

 

 

 

 

4.             Tax expense

 

Analysis of tax charge for the year

2013

£'000

2012

£'000




Current tax

634

786

Deferred tax

128

(259)

Total tax charge for the year

762

527

 

The tax charge includes actual current and deferred tax for continuing operations.

 

The deferred tax charge has arisen partly as a result of the accelerated tax depreciation on the Blue Tower and the other properties, and partly due to the reversal of the deferred tax asset following the sale of the Bacha property. The deferred tax asset on the Bacha property has been created in respect of accrued interest on shareholder loans which was expected to be relieved against tax when they were repaid. However, there remain unused tax losses in relation to this property which are now unlikely to be utilised in the near future and therefore the directors have formed the view that the tax asset should be reversed.

 

There was insufficient taxable income earned in the UK with which to relieve operating costs incurred in the UK. This should have given rise to a deferred tax asset. However, the Group is not able to recognise this deferred tax asset in these accounts because the directors have formed the view that such a tax asset would be unlikely to be utilised in the near future.

 

As a result of the above the effective tax rate payable by the Group increased to 21% (2012: 13%).

 

 

5.             Earnings per share

 


2013

2012

Basic earnings per share

2.31p

2.88p

Diluted earnings per share

2.18p

2.73p





£'000

£'000

Basic earnings

2,568

3,196

Diluted earnings assuming full dilution

2,592

3,212

 

The following numbers of shares have been used to calculate both the basic and diluted earnings per share:

 


2013

Number

2012

Number

Weighted average number of ordinary shares in issue (used for basic earnings per share calculation)

111,119,031

111,056,118

Number of share options assumed to be exercised

7,500,000

6,500,000

Total number of ordinary shares used in the diluted earnings per share calculation

118,619,031

117,556,118



 

The following earnings have been used to calculate both the basic and diluted earnings per share

 

Basic earnings per share

2013

£'000

2012

£'000

Basic earnings 

2,568

3,196




Diluted earnings per share

2013

 

£'000

2012

£'000

Basic earnings

2,568

3,196

Notional interest on share options assumed to be exercised

24

16

Diluted earnings

 

2,592

 

3,212

 

 

6.             Investment properties

 

Investment properties indirectly owned by the Group, via FOP are stated at cost. The properties were valued by CBRE at the Group's financial year-end at €26.10 million (2012: €26.60 million), the Sterling equivalent at closing foreign exchange rates being £22.10 million (2012: £22.20 million). The properties have not been depreciated as in the directors' opinion the properties estimated residual value at the end of the period of ownership should be higher than the carrying value.

 


2013

2012


Group

£'000

Group

£'000

Investment properties



At 1 April

20,161

22,061




Additions

7

-

Foreign exchange translation

181

(1,900)

At 31 March

20,349

20,161

 

 

7.             Investment in associates and other financial assets

 

The Group has the following investments:

 


2013

2012


Group

£'000

Group

£'000




a) Associates



At 1 April

499

377

Share of associates profit after tax

145

182

Dividends received

(29)

(60)

At 31 March

615

499

 

The Group's investments in associated companies is held at cost plus its share of post acquisition profits assuming the adoption of the cost model for accounting for investment properties under IAS40 and comprises the following:

 


2013

2012


Group

£'000

Group

£'000

Investments in associates



5th Property Trading Ltd

686

594

Regional Property Trading Ltd

237

213


923

807

Less: Share of profit after tax withheld on sale of property to associate in 2007

(308)

(308)


615

499

 

If the Group had adopted the alternative fair value model for accounting for investment properties, the carrying value of the investment in associates would have increased by £861,000 (2012: £905,000) to £1,476,000 (2012: £1,404,000).

 


2013

2012

 

b) Other financial assets and investments

Group

£'000

Group

£'000




At 1 April

903

711

Additions

40

192

Decrease in fair value during the year

(51)

-

At 31 March

892

903

 

The Group holds two investments, one unlisted, the other listed. Both are held at fair value. All of the assets have been classified as available for sale. In the directors' view the fair value has been estimated to be not materially different from the carrying value. Fair value for the unlisted investment has been arrived at by applying the Group's percentage holding in this investment of the fair value of the net assets of the fund. Fair value for the listed investment has been derived from the quoted share price at the year-end.

 

The addition in investments is in respect of the Group's 0.9% interest in the UK Pension Property Portfolio L.P.

 

8.             Inventories - land and buildings

 


2013

2012


Group

£'000

Group

£'000




Directly held Group properties for resale at cost



At 1 April

10,714

10,896

Additions

Disposals

44

(2,426)

113

-

Foreign exchange translation

259

(295)

At 31 March

8,591

10,714

 

The disposal refers to the sale of Bacha, a property located in Warsaw, Poland in September 2012. The remaining property, Blue Tower, also located in Warsaw, Poland has a fair value of £12.85 million at 31 March 2013 (2012: £12.30 million).

 

 

9.             Trade and other receivables

 


2013

2012


Group

£'000

Group

£'000




Current assets



Trade receivables

917

852

Other receivables

66

57

Prepayments and accrued income

229

347


1,212

1,256




Non-current assets



Other receivables

436

432

 

 

10.          Trade and other payables

 


2013

2012


Group

£'000

Group

£'000

Current liabilities



Trade payables

568

734

Other taxation and social security

271

288

Other payables and accruals

1,155

1,121

Deferred income

17

17


2,011

2,160



 

11.          Financial liabilities

 


2013

£'000

2012

£'000

Current liabilities



Bank loan

151

123

Finance lease

486

485


637

608




Non-current liabilities



Loans repayable by subsidiary (FOP) to third party shareholders

1,130

1,196

Bank loans

9,659

9,395

Finance lease

13,455

13,719


24,244

24,310

 


2013

£'000

2012

£'000




Total obligations under bank loans and finance leases



Repayable within one year

637

608

Repayable within one and five years

23,114

11,576

Repayable after five years

1,130

12,734


24,881

24,918




 

Loans repayable by FOP to third party shareholders are repayable in October 2020.

 

Two bank loans and one finance lease (all denominated in foreign currencies) totalling £23,751,000 (2012: £23,722,000) included within financial liabilities are secured against investment properties owned by Fprop Opportunities plc (FOP) and the property owned by the Group shown under inventories.

 

The preliminary 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 35 Old Queen Street, London, SW1H 9JA.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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