TIDMFPO
RNS Number : 0035R
First Property Group PLC
25 June 2020
Date: 25 June 2020
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 2020
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 2020.
Highlights:
-- Sale of Cha ubińskiego 8 (CH8), the Group's largest directly
owned property for EUR44 million;
-- Significant cash reserves: GBP23.6 million as at 23 June 2020;
-- Have not drawn on any government support for COVID-19;
-- Final dividend maintained at 1.22 pence per share;
-- Well positioned to weather the crisis and make judicial
investments as the UK emerges from it;
-- Retained No.1 investment performance ranking versus MSCI CEE Benchmark;
-- Weighted average unexpired fund management contract term: 5
years, 0 months (2019: 5 years, 9 months).
Financial Summary:
Unaudited Audited Percentage
year to year to change
31 March 31 March 2019
2020
Income Statement:
---------------------------------------------------------------------------
Statutory profit
before tax GBP5.52m GBP8.31m -33.6%
*PROFORMA: GBP7.25m -23.9%
Diluted earnings
per share 4.29p 4.85p -11.5%
Total dividend per
share 1.67p 1.66p +0.6%
Average GBP/EUR rate 0.873 0.881 -
*Recalculated to enable a like for like comparison with
FY2020 by treating the deconsolidated entity Fprop Opportunities
plc (FOP) as an associate rather than a subsidiary (See
Note 4 Reconciliation and Note 3 Segmental Analysis).
Balance Sheet at year end:
---------------------------------------------------------------------------
Net debt *GBP57.20m GBP56.94m +0.5%
Gearing ratio at
market value** 50.94% 50.44% -
Gearing ratio at
book value*** 57.32% 59.09% -
Net assets per share 43.53p 41.46p +5.0%
Adjusted net assets
per share (EPRA basis) 55.00p 57.48p -4.3%
Cash balances ****GBP7.34m GBP9.74m -24.6%
GBP/EUR rate 0.885 0.862
*Prior to completion of sale of CH8 which
completed in April 2020.
**Group debt divided by gross assets at market
value.
***Group debt divided by gross assets at
book value.
****Excludes cash following completion of
sale of CH8.
Commenting on the results, Ben Habib, Chief Executive of First
Property Group, said:
"It is a difficult time to be reporting our results against the
backdrop of a pandemic and the World in the throes of an economic
crisis. Notwithstanding this, I am pleased to report that the Group
is in as strong a position as it has ever been, with cash resources
amounting to some GBP23.6 million.
We have had no need to draw on any of the support measures
offered by the government in the wake of COVID-19 and are well
positioned to take advantage of investment opportunities that will
undoubtedly emerge. We shall aim to do so in conjunction with our
clients so as to further our fund management business.
I am hopeful that we will emerge from the crisis in an even
stronger position than we entered it."
A briefing for analysts will be held at 10:30hrs 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 website.
For further information please contact:
First Property Group plc Tel: +44 (20) 7340
0270
Ben Habib (Chief Executive Officer) www.fprop.com
George Digby (Group Finance Director) investor.relations@fprop.com
Jeremy Barkes (Director, Business
Development)
Arden Partners (NOMAD & Broker) Tel: + 44 (20) 7614
5900
John Llewelyn-Lloyd (Director, Corporate
Finance)
Ben Cryer (Corporate Finance)
Newgate Communications (PR) Tel: + 44 7540106366
Robin Tozer / Tom Carnegie / Isabelle firstproperty@newgatecomms.com
Smurfit
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 eight directly held properties in
Poland and Romania, and non-controlling interests in ten of the
twelve funds managed by FPAM.
Listed on AIM the Company has offices in London, Warsaw and
Bucharest. Around one third of the shares in the Company are owned
by management and their families. Further information about the
Company and its products can be found at: www.fprop.com .
CHIEF EXECUTIVE'S STATEMENT
Financial Performance
Notwithstanding the major disruption to the economy and markets
caused by various government responses to COVID-19, I am pleased to
report that the Group is in as strong a position as it has ever
been, with Group cash of some GBP23.6 million at 23 June.
The Group has not accessed any of the government support schemes
to ease the effects of the lockdown, nor has it put any staff on
furlough or made any redundancies. The group has honoured contracts
with its counterparties, and expects to continue doing so.
Profit before tax decreased by 33.6% to GBP5.52 million (2019:
GBP8.31 million) and by 23.9% on a proforma basis (2019: GBP7.25
million), mainly due to performance related fees reducing to
GBP415,000 from GBP1.54 million in 2019.
Diluted earnings per share decreased by 11.5% to 4.29 pence
(2019: 4.85 pence), a smaller decrease than profit before tax due
to a lower tax charge.
Profit before tax was largely unaffected by foreign exchange
rate movements.
The most significant financial and operational event of the year
was the sale announced on 23 December 2019 of the Group's largest
directly owned asset, a 50.3% share in Cha ubińskiego 8 (CH8), an
office building in Warsaw. The sale, which completed after the
financial year-end, released some GBP17 million of cash and reduced
debt to some GBP42 million (all of which is non-recourse to the
Group). The cash generated both underpins the Group and provides it
with significant resources with which to make new investments in
what is likely to become an interesting investment market. It is
intended to invest the cash in partnership with clients of the
Group, in line with the Group's aim to grow its fund management
business.
The Group ended the year with increased net assets, excluding
non-controlling interests, of GBP48.05 million (2019: GBP46.17
million), equating to 43.53 pence per share (2019: 41.46 pence per
share). The net assets of the Group when adjusted to their market
value less any deferred tax liabilities decreased by 5.1% to
GBP62.15 million (2019: GBP65.51 million), equating to 55.00 pence
per share (2019: 57.48 pence per share).
The annualised growth in adjusted net assets together with
dividends paid to shareholders over the last ten years equates to
22.7% (2019: 22.8%) per annum, a record of which we are immensely
proud.
During the year the Group purchased 1,000,000 of its own
Ordinary Shares, which are now held in Treasury, for a total
consideration of GBP417,000 (equating to an average price paid of
41.7 pence per share).
Dividend
The Directors have resolved to maintain the final dividend at
1.22 pence per share (2019: 1.22 pence per share), which together
with the interim dividend of 0.45 pence per share (2019: 0.44 pence
per share), equates to a dividend for the year of 1.67 pence per
share (2019: 1.66 pence per share).
The proposed final dividend will be paid on 25 September 2020 to
shareholders on the register at 21 August 2020, and is subject to
shareholder approval at the forthcoming annual general meeting on
23 September 2020.
The full year's dividend is covered 2.60 times (2019: 2.98
times).
REVIEW OF OPERATIONS
PROPERTY FUND MANAGEMENT (First Property Asset Management Ltd or
FPAM)
As at 31 March 2020 third party assets under management amounted
to GBP567 million (2019: GBP611 million), a reduction of some 7%.
Around a third of the reduction from the prior year was due to
property sales. The balance was due to downwards revaluations, in
particular in the retail sector following the onset of
COVID-19.
No new funds were established during the year.
The split of funds managed across different asset classes,
including funds in which the Group is a minority shareholder,
is:
UK Poland Romania Total % of Total
GBPm. GBPm. GBPm. GBPm.
-------------------- ------- ------- -------- ------- -----------
Offices 215.67 105.36 7.82 328.85 58.0%
Retail warehousing 100.45 - - 100.45 17.7%
Supermarkets/
Supermarket
led schemes 51.58 19.68 0.98 72.24 12.8%
Shopping centres - 57.45 - 57.45 10.1%
Industrial 8.03 - - 8.03 1.4%
-------------------- ------- ------- -------- ------- -----------
Total 375.73 182.49 8.80 567.02 100%
-------------------- ------- ------- -------- ------- -----------
% of Total
third party
AUM 66.3% 32.2% 1.5% 100%
In Central Europe, FPAM retained its position as the best
performing fund manager versus MSCI's Central and Eastern European
(CEE) Benchmark, now for the fourteen years to 31 December 2019.
Rental income was the main driver which contributed to the result.
In the recent COVID-19 pandemic, our rent collection rate has thus
far been higher than the industry average, according to a survey by
Remit Consulting. In the UK, where the majority of rent is due
quarterly in advance, we collected some 93% of rent for the March
quarter. The collection rates in Poland and Romania were some 84%
and 95% respectively of the combined April and May rental
income.
On 1 November 2019 First Property Asset Management Ltd became a
full scope Alternative Investment Fund Manager (AIFM) enabling it
to manage above EUR500 million in aggregate of third-party
funds.
The reconciliation of movement in funds under management during
the year is shown below:
UK CEE Total No. of prop's
GBPm. GBPm. GBPm.
----------------------- -------- ------- -------- --------------
As at
31 March 2019 415.95 195.12 611.07 71
----------------------- -------- ------- -------- --------------
Purchases:
-Existing funds - - - -
-New funds - - - -
Property sales (13.98) - (13.98) (2)
Transfer to Group - - - -
Properties
Capital expenditure 1.17 0.34 1.51 -
Property depreciation
and write down - (0.48) (0.48) -
Property revaluation (27.41) (9.09) (36.50) -
FX revaluation - 5.40 5.40 -
As at
31 March 2020 375.73 191.29 567.02 69
----------------------- -------- ------- -------- --------------
Fund management fees are levied monthly by FPAM generally by
reference to the value of funds under management excluding cash and
cash commitments. The effect of any increase (or decrease) in fund
management fee income associated with increased (or decreased)
funds under management is not realised in full until the financial
year following investment (or sale), because of the timing of draw
down (or sale) during the year.
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 realised capital gains. Under its
accounting policy the Group does not recognise unrealised property
revaluations above the properties' original cost. These payments
are adjusted annually, if necessary, for any overpayments made in
previous years up to a maximum of total past cumulative payments
received. In the year just ended the Group recognised GBP415,000
(2019: GBP961,000), increasing the maximum that could be subject to
clawback to GBP1.38 million. The reduction in the contribution from
Fprop Offices LP was due to the value of its properties being
marked down at 31 March 2020. Future entitlements to payment in
respect of this fund are being earned at an annualised rate of
GBP820,000 per annum, before property revaluations, and thus act as
a buffer against possible refund liabilities in the future.
Revenue excluding performance fees earned by this division
increased to GBP3.48 million (2019: GBP3.42 million) but total
revenue decreased by 21% to GBP3.90 million (2019: GBP4.96
million), resulting in a profit before unallocated central
overheads and tax of GBP1.34 million (2019: GBP3.03 million). The
decrease in total revenue and profit earned by this division
results mainly from a lower contribution from performance fees,
with Fprop Offices LP being the only fund from which performance
fees were due.
At the year-end FPAM's fund management fee revenue, excluding
any profit share from Fprop Offices LP, was being earned at an
annualised rate of GBP3.13 million (2019: GBP3.34 million).
FPAM continues to manage twelve property investment funds. The
weighted average unexpired fund management contract term at the
year-end was 5 years, 0 months (2019: 5 years, 9 months).
Looking ahead, we expect that the disruption caused by the
COVID-19 pandemic is likely to lead to a temporary reduction in
asset prices. We expect to increase our investment activities as a
result, including by investing Group cash alongside fund management
clients.
A brief synopsis of the value of assets and maturity of each of
the funds managed by FPAM is set out below:
Fund Country Fund Assets under No of % of total Assets under
of investment expiry management properties assets under management
at market management at market
value at value at
31 March 31 March 2019
2020
----------------- ---------------- ---------- ------------- ------------ -------------- ---------------
Fund management GBPm. GBPm.
division
----------------- ---------------- ---------- ------------- ------------ -------------- ---------------
SAM & DHOW UK Rolling * * * *
5PT Poland Dec 2022 8.0 3 1.29 7.90
UK PPP UK Feb 2022 70.3 20 11.28 87.22
OFFICES UK Jun 2024 143.4 5 23.01 146.60
SIPS UK Jan 2025 143.4 24 23.00 163.13
FOP Poland Oct 2025 71.3 5 11.44 71.84
FRS Romania Jan 2026 1.0 1 0.16 1.01
FGC Poland Mar 2026 22.4 1 3.59 21.59
SPEC OPPS UK Jan 2027 18.6 4 2.99 19.00
FKR Poland Mar 2027 23.0 1 3.69 23.00
FCL Romania Jun 2028 7.8 1 1.25 7.67
FPL Poland Jun 2028 57.8 4 9.27 62.11
----------------- ---------------- ---------- ------------- ------------ -------------- ---------------
Total Third Party AUM 567.0 69 90.97 611.07
----------------------------------------------- ------------- ------------ -------------- ---------------
Group Properties 56.3 8 9.03 94.61
----------------------------------- ---------- ------------- ------------ -------------- ---------------
Total AUM 623.3 77 100.00 705.68
----------------------------------------------- ------------- ------------ -------------- ---------------
* Not subject to recent revaluation;
GROUP PROPERTIES
At 31 March 2020 Group Properties comprised eight (2019: nine)
directly owned properties in Poland and Romania and non-controlling
interests in ten of the twelve funds managed by FPAM.
1. Directly owned Group Properties
The Group's eight (2019: nine) directly owned commercial
properties in Poland and Romania are accounted for under the cost
model as set out in the table below:
Country Sector No. of Book value Market Contribution Contribution
properties value to Group to Group
profit before profit before
tax - year tax - year
to to
31 March 31 March
2020 2019
--------- -------------- ------------ ----------- ------- --------------- ---------------
GBPm. GBPm. GBPm. GBPm.
Poland Offices 2 37.68 43.70 5.1 *2.3
Poland Supermarkets 4 5.31 6.00 0.2 (0.1)
Office and
Romania logistics 2 4.10 6.60 0.4 0.2
Total 8 47.09 56.30 5.7 2.4
------------------------- ------------ ----------- ------- --------------- ---------------
* includes a EUR3.5 million impairment loss to an investment
property.
The directly owned Group Properties generated a profit before
unallocated central overheads and tax of GBP4.70 million (2019:
GBP2.70 million). The increase was mainly a result of the profit of
GBP1.53 million earned on the sale of CH8, Warsaw.
Of the Group's remaining eight directly owned properties, two
account for 80% by value (GBP43.70 million). Both are office
buildings in Poland of which one is in Warsaw (11,000 m(2) ) and
the other in Gdynia (15,500 m(2) ).
The Group continues to depreciate the holding value of its
office building in Gdynia at a rate of GBP1.74 million (EUR1.97
million) per annum because it is let to a single tenant and the
lease expires in October 2020. We have commenced discussions with
the tenant and other prospective tenants about leasing space in the
building. The balance of 20% by value (GBP12.60 million) is
invested in three mini-supermarkets in Poland, a development site
in Warsaw, an office in Bucharest and a logistics warehouse in
Romania.
The debt secured against the eight Group Properties reduced by
some GBP22 million to GBP42 million following the sale of CH8,
resulting in a loan to value ratio of some 75% and the ratio of
debt to gross assets at market value of some 51%.
Analysis of borrowings secured against the eight directly
held properties:
------------------------------------------------------------------------
31 March 31 March 2019 % change
2020
Book value GBP47.09m GBP82.14m -42.7%*
Market value GBP56.30m GBP94.61m -40.5%
Gross debt (all non-recourse
to Group) **GBP41.97m GBP66.68m -37.1%
LTV at book value
% **89.13% 81.18%
LTV at market value
% ***74.55% 70.43%
*Reduction due to the sale of the Group's largest directly owned
property, CH8.
**Gross debt excludes the bank loan (GBP22.56 million) in
respect of CH8, the investment property sold at the year end. The
bank loan was repaid following completion of the sale on 24 April
2020.
***Calculated by excluding the repaid bank loan relating to
CH8.
Each loan secured against the eight Group Properties is held in
a separate non-recourse special purpose vehicle. There are no loan
to value covenant breaches.
The finance lease for the office building in Gdynia is
technically in default of one of its loan covenants for failure to
lease more than 50% of the leasable area one year prior to the
expiry of the current sole tenant's lease in October 2020.
Negotiations with the lender, the tenant and prospective tenants
are in progress.
Interest expense in the year amounted to some GBP1.34 million
(2019: GBP2.18 million). In order to mitigate potential interest
rate increases we have fixed the interest rate on a proportion
(47%) of these loans. The current weighted average borrowing cost
is 1.83% (2019: 2.15%).
2. Associates and Investments
The Group's non-controlling interests in ten of the twelve funds
managed by FPAM are accounted for under the cost model as 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/(losses) profits/(losses)
Group fund earned by earned by
fund fund
31 March 31 March
2020 2019
-------------------- ---------- ------------ ---------- ------------------ ------------------
GBP'000 GBP'000 GBP'000 GBP'000
-------------------- ---------- ------------ ---------- ------------------ ------------------
Interest in associates
5PT 40.6% 1,128 1,209 149 54
RPT/ E and * * * * *(9)
S
FRS 24.1% 168 254 18 116
FGC 28.2% 2,346 2,977 288 302
FKR 18.1% 1,451 1,870 169 156
FCL 17.4% 519 519 79 17
FPL 23.4% 1,908 6,956 (141) 1,051
FOP 40.0% 10,178 10,178 658 (87)
-------------------- ---------- ------------ ---------- ------------------ ------------------
Share of results
in associates 17,698 23,963 1,220 1,600
Investments
------------- ----- ---------- ------------ ---------- --------------------
UKPPP 0.9% 672 672 134 59
SPEC OPPS 4.0% 536 536 57 45
OFFICES 1.6% 1,966 1,966 133 169
------------- ----- ---------- ------------ ---------- --------------------
Sub Total 3,174 3,174 324 273
Total 20,872 27,137 1,544 1,873
-------------------- ---------- ------------ ---------- ------------------ ------------------
*Representing the Group's share of the loss from its associate
share in RPT/ E and S prior to its consolidation into the Group's
accounts on 1 August 2018.
The contribution to Group profit before tax prior to the
deduction of unallocated central overheads from our ten minority
shareholdings in funds managed by FPAM was GBP1.22 million down
from GBP1.60 million in 2019 (2019 proforma: GBP2.32 million). The
reduction in profit compared to 2019 was mainly due to:
-- a loss of GBP141,000 in Fprop Phoenix Ltd, which benefitted
from a one-off gain in the prior year following the successful
conclusion of a legacy dispute with a contractor (2019: GBP1.05
million);
-- a reduction in the value of GBP659,000 in the Group's 40%
shareholding in FOP after the Polish government closed all shopping
centres as part of its response to COVID-19 and the resultant
reduction in the value of its two shopping centres.
Commercial Property Markets Outlook
Poland:
GDP in Poland is likely to be one of the least affected in the
EU by the pandemic and one of just four in the bloc that is
expected to return to 2019 levels of economic productivity by the
end of 2021, according to the EU Commission and the World Bank.
Prior to the crisis the ratio between Polish government debt and
GDP was low at around 49%, making their COVID-19 stimulus package
(which is worth some 10% of GDP) affordable. Interest rates,
meanwhile, sit at 0.5% in Poland and can be cut if needed. Poland
was one of the first European countries to exit lockdown.
Romania:
Similar to Poland, Romania was quick to respond to the COVID-19
pandemic. It entered lockdown relatively early, and was quick to
implement measures to combat the ill effects of it, including a
fiscal stimulus package. Romania's economy is similarly expected to
recover faster than most EU countries.
United Kingdom:
According to Bank of England forecasts the economy will shrink
by around 14% this year. The true extent of this has not yet been
broadly felt due to the various government measures to combat the
effects of lockdown. When the furlough scheme ends in October
unemployment is likely to rise further and occupier demand for
commercial property is likely to reduce. With government debt set
to balloon to levels not seen since World War II, not just in the
UK but globally, interest rates are likely to remain low for a long
time. This is likely to buoy asset prices, even in the face of
deteriorating economic fundamentals.
Current Trading and Prospects
It is a difficult time to be reporting our results against the
backdrop of a pandemic and the World in the throes of an economic
crisis. Notwithstanding this, I am pleased to report that the Group
is in as strong a position as it has ever been, with cash resources
amounting to some GBP23.6 million.
We have had no need to draw on any of the support measures
offered by the government in the wake of COVID-19 and are well
positioned to take advantage of investment opportunities that will
undoubtedly emerge. We shall aim to do so in conjunction with our
clients so as to further our aim to grow our fund management
business.
I am hopeful that we will emerge from the crisis in an even
stronger position to that in which we entered it.
Ben Habib
Chief Executive
25 June 2020
FINANCE DIRECTOR'S REVIEW
The financial results for the year ended 31 March 2020 bear
testimony not only to the Group's business model through the
current on-going upheavals but also to the Group's longstanding
policy of holding its properties, whether directly held Group
Properties or Associates and Investments, at the lower of cost and
fair value. This results in smoother earnings because there is no
effect on either the Income Statement or reported Net Assets as
stated in the Balance Sheet, in the event of uplifts in value or
reversals of such uplifts, providing the revised value is above
original cost.
The one exception to the above policy is the Group's 40%
interest in Fprop Opportunities plc (FOP) which had to be stated at
fair (market) value in October 2018 when it achieved associate
status, in accordance with IFRS. This fund holds two shopping
centres in Poland, the valuations of which were adversely affected
by the Polish government's decision to close shopping centres to
combat the COVID-19 pandemic. This resulted in a reduction in fair
value of GBP659,000 charged to the income statement.
The income returns were also affected by the closures. Despite
this the Group achieved a creditable profit before tax of GBP5.52
million against GBP8.31 million in 2019 (proforma: GBP7.25
million).
The sale of CH8 resulted in the value of the directly held Group
Properties reducing from GBP94.6 million to GBP56.3 million.
The reduction in third party assets under management (AUM) from
GBP611 million to GBP567 million was the result of two further
property disposals and reductions in valuations largely in the
final quarter after the onset of the COVID-19 pandemic.
Total Group Net assets (excluding the non-controlling interest)
increased by 4.07% to GBP48.05 million (2019: GBP46.17
million).
The annualised growth in adjusted net assets together with
dividends paid to shareholders over the last ten years equates to
22.7% (2019: 22.8%) per annum.
GOING CONCERN
As part of the preparation of our Financial Statements, there
has been a particular focus on our going concern assessment.
Further information on our approach and the result of our
assessment is included in note 1 of the Financial Statements.
INCOME STATEMENT
Revenue and Gross Profit
A review of the operating and financial performance of the
results of the two trading divisions for the year are included in
the Chief Executive's Statement. The main adverse effect of the
COVID-19 pandemic was to reduce the contribution from Associates
due to their exposure to three shopping centres in Poland, which
were subject to enforced closure with effect from 14 March
2020.
Operating Expenses
Operating expenses decreased by 7.62% to GBP8.61 million (2019:
GBP9.32 million) mainly due to lower staff and executive incentives
across the Group.
Investment Property Depreciation
The Directors have reviewed the residual value of the Group's
directly held property located in Gdynia and have continued to
apply depreciation charged within operating expenses of GBP1.73
million (2019: GBP1.74 million).
Share of Results in Associates
The contribution for the year of GBP1.22 million (2019: GBP1.60
million) comprised the Group's share of post-tax profits from seven
investments. This includes a reduction in the fair value of the
Group's interest in FOP of GBP659,000 (2019: GBP764,000). All
associates performed well but the apparent reduction from last year
was mainly because of a one-off benefit in the prior year from a
favourable litigation outcome in Fprop Phoenix Ltd.
Investment Income (from other financial assets and
investments)
The increase from GBP273,000 to GBP324,000 from the Group's
investment in three of the four UK funds it manages was due to the
sale of a property in one fund which realised a gross profit of
GBP6.4 million.
Financing Costs
Overall, the Group's finance costs reduced to GBP1.34 million
from GBP2.18 million in 2019 (GBP1.39 million on a proforma basis,
adjusting for the deconsolidation of FOP in October 2018). All bank
loans and finance leases are denominated in Euro and all are used
to finance properties valued in Euro.
Current Tax
The current tax charge of GBP974,000 decreased from GBP1.28
million in 2019 (GBP1.04 million on a proforma basis, adjusting for
the deconsolidation of FOP in October 2018) but also included an
under provision of UK corporation tax of GBP161,000 from 2019.
The charge includes Polish and Romanian corporation tax where
the headline rates remain at 19% and 16% respectively. Unused
trading tax losses in the UK of GBP6.35 million are available to be
carried forward and will be utilised when / if possible.
Deferred Tax
A deferred tax credit of GBP360,000 (2019: charge of GBP659,000)
has arisen mainly due to the strength of the Euro against the
Polish Zloty which reduced the tax liability computed and payable
in Polish Zloty.
Diluted earnings per Share
Diluted earnings per share decreased by 11.5% from 4.85p to
4.29p per share, a smaller decrease than the 33.6% decrease in the
profit before tax for the year due to a lower total effective tax
charge of 11.1% (2019: 23.4%).
BALANCE SHEET
Investment Properties and Property held as Inventory (all held
at cost)
The book value of the Group's eight wholly owned properties
ended the year at GBP47.09 million (2019: GBP82.14 million)
compared to fair value of GBP56.30 million (2019: GBP94.61
million). The reason for the reduction was completion of the sale
of CH8 in April 2020.
IFRS 16 - Lease liabilities and right of use assets
The Group has adopted IFRS 16 for the first time in this set of
results. Under IFRS certain lease commitments have to be
capitalised and treated as finance leases. One such lease qualifies
for this treatment and its present value asset and liability amount
to GBP584,000 with a corresponding liability shown within lease
liabilities.
Capital Expenditure (investment and trade properties)
Capital expenditure of GBP1.26 million (2019: GBP1.54 million)
mostly comprised office fit-outs for new tenants in CH8.
Borrowings
All bank and finance lease borrowings were denominated in Euro
and decreased from EUR77.38 million (GBP66.68 million) to EUR72.93
million (GBP64.53 million) due to scheduled bank loan repayments of
EUR6.42 million. There was one additional bank loan drawdown by
Felix Developments SRL of EUR2.0 million in May 2019. The ratio of
debt to gross assets at market value (the gearing ratio) was 50.94%
(2019: 50.44%). After the year-end the bank loan secured against
CH8 was repaid, following completion of its sale on 24 April 2020,
thereby reducing Group debt to GBP41.97 million.
The finance lease for Gdynia was the subject of a notice of an
event of default in October 2019 for failure to lease more than 50%
of the leasable area 12 months prior to the end of the current sole
tenant's lease in October 2020. As a result, the lender exercised
control over the property's bank account from this date until such
time as the requisite letting is secured. Access to these funds
amounting to GBP875,000 at the year-end is restricted. Negotiations
with the lender, the tenant and prospective tenants are in
progress.
Bank deposits of EUR1.86 million (2019: EUR1.83 million) are
held in respect of four bank loans to redress potential Debt
Service Cover Ratio (DSCR) covenant shortfalls, of which EUR1.20
million (2019: EUR1.20 million) are held in prepayments. The
largest of these deposits was EUR1.1 million in relation to CH8 and
was returned in April on completion of its sale.
Non-controlling Interests (NCI)
There are two non-controlling interests (NCI) represented by a
10% interest in the share capital of Corp Sp. z o. o., (the
property management company to Blue Tower, Warsaw), and 23% of the
share capital of E and S Estates Ltd. The value of these holdings
increased to GBP157,000 (2019: GBP114,000) reflecting an improved
performance from E and S Estates Ltd.
Foreign Exchange Translation Reserve
As a result of the Polish Zloty weakening against Sterling to
PLN/GBP 5.1502 (2019: PLN/GBP 4.9957) there was a GBP0.53 million
reduction in this reserve during the year to a deficit of GBP1.26
million.
Treasury Shares
First Property Group plc purchased 1,000,000 Ordinary Shares in
itself during the year, at an average price of 41.7 pence per share
including transaction costs, or GBP417,000. This purchase resulted
in a reduction of equal quantum in the Group's net assets.
CASH and CASH FLOW
Cash levels decreased from GBP9.74 million to GBP7.34 million at
the year-end. This reduction arose largely as a result of:
- Scheduled bank loan repayments of GBP5.61 million;
- Capital expenditure on the Group's properties of GBP1.26 million;
- Payment of dividend GBP1.86 million;
- The share buy-back, referred to above, at a cost of GBP417,000.
Cash was GBP23.6 million as at 23 June 2020 boosted by the
completion of the sale of CH8 on 24 April 2020.
CONSOLIDATED INCOME STATEMENT
for the year ended 31 March 2020
Notes Year ended Year ended Year ended
31 March
2019 PROFORMA*
Total
results
31 March 31 March
2020 (unaudited) 2019
Total results (audited)
Total results
GBP'000 GBP'000 GBP'000
-------------------------------- ------ ----------------------- ---------------- ---------------
Revenue 3 16,287 16,636 20,437
Cost of sales (3,969) (3,508) (4,491)
-------------------------------- ------ ----------------------- ---------------- ---------------
Gross profit 12,318 13,128 15,946
Profit on the sale of
FOP shares - 64 64
Profit on sale of an
investment property 6 1,527 - -
Gain on loss of control
of subsidiary - 4,827 4,827
Impairment of goodwill
on acquisition of subsidiary - (59) (27)
Loss on disposal of subsidiary - (5) (5)
Write down/ Impairment
loss to investment property 11 - (2,984) (2,984)
Operating expenses (8,612) (9,014) (9,320)
-------------------------------- ------ ----------------------- ---------------- ---------------
Operating profit 5,233 5,957 8,501
-------------------------------- ------ ----------------------- ---------------- ---------------
Share of results in associates 12 1,879 3,084 2,364
Fair value adjustment
to associate 12 (659) (764) (764)
Investment income 324 273 273
Interest income 5 80 84 114
Interest expense 5 (1,338) (1,388) (2,180)
-------------------------------- ------ ----------------------- ---------------- ---------------
Profit before tax 5,519 7,246 8,308
Tax charge 7 (614) (1,708) (1,943)
-------------------------------- ------ ----------------------- ---------------- ---------------
Profit for the year 4,905 5,538 6,365
-------------------------------- ------ ----------------------- ---------------- ---------------
Attributable to:
Owners of the parent 4,859 5,514 5,514
Non-controlling interests 46 24 851
-------------------------------- ------ ----------------------- ---------------- ---------------
4,905 5,538 6,365
-------------------------------- ------ ----------------------- ---------------- ---------------
Earnings per share:
Basic 9 4.38p 4.95p
Diluted 9 4.29p 4.85p
-------------------------------- ------ ----------------------- ---------------- ---------------
All operations are continuing.
*Recalculated on a Proforma basis in order to enable a like for
like comparison with the current year, by treating the
deconsolidated entity Fprop Opportunities plc (FOP) as an associate
rather than a subsidiary. Proforma numbers are adjusted to exclude
FOP's profit up to the date of deconsolidation on 12 October 2019,
reinstating FOP asset management fees and including FPG's share of
FOP's contribution as an associate. See note 4 for further
analysis.
CONSOLIDATED SEPARATE STATEMENT
OF OTHER COMPREHENSIVE INCOME
for the year ended 31 March 2020
Year ended Year ended Year ended
31 March
2019
31 March 31 March
2020 2019
(unaudited) PROFORMA (audited)
Total results Total results
GBP'000 GBP'000 GBP'000
--------------------------------------- ---- --------------- ----------- ---------------
Profit for the year 4,905 5,538 6,365
--------------------------------------------- --------------- ----------- ---------------
Other comprehensive income
Exchange differences on retranslation
of foreign subsidiaries (502) (1,408) (1,784)
Foreign exchange profit recycled
to the income statement on disposal - (721) (721)
Net gain/(loss) on financial
assets at fair value through
other comprehensive income (195) 29 29
Taxation - - -
--------------------------------------- ---- --------------- ----------- ---------------
Total comprehensive income for
the year 4,208 3,438 3,889
Total comprehensive income for
the year attributable to:
Owners of the parent 4,135 3,414 3,414
Non-controlling interests 73 24 475
--------------------------------------------- --------------- ----------- ---------------
4,208 3,438 3,889
-------------------------------------------- --------------- ----------- ---------------
All operations are continuing.
CONSOLIDATED BALANCE SHEET
As at 31 March 2020
Notes As at As at
31 March 31 March 2019
2020
(unaudited) (audited)
GBP'000 GBP'000
Non-current assets
Goodwill 10 153 153
Investment properties 11 32,537 67,348
Property, plant and equipment 64 58
Investment in associates 12a) 17,698 17,054
Other financial assets 12b) 3,174 3,539
Other receivables 14 922 1,312
Right of use assets 8 584 -
Deferred tax assets 16 2,659 2,779
---------------------------------- ------ ------------- ---------------
Total non-current assets 57,791 92,243
---------------------------------- ------ ------------- ---------------
Current assets
Inventories - land and buildings 13 14,558 14,817
Current tax assets 122 28
Trade and other receivables 14 44,845 5,918
Cash and cash equivalents 7,337 9,738
---------------------------------- ------ ------------- ---------------
Total current assets 66,862 30,501
---------------------------------- ------ ------------- ---------------
Current liabilities
Trade and other payables 15 (9,158) (7,078)
Financial liabilities 17 (49,073) (6,329)
Current tax liabilities (71) (80)
---------------------------------- ------ ------------- ---------------
Total current liabilities (58,302) (13,487)
---------------------------------- ------ ------------- ---------------
Net current assets 8,560 17,014
---------------------------------- ------ ------------- ---------------
Total assets less current
liabilities 66,351 109,257
---------------------------------- ------ ------------- ---------------
Non-current liabilities:
Financial liabilities 17 (15,461) (60,348)
Lease liabilities 8 (584) -
Deferred tax liabilities 16 (2,102) (2,623)
Net assets 48,204 46,286
---------------------------------- ------ ------------- ---------------
Equity
Called up share capital 1,166 1,166
Share premium 5,791 5,791
Share-based payment reserve 179 179
Foreign exchange translation
reserve (1,260) (731)
Purchase of own shares reserve (2,653) (2,248)
Investment revaluation reserve (236) (41)
Retained earnings 45,060 42,056
---------------------------------- ------ ------------- ---------------
Equity attributable to the
owners of the parent 48,047 46,172
Non-controlling interests 157 114
---------------------------------- ------ ------------- ---------------
Total equity 48,204 46,286
---------------------------------- ------ ------------- ---------------
Net assets per share 9 43.53p 41.46p
---------------------------------- ------ ------------- ---------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2020
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
2019 1,166 5,791 179 (731) (2,248) (41) 42,056 114 46,286
Profit
for the
year - - - - - - 4,905 - 4,905
Net gain/(loss)
on financial
assets
at fair
value through
other
comprehensive
income - - - - - (195) - - (195)
Exchange
differences
on
retranslation
of foreign
subsidiaries - - - (529) - - - 27 (502)
Sale of
treasury
shares - - - - 12 - - - 12
Purchase
of treasury
shares - - - - (417) - - - (417)
Exercise - - - - - - - - -
of Share
Options
Non-controlling
interests - - - - - - (46) 46 -
Dividends
paid - - - - - - (1,855) (30) (1,885)
----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- --------
At 31 March
2020 1,166 5,791 179 (1,260) (2,653) (236) 45,060 157 48,204
----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- --------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2019
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
2018 1,166 5,789 203 1,398 (95) (70) 38,344 6,187 52,922
Profit
for the
year - - - - - - 6,365 - 6,365
Net gain/(loss)
on financial
assets
at fair
value through
other
comprehensive
income - - - - - 29 - - 29
Change
in proportion
held by
NCI (FOP) - - - - - - - 978 978
Change
in proportion
held by
NCI (EAS) - - - - - - - 95 95
Deconsolidation
of FOP - - - - - - - (7,598) (7,598)
Exchange
differences
on
retranslation
of foreign
subsidiaries - - - (1,408) - - - (376) (1,784)
Foreign
exchange
profit
recycled
to the
income
statement - - - (721) - - - - (721)
Sale of
treasury
shares - 2 - - 10 - - - 12
Purchase
of treasury
shares - - - - (2,201) - - - (2,201)
Exercise
of share
options - - (24) - 38 - - - 14
Non-controlling
interests - - - - - - (851) 851 -
Dividends
paid - - - - - - (1,802) (23) (1,825)
----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- --------
At 31 March
2019 1,166 5,791 179 (731) (2,248) (41) 42,056 114 46,286
----------------- -------- -------- ------------ ------------ --------- ------------ --------- ---------------- --------
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March 2020
2020 2019
Group Group
GBP'000 GBP'000
----------------------------------------- --------- ---------
Cash flows from operating activities
----------------------------------------- --------- ---------
Operating profit 5,233 8,501
Adjustments for:
Depreciation/write down of investment
property and property, plant
& equipment 2,178 5,167
Profit on the sale of investment (1,527) -
property
Profit on the sale of FOP shares - (64)
Gain on loss of control of subsidiary - (4,827)
Impairment loss on an investment
property - (32)
Impairment of goodwill on acquisition
of subsidiary - 27
Loss on disposal of subsidiary - 5
(Increase)/decrease in inventories (258) 96
Decrease/(increase) in trade
and other receivables 1,040 (1,285)
(Decrease)/increase in trade
and other payables (483) (187)
Other non-cash adjustments 121 599
Cash generated from operations 6,304 8,000
Taxes paid (1,013) (1,268)
------------------------------------------ --------- ---------
Net cash flow from operating
activities 5,291 6,732
------------------------------------------ --------- ---------
Cash flow from/(used in) investing
activities
----------------------------------------- --------- ---------
Capital expenditure on investment
properties (1,258) (1,531)
Proceeds from partial disposal
of other financial assets held
at fair value through other
comprehensive income 576 549
Purchase of property, plant
& equipment (43) (36)
Proceeds from the sale of FOP
shares - 2,630
Cash paid on acquisitions of
new subsidiaries - (527)
Cash and cash equivalents received
on acquisitions of new subsidiaries - 421
Cash disposed following deconsolidation
of subsidiaries - (2,046)
Investment in shares of new
associates - (527)
Payment of Rights Issue in 5PT - (138)
Investment in funds - (468)
Proceeds from funds 218 569
Interest received 80 114
Dividends from associates - 590
Distributions received 276 273
Net cash flow used in investing
activities (151) (127)
------------------------------------------ --------- ---------
Cash flow from/(used in) financing
activities
Net repayment of shareholder
loan in subsidiary - (121)
Proceeds from bank loan 1,769 -
Repayment of bank loans (3,054) (3,179)
Repayment from the sale of FOP
shareholder loan - 326
Repayment of finance lease (2,562) (3,065)
Sale of shares held in treasury 12 12
Purchase of new treasury shares (417) (2,201)
Exercise of share options - 47
Interest paid (1,338) (2,180)
Dividends paid (1,855) (1,802)
Dividends paid to non-controlling
interests (30) (23)
------------------------------------------ --------- ---------
Net cash flow used in financing
activities (7,475) (12,186)
------------------------------------------ --------- ---------
Net increase/(decrease) in cash
and cash equivalents (2,335) (5,581)
------------------------------------------ --------- ---------
Cash and cash equivalents at
the beginning of the year 9,738 15,315
------------------------------------------ --------- ---------
Currency translation gains on
cash and cash equivalents (66) 4
------------------------------------------ --------- ---------
Cash and cash equivalents at
the year end 7,337 9,738
------------------------------------------ --------- ---------
1. Basis of Preparation
These preliminary financial statements have not been audited and
are derived from the statutory accounts within the meaning of
section 434 of the Companies Act 2006. They have been prepared in
accordance with the Group's accounting policies that will be
applied in the Group's annual financial statements for the year
ended 31 March 2020. The policies have been consistently applied to
all years presented unless otherwise stated below. These accounting
policies are drawn up in accordance with International Accounting
Standards (IAS) and International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board
and as adopted by the European Union (EU). Whilst the financial
information included in this preliminary statement has been
prepared in accordance with IFRS, this announcement does not itself
contain sufficient information to fully comply with IFRS. The
comparative figures for the financial year ended 31 March 2019 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
In the shadow of the COVID-19 pandemic and the increased
uncertainty that it brings, 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.
Underlying their conclusion was the sale of the Group's most
valuable property, CH8, for a consideration of EUR44.0 million. The
sale completed on 24 April 2020 and increased the Group's cash
balances by EUR19.6 million after repaying the bank loan secured
against the property. The Board therefore believes it is well
placed to navigate a prolonged period of uncertainty if
necessary.
The health and safety of all its employees and key service
providers continues to remain a priority and the Group continues to
monitor recommendations issued by the relevant authorities, and is
complying with these where appropriate across the properties that
it either owns or manages. The Group has put into action its
Disaster Recovery (DR) plan which include travel restrictions and
remote working policies. These have been in effect since 23 March
2020 and are operating well.
Analysis and scenario testing, which includes the impact from
the COVID-19 pandemic, was carried out on the Group's main
divisional income streams, being asset management fees from the
asset management division, rental income from its eight 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 (58%), three of which are limited partnerships whose limited
partners are mostly UK pension funds.
With one exception, fees are invoiced monthly and are calculated
based on a percentage of the latest valuation, which for the UK
funds are performed quarterly. This income was tested for
percentage falls in property values and the fund's ability to
pay.
Income collected by the UK funds has to fall by over 85% before
the fund's turn cash negative. In the one fund from which fees are
not levied by reference to the property's valuation (Fprop Offices
LP) no income was forecast for the purposes of this test, although
a 9% decrease in property values in this fund would trigger a
clawback of the fee recognised in the year to 31 March 2020. A 15%
decrease would trigger the maximum clawback of fees recognised to
date of GBP1.38m.
In the two UK funds with borrowing there is headroom of 20% on
current property values within the LTV covenant agreed with the
lenders. The Directors believe all funds have access to adequate
resources to remedy the remote possibility of any loan covenant
breaches.
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). 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 collectability of all asset management fees is in little
doubt. Their longevity 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 5
years, 0 months.
b) Rental income from Group Properties
All eight Group Properties are located in Poland or Romania.
These properties consist of 3 office blocks, a logistics warehouse
and four mini-supermarkets. All were independently valued on 31
March 2020 after the COVID-19 outbreak at GBP56.30 million (2019:
GBP94.61 million).
Whilst uncertainty in these valuations exist and short-term
fluctuations can be expected there are reasons to be optimistic.
Exposure to non-food retailers is very limited and with Poland
exiting lockdown on 4 May 2020 the economic recovery there is
forecast to be amongst the leaders in Europe.
The rental income has been reviewed and tested 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 period. Any renegotiation of rental
payment terms that have been agreed are reflected in the
analysis.
The weighted average applicable LTV ratio for these Group
Properties where applicable is 49.36% against a combined weighted
average covenant of 67.38%. Of the Group Properties which are
subject to an LTV bank covenant, current values are 26.74% higher.
In the case of Gdynia whose borrowing is not subject to an LTV
covenant the test assumes that the current finance lease will be
renegotiated on competitive terms.
The Directors have considered the consequences of failing to
refinance the Gdynia property in this going concern assessment when
the final finance lease repayment of EUR25.2 million falls due in
February 2021. They are confident that, since the debt is
non-recourse to the Group and that its equity in the property is
valued in these financial statements at only EUR0.55 million, a
failure to refinance would have no bearing on the going concern
assessment.
c) Income from Associates and Investments
Analysis was also carried out on the returns from the Group's
investment in Associates. All funds invested in Poland and Romania
have temporarily suspended distributions to shareholders and
consequently no income for the Group was assumed from this source
for the purposes of this test. 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. Average rent
collection within the funds invested was 93% for the March quarter.
For the purposes of this test a 50% fall was factored in for the
full year.
Going Concern statement
Based on the results of the analysis carried out as outlined
above the Board believes that the Group has the ability to continue
its business for at least 12 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.
New Standards and Interpretations
New standards impacting the Group which have been adopted in the
preliminary financial statements for the year ended 31 March 2020,
and which have given rise to changes in the Group's accounting
policies are:
IFRS 16 Leases
The company has changed its accounting policy for leases.
Until 31 March 2019 the group held a small number of leases as
lessee which were classified as operating leases, under which the
significant portion of the risks and rewards of ownership were not
transferred to the company. Payments made under operating leases
were charged to profit or loss on a straight-line basis over the
period of the lease.
From 1 April 2019, leases are recognised as a right-of-use asset
and a corresponding liability at the date at which the leased asset
is available for use by the group.
Assets and liabilities arising from a lease are initially
measured on a present value basis. Lease liabilities include the
net present value of the following lease payments:
-- Fixed payments, less any lease incentives received
-- Variable lease payments that are based on an index or a rate
-- Amounts expected to be paid by the company under residual value guarantees
-- Payments or penalties for terminating the lease, if the lease
term reflects the company exercising that option.
Lease payments to be made under reasonably certain extension
options are also included in the measurement of the liability.
The lease payments are discounted using the lessee's incremental
borrowing rate, being the rate that the company would have to pay
to borrow the funds necessary to obtain an asset of similar value
to the right-of-use asset in a similar economic environment with
similar terms, security and conditions.
To determine the incremental borrowing rate the company where
possible, uses recent third-party financing received by the
individual lessee as a starting point, adjusted to reflect changes
in financing conditions since third party financing was
received.
Lease payments are allocated between principal and finance cost.
The finance cost is charged to profit or loss over the lease period
so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the
following:
-- the amount of the initial measurement of lease liability
-- any lease payments made at or before the commencement date
less any lease incentives received
-- any initial direct costs; and
-- restoration costs.
Right-of-use assets are generally depreciated over the shorter
of the asset's useful life and the lease term on a straight-line
basis. If the group is reasonably certain to exercise a purchase
option, the right-of-use asset is depreciated over the underlying
asset's useful life.
Payments associated with short-term leases of equipment and
vehicles and all leases of low-value assets are recognised on a
straight-line basis as an expense in profit or loss. Short-term
leases are leases with a lease term of 12 months or less.
These preliminary financial statements were approved by the
Board of Directors on 18 June 2020.
2. Revenue
Revenue from continuing operations consists of revenue arising
in the United Kingdom 12% (2019: 11%), Poland 81% (2019: 82%) and
Romania 7% (2019: 7%). All revenue relates solely to the Group's
principal activities.
3. Segment Reporting 2020
Fund Group Properties
Management Division
Division
---------------------------------------------
Property Group Associates Unallocated Total
fund properties and central
management and other investments overheads
co-investments
----------------------- --------------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ---------------------- -------------------------- ----------------------- ----------------------- --------------------
Rental income - 10,403 - - 10,403
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Service charge
income - 1,986 - - 1,986
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Asset
management
fees 3,483 - - - 3,483
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Performance
related
fee income 415 - - - 415
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Total revenue 3,898 12,389 - - 16,287
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Depreciation
and
amortisation (35) (2,443) - - (2,478)
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Operating
profit 1,335 5,962 - (2,064) 5,233
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Share of
results
in associates - - 1,879 - 1,879
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Fair value
adjustment
on associates - - (659) - (659)
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Investment
income - - 324 - 324
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Interest income - 74 - 6 80
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Interest
payable - (1,338) - - (1,338)
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Profit/(loss)
before tax 1,335 4,698 1,544 (2,058) 5,519
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Analysed as:
Underlying
profit/(loss)
before tax
before
adjusting for
the following
items: 1,344 6,549 2,203 (1,023) 9,073
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Profit on the
sale of
investment
property - 1,527 - - 1,527
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Fair value
adjustment
on associates - - (659) - (659)
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Depreciation (35) (2,443) - - (2,478)
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Performance
related
fee income 415 - - - 415
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Staff
incentives (383) (325) - (1,101) (1,809)
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Realised
foreign
currency
(losses)/gains (6) (610) - 66 (550)
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Total 1,335 4,698 1,544 (2,058) 5,519
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Assets - Group 1,078 98,591 3,174 4,032 106,875
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Share of net
assets of
associates - - 18,006 (308) 17,698
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Liabilities (338) (74,793) - (1,238) (76,369)
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Net assets 740 23,798 21,180 2,486 48,204
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Additions to non-current assets
Property, plant
and equipment - 43 - - 43
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Investment
properties - 1,258 - - 1,258
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Trading stock - 346 - - 346
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Investment in - - - - -
associates
---------------------- -------------------------- ----------------------- ----------------------- --------------------
Segment Reporting 2019
Fund Group Properties
Management Division
Division
---------------------------------------------
Property Group Group fund Unallocated Total
fund properties properties central
management and other FOP overheads
co-investments
----------------------- --------------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ---------------------- -------------------------- ---------------------- ----------------------- --------------------
Rental income - 9,658 3,272 - 12,930
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Service charge
income - 1,748 798 - 2,546
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Asset
management
fees 3,420 - - - 3,420
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Performance
related
fee income 1,541 - - - 1,541
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Total revenue 4,961 11,406 4,070 - 20,437
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Depreciation
and
amortisation (37) (1,991) (200) - (2,228)
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Operating
profit 3,031 2,048 6,136 (2,714) 8,501
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Share of
results
in associates - 1,687 (87) - 1,600
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Investment
income - 273 - - 273
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Interest income - 78 31 5 114
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Interest
payable - (1,387) (793) - (2,180)
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Profit/(loss)
before tax 3,031 2,699 5,287 (2,709) 8,308
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Analysed as:
Underlying
profit/(loss)
before tax
before
adjusting for
the following
items: 1,981 7,467 2,058 (1,012) 10,494
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Impairment
losses - (3,043) 32 - (3,011)
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Group's share
of revaluation
losses on
associates - - (764) - (764)
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Profit on the
sale of 'FOP'
shares - 64 - - 64
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Gain on loss
of control of
subsidiary - 606 4,221 - 4,827
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Depreciation
on investment
property - (1,740) - - (1,740)
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Performance
related
fee income 1,541 - - - 1,541
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Staff
incentives (476) (190) (212) (1,669) (2,547)
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Realised
foreign
currency
(losses)/gains (15) (465) (48) (28) (556)
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Total 3,031 2,699 5,287 (2,709) 8,308
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Assets - Group 1,630 98,118 - 5,942 105,690
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Share of net
assets of
associates - 17,362 - (308) 17,054
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Liabilities (398) (74,254) - (1,806) (76,458)
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Net assets 1,232 41,226 - 3,828 46,286
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Additions to non-current assets
Property, plant
and equipment - 35 - - 35
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Investment
properties - 1,116 415 - 1,531
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Trading stock - 11 - - 11
---------------------- -------------------------- ---------------------- ----------------------- --------------------
Investment in
associates - 1,663 11,509 - 13,172
---------------------- -------------------------- ---------------------- ----------------------- --------------------
4. Reconciliation of actual 2019 to Proforma Income Statement
and Proforma Statement of Comprehensive Income
Original Less: Add: Adjustment: PROFORMA
Year FOP (per Reinstate FOP contribution Year to
to 31 published FOP Asset as an 31 March
March segment Management Associate 2019
2019 at 30 Sept fee elimination
2018)
-------------------------- --------- ------------ ----------------- ----------------- ----------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 20,437 4,070 269 - 16,636
Cost of sales (4,491) (983) - - (3,508)
-------------------------- --------- ------------ ----------------- ----------------- ----------
Gross profit 15,946 3,087 269 - 13,128
Profit on sale
of FOP shares 64 - - - 64
Impairment of
goodwill on acquisition
of subsidiary (27) 32 - - (59)
Gain on loss
of control of
subsidiary 4,827 - - 4,827
Impairment loss
to investment
property (2,984) - - - (2,984)
Loss on disposal
of subsidiary (5) - - - (5)
Operating expenses (9,320) (575) (269) - (9,014)
-------------------------- --------- ------------ ----------------- ----------------- ----------
Operating profit 8,501 2,544 - - 5,957
-------------------------- --------- ------------ ----------------- ----------------- ----------
Share of results
in associates 1,600 - - 720 2,320
Investment income 273 - - - 273
Interest income 114 30 - - 84
Interest expense (2,180) (792) - - (1,388)
-------------------------- --------- ------------ ----------------- ----------------- ----------
Profit before
tax 8,308 1,782 - 720 7,246
Tax charge
Current tax (1,284) (240) - - (1,044)
Deferred tax (659) 5 - - (664)
-------------------------- --------- ------------ ----------------- ----------------- ----------
(1,943) (235) - - (1,708)
-------------------------- --------- ------------ ----------------- ----------------- ----------
Profit after
tax for the year 6,365 1,547 - 720 5,538
Attributable
to:
Owners of the
parent 5,514 720 - 720 5,514
Non-controlling
interests 851 827 - - 24
-------------------------- --------- ------------ ----------------- ----------------- ----------
6,365 1,547 - 720 5,538
-------------------------- --------- ------------ ----------------- ----------------- ----------
Other comprehensive
income
------------------------------------- ------------ ----------------- ----------------- ----------
Exchange differences
on retranslation
of foreign subsidiaries (1,784) (376) - - (1,408)
Foreign exchanges
profit recycled
to the income
statement on
disposal (721) - - - (721)
Net gain/(loss)
on financial
assets at fair
value through
OCI 29 - - - 29
Taxation - - - - -
-------------------------- --------- ------------ ----------------- ----------------- ----------
Total comprehensive
income for the
year 3,889 1,171 - 720 3,438
-------------------------- --------- ------------ ----------------- ----------------- ----------
Total comprehensive income for the year attributable to:
--------------------------------------------------------------------
Owners of the
parent 3,414 720 - 720 3,414
Non-controlling
interests 475 451 - - 24
------------------------ --------- --------- --- ----- --------
3,889 1,171 - 720 3,438
------------------------ --------- --------- --- ----- --------
Reconciliation for adjustment to Share of results in
associates:
PROFORMA
Year to 31
March 2019
GBP'000 GBP'000
------------------------------------ -------- ------------
Share of results in
associates 1,600
Adjustments for:
FOP profit before tax for 6 months
to 30 September 2018 1,782
Tax expense attributable
to FOP (235)
--------
Profit after tax 1,547
Less: FOP non-controlling interest
30 September 2018 (827)
--------
720
-------------------------------------- -------- ------------
Share of result of associates on
a proforma basis 2,320
-------------------------------------- -------- ------------
5. Interest Income
2020 2019
Group Group
GBP'000 GBP'000
Interest income - bank deposits 26 18
Interest income - other 54 96
-------------------------------------------- -------------------- --------------------
Total interest income 80 114
-------------------------------------------- -------------------- --------------------
2020 2019
Group Group
GBP'000 GBP'000
---------------------------------------------- -------------------- --------------------
Interest expense - property loans (1,009) (1,571)
Interest expense - bank and other (53) (49)
Finance charges on finance leases (276) (560)
---------------------------------------------- -------------------- --------------------
Total interest expense (1,338) (2,180)
---------------------------------------------- -------------------- --------------------
6. Profit on the Sale of an Investment Property
During the year, the Group's largest property, Chalubinskiego 8
(CH8) in Warsaw, Poland was sold for EUR44 million. The sale
completed on 24 April 2020 with its financial liabilities being
discharged.
EUR '000
Sale Proceeds 44,000
------------------------------------------------- --------------------
Less: Cost to sell
Cost of property (39,614)
Cost of sale guarantees (2,612)
Other transactional costs (314)
Release of property provision 266
------------------------------------------------- --------------------
Profit on the sale of an investment
property 1,726
------------------------------------------------- --------------------
The profit on sale of the property recognised in the
Consolidated Income Statement is GBP1,527,083 which represents the
profit above of EUR1,725,757 converted at a rate of 1.1301
EUR/GBP.
As a condition of the sale the Group has guaranteed the rental
and service charge income and fitout costs on the residual vacant
space, up to some EUR1.2 million per annum for five years and
EUR1.5 million respectively. A provision for the potential cost of
this guarantee has been included within other payables and
accruals.
7. Tax Expense
2020 2019
GBP'000 GBP'000
------------------------------------------------ -------------------- --------------------
Analysis of tax charge for the year
Current tax (974) (1,284)
Deferred tax 360 (659)
------------------------------------------------ -------------------- --------------------
Total tax charge for the year (614) (1,943)
------------------------------------------------ -------------------- --------------------
The tax charge includes actual 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.
8. Lease Liabilities and Right of Use Assets
The Group has reviewed the lease terms of its leases in force at
the date of transition and has identified two leases.
The first lease which is the lease of the UK office at St
James's Street, London terminates 1 July 2020 therefore within 12
months of the transition date. The Group has taken the exemption
under IFRS 16 for short term leases and continued to recognise the
cost of this lease as an expense in the income statement.
The second lease within the Group is by First Property Poland
sp. z. o. o. (FPP), a subsidiary entity leasing office space from
5(th) Property Trading Poland sp. z. o. o. (a related party to the
Group). This lease terminates on 31 March 2024. A discount rate of
2.75% has been applied representing its incremental borrowing
rate.
As at 31 March 2020 the Group has recognised a lease liability
under IFRS 16 of GBP584,000 with an equivalent right of use asset.
The net charge to the income statement was GBP8,462.
9. Earnings/NAV per Share
2020 2019
Basic earnings per share 4.38p 4.95p
Diluted earnings per share 4.29p 4.85p
GBP'000 GBP'000
Basic earnings 4,859 5,514
Diluted earnings assuming full dilution 4,867 5,522
The following numbers of shares have been used to calculate both
the basic and diluted earnings per share:
2020 2019
Number Number
-------------------------------------- ------------ ------------
Weighted average number of Ordinary
shares in issue
(used for basic earnings per share
calculation) 110,953,578 111,353,468
-------------------------------------- ------------ ------------
Number of share options 2,610,000 2,610,000
-------------------------------------- ------------ ------------
Total number of Ordinary shares used
in the diluted earnings per share
calculation 113,563,578 113,963,468
-------------------------------------- ------------ ------------
The following earnings have been used to calculate both the
basic and diluted earnings per share:
2020 2019
GBP'000 GBP'000
------------------------------------ --------- ---------
Basic earnings per share
Basic earnings 4,859 5,514
------------------------------------ --------- ---------
Diluted earnings per share
Basic earnings 4,859 5,514
Notional interest on share options
assumed to be exercised 8 8
------------------------------------ --------- ---------
Diluted earnings 4,867 5,522
------------------------------------ --------- ---------
2020 2019
Net assets per share 43.53p 41.46p
Adjusted net assets per share 55.00p 57.48p
------------------------------- ------- -------
The following numbers have been used to calculate both
the net assets and adjusted net assets per share:
For net assets per share GBP'000 GBP'000
------------------------------------------- -------- --------
Net assets excluding non-controlling
interests 48,047 46,172
GBP'000 GBP'000
For adjusted net assets per share
Net assets excluding non-controlling
interests 48,047 46,172
Investment properties at fair value
net of deferred tax 4,520 4,664
Inventories at fair value net of deferred
tax 2,939 5,416
Other items 6,641 9,256
------------------------------------------- -------- --------
Total 62,147 65,508
------------------------------------------- -------- --------
Number Number
------------------------------------ ------------ ------------
Number of shares in issue at year
end 110,382,332 111,354,001
Number Number
------------------------------------ ------------ ------------
Number of shares in issue at year
end 110,382,332 111,354,001
Number of share options assumed to
be exercised 2,610,000 2,610,000
------------------------------------ ------------ ------------
Total 112,992,332 113,964,001
------------------------------------ ------------ ------------
10. Goodwill
2020 2019
Group Group
GBP'000 GBP'000
------------------------ -------------------- --------------------
At 1 April 153 153
------------------------ -------------------- --------------------
At 31 March 153 153
------------------------ -------------------- --------------------
The Directors have carried out an annual impairment test and
concluded that no impairment was necessary because the estimated
value in use was higher than the value stated.
11. Investment Properties
2020 2019
Group Group
GBP'000 GBP'000
-------------------------------------------------------- -------------------- --------------------
Investment properties
At 1 April 67,348 132,180
Capital expenditure 1,258 1,531
Additions - 5,406
Disposal (32,190) (63,907)
Depreciation (2,055) (2,111)
Write down/impairment loss to an investment
property - (2,984)
Foreign exchange translation (1,824) (2,767)
-------------------------------------------------------- -------------------- --------------------
At 31 March 32,537 67,348
-------------------------------------------------------- -------------------- --------------------
Investment properties owned by the Group are stated at cost less
depreciation and accumulated impairment losses. The properties were
valued at the Group's financial year end at EUR43.08 million (2019:
EUR84.84 million), the Sterling equivalent at closing foreign
exchange rates being GBP38.12 million (2019: GBP73.18 million).
On acquisition of the Gdynia property the Directors took the
decision to depreciate the property over the lease term which
expires in 2020. In the Directors' opinion the property's estimated
residual value at the end of the period of ownership will be lower
than the carrying value. No other property has been depreciated as
the estimated residual value is expected to be higher than the
carrying value.
The property disposals in the year to 31 March 2020 represent
the sale of CH8 for EUR44.00 million. The disposal of GBP32.19
million represents the cost of the property up to the point of
sale. See Note 6 for detail of the sale of the property.
12. Investment in Associates and Other Financial Assets and Investments
The Group has the following investments:
2020 2019
Group Group
GBP'000 GBP'000
---------------------------------------------------- -------------------- --------------------
a) Associates
At 1 April 17,054 4,725
Additions - 13,172
Disposals - (1,304)
Shareholder loan repayments (576) (549)
Share of associates' profit after
tax 1,879 2,364
Share of associates' revaluation losses (659) (764)
Dividends received - (590)
---------------------------------------------------- -------------------- --------------------
At 31 March 17,698 17,054
---------------------------------------------------- -------------------- --------------------
The Group's investments in associated companies is held at cost
plus its share of post-acquisition profits assuming the adoption of
the cost model for accounting for investment properties under IAS40
and comprises the following:
2020 2019
Group Group
GBP'000 GBP'000
----------------------------------------------------- -------------------- --------------------
Investment in associates
5(th) Property Trading Ltd 1,436 1,288
Fprop Romanian Supermarkets Ltd 168 150
Fprop Galeria Corso Ltd 2,346 2,089
Fprop Krakow Ltd 1,451 1,308
Fprop Cluj Ltd 519 458
Fprop Phoenix Ltd 1,908 2,049
Fprop Opportunities plc 10,178 10,020
----------------------------------------------------- -------------------- --------------------
18,006 17,362
----------------------------------------------------- -------------------- --------------------
Less: Share of profit after tax withheld
on sale of property to 5(th) Property
Trading Ltd in 2007 (308) (308)
----------------------------------------------------- -------------------- --------------------
17,698 17,054
----------------------------------------------------- -------------------- --------------------
If the Group had adopted the alternative fair value model for
accounting for investment properties, the carrying value of the
investments in associates would have increased to GBP23.96 million
(2019: GBP25.97 million).
2020 2019
Group Group
GBP'000 GBP'000
------------------------------------------------------ -------------------- --------------------
b) Other financial assets and investments
At 1 April 3,539 4,517
Additions 48 468
Disposals - (900)
Repayments (218) (569)
Increase /(Decrease) in fair value
during the year (195) 23
------------------------------------------------------ -------------------- --------------------
At 31 March 3,174 3,539
------------------------------------------------------ -------------------- --------------------
The Group holds three unlisted investments in funds managed by
it. All are held at fair value. All of the assets have been
designated at fair value through OCI upon the adoption of IFRS 9.
In the Directors' view the fair value has been estimated to be not
materially different from their carrying value. Fair value has been
arrived at by applying the Group's percentage holding in the
investments to the fair value of their net assets.
13. Inventories - Land and Buildings
2020 2019
Group Group
GBP'000 GBP'000
------------------------------------------------ -------------------- --------------------
Group properties for resale at cost
At 1 April 14,817 15,586
Capital expenditure 346 11
Disposal/write off - (30)
Depreciation (88) (77)
Foreign exchange translation (517) (673)
------------------------------------------------ -------------------- --------------------
At 31 March 14,558 14,817
------------------------------------------------ -------------------- --------------------
The Group's total interest in Blue Tower (an office block in
Warsaw) is 48.2% of the building. The fair value of this interest
is GBP18.19 million (EUR20.55 million) down from GBP21.50 million
(EUR24.95 million) in 2019 but is stated at cost as above.
14. Trade and Other Receivables
2020 2019
Group Group
GBP'000 GBP'000
--------------------------------------------------------- -------------------- --------------------
Current assets
Trade receivables 1,423 1,408
Less provision for impairment of receivables (330) (297)
--------------------------------------------------------- -------------------- --------------------
Trade receivables net 1,093 1,111
Other receivables 42,343 2,836
Prepayments and accrued income 1,409 1,971
--------------------------------------------------------- -------------------- --------------------
At 31 March 44,845 5,918
--------------------------------------------------------- -------------------- --------------------
Other receivables, under current assets, includes GBP38.93
million relating to the sale proceeds following the sale of CH8,
which were received in full on 24 April 2020.
Non-current assets
------------------------------- --------------- -----------------
Other receivables 922 1,312
------------------------------- --------------- -----------------
Other receivables, under non-current assets, relates to the
deferred consideration from the sale of an investment property
located in Romania. This has been discounted to reflect its current
value.
15. Trade and Other Payables
2020 2019
Group Group
GBP'000 GBP'000
----------------------------------------------- -------------------- --------------------
Current liabilities
Trade payables 2,591 2,798
Other taxation and social security 1,030 855
Other payables and accruals 5,354 3,235
Deferred income 183 190
----------------------------------------------- -------------------- --------------------
At 31 March 9,158 7,078
----------------------------------------------- -------------------- --------------------
16. Deferred Tax
Deferred tax assets and liabilities are attributable to the
following items:
2020 2020 2020 2019 2019 2019
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 (1,026) 56 (1,082) (919) 120 (1,039)
Accrued income (7) - (7) (5) - (5)
Foreign bank
loan 1,281 1,295 (14) 1,108 1,108 -
Investment properties
and inventories (11) 983 (994) (146) 1,425 (1,571)
Other temporary
differences 320 325 (5) 118 126 (8)
----------------------- ------------ --------- ------------- ------------ --------- -------------
At 31 March 557 2,659 (2,102) 156 2,779 (2,623)
----------------------- ------------ --------- ------------- ------------ --------- -------------
17. Financial Liabilities
2020 2019
Group Group
GBP'000 GBP'000
------------------------- --------- ---------
Current liabilities
Bank loan 23,829 3,780
Finance leases 25,244 2,549
------------------------- --------- ---------
At 31 March 49,073 6,329
------------------------- --------- ---------
Non-current liabilities
Bank loans 15,461 35,783
Finance leases - 24,565
------------------------- --------- ---------
At 31 March 15,461 60,348
------------------------- --------- ---------
2020 2019
Group Group
GBP'000 GBP'000
------------------------------------- --------- ---------
Total obligations under bank loans
and finance leases
Repayable within one year 49,073 6,329
Repayable within one and five years 8,770 54,073
Repayable after five years 6,691 6,275
------------------------------------- --------- ---------
At 31 March 64,534 66,677
------------------------------------- --------- ---------
Six bank loans and one finance lease all denominated in Euros
totalling GBP64.53 million (2019: GBP66.68 million), included
within financial liabilities, are secured against investment
properties owned by the Group and one property owned by the Group
shown under inventories. These bank loans and finance lease are
otherwise non-recourse to the Group's assets.
There are no loan to value covenant breaches based on the
current market values.
The finance lease for the office building in Gdynia is
technically in default of one of its loan covenants for failure to
lease more than 50% of the leasable area one year prior to the
expiry of the current sole tenant's lease in October 2020.
Negotiations with the lender, the tenant and prospective tenants
are in progress.
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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR EANKLAFDEEFA
(END) Dow Jones Newswires
June 25, 2020 02:00 ET (06:00 GMT)
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