TIDMFPO
RNS Number : 5731D
First Property Group PLC
22 June 2023
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 2023
First Property Group plc (AIM: FPO), the property fund manager
and investor with operations in the United Kingdom and Central
Europe, today announces its preliminary results for the twelve
months ended 31 March 2023.
Highlights since interim results:
-- Sold two directly owned supermarkets in Poland for GBP5.50
million generating a profit of GBP0.68 million.
-- 5th Property Trading Ltd (5PT), a fund in which the Group
gained a controlling interest following the purchase of an
additional 6.57% in shares, has been consolidated into the Group's
accounts.
-- Post the year end, launched a senior debt product for secured
lending against commercial property.
-- Second interim dividend, in lieu of a final dividend, of 0.25
pence per share paid on 5 April 2023, to make a total dividend of
GBP0.50 pence for the year (2022: GBP0.50 pence).
Financial summary:
Restated Percentage
Unaudited Audited change
year to year to
31 March 31 March
2023 2022
-------------------------------- ------------ ----------- -----------
Income Statement:
------------------------------------------------------------------------
Statutory profit before
tax GBP2.49m GBP7.08m -64.83%
Diluted earnings per share 1.70p 6.01p -71.71%
Total dividend per share 0.50p 0.50p -%
Average EUR/GBP exchange
rate 1.1567 1.1754 -
Financial Position at the year-end:
------------------------------------------------------------------------
Investment properties at
book value* GBP47.01m GBP36.20m +29.86%
Investment properties at
market value* GBP53.97m GBP42.24m +27.77%
Associates and investments
at book value GBP22.13m GBP26.58m -16.74%
Associates and investments
at market value GBP25.27m GBP30.60m -17.42%
Cash balances GBP7.65m GBP6.42m +19.16%
Cash per share 6.82p 5.81p +17.38%
Gross debt** GBP29.66m GBP23.66m +25.36%
Net debt** GBP22.00m GBP17.24m +27.61%
Gearing ratio at book value*** 40.57% 35.62%^ -
Gearing ratio at market 36.08% 31.25%^ -
value***
Net assets at book value**** GBP43.44m GBP42.77m^ +1.57%
Net assets at market value GBP52.54m GBP52.05m^ +0.94%
Adjusted net assets per
share (EPRA basis) 46.50p 46.07p^ +0.93%
Year-end EUR/GBP rate 1.1381 1.1834 -
*Investment properties includes properties of 5PT, previously
classed as an associate
**Debt comprises financial liabilities, including those
of 5PT
***Gearing ratio = Gross debt divided by gross
assets
****Attributable to the owners of the parent,
excludes non-controlling interests
^Restated, further details within the basis of
preparation section of the notes to the accounts.
Commenting on the results, Ben Habib, Chief Executive of First
Property Group plc, said:
"These are a creditable set of results in extremely challenging
times.
"The end of lockdowns should have ushered in a more normal
trading environment. Instead, we are experiencing the severe impact
of broken supply chains and labour markets. Together with the war
in Ukraine, the result has been rocketing inflation and a
concomitant increase in interest rates.
"Consequently, investment markets have been hit hard, with a
sharp reduction in debt availability and the volumes of property
being traded.
"Occupational demand is generally holding up better than
investment markets and we are making some inroads in letting the
space available at our office blocks in Warsaw and Gdynia.
"Given the general withdrawal of financing from the market, we
have established a platform for the provision of debt to finance
commercial property investments. It is too early to determine the
likely success of this venture but we believe it to be the right
product, launched at the right time."
A briefing for analysts and shareholders will be held at
11.00hrs today via Investor Meet Company. To participate it is
necessary to register at
https://www.investormeetcompany.com/first-property-group-plc/register-investor
and select to meet the Company. Those who have already registered
and selected to meet the Company will be automatically invited. A
copy of the accompanying investor presentation and a recording of
the call will be posted on the Company's website.
For further information please contact:
First Property Group plc Tel: +44 (20) 7340
0270
Ben Habib (Chief Executive Officer) www.fprop.com
Laura James (Group Finance Director) investor.relations@fprop.com
Jeremy Barkes (Director, Business
Development)
Jill Aubrey (Company Secretary)
Allenby Capital (NOMAD & Broker) Tel: + 44 (0) 20 3328
5656
Nick Naylor / Daniel Dearden-Williams
(Corporate Finance)
Amrit Nahal (Equity Sales)
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 twelve 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 include six directly held properties in
Poland, one in Romania, and non-controlling interests in nine of
the twelve funds.
Quoted on AIM, the Company has offices in London and Warsaw.
Around one third of the shares in the Company are owned by
management, directors and their families. Further information about
the Company and its properties can be found at: www.fprop.com .
CHIEF EXECUTIVE'S STATEMENT
Financial performance
I am pleased to report the Company's preliminary results for the
year ended 31 March 2023.
Revenue earned by the Group during the year amounted to GBP7.25
million (31 March 2022: GBP8.65 million) yielding a profit before
tax of GBP2.49 million (31 March 2022: GBP7.08 million). The profit
for the prior year, as explained in the accounts for that year, was
bolstered by the restructuring of the loan secured on the Group's
property in Gdynia.
The Group's profit was lower than in previous years due to the
sale of income producing properties and the re-investing of some of
these proceeds in the office block in Gdynia and in a further 32%
of Blue Tower in Warsaw. Both investments were largely vacant at
the time the investments were made and are now being leased up.
Further details on these investments are set out below.
The Group ended the year with net assets calculated under the
cost basis of accounting, excluding non-controlling interests, of
GBP43.44 million (2022: restated GBP42.77 million), equating to
39.18 pence per share (2022: restated 38.74 pence per share). It is
the accounting policy of the Group to carry its properties and
interests in associates at the lower of cost or market value.
The net assets of the Group when adjusted to their market value
less any deferred tax liabilities (EPRA basis), amounted to
GBP52.54 million or 46.50 pence per share (31 March 2022: restated
GBP52.05 million or 46.07 pence per share).
Gross debt amounted to GBP29.66 million at the year-end (31
March 2022: GBP23.66 million), GBP17.02 million of which was
non-interest bearing and represents deferred consideration payable
for the purchase of two properties in Poland (in Gdynia and Warsaw,
as referenced above). Net debt stood at GBP22.00 million (31 March
2022: GBP17.24 million). The debt was secured against six
properties in Poland and one in Romania.
The Group's gearing ratio with its properties at their book
value was 40.57% (31 March 2022: restated 35.62%) and with its
properties at their market value was 36.08% (31 March 2022:
restated 31.25%).
Group cash balances at the year-end stood at GBP7.65 million (31
March 2022: GBP6.42 million), equivalent to 6.82 pence per share
(31 March 2022: 5.81 pence per share).
Diluted earnings per share was 1.70 pence (2022: 6.01
pence).
As set out in previous accounts, the profit share earned by
Fprop Offices LP is subject to clawback. As a result of reductions
in the value of commercial property, an adjustment has been made to
the net assets of the Group as at 31 March 2022 to reflect the
likelihood of this clawback. No cash repayment has yet been made
but the Directors consider it prudent to make this adjustment. In
addition, the results for the year to 31 March 2023 include a
provision of GBP0.59 million which represents the balance of any
potential clawback.
Dividend
Instead of a final dividend (usually paid in September), a
second interim dividend of 0.25 pence per share was paid on 5 April
2023 (2022: Final dividend 0.25 pence per share), which together
with the first interim dividend of 0.25 pence per share equates to
a dividend for the year of 0.50 pence per share (2022: 0.50 pence
per share).
REVIEW OF OPERATIONS
PROPERTY FUND MANAGEMENT
Third party assets under management ended the year at GBP400.4
million (31 March 2022: GBP516.5 million).
The decrease was attributable to:
1. The sale by three funds of seven properties in the United
Kingdom valued at GBP69.0 million offset by the purchase by another
fund of one property, also in the United Kingdom, for GBP6.2
million;
2. A decrease in the value of the remainder of the portfolio of
some GBP52.4 million offset by foreign exchange gains of GBP4.8
million; and
3. The consolidation of 5PT into the Group's accounts, a fund
invested in three commercial properties in Poland with a value at
the date of acquisition of GBP7.62 million.
Fund management fees are generally levied monthly by reference
to the value of properties. In the case of Fprop Offices LP, the
Group is entitled to a share of total profits in lieu of fund
management fees and to receive annual payments on account
equivalent to 10% of total cumulative income profits and capital
gains. These payments are adjusted annually.
Revenue earned by this division decreased by 38% to GBP2.52
million (2022: GBP4.04 million), resulting in profit before
unallocated central overheads and tax decreasing by GBP1.32 million
to GBP0.12 million (2022: GBP1.44 million). The decrease was due to
the sale of properties held by three funds invested in the United
Kingdom, a reduction in value of properties generally, and a
provision for the possible clawback by Fprop Offices LP of GBP0.59
million in profit share.
At the year end fund management fee income, excluding
performance fees, was being earned at an annualised rate of GBP2.55
million (31 March 2022: GBP2.66 million).
The weighted average unexpired fund management contract term at
the year-end was 2 years, 9 months (31 March 2022: 3 years, 7
months).
The reconciliation of movement in third party funds managed by
FPAM during the year is shown below:
Funds managed for third parties (including
funds in which the Group is a minority
shareholder)
----------------------- -------------------------------------------------
UK CEE Total No. of
GBPm GBPm GBPm properties
----------------------- ---------- --------- --------- ---------------
As at 1 April 2022 345.5 171.0 516.5 62
----------------------- ---------- --------- --------- ---------------
Purchases 6.2 - 6.2 1
Property sa les (69.0) - (69.0) (7)
Reclassified as Group
properties - (7.6) (7.6) (3)
Capital expenditure 0.3 1.6 1.9 -
Property revaluation (41.6) (10.8) (52.4) -
FX revaluation - 4.8 4.8 -
----------------------- ---------- --------- --------- ---------------
As at 31 March 2023 241.4 159.0 400.4 53
----------------------- ---------- --------- --------- ---------------
An overview of the value of assets and maturity of each of the
funds managed by FPAM is set out below:
Fund Country Fund Assets No. of % of total Assets
of investment expiry under properties third-party under
management assets management
at market under at market
value at management value at
31 March 31 March
2023 2022
--------------- --------------- ------------- ------------- ------------ -------------- ----------------
GBPm. GBPm.
-------------------------------- ------------ -------------- ------------ -------------- --------------
SAM & DHOW UK Rolling * * * *
5PT** Poland Dec 2025 - - - 7.7
OFFICES UK Jun 2024 84.9 4 21.2 136.4
SIPS UK Jan 2025 104.7 21 26.1 140.6
FOP Poland Oct 2025 64.5 5 16.1 64.5
FGC Poland Mar 2026 22.0 1 5.5 21.3
UK PPP UK Jan 2027 28.1 10 7.0 41.5
SPEC OPPS UK Jan 2027 14.9 4 3.7 17.0
FKR Poland Mar 2027 16.8 1 4.2 19.4
FCL Romania Jun 2028 8.7 1 2.2 8.5
FPL Poland Jun 2028 47.0 4 11.8 49.6
FULCRUM UK Indefinite 8.8 2 2.2 10.0
--------------- --------------- ------------- ------------- ------------ -------------- ----------------
Total Third-Party
AUM 400.4 53 100.0 516.5
----------------------------------------------- ------------- ------------ -------------- ----------------
* Not subject to recent revaluation.
** The Group gained control of this fund in May 2022,
consolidating its Net Assets into the Group.
The sub sector weightings of investments in FPAM funds is set
out in the table below:
UK Poland Romania Total % of Total
------------------------ ------ ------- -------- ------ -----------
GBPm. GBPm. GBPm. GBPm.
------------------------ ------ ------- -------- ------ -----------
Offices 150.5 85.9 8.7 245.1 61.2%
Retail warehousing 62.3 - - 62.3 15.6%
Supermarkets 28.6 12.6 - 41.2 10.3%
Shopping centres - 51.8 - 51.8 12.9%
Total 241.4 150.3 8.7 400.4 100.0%
------------------------ ------ ------- -------- ------ -----------
% of Total Third-Party
AUM 60.3% 37.5% 2.2% 100%
------------------------ ------ ------- -------- ------ -----------
GROUP PROPERTIES
At 31 March 2023, Group Properties comprised seven directly
owned commercial properties in Poland and Romania valued at
GBP53.97 million (31 March 2022: seven valued at GBP42.24 million)
and interests in nine of the twelve funds managed by FPAM
(classified as Associates and Investments) in which the Group's
share is valued at GBP25.27 million (31 March 2022: GBP30.60
million).
The contribution to Group profit before tax and unallocated
central overheads from the Group Properties division was GBP3.43
million (31 March 2022: GBP8.60 million), representing 97% of Group
profit before unallocated central overheads and tax. The profit in
the prior year included the benefit of a GBP7.81 million debt
restructuring. In addition, the Group's investments in largely
vacant office property in Gdynia and Blue Tower with the proceeds
from the sale of income producing property have not yet turned
cashflow positive, though reasonable leasing progress is being
made.
The contribution to Group profit before tax and unallocated
central overheads from directly owned properties was GBP2.56
million (31 March 2022: GBP7.48 million) and the Associates and
Investments contributed GBP0.87 million (31 March 2022: GBP1.12
million).
1. Directly owned Group Properties (all accounted for under the cost model):
The book value of the Group's seven directly owned properties
was GBP47.01 million (31 March 2022: seven properties with a book
value of GBP36.20 million). The increase was mainly due to an
additional investment of GBP7.44 million in Blue Tower, Warsaw and
the consolidation of 5PT, which owns three properties in Poland
valued at GBP8.45 million, into the Group's accounts. Their market
value, based on valuations at 31 March 2023, was GBP53.97 million
(31 March 2022: seven properties valued at GBP42.24 million).
Country Sector Property/ No. Book Market *Contribution *Contribution
Fund Name of props value value to Group to Group
31 March 31 31 March profit profit
2023 March 2023 before before
2023 tax tax
31 March 31 March
2023 2022
--------- ------------- ------------ ---------- ------- ---------- -------------- --------------
GBPm. GBPm. GBPm. GBPm.
Poland Office Gdynia 1 14.20 14.50 (0.39) (0.86)
Poland Office Blue Tower 1 20.50 24.20 1.13 1.20
Poland Supermarket Praga 1 1.98 2.95 0.12 0.20
Romania Office Dr Felix 1 2.36 3.87 0.27 0.37
Poland Multi use 5PT*** 3 7.97 8.45 0.28 -
--------- ------------- ------------ ---------- ------- ---------- -------------- --------------
Total* 7 47.01 53.97 1.41 0.91
-------------------------------------- ---------- ------- ---------- -------------- --------------
Profit from the sale of three investment 1.78 -
properties
Debt restructuring on
finance lease** - 7.81
Other overhead costs allocated to the
Group Property division (0.63) (1.24)
----------------------------------------------------------------------- -------------- --------------
Total contributions to PBT from Group
Properties 2.56 7.48
----------------------------------------------------------------------- -------------- --------------
* Prior to the deduction of direct overhead and unallocated
central overhead expenses.
**Includes EUR9.00 million (GBP7.81 million) debt reduction
following restructuring of the finance lease at Gdynia.
***5PT, a fund in which the Group gained a controlling interest
(previously recognised as an associate).
Two of the Group's seven directly owned properties account for
72% (GBP38.70 million) of their total market value. Both are office
buildings in Poland of which one is Blue Tower (in which the
Group's 80.3% share totals circa 18,000 square metres) and the
other is in Gdynia (circa 13,500 square metres).
On 12 August 2022 the Group acquired some 7,171 square meters in
Blue Tower in Warsaw at a price of GBP7.20 million. The purchase
resulted in the Group's interest in the building increasing from
48.2% to 80.3%. Some 5,159 square metres of the newly acquired
space was vacant at purchase.
The Group's office property in Gdynia is now 28% leased, up from
20% at 31 March 2022. When fully let it is anticipated that the
building should generate net operating income of over GBP1.90
million per annum.
The Group's other directly owned properties include an office
block in Bucharest, Romania valued at GBP3.87 million, and four
properties in Poland held by consolidated undertakings valued at
GBP11.40 million. These comprise a mini-supermarket in Warsaw held
by E and S Estates Sp. Zo.o (E&S) (in which the Group owns an
aggregate 88.5% interest), and two retail units in Warsaw, a
mixed-use building in Warsaw, and an office block in Poznan all
held by 5PT (in which the Group owns 47.2% but is deemed to have
control).
In August 2022 the Group sold a warehouse in Tureni, Romania for
GBP3.11 million which realised a profit of GBP1.10 million.
In December 2022 the Group sold two supermarkets in Poland held
by E&S for GBP5.50 million which realised a profit of GBP0.68
million. The Group also refinanced the last remaining property held
by E&S, a supermarket valued at GBP2.95 million, releasing some
GBP1.50 million in cash.
The debt secured against these seven properties totalled
GBP29.66 million (31 March 2022: GBP23.66 million), of which only
GBP12.64 million was interest bearing. The remainder (GBP17.02
million) represents deferred consideration in respect of the
Group's purchase of its additional share in Blue Tower and for the
office block in Gdynia.
Interest costs on the Group's debt amounted to GBP0.53 million
(2022: GBP0.33 million). This equates to an average borrowing cost
of 1.8% per annum when expressed as a percentage of total
outstanding Group debt of GBP29.66 million, or 4.2% per annum if
the deferred consideration of GBP17.02 million, on which no
interest is payable, is excluded.
31 March 2023 31 March 2022
GBPm. GBPm.
Book value of directly owned
properties 47.01 36.20
Market value of directly owned
properties 53.97 42.24
Gross debt undiscounted (all
non-recourse to Group) 29.66 23.66
LTV at book value 63.09% 65.35%
LTV at market value 54.96% 56.01%
Average borrowing cost 1.8% 1.4%
-------------------------------- -------------- --------------
The average vacancy rate across all seven properties is
23.60%.
The weighted average unexpired lease term (WAULT) as at 31 March
2023 was 5 years, 2 months (2022: 5 years, 7 months).
2. Associates and Investments
These comprise non-controlling interests in nine of the twelve
funds managed by FPAM and are valued at GBP25.27 million (31 March
2022: GBP30.60 million). Of these, five are accounted for as
Associates and held at the lower of cost or fair value (the "cost
model"), and four are accounted for as Investments in funds and
held at fair value.
The contribution to Group profit before tax and unallocated
central overheads from its Associates and Investments decreased by
22.3% to GBP0.87 million (31 March 2022: GBP1.12 million). The
contribution was impacted by aggregate impairment provisions of
GBP0.90 million in the value of Fprop Krakow Ltd (FKR) and Fprop
Opportunities plc (FOP). In addition, another Associate, Fprop
Phoenix Ltd (FPL), made a loss after tax of which the Group's share
amounted to GBP0.85 million (2022: loss of GBP0.62 million).
An overview of the Group's Associates and Investments is set out
in the table below:
Fund % owned Book value Current Group's Group's
by of First market share share
First Property's value of of post-tax of post-tax
Property share in holdings profits profits
Group fund earned by earned by
fund fund
31 March 31 March
2023 2022
------ ---------- ------------ ---------- ------------- --------------
% GBP'000 GBP'000 GBP'000 GBP'000
------ ---------- ------------ ---------- ------------- --------------
a) Associates (all invested in Poland and Romania)
5PT * - - - 97
FRS ** - - - 47
FOP 45.7 12,679 12,679 293 1,044
FGC 29.1 3,058 3,303 289 221
FKR 18.1 1,155 1,155 (426) (12)
FPL 23.4 60 2,682 (848) (617)
FCL 21.2 636 908 64 67
------ ---------- ------------ ---------- ------------- --------------
Sub Total 17,588 20,727 (628) 847
------------------ ------------ ---------- ------------- --------------
*Consolidated into the Group from May 2022
**In liquidation
b) Investments (all invested in the United Kingdom)
UK PPP 0.9 272 272 40 100
FULCRUM 2.5 185 185 9 -
SPEC OPPS 11.1 2,624 2,624 1,353 23
OFFICES 1.6 1,463 1,463 95 148
---------------- -------- -------- -------- -------- -----
Sub Total 4,544 4,544 1,497 271
-------------------------- -------- -------- -------- -----
Total 22,132 25,271 869 1,118
------- ------- ------- ---- ------
3. New product: secured lending against commercial property
Post the year end the Group launched a senior debt product for
secured lending against commercial property.
With interest rates increasing and banks retreating from lending
to commercial property, the returns available in making relatively
safe loans are potentially more attractive than investing in the
underlying property.
The loans will likely be up to GBP20 million in value; 65% of
loan to value (LTV); and interest only.
No new employees will, initially, be required to be employed to
roll out this product and the Group does not intend to use its own
cash to make such loans. It may, however, invest alongside third
parties in any fund structures set up to make such loans.
Commercial Property Markets Outlook
Poland:
The rate of growth in Poland's GDP is expected to slow from a
rate of 5.1% in 2022 to 1.5% in 2023, compared to a pre-pandemic
10-year average of 3.6% per annum, amidst high inflation, which
peaked at over 17% per annum, and tighter monetary conditions. The
rate of inflation has, since its peak, reduced to some 13% per
annum.
The National Bank of Poland's key policy interest rate is
currently at 6.75% per annum.
Commercial property markets in Poland have slowed dramatically
as interest rates have increased and banks have withdrawn from
lending to the sector. The development of new buildings has
similarly reduced.
However, continued economic growth and the influx of refugees
and businesses from Ukraine is sustaining occupational demand.
Rent review provisions in Polish leases are mostly contractually
linked either to the rate of inflation in Poland or the Eurozone.
This offers landlords some protection from inflation as long as the
economy remains buoyant.
United Kingdom:
Economic growth in the United Kingdom is barely perceptible,
compared to growth rates of 1-3% per annum in the years leading up
to the pandemic. Inflation is the highest in the G7 group of
developed nations, running at over 8% on an annualised basis. This
in turn has led to successive increases in the Bank of England base
interest rate to 4.5% at the date of these results with further
rises forecast.
The investment market for commercial property has weakened in
the face of these headwinds. Offices have been particularly hard
hit due to lockdowns and the development of a work from home
culture. The cost of ensuring that buildings comply with net zero
legislation is exacerbating the situation and is resulting in wide
value dispersion between those buildings which do comply, those
that can be made to comply and those for which compliance is too
costly.
Rental values should over time be sustained by inflation and a
reduction in the supply of property in sectors which are over
supplied, such as offices.
Current Trading and Prospects
These are a creditable set of results in extremely challenging
times.
The end of lockdowns should have ushered in a more normal
trading environment. Instead, we are experiencing the severe impact
of broken supply chains and labour markets. Together with the war
in Ukraine, the result has been rocketing inflation and a
concomitant increase in interest rates.
Consequently, investment markets have been hit hard, with a
sharp reduction in debt availability and the volumes of property
being traded.
Occupational demand is generally holding up better than
investment markets and we are making some inroads in letting the
space available at our office blocks in Warsaw and Gdynia.
Given the general withdrawal of financing from the market, we
have established a platform for the provision of debt to finance
commercial property investments. It is too early to determine the
likely success of this venture but we believe it to be the right
product, launched at the right time.
Ben Habib
Chief Executive
22 June 2023
GROUP FINANCE DIRECTOR'S REVIEW
Profit before tax for the year was GBP2.49 million (2022:
GBP7.08 million) largely driven by 'one off' sales of properties
owned directly by the Group which generated a profit of GBP1.78
million.
The profit in the prior year was bolstered due to an exceptional
gain of EUR9.00 million (GBP7.81 million) from the restructuring of
the finance lease secured against the Group's office block in
Gdynia, Poland.
Group net assets excluding non-controlling interests increased
to GBP43.44 million (31 March 2022 Restated: GBP42.77 million)
.
During the year the Group gained control of 5PT, a fund managed
by FPAM in which it owns a 47.2% share but is considered to have
control in accordance with the provisions of IFRS 10, resulting in
its consolidation into these accounts. The Group's share of its net
assets at consolidation was GBP1.54 million. Previously, the
Group's investment in this fund was accounted for as an associate
(31 March 2022: GBP1.34 million).
On 31 March 2023, the Group granted to employees the option to
subscribe to 10,450,000 new ordinary shares in the Company at an
exercise price of 23.5 pence per Ordinary Share, being the
mid-market closing price on 30 March 2023. The options granted
resulted in an increase to 12,560,000 in the number of outstanding
options over Ordinary Shares, representing approximately 11.33% of
the Company's issued share capital. See note 6 of the financial
statements for further information on the terms of the options
granted.
Gross debt, excluding lease liabilities, increased to GBP29.66
million (31 March 2022: GBP23.66 million) mainly due to the
purchase of additional space in Blue Tower, Warsaw . Of this gross
debt, GBP17.02 million is deferred consideration on which no
interest is payable. Net debt, excluding lease liabilities, reduced
to GBP22.00 million (31 March 2022: GBP17.24 million).
GOING CONCERN
Information on our approach and the result of our assessment is
included in note 1 of the Financial Statements.
FPROP OFFICES LP CLAWBACK
The Group is entitled to a share of total profits in Fprop
Offices LP in lieu of fund management fees and to receive annual
payments on account equivalent to 10% of total cumulative income
profits and capital gains. These payments are adjusted annually, if
necessary, for any overpayments made in previous years up to a
maximum of total past cumulative payments received. A s at 31 March
2022, the Group had recognised a cumulative total of GBP1.97
million as revenue in 2022 and prior years.
The combination of inflationary pressures, higher interest
rates, a cost of living crisis in the UK and an increase in
employees working from home has caused severe disruption to
economic activity and a reduction in the value of commercial
property. During the period between 1 April 2022 and 31 March 2023,
the properties held by Fprop Offices LP reduced in value by 18%. As
a result, the Group considers that GBP1.97 million of revenue
previously recognised will need to be clawed back, with GBP1.38
million being the cumulative amount of revenue recognised to 31
March 2021, being shown as a restatement of the Financial Year 2022
and GBP0.59 million being reflected as a reduction to revenue for
the year to 31 March 2023.
See further information on the impact of this adjustment in the
notes to the financial statements.
INCOME STATEMENT
A review of the operating and financial performance of the two
trading divisions are included in the Chief Executive's
Statement.
Revenue and Gross Profit
Revenue for the year decreased by GBP1.40 million or 16% to
GBP7.25 million (2022: GBP8.65 million).
Gross profit (revenue less the cost of sales) reduced by GBP0.73
million or 13% to GBP4.99 million (2022: GBP5.72 million).
Performance fee income
Performance fees totalled a negative GBP0.37 million (2022:
positive GBP0.58 million). It comprised GBP0.22 million earned from
the sale of two properties by two of the UK funds managed by FPAM
and a provision for the clawback of revenue of GBP0.59 million by
Fprop Offices LP.
Operating expenses
Operating expenses decreased by GBP2.69 million or 36% to
GBP4.77 million (2022: GBP7.46 million) mainly due to a reduction
in incentives paid to employees to GBP0.11 million (2022: GBP2.03
million).
Share of results in associates
The contribution from the Group's associates amounted to a loss
of GBP0.63 million (2022: profit GBP0.85 million) mainly due to an
impairment provision of GBP0.43 million in respect of the Group's
18.1% holding in Fprop Krakow Ltd (FKR) and an impairment provision
of GBP0.47 million in respect of the Group's 45.7% holding in Fprop
Opportunities plc (FOP) .
Fprop Phoenix Ltd (FPL), in which the Group owns 23.4%, made a
loss after tax of which the Group's share amounted to GBP0.85
million (2022: loss of GBP0.62 million).
Investment income (from other financial assets and
investments)
Investment income from the Group's four investments in five of
the UK funds managed by FPAM increased by 455% to GBP1.50 million
(2022: GBP0.27 million), of which GBP1.35 million represented
distributions from Fprop UK Special Opportunities LP (Spec
Opps).
Financing costs
Finance costs increased to GBP0.53 million (2022: GBP0.33
million) mainly due to higher interest rates payable on our
floating rate loans. All bank loans are denominated in Euros, and
all are used to finance properties valued in Euros.
Taxation
The tax charge increased to GBP0.45 million (2022: GBP0.25
million) of which GBP0.38 million was in respect of the profit from
the sale of two directly held properties by E&S, a consolidated
undertaking (2022: GBPNil).
The charge includes Polish and Romanian corporation tax where
headline rates remain at 19% and 16% respectively.
STATEMENT OF FINANCIAL POSITION
Investment Properties (held using the cost model)
The Group has adopted the "cost model" of valuation whereby
investment properties are accounted for at the lower of cost less
accumulated depreciation and impairments or fair market value.
During the year the Group acquired an additional 7,171 square
metres of office space in Blue Tower for a consideration of GBP7.20
million, which is payable in seven instalments over a six year
period. Following this purchase, the Group's interest in Blue Tower
now amounts to 80.3% (2022: 48.2%) of the building. As a result of
this acquisition the Group reclassified the building from Inventory
to Investment Property. Following this reclassification, no
properties were held under inventory.
Following the Group's purchase of 6.57% of the shares in issue
of 5PT during the year, its interest in 5PT increased to 47.2%. The
Group is now considered to have a controlling interest in this fund
(previously held as an associate). As a result, the three
commercial properties held by the fund were added to Investment
Properties with a fair value at the date of consolidation of
GBP7.62 million.
The Group also disposed of three properties during the year. In
August 2022 it sold a warehouse in Tureni, Romania for GBP3.11
million which generated a profit of GBP1.10 million after
accounting for disposal costs.
In December 2022 E&S sold two supermarkets in Poland for
GBP5.50 million (EUR6.20 million) generating a profit after sale of
GBP0.68 million.
At the year end the Group held seven properties. Their book
value was GBP47.01 million (31 March 2022: seven properties valued
at GBP36.20 million). Their fair market value was GBP53.97 million
(31 March 2022: GBP42.24 million).
Capital expenditure incurred on the Group's seven directly owned
properties amounted to GBP1.02 million (2022: seven properties,
GBP1.76 million).
Foreign exchange revaluations amounted to a debit of GBP1.32
million (2022: credit GBP0.22 million).
Borrowings
Bank and other borrowings (including deferred consideration)
increased to GBP29.66 million (31 March 2022: GBP23.66 million)
mainly due to the purchase of the additional space at Blue Tower
but also due to the consolidation of 5PT (GBP3.60 million) into
these financial statements.
The ratio of debt to gross assets at their market value (the
gearing ratio) increased to 36.08% (31 March 2022: 31.25%).
All bank loans are denominated in Euros and are non-recourse to
the Group's assets.
Deposits of GBP0.64 million (31 March 2022: GBP0.55 million) are
held by lending banks in respect of four bank loans (31 March 2022:
four) as security for Debt Service Cover Ratio (DSCR) covenants and
consequently this amount of cash and cash equivalents was
restricted as at 31 March 2023.
Trade and Other Receivables
Trade and other receivables decreased by GBP0.60 million to
GBP3.73 million (31 March 2022: GBP4.33 million).
Provisions
Provisions decreased to GBP0.16 million (31 March 2022: GBP0.92
million) and are entirely in respect of the space at Chalubinskiego
(CH8), Warsaw, over which commitments in respect of fit-out and
rent guarantees were granted at its sale in the Financial Year
2021. Payments of GBP0.37 million (2022: GBP1.93 million) pursuant
to this were made in the year. The reduction in the provision is
due to some 85% (2022: 73%) of the office space which is subject to
the guarantee having been leased. The provision represents our best
estimate of the Group's remaining liability over the life of the
rent guarantee (until April 2025).
Non-controlling Interests
The value of the Group's three non-controlling interests
increased to GBP2.03 million (31 March 2022: GBP0.23 million).
Non-controlling interests consist of:
1. 10% of the share capital of Corp Sp. z o. o., the property
management company to Blue Tower, Warsaw;
2. 23% of the share capital of E and S Estates Ltd, a fund
invested in one property in Poland; and
3. 52.80% of the share capital of 5th Property Trading Ltd, a
fund invested in three commercial properties in Poland.
Investment Revaluation Reserve
The investment revaluation reserve decreased by GBP1.41 million
(2022: increased by GBP1.04 million) to a debit balance of GBP0.73
million mainly due to a decrease in the value of the Group's
investment in Fprop UK Special Opportunities LP (Spec Opps)
resulting from property sales by the UK Pension Property Portfolio
LP (UKPPP), a fund in which it holds an investment.
Foreign Exchange Translation Reserve
A strengthening of the Polish Zloty against Sterling to PLN
5.3267/ GBP (31 March 2022: PLN 5.4868/ GBP) resulted in a
reduction in the deficit in the foreign exchange translation
reserve to GBP2.35 million (31 March 2022: GBP3.30 million).
Cash and cash equivalents
The Group's cash balance increased to GBP7.65 million (31 March
2022: GBP6.42 million) mainly as a result of investing and
financing activities.
Laura James
Group Finance Director
22 June 2023
CONSOLIDATED INCOME STATEMENT
for the year ended 31 March 2023
Year ended Year ended
31 March 31 March
Notes 2023 2022
Total results Total results
GBP'000 GBP'000
---------------------------------------- -------- ---------------- ----------------
Revenue 2 7,249 8,645
Cost of sales (2,257) (2,928)
---------------------------------------- -------- ---------------- ----------------
Gross profit 4,992 5,717
Debt reduction following restructuring
of finance lease 3 - 7,809
Profit on sale of investment 1,779 -
properties
Operating expenses (4,767) (7,464)
---------------------------------------- -------- ---------------- ----------------
Operating profit 2,004 6,062
---------------------------------------- -------- ---------------- ----------------
Share of associates' profit/(loss)
after tax 9 273 (29)
Share of associates' revaluation
(losses)gains 9 (901) 876
Investment income 1,497 271
Interest income 4 145 230
Interest expense 4 (530) (330)
---------------------------------------- -------- ---------------- ----------------
Profit before tax 2,488 7,080
Tax charge 5 (449) (245)
---------------------------------------- -------- ---------------- ----------------
Profit for the year 2,039 6,835
---------------------------------------- -------- ---------------- ----------------
Attributable to:
Owners of the parent 1,919 6,779
Non-controlling interests 120 56
---------------------------------------- -------- ---------------- ----------------
2,039 6,835
---------------------------------------- -------- ---------------- ----------------
Earnings per share:
Basic 6 1.73p 6.14p
Diluted 6 1.70p 6.01p
---------------------------------------- -------- ---------------- ----------------
All operations are continuing.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March 2023
Year ended Year ended
31 March 31 March
2023 2022 Total
Total results results
GBP'000 GBP'000
Profit for the year 2,039 6,835
-------------------------------------------- ---------------- -------------
Other comprehensive income
Items that may subsequently be
reclassified to profit or loss
Exchange differences on retranslation
of foreign subsidiaries 944 (189)
Net(loss)/ profit on financial assets
at fair value through other comprehensive
income (1,412) 1,039
Taxation - -
-------------------------------------------- ---------------- -------------
Total comprehensive income for
the year 1,571 7,685
Total comprehensive income for
the year attributable to:
Owners of the parent 1,324 7,623
Non-controlling interests 247 62
-------------------------------------------- ---------------- -------------
1,571 7,685
-------------------------------------------- ---------------- -------------
All operations are continuing.
STATEMENT OF FINANCIAL POSITION
First Property Group plc
Registered No. 02967020
As at 31 March 2023
2023 2022
Notes Group Group
GBP'000 GBP'000
------------------------------ -------- --------- ---------
Non-current assets
Investment properties 7 47,009 23,849
Right of use assets 8 197 1,018
Property, plant and
equipment 80 128
Investment in Group - -
undertakings
Investment in associates 9a) 17,588 19,135
Other financial assets
at fair value through
OCI 9b) 4,544 7,445
Other receivables 14 - 95
Goodwill 11 153 153
Deferred tax assets 12 930 1,599
------------------------------ -------- --------- ---------
Total non-current assets 70,501 53,422
------------------------------ -------- --------- ---------
Current assets
Inventories - land and
buildings 13 - 12,352
Current tax assets 79 14
Right of use assets 8 457 446
Trade and other receivables 14 3,729 4,329
Cash and cash equivalents 7,647 6,419
------------------------------ -------- --------- ---------
Total current assets 11,912 23,560
------------------------------ -------- --------- ---------
Current liabilities
Trade and other payables 15 (3,310) (4,764)
Provisions 16 (158) (922)
Lease Liabilities 8 (469) (410)
Financial liabilities 17 (1,116) (4,212)
Other financial liabilities 18 (939) -
Current tax liabilities (28) (20)
------------------------------ -------- --------- ---------
Total current liabilities (6,020) (10,328)
------------------------------ -------- --------- ---------
Net current assets 5,892 13,232
------------------------------ -------- --------- ---------
Total assets less current
liabilities 76,393 66,654
------------------------------ -------- --------- ---------
Non-current liabilities
Financial liabilities 17 (11,519) (9,309)
Other financial liabilities 18 (16,082) (10,141)
Lease Liabilities 8 (267) (1,098)
Deferred tax liabilities 12 (3,050) (3,112)
------------------------------ -------- --------- ---------
Net assets 45,475 42,994
------------------------------ -------- --------- ---------
Equity
Called up share capital 1,166 1,166
Share premium 5,635 5,791
Share-based payment
reserve 179 179
Foreign exchange translation
reserve (2,353) (3,297)
Purchase of own shares
reserve (2,440) (2,653)
Investment revaluation
reserve (728) 684
Retained earnings 41,983 40,895
------------------------------ -------- --------- ---------
Equity attributable
to the owners of the
parent 43,442 42,765
Non-controlling interests 2,033 229
------------------------------ -------- --------- ---------
Total equity 45,475 42,994
------------------------------ -------- --------- ---------
Net assets per share 6 39.18p 38.74p
------------------------------ -------- --------- ---------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2023
Group Share Share Share-based Foreign Purchase Investment Retained Non-controlling Total
capital premium payment exchange of own revaluation earnings interests
reserve translation shares reserve
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- --------
At 1 April
2022 1,166 5,791 179 (3,297) (2,653) 684 40,895 229 42,994
Profit for
the year - - - - - - 2,039 - 2,039
Net loss on
financial
assets at
fair value
through other
comprehensive
income - - - - - (1,412) - - (1,412)
Purchase from
treasury shares - (156) - - 213 - - - 57
Exchange
differences
arising on
translation
of foreign
subsidiaries - - - 944 - - - 127 1,071
Transfer 5PT
to subsidiary
undertaking - - - - - - - 1,606 1,606
Total
comprehensive
income - (156) - 944 213 (1,412) 2,039 1,733 3,361
Non-controlling
interests - - - - - - (120) 120 -
Dividends
paid - - - - - - (831) (49) (880)
----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- --------
At 31 March
2023 1,166 5,635 179 (2,353) (2,440) (728) 41,983 2,033 45,475
----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- --------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Restated)
for the year ended 31 March 2022
Group Share Share Share-based Foreign Purchase Investment Retained Non-controlling Total
capital premium payment exchange of own revaluation earnings interests
reserve translation shares reserve
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- --------
At 1 April
2021 1,166 5,791 179 (3,108) (2,653) (355) 34,392 201 35,613
Profit for
the year - - - - - - 6,835 - 6,835
Net gain on
financial
assets at
fair value
through other
comprehensive
income - - - - - 1,039 - - 1,039
Exchange
differences
arising on
translation
of foreign
subsidiaries - - - (189) - - - 6 (183)
Total
comprehensive
income - - - (189) - 1,039 6,835 6 7,691
Non-controlling
interests - - - - - - (56) 56 -
Dividends
paid - - - - - - (276) (34) (310)
----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- --------
At 31 March
2022 1,166 5,791 179 (3,297) (2,653) 684 40,895 229 42,994
----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- --------
Foreign Exchange Translation Reserve
The translation reserve comprises all foreign exchange
differences arising from the translation of the financial
statements of foreign Group companies. This reserve is non
distributable.
Share Based Payment Reserve
The Group grants certain of its employees' rights to its equity
instruments as part of its share-based payment incentive plans. The
value of these rights has been charged to the Income Statement and
has been credited to the share-based payment reserve (which is a
distributable reserve).
Purchase of Own Ordinary Shares
The cost of the Company's Ordinary Shares purchased by the
Company for treasury purposes is held in this reserve. The reserve
is non distributable.
Investment Revaluation Reserve
The change in fair value of the Group's financial assets
measured at fair value through Other Comprehensive Income is held
in this reserve and is non distributable.
CASH FLOW STATEMENTS
for the year ended 31 March 2023
Restated
2023 2022
Notes Group Group
GBP'000 GBP'000
---------------------------------------- ------- --------- ---------
Cash flows from operating activities
Operating profit/(loss) 2,004 6,062
Adjustments for:
Depreciation of investment property
and property, plant & equipment 99 90
Debt reduction following restructuring
of finance lease 3 - (7,809)
Profit on the sale of investment (1,779) -
properties
Impairment loss on an investment - -
property
Decrease/(increase) in inventories - 38
Decrease/ (increase) in trade
and other receivables 777 1,208
(Decrease)/ increase in trade
and other payables 4,189 (1,213)
Other non-cash adjustments 215 65
---------------------------------------- ------- --------- ---------
Cash generated from operations 5,505 (1,559)
---------------------------------------- ------- --------- ---------
Taxes paid (616) 118
---------------------------------------- ------- --------- ---------
Net cash flow from/(used in)
operating activities 4,889 (1,441)
---------------------------------------- ------- --------- ---------
Cash flow (used in)/ from investing
activities
Capital expenditure on investment
properties 7 (1,017) (1,642)
Purchase of property, plant &
equipment 2 (10) (33)
Proceeds from the sale of investment
property 7 8,612 -
Purchase of investment property 13 (7,443) -
Investment in shares of new associates (606) -
Investment in funds 9b) (3) (3,633)
Proceeds from funds 9b) 1,492 290
Proceeds from investments in
associates 9a) 176 48
Interest received 145 187
Dividends from associates 9a) - 241
Distributions received - 266
---------------------------------------- ------- --------- ---------
Net cash flow from/(used in)
investing activities 1,346 (4,276)
---------------------------------------- ------- --------- ---------
Cash flow (used in)/ from financing
activities
---------------------------------------- ------- --------- ---------
Proceeds from bank loan 1,474 1,289
Repayment of bank loans (5,215) (1,297)
Repayment of finance lease - (3,434)
Sale of shares held in Treasury 58 -
Interest paid 4 (530) (330)
Dividends paid (831) (276)
Dividends paid to non-controlling
interests (49) (34)
---------------------------------------- ------- --------- ---------
Net cash flow (used in)/ from
financing activities (5,093) (4,082)
Net /increase/decrease in cash
and cash equivalents 1,142 (9,799)
---------------------------------------- ------- --------- ---------
Cash and cash equivalents at
the beginning of the year 6,419 16,244
---------------------------------------- ------- --------- ---------
Currency translation gains/(losses)
on cash and cash equivalents 86 (26)
---------------------------------------- ------- --------- ---------
Cash and cash equivalents at
the year end 7,647 6,419
---------------------------------------- ------- --------- ---------
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 2023. The policies have been consistently
applied to all years presented unless otherwise stated below. These
accounting policies are drawn up in accordance with UK-adopted
International Accounting Standards ('IFRS'). 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 2022 have
been restated as set out below under prior year adjustment and 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.
Going Concern
The Directors have carried out an analysis to support their view
that the Group is a going concern and under which basis these
financial statements have been prepared.
Analysis and scenario testing, was carried out on the Group's
main divisional income streams, being asset management fees from
the asset management division, rental income from its seven
directly owned group properties and cash returns from its
associates and investments.
a) Asset Management Fee Income
Asset management fee income is primarily derived from its UK
funds (52%), four of which are limited partnerships whose limited
partners are a mix of pension funds and registered charities. With
one exception, fees are invoiced monthly and are calculated based
on a percentage of the latest valuation, which for the UK funds is
performed quarterly.
In the one fund from which fees are not levied by reference to
the properties valuation (Fprop Offices LP) a clawback of income
can be triggered. As at 31 March 2022, a performance fee totalling
of GBP1.97 million had been recognised of which GBP1.41 million has
been received in cash. As a result of falls in the value of the
properties held in this fund, the Group considers that GBP1.97
million will be clawed back in line with the contract. This is
reflected in the financial statements in the following manner;
-- GBP1.38 million, being the cumulative amount of income
recognised to 31 March 2021. This amount is shown as a restatement
of the 31 March 2022 Statement of Financial Position as set out in
the Prior Year Adjustment note below
-- GBP0.59 million clawed back as a reduction in the performance
fee revenue included as part of the asset management revenue in the
year ended 31 March 2023
-- The Group will repay GBP0.25 million to Fprop Offices LP. At
the year end this amount was recognised in Trade and Other
payables
Asset management fees on the Group's Polish and Romanian managed
funds are also levied as a percentage of funds under management,
with reference to the most recent valuations, again with one
exception where the fee is fixed (Fprop Phoenix Ltd (FPL)). These
funds are set up under the ownership of a UK limited company which
in turn owns the company domiciled in the country that owns the
property. Each of these local companies has borrowing secured on
the property and is therefore ring fenced from the Group.
The longevity of this asset management fee income is determined
by the fund's life which is fixed by agreement when each fund is
first established. The weighted average unexpired fund management
contract term is 2 years, 9 months.
b) Rental Income from Group Properties
All seven Group Properties are located in Poland or Romania.
These properties consist of four office blocks, a mini-supermarket,
one multi-let property and ground-floor retail property. All were
independently valued on 31 March 2023 at GBP53.97 million (31 March
2022: seven properties GBP42.24 million).
The rental income has been reviewed and evaluated and no
significant falls in collection rates are expected. The tenants are
of good quality, as proven by excellent cash collection rates
through and after the lockdown periods. Any renegotiation of rental
payment terms that have been agreed are reflected in the
analysis.
On 12 August 2022 the Group acquired some 7,171 square meters in
Blue Tower in Warsaw at a price of GBP7.20 million. The purchase
resulted in the Group's interest in the building increasing from
48.2% to 80.3%. Some 5,159 square metres of the newly acquired
space was vacant at purchase.
The Group's office property in Gdynia is now 28% leased, up from
20% at 31 March 2022. A further 72% of the office space in the
building remains to be leased. When fully let it is anticipated the
building should generate net operating income of over GBP1.90
million per annum.
c) Income from Associates and Investments
Analysis was also conducted on the returns from the Group's
investment in its four (2022: five) Associates.
All bank loan covenants were reviewed and tested against future
decreases in valuation and net operating income.
Dividend income from the Group's UK investments was also stress
tested and found not to have a significant impact.
Going Concern Statement
Based on the results of the analysis conducted as outlined above
the Board believes that the Group has the ability to continue its
business for at least twelve months from the date of approval of
the financial statements and therefore has adopted the going
concern basis in the preparation of this financial information.
Prior year adjustment
Fund management fees are generally levied monthly by reference
to the value of properties. In the case of Fprop Offices LP, the
Group is entitled to a share of total profits in lieu of fund
management fees and to receive annual payments on account
equivalent to 10% of total cumulative income profits and capital
gains. These payments are adjusted annually, if necessary, for any
overpayments made in previous years up to a maximum of total past
cumulative payments received.
As at 31 March 2022, the Group had reflected cumulative revenue
of GBP1.97 million. The Group recognised its share of the total
profits of Fprop Offices LP as performance fee income within asset
management revenue.
The combination of inflationary pressures, higher interest
rates, a cost of living crisis in the UK and an increase in
employees working from home has caused severe disruption to
economic activity and a reduction in the value of commercial
property. During the period between 1 April 2022 and 31 March 2023,
there was a 18% fall in the value of the properties held by Fprop
Offices LP. As a result, the Group considers that GBP1.38 million
of the previously recognised revenue should be reversed as a prior
year adjustment to the 31 March 2022 financial statements and
GBP0.59 million should be reflected as a reduction to revenue for
the year to 31 March 2023.
For the purposes of revenue recognition under IFRS 15, the
profit share due to the Group is a "variable consideration".
Paragraph 56 of IFRS 15 places a constraint upon the recognition of
variable consideration, requiring that it should only be recognised
to the extent that it is highly probable that a significant
reversal in the amount of cumulative revenue recognised will not
occur when the uncertainty associated with the variable
consideration is subsequently resolved.
The IFRS rules require that the reduction in previously
recognised variable consideration should be presented as a prior
period adjustment.
The following line items in the Statement of Financial Position
in the financial statements were impacted.
Year ended
31 March
2022
Retained Earnings
-----------
Retained Earnings as reported in the 2022
financial statements. 42,271
-----------
Prior year restatement due to IFRS 15 accounting
treatment (1,376)
-----------
Retained Earnings as restated 40,895
-----------
Trade and other payables
-----------
Trade and other payables as reported in
the 2022 financial statements. (3,388)
-----------
Prior year restatement due to IFRS 15 accounting
treatment (1,376)
-----------
Trade and other payables (4,764)
-----------
Net Assets
-----------
Net assets excluding non-controlling interests
as reported in the 2022 financial statements 44,141
-----------
Prior year restatement due to IFRS 15 accounting
treatment (1,376)
-----------
Net assets as restated 42,765
-----------
Net Assets per share
-----------
Net assets per share as reported in the
2022 financial statements 40.00p
-----------
Prior year restatement due to IFRS 15 accounting
treatment (1.26p)
-----------
Net assets per share as restated 38.74p
-----------
New Standards and Interpretations
New standards impacting the Group have been adopted in the
preliminary financial statements for the year-ended 31 March 2023,
none of which have had a significant impact to the financial
statements:
-- Annual Improvements to IFRS Standards 2018-2020 Cycle
-- Amendments to IFRS 3 - Reference to the Conceptual Framework
-- Amendments to IAS 16 - Property, Plant and Equipment: Proceeds before Intended Use
-- Amendment to IAS 37 - Onerous Contracts: Cost of Fulfilling a Contract
The Group has not adopted any new IFRSs that are issued but not
yet effective and it does not expect any of these changes to impact
the group.
These preliminary financial statements were approved by the
Board of Directors on 21 June 2023.
1. Revenue
Revenue from continuing operations consists of revenue arising
in the United Kingdom 12% (2022: 27%), Poland 75% (2022: 59%) and
Romania 13% (2022: 14%). All revenue relates solely to the Group's
principal activities.
2. Segment Reporting 2023
Fund Group Properties
Management Division
Division
---------------------------------------------
Property Group Associates Unallocated Total
fund properties and central
management investments overheads
----------------------- --------------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ---------------------- -------------------------- ----------------------- ----------------------- --------------------
Rental income - 3,614 - - 3,614
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Service charge
income - 1,115 - - 1,115
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Sale of a - - - - -
property
held in
inventory
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Asset
management
fees 2,892 - - - 2,892
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Performance
related
fee income (372) - - - (372)
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Total revenue 2,520 4,729 - - 7,249
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Depreciation
and
amortisation (36) (24) - - (60)
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Operating
profit 120 3,069 - (1,185) 2,004
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Share of
results
in associates - - 273 - 273
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Fair value
adjustment
on associates - - (901) - (901)
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Investment
income - - 1,497 - 1,497
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Interest income - 20 - 125 145
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Interest
payable - (530) - - (530)
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Profit/(loss)
before
tax 120 2,559 869 (1,060) 2,488
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Analysed as:
Underlying
profit/(loss)
before tax
before
adjusting for
the
following
items: 513 752 273 (1,089) 449
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Provision in
respect
of rent
guarantee - 511 - - 511
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Profit on the
sale
of investment
properties - 1,779 - - 1,779
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Interest
received
on loan to FOP
@12% - 125 - - 125
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Fair value
adjustment
on associates - - (901) - (901)
---------------------- -------------------------- ----------------------- ----------------------- --------------------
UK fund
distributions
following
sales of
properties - - 1,497 - 1,497
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Performance
related
fee income 222 - - - 222
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Clawback of
Office
income (594) (594)
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Staff
incentives (44) (65) - - (109)
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Realised
foreign
currency
(losses)/gains 23 (543) - 29 (491)
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Total 120 2,559 869 (1,060) 2,488
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Assets - Group 795 54,525 4,544 4,727 64,591
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Share of net
assets
of associates - - 17,588 - 17,588
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Liabilities (71) (36,574) - (59) (36,704)
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Net assets 724 17,951 22,132 4,668 45,475
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Additions to non-current assets
Property, plant
and
equipment 8 2 - - 10
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Investment
properties - 1,017 - - 1,017
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Trading stock - 7,443 - - 7,443
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Segment Reporting 2022
Fund Group Properties
Management Division
Division
---------------------------------------------
Property Group Associates Unallocated Total
fund properties and central
management investments overheads
----------------------- --------------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ---------------------- ---------------------- ----------------------- ----------------------- --------------------
Rental income - 2,926 - - 2,926
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Service charge
income - 1,678 - - 1,678
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Asset
management
fees 3,463 - - - 3,463
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Performance
related
fee income 578 - - - 578
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Total revenue 4,041 4,604 - - 8,645
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Depreciation
and
amortisation (36) (24) - - (60)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Operating
profit 1,437 7,781 - (3,156) 6,062
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Share of
results
in associates - - (29) - (29)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Fair value
adjustment
on associates - - 876 - 876
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Investment
income - - 271 - 271
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Interest income - 29 - 201 230
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Interest
payable - (330) - - (330)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Profit/(loss)
before
tax 1,437 7,480 1,118 (2,955) 7,080
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Analysed as:
Underlying
profit/(loss)
before tax
before
adjusting for
the
following
items: 1,182 401 242 (1,449) 376
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Provision in
respect
of rent
guarantee - (629) - - (629)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Debt reduction
following
restructuring
of finance
lease - 7,809 - - 7,809
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Interest
received
on loan to
FOP @12% - 202 - - 202
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Fair value
adjustments
on associates - - 876 - 876
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Performance
related
fee income 578 - - - 578
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Staff
incentives (305) (251) - (1,472) (2,028)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Realised
foreign
currency
(losses)/gains (18) (52) - (34) (104)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Total 1,437 7,480 1,118 (2,955) 7,080
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Assets - Group 891 44,693 7,445 4,818 57,847
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Share of net
assets
of associates - - 19,135 - 19,135
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Liabilities (143) (33,348) - (547) (34,038)
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Net assets 748 11,345 26,580 4,271 42,994
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Additions to non-current assets
Property, plant
and equipment 5 28 - - 33
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Investment
properties - 1,642 - - 1,642
---------------------- ---------------------- ----------------------- ----------------------- --------------------
Trading stock - 119 - - 119
---------------------- ---------------------- ----------------------- ----------------------- --------------------
3. Debt Reduction following Restructuring of Finance Lease
The prior year results reflect the reduction of EUR9.00 million
(GBP7.81 million) in the amount owed to ING Bank ( from EUR25
million to EUR16 million) in final settlement of the finance lease
secured against the Group's directly held property in Gdynia. As
part of the transaction ING was paid EUR4.00 million in June 2021.
The remainder of the finance lease liability was replaced by
interest free deferred consideration of EUR12.00 million (GBP10.54
million) repayable by June 2024. The deferred consideration is
reflected as an Other Financial Liability in the Statement of
Financial Position.
4. Interest Income
2023 2022
Group Group
GBP'000 GBP'000
Interest income - bank deposits - -
Interest income - other 145 230
-------------------------------------------- -------------------- --------------------
Total interest income 145 230
-------------------------------------------- -------------------- --------------------
2023 2022
Group Group
GBP'000 GBP'000
---------------------------------------------- -------------------- --------------------
Interest expense - property loans (516) (326)
Interest expense - bank and other (14) (4)
Total interest expense (530) (330)
---------------------------------------------- -------------------- --------------------
5. Tax Expense
2023 2022
Group Group
GBP'000 GBP'000
------------------------------------------------ -------------------- --------------------
Analysis of tax charge for the year
Current tax (559) (172)
Deferred tax 110 (73)
------------------------------------------------ -------------------- --------------------
Total tax charge for the year (449) (245)
------------------------------------------------ -------------------- --------------------
The tax charge includes current and deferred tax for continuing
operations.
As in prior years, brought forward and current UK tax losses
have not been recognised as a deferred tax asset due to
insufficient foreseeable taxable income being earned in the UK.
6. Earnings/NAV per Share
2023 2022
Basic earnings per share 1.73p 6.14p
Diluted earnings per share 1.70p 6.01p
The following earnings have been used
to calculate both the basic and diluted
earnings per share:
GBP'000 GBP'000
Basic earnings 1,919 6,779
Notional interest on share options
assumed to be exercised 2 7
Diluted earnings assuming full dilution 1,921 6,786
The following numbers of shares have been used to calculate the
basic and diluted earnings per share and the net assets and
adjusted net assets per share:
2023 2022
Number Number
-------------------------------------- ------------ ------------
Weighted average number of Ordinary
shares in issue
(used for basic earnings per share
calculation) 110,875,483 110,382,332
-------------------------------------- ------------ ------------
Number of share options 2,110,000 2,610,000
-------------------------------------- ------------ ------------
Total number of Ordinary shares used
in the diluted earnings per share
calculation 112,985,483 112,992,332
-------------------------------------- ------------ ------------
On 5 April 2022, an employee exercised 500,000 share options
which had an exercise price of 11.50p.
On 31 March 2023, the Group granted to employees the option to
subscribe to 10,450,000 new ordinary shares in the Company at an
exercise price of 23.50 pence per Ordinary Shares, being the
mid-market closing price on 30 March 2023. The options have a term
of ten years and unexercised options will expire at midnight on 31
March 2033. The options granted will result in an increase from
2,110,000 to 12,560,000 in the number of outstanding options over
Ordinary Shares, which represents approximately 11.33% of the
Company's issued share capital.
For the purpose of calculating diluted earnings per share, the
number of Ordinary Shares shall be the weighted average number of
Ordinary Shares, plus the weighted average number of Ordinary
Shares that would be issued on the conversion of all the dilutive
potential Ordinary Shares into Ordinary Shares. Options have a
dilutive effect only when the average market price of the Ordinary
Shares during the period exceeds the exercise price of the options
and thus they are 'in the money'. Given the share options were
granted on 31 March 2023 they have not been included in the diluted
EPS calculation or the adjusted net assets per share
calculations.
2023 Restated
2022
Net assets per share 39.18p 38.74p
Adjusted net assets per share 46.50p 46.07p
------------------------------- ------- ---------
The following numbers have been used to calculate both
the net assets and adjusted net assets per share:
2023 Restated
2022
-------------------------------------- --------- ------------
GBP'000 GBP'000
-------------------------------------- --------- ------------
For net assets per share
-------------------------------------- --------- ------------
Net assets excluding non-controlling
interests 43,442 42,765
GBP'000 GBP'000
For adjusted net assets per share
Net assets excluding non-controlling
interests 43,442 42,765
Uplift of investment properties at
fair value net of deferred tax 5,639 2,486
Uplift of inventories at fair value
net of deferred tax - 2,403
Uplift of investments in associates
and other financial investments to
fair value 3,139 4,016
Other items 324 381
-------------------------------------- --------- ------------
Total 52,544 52,051
-------------------------------------- --------- ------------
7. Investment Properties
2023 2022
Group Group
GBP'000 GBP'000
----------------------------------------------- -------------------- --------------------
Investment properties
At 1 April 23,849 22,456
Reclassification of Inventory 19,795 -
Additions arising on consolidation 7,621 -
Capital expenditure 1,017 1,642
Disposal (6,459) -
Depreciation (134) (30)
Foreign exchange translation 1,320 (219)
----------------------------------------------- -------------------- --------------------
At 31 March 47,009 23,849
----------------------------------------------- -------------------- --------------------
During the year the Group acquired an additional 7,171m(2) of
office space in Blue Tower for a consideration of GBP7.20 million,
which is payable in seven instalments over a six year period.
Following this purchase, the Group's interest in Blue Tower (an
office block in Warsaw) now represents 80.3% (2022: 48.2%) of the
building. As a result of this acquisition the Group reclassified
the building from Inventory to Investment Property.
During the year the Group took control of 5th Property Trading
Ltd, a fund in which it previously held as a share of associate, as
a result three additional commercial properties were added to
investment properties with a fair value at the date of
consolidation of GBP7.62 million (EUR9.07 million).
During the period the Group disposed of three properties. The
first sale, in August 2022, was of a warehouse in Tureni, Romania
for GBP3.11 million which generated a profit of GBP1.10 million
after accounting for disposal costs. In December 2022, the Group
also disposed of two supermarkets in Poland on behalf of a fund
managed by the Group and in which the Group has an 88.5% interest.
These two properties sold for GBP5.50 million (EUR6.20 million)
generating a profit after sale of some GBP0.68 million.
At the year end the Group held seven properties.
Investment properties owned by the Group are stated at cost less
depreciation and any accumulated impairment in value. The
properties were valued at the Group's financial year end at
EUR61.43 million (31 March 2022: EUR50.43 million including the
property transferred from inventory), the Sterling equivalent at
closing foreign exchange rates being GBP53.97million (31 March
2022: GBP42.24 million including the property transferred from
inventory).
Amounts recognised in the income statement:
2023 2022
Group Group
GBP'000 GBP'000
------------------------------------------------ -------------------- --------------------
Rental income from operating leases 3,614 2,926
i. Leasing arrangements where the group is a lessor:
2023 2022
Group Group
GBP'000 GBP'000
--------------------------------------------------------- -------------------- --------------------
Minimum lease receipts under non-cancellable
operating leases to be received:
Not later than one year 2,113 2,043
Later than one year and not later
than five years 5,190 6,790
Later than five years 2,546 3,758
--------------------------------------------------------- -------------------- --------------------
9,849 12,591
--------------------------------------------------------- -------------------- --------------------
Investment properties are comprised of commercial properties
that are leased to third parties. The Group has approximately 51
leases granted to its tenants. These vary depending on the
individual tenant and the respective property and demise but
typically are let for a term of five years. The weighted average
lease length of the leases granted was 5 years and 2 months (2022:
5 years and 7 months). No contingent rents are charged.
8. Right of Use Assets and Lease Liabilities
This note provides information for leases where the group is a
lessee. For leases where the group is a lessor, see note 7.
The amounts recognised in the financial statements in relation
to the leases are as follows:
i. Amounts recognised in the balance sheet:
31 Mar 2023 31 Mar 2022
GBP'000 GBP'000
-------------------------------- ----------------------- -----------------------
Right of use assets
Current 457 446
Non-current 197 1,018
-------------------------------- ----------------------- -----------------------
31 Mar 2023 31 Mar 2022
GBP'000 GBP'000
------------------------------ ----------------------- -----------------------
Lease Liabilities
Current 469 410
Non-current 267 1,098
------------------------------ ----------------------- -----------------------
There was no additions (2022: one, GBP0.75 million) to the right
of use assets and no additions (2022: one, GBP77 million) to the
lease liability) during the financial year. There was one disposal
of the 5PT right of use asset and liability due to fact that 5PT
has been consolidated in the current financial year.
ii. Amounts recognised in the Income Statement:
2023 2022
GBP'000 GBP'000
--------------------------------------- -------- --------
Depreciation/ Rent charge of right-of
use-assets
Buildings 457 446
--------------------------------------- -------- --------
457 446
--------------------------------------- -------- --------
2023 2022
GBP'000 GBP'000
------------------ -------- --------
Interest expense
Buildings 154 186
------------------ -------- --------
154 186
------------------ -------- --------
iii. Summary of the groups leasing activity:
The Group has reviewed the terms of its leases and has
identified:
A lease of the UK office on St. James's Street, London, SW1A 1HD
and a lease by First Property Poland Sp. z o. o. (FPP) for an
office in Poland.
As at 31 March 2023 the Group has recognised a lease liability
under IFRS 16 of GBP0.74 million (31 March 2022: GBP1.51 million)
and a right of use asset of GBP0.65 million (2022: GBP1.46
million). The net debit to the Income Statement was GBP39,000.
Rental contracts are typically made for fixed periods of six months
to four years but may have extension options.
9. Investment in Associates and Other Financial Assets and Investments
The Group has the following investments:
2023 2022
Group Group
GBP'000 GBP'000
---------------------------------------------------- -------------------- --------------------
a) Associates
At 1 April 19,135 18,577
Additions 606 -
Disposals (1,349) -
Shareholder loan repayments (176) (48)
Share of associates' profit (loss)
after tax 273 (29)
Share of associates' revaluation gains/
(losses) (901) 876
Dividends received - (241)
---------------------------------------------------- -------------------- --------------------
At 31 March 17,588 19,135
---------------------------------------------------- -------------------- --------------------
The disposal during the year represents the Group gaining
control of 5th Property Trading Ltd, a fund which at 31 March 2022
it held 40.63%. Following the purchase of additional shares in this
company the Group is now deemed to have control and has
consolidated this fund into the Group. For further information
please see note 10.
The Group's investments in associated companies are accounted
for under the "cost model" under IAS40 whereby the Group's share is
held at cost plus its share of subsequent accumulated profits less
dividends received. It comprises the following:
2023 2022
Group Group
GBP'000 GBP'000
----------------------------------------------------- -------------------- --------------------
Investment in associates
5th Property Trading Ltd - 1,652
Fprop Galeria Corso Ltd 3,058 2,700
Fprop Krakow Ltd 1,154 1,580
Fprop Cluj Ltd 636 615
Fprop Phoenix Ltd 61 913
Fprop Opportunities plc 12,679 11,983
----------------------------------------------------- -------------------- --------------------
17,588 19,443
----------------------------------------------------- -------------------- --------------------
Less: Share of profit after tax withheld
on sale of property to 5th Property
Trading Ltd in 2007 - (308)
----------------------------------------------------- -------------------- --------------------
17,588 19,135
----------------------------------------------------- -------------------- --------------------
If the Group had adopted the alternative "fair value" model for
accounting for investment properties, the carrying value of the
investments in the remaining five associates would be GBP20.73
million (31 March 2022: six associates - GBP23.15 million).
2023 2022
Group Group
GBP'000 GBP'000
------------------------------------------------------ -------------------- --------------------
b) Other financial assets and investments
At 1 April 7,445 3,061
Additions 3 3,633
Disposals - -
Repayments (1,492) (290)
Increase/ (decrease) in fair value
during the year (1,412) 1,041
------------------------------------------------------ -------------------- --------------------
At 31 March 4,544 7,445
------------------------------------------------------ -------------------- --------------------
The Group holds four (2022: four) unlisted investments in funds
managed by it. Each is designated at fair value through "Other
Comprehensive Income" (OCI) as per IFRS 9. The Directors' consider
their fair value to be not materially different from their carrying
value. Fair value has been calculated by applying the Group's
percentage holding in the investments to the fair value of their
net assets.
10. Business Acquisitions
At 1 April 2022, the Group held a 40.63% investment in 5th
Property Trading Ltd (5PT), a fund it manages on behalf of clients.
This fund was accounted for as a share of associate which had a
book value of GBP1.34 million at 31 March 2022.
On 23 May 2022, following the purchase of additional shares in
this fund, the Group's holding increased to 46.59%, this combined
with a Director, Ben Habib's personal interest in the fund of
5.96%, the Group is considered to have control. As a result, FPG
consolidated these companies into the Group.
A further purchase of additional shares (0.61%) during the year
brought the Group's holding to 47.2%. At the year-end the Group is
deemed to control 53.16% of the fund when including Ben Habib's
personal interest.
Net assets acquired at acquisition:
GBP'000
Non- current assets
Investment properties 7,621
Property, plant and equipment 1
Investment in Group undertakings 1
Deferred tax asset 96
--------------------------------------------- -------------------
Total Non-current assets 7,719
--------------------------------------------- -------------------
Current assets
Trade and other receivables 106
Cash and cash equivalents 80
--------------------------------------------- -------------------
Total current assets 186
--------------------------------------------- -------------------
Current liabilities
Trade and other payables (139)
Current tax liabilities (3)
--------------------------------------------- -------------------
Total current liabilities (142)
--------------------------------------------- -------------------
Net current assets 44
--------------------------------------------- -------------------
Total assets less current
liabilities 7,763
--------------------------------------------- -------------------
Non-current liabilities
Financial liabilities (3,745)
Deferred tax liabilities (708)
--------------------------------------------- -------------------
Net Assets 3,310
--------------------------------------------- -------------------
Equity attributable to the
owners of the parent 1,542
Non-controlling interest 1,768
--------------------------------------------- -------------------
11. Goodwill
2023 2022
Group Group
GBP'000 GBP'000
------------------------ -------------------- --------------------
At 1 April 153 153
------------------------ -------------------- --------------------
At 31 March 153 153
------------------------ -------------------- --------------------
The Directors have conducted an annual impairment test and
concluded that no impairment was necessary because the estimated
value in use was higher than the value stated.
12. Deferred Tax
Deferred tax assets and liabilities are attributable to the
following items:
2023 2023 2023 2022 2022 2022
Group Group Group Group Group Group
net assets assets liabilities net assets assets liabilities
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ------------ --------- ------------- ------------ --------- -------------
Accrued interest
payable 106 106 - 117 117 -
Accrued income (5) - (5) (4) - (4)
Foreign bank
loan (480) 130 (610) (212) 203 (415)
Investment properties
and inventories (1,476) 604 (2,080) (1,476) 1,119 (2,595)
Other temporary
differences (265) 90 (355) 62 160 (98)
----------------------- ------------ --------- ------------- ------------ --------- -------------
At 31 March (2,120) 930 (3,050) (1,513) 1,599 (3,112)
----------------------- ------------ --------- ------------- ------------ --------- -------------
13. Inventories - Land and Buildings
2023 2022
Group Group
GBP'000 GBP'000
------------------------------------------------ -------------------- --------------------
Group properties for resale at cost
At 1 April 12,352 12,494
Additions 7,443 -
Reclassified as Investment Property (19,795) -
Capital expenditure - 119
Disposal - -
Depreciation - (157)
Foreign exchange translation - (104)
------------------------------------------------ -------------------- --------------------
At 31 March - 12,352
------------------------------------------------ -------------------- --------------------
During the year the Group acquired an additional 7,171m(2) of
office space in Blue Tower for a consideration of GBP7.20 million,
which is payable in seven instalments over a six year period.
Following this purchase, the Group's interest in Blue Tower (an
office block in Warsaw) now represents 80.3% (2022: 48.2%) of the
building. As a result of this acquisition the Group reclassified
the building from Inventory to Investment Property.
14. Trade and Other Receivables
2023 2022
Group Group
GBP'000 GBP'000
--------------------------------------------------------- -------------------- --------------------
Current assets
Trade receivables 1,130 1,003
Less provision for impairment of receivables (242) (73)
--------------------------------------------------------- -------------------- --------------------
Trade receivables net 888 930
Other receivables 1,820 2,299
Prepayments and accrued income 1,021 1,100
--------------------------------------------------------- -------------------- --------------------
At 31 March 3,729 4,329
--------------------------------------------------------- -------------------- --------------------
2023 2022
Group Group
Non-current assets GBP'000 GBP'000
------------------------------- -------------------- -------------------
Other receivables - 95
------------------------------- -------------------- -------------------
Other receivables, under non-current assets, relates to the
deferred consideration from the sale of an investment property
located in Romania. This has all been repaid.
15. Trade and Other Payables
2023 Restated
2022
Group Group
GBP'000 GBP'000
----------------------------------------------- -------------------- --------------------
Current liabilities
Trade payables 1,227 1,105
Other taxation and social security 254 313
Other payables and accruals 1,701 3,293
Deferred income 128 53
----------------------------------------------- -------------------- --------------------
At 31 March 3,310 4,764
----------------------------------------------- -------------------- --------------------
16. Provisions
2023 2022
Group Group
Current liabilities GBP'000 GBP'000
-------------------------------- ------------------- -------------------
At 31 March 158 922
-------------------------------- ------------------- -------------------
The provision at 31 March 2023 represents a rent guarantee of
GBP0.16 million (31 March 2022: GBP0.52 million) and fit-out costs
of GBPNil (31 March 2022: GBP0.40 million). These provisions are in
respect of the rent guarantee given as part of the sale of a
property, CH8, which completed in April 2020.
17. Financial Liabilities
2023 2022
Group Group
GBP'000 GBP'000
------------------------- --------- ---------
Current liabilities
Bank loan 1,116 4,212
At 31 March 1,116 4,212
------------------------- --------- ---------
Non-current liabilities
Bank loans 11,519 9,309
At 31 March 11,519 9,309
------------------------- --------- ---------
2023 2022
Group Group
GBP'000 GBP'000
------------------------------------- --------- ---------
Total obligations under bank loans
Repayable within one year 1,116 4,212
Repayable within one and five years 8,080 7,364
Repayable after five years 3,439 1,945
------------------------------------- --------- ---------
At 31 March 12,635 13,521
------------------------------------- --------- ---------
Five bank loans all denominated in Euros and totalling GBP12.64
million (31 March 2022: GBP13.52 million), included within
financial liabilities, are secured against investment properties
owned by the Group. These bank loans are otherwise non-recourse to
the Group's assets.
The interest rate profile of the Group's financial liabilities
at 31 March 2023 and 31 March 2022 was as follows:
Interest Non- Total
bearing interest
GBP'000 bearing
GBP'000 GBP'000
----------------------------- --------- ---------- ---------
Bank loans 12,635 - 12,635
Other financial liabilities - 17,021 17,021
----------------------------- --------- ---------- ---------
At 31 March 2023 12,635 17,021 29,656
Bank loans 13,521 - 13,521
Other financial liabilities - 10,141 10,141
----------------------------- --------- ---------- ---------
At 31 March 2022 13,521 10,141 23,662
----------------------------- --------- ---------- ---------
A one percentage point increase in interest rates would increase
the annual interest bill by GBP0.13 million per annum (2022:
GBP0.14 million).
18. Other Financial Liabilities
2023 2022
Group Group
GBP'000 GBP'000
------------------------- --------- ---------
Current liabilities 939 -
------------------------- --------- ---------
Non-current liabilities 16,082 10,141
------------------------- --------- ---------
2023 2022
Group Group
GBP'000 GBP'000
----------------------------------------- --------- ---------
Total obligations under Other Financial
Liabilities
Repayable within one year 939 -
Repayable within one and five years 14,317 10,141
Repayable after five years 1,765 -
----------------------------------------- --------- ---------
At 31 March 2023 17,021 10,141
----------------------------------------- --------- ---------
This non-current liability includes the balance of EUR12.00
million which was a result of the restructuring of a finance lease
secured against the office tower in Gdynia. The restructuring
resulted in the amount owed to ING bank in final settlement
reducing by EUR9.00 million (GBP7.81 million). As part of the deal,
the Group acquired the freehold of the property for EUR16.00
million of which EUR4.00 million has been paid and EUR12.00 million
is repayable by June 2024. No interest is payable on this
non-current liability.
Non-current liabilities also includes the Group's new investment
in Blue Tower, Warsaw, which was financed by deferred consideration
of PLN 40.40 million (GBP7.44 million). This liability, which is
non-interest bearing, is payable in seven instalments over six
years. The first instalment of PLN 6.0 million (GBP1.07 million)
was paid in September 2022.
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 32
St James's Street, London, SW1A 1HD.
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END
FR EASKAALXDEEA
(END) Dow Jones Newswires
June 22, 2023 02:00 ET (06:00 GMT)
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