Slide 1: Preliminary Results for the financial year ended 31 March 2018
Preliminary Results for the financial year ended 31 March 2018 First Property Group plc 8 June 2018 FPAM funds rank No.1 versus MSCI’s Central & Eastern European (CEE) Benchmark for the twelve years from the commencement of its operations in Poland in 2005 to December 2017, and for the periods from
Slide 2: Contents
First Property Group plc Contents Company Description 3 Markets 28-31 Investment Approach 4-5 Investment Markets – Poland 29 Group Structure 6 Investment Markets – Romania 30 Investment Markets – United Kingdom 31 Preliminary Results 7 Financial Performance Summary 8 Outlook - Why invest in Fprop pl
Slide 3: Company Description
First Property Group plc Company Description First Property Group plc (AIM: FPO) is an award winning property fund manager and investor with operations in the United Kingdom and Central Europe. Around one third of the shares in the Company are owned by management and their families. It has grown its
Slide 4: Investment Approach
First Property Group plc Investment Approach Sustainable income is a priority: The yield at purchase of any property investment must ALWAYS exceed debt service costs; We assess investments with an emphasis on ROE as opposed to IRR (because IRR’s require an exit price assumption); Over the lo
Slide 5: Investment Approach (cont.)
First Property Group plc Investment Approach (cont.) Property is illiquid – but this illiquidity can be mitigated by rental income – liquidity through income; Flexibility in the light of market changes; An active approach to asset management (where possible): Largely exited the UK commercial
Slide 6: Group Structure
First Property Group plc Group Structure The Company operates via two divisions: Fund Management Group (FPAM) Properties AUM: £454m Market value: £171m FCA regulated and 10 commercial properties AIFMD approved; in Poland & Romania, including 5 held by 12 funds. consolidated undertaking, FOP (i
Slide 7: Preliminary Results - Highlights
Preliminary Results - Highlights Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 7
Slide 8: Financial Performance Summary
Preliminary Results Financial Performance Summary Unaudited year to Audited to Percentage change 31 March 2018 31 March2017 Income Statement: Statutory profit before tax £9.23m £9.14m +1.0% Diluted earnings per share 5.70p 6.61p -13.8% Total dividend per share 1.60p 1.55p +3.2% Average £/€ rate used
Slide 9: Financial Performance Summary (cont.)
Preliminary Results Financial Performance Summary (cont.) Unaudited year to Audited year to Percentage change 31 March 2018 31 March 2017 Group Direct Property Portfolio at year end: Book value £147.80m £143.52m +3.0% Market value £171.34m £164.48m +4.2% Gross debt (non-recourse to £117.62m £117.54m
Slide 10: Highlights
Preliminary Results Highlights Financial Highlights: Group’s profit before tax of £9.23 million (2017: £9.14 million); Total assets under management up 31% to £626 million (2017: £477 million); Third party assets under management up 45% to £454 million (2017: £313 million); Adjusted NAV per
Slide 11: Highlights - Operational
Preliminary Results Highlights Operational Highlights: Investment performance ranked No.1 versus MSCI’s Central & Eastern Europe (CEE) Benchmark over the twelve years to 31 December 2017. Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 11
Slide 12: NAV per share 2007-2018
Preliminary Results NAV per share 2007-2018 60 • Adjusted NAV: EPRA NAV NAV Cash 53.07p; 50 • The annualised 40 growth in adjusted Pence per share net assets together 30 with dividends paid to shareholders over 20 the last five years equates to 25.3% 10 per annum (2017: 24.7% per annum) 0 External v
Slide 13: Continued Growth in Dividend
Preliminary Results Continued Growth in Dividend 1.80 Proposed Final 1.60 dividend: 1.40 1.18p (2017: 1.15p) +2.6% 1.20 Pence per share 1.00 Ex div date: 23 Aug Record date: 24 Aug 0.80 Payment date: 28 Sep 0.60 0.40 Total dividend for year to Mar-2018: 0.20 1.60p (2017: 1.55p) 0.00 FY03 FY04 FY05 F
Slide 14: Segmental Analysis
Segmental Analysis Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 14
Slide 15: Profit before Tax by segment
Segmental Analysis Profit before Tax by segment 14 12 0.40 1.00 10 1.38 4.44 £ Million 8 2.63 FPAM (excl fees from FOP) 6 Group Properties (incl FOP) 11.53 11.18 8.85 4 2.84 6.57 6.32 2 2.07 - Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 15
Slide 16: Fund Management - summary
Segmental Analysis Fund Management - summary Fund £1,004,000 to PBT* • Third party AUM: £454m; (2017: £404,000) Management • Twelve funds invested across UK, 8.2% of PBT* (2017: 3.4%) Poland & Romania; • Annualised fee income of £2.60 million * = prior to deduction of (2017: £2.45 million). In-b
Slide 17: Fund Management Revenue and AUM
Segmental Analysis Fund Management Revenue and AUM AUM set to continue to rise; 10 700 Performance Fee FPAM Revenue AUM 9 600 Underlying 8 annualised fee 7 500 income (excl perf Revenue (£ Million) AUM (£ Million) 6 fees) = £2.60m 400 (2017: £2.45m). 5 300 4 3 200 2 100 1 - - Mar-13 Mar-14 Mar-1
Slide 18: Fund Management Breakdown of AUM By Fund
Segmental Analysis Fund Management Breakdown of AUM Regional Property 5th Property Trading By Fund Trading Ltd (RPT), Ltd (5PT), 1.2% 0.8% Fprop Opportunities plc (FOP), 11.9% Group Properties, 15.5% UK Pension Property Portfolio (UK PPP Fprop Offices LP, LP), 14.9% 18.3% Fprop UK Special SIPS Prope
Slide 19: Breakdown of AUM By Investor Category and Geography
Segmental Analysis Fund Management Breakdown of AUM By Investor Category By Geography 3% 2% 13% 25% Fprop 36% Pension Funds Poland Family Offices/HNW UK Endowments 62% Romania 59% Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 19
Slide 20: Group Properties - summary
Segmental Analysis Group Properties - summary Group £11.18m to PBT* • 10 commercial properties in Poland & Romania, Properties (2017: £11.53m) including 5 held by FOP : o Book value £147.8m gross / £30.2m net equity 91.8% of PBT* o Market value £171.3m gross / £53.7m net (2017: 96.6%) equity • N
Slide 21: Group Properties contributions to Profit before tax
Segmental Analysis Group Properties contributions to Profit before tax (prior to deduction of unallocated central overheads) 14 12 Contribution to PBT from non-controlling interests in funds managed by FPAM 10 8 £ Million Contribution to PBT from Group's share in FOP 6 4 Contribution to PBT from dir
Slide 22: Group Properties Cash flows from directly owned properties
Segmental Analysis Group Properties Cash flows from the properties owned directly by the Group & FOP Year to 31 March 2018 Year to 31 March 2017 €m. €m. Net operating income (NOI) 18.77 19.47 Interest expense on bank loans / finance leases (3.15) (3.42) NOI after interest expense 15.62 16.05 Current
Slide 23: Group Properties Loan terms and yield
Segmental Analysis Group Properties Loan terms and yield of the properties owned by Group & FOP Properties held in separate non-cross collateralised SPV’s which are non-recourse to the Group; Interest rates: Current weighted average borrowing cost = c2.34% (2017: 2.35%) per annum; A 1% incre
Slide 24: Group Properties Loan terms and yield (cont.)
Segmental Analysis Group Properties Loan terms and yield of the properties owned by Group & FOP The year on year reduction in net operating income, by €700,000 (or 3.6%), was caused by the sale of a warehouse in Ploesti, Romania and the lease expiry of a warehouse in Tureni, Romania. Around 40% of
Slide 25: Group Properties Tenant exposure
Segmental Analysis Group Properties Tenant exposure Tenant Sector % 1 Technology Asseco S.A. 29 2 Financial Services First Property Poland Sp. z o.o. 10 3 Food Retail Carrefour 8 4 Construction Skanska S.A. 6 5 Food Retail Tesco (Polska) sp z o.o. 4 6 Insurance Mazowiecki Odział Wojewódzkiego Narodo
Slide 26: Breakdown of Assets by Geography
Segmental Analysis Group Properties Breakdown of Assets by Geography Tureni, Romania, 1.3% Romania Poland Bucharest, Chałubińskiego 8, Romania, 1.7% Poland, 22.6% Gdynia, Poland, Panorama 18.5% Krasnystaw, Poland, 2.7% Zoliborz Plaza, Galeria Ostrowiec, Poland, 6.1% Poland, 18.5% Lublin, Poland, 7.0
Slide 27: Group Properties by Asset Type
Segmental Analysis Group Properties by Asset Type Industrial, 3% Retail, 44% Office, 53% Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 27
Slide 28: Markets
Markets Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 28
Slide 29: Investment Markets Poland
Investment Markets Poland GDP Growth - continues to exceed that of most other EU nations 2018: >3.8% (F); 2019: 3.1% (F); Inflation: c2.5% per annum; Government debt remains low by international standards at c54% of GDP. Commercial Property: GDP growth in Poland, which is forecast at 3
Slide 30: Investment Markets Romania
Investment Markets Romania GDP Growth: 2018: >4.5% (F) 2019: >4.0% (F) Commercial Property: Investor demand for commercial property is increasing but remains low. Transaction volumes in 2017 amounted to some €1 billion (2016: €0.9 billion), of which c40% was invested in Bucharest. In the
Slide 31: Investment Markets United Kingdom
Investment Markets United Kingdom GDP Growth: 2018: c1.2% (F) 2019: c1.6% (F) Commercial Property: Commercial property transactions in 2017 exceeded £65 billion, up 25% from £52 billion in 2016; the office sector accounted for 37% (£24 billion) of all investment whilst retail volumes decli
Slide 32: Outlook - Why invest in Fprop plc?
First Property Group plc Outlook - Why invest in Fprop plc? 1. Expertise: Experienced, nimble management team; Excellent investment track record: 26% p.a. growth in net assets plus dividends since 2006; Ranked No.1 vs MSCI’s Central & Eastern European Benchmark. 2. Reliable earnings: Diversi
Slide 33: Appendix
Appendix Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 33
Slide 34: Funds under management
Appendix Funds under management Fund Country of Investment Fund expiry AUM 30 Sep-2017 % of total AUM SAM & DHOW UK Rolling * * RPT & EAS Poland Aug 2020 5.31 0.85% 5PT Poland Dec 2022 7.63 1.22% UKPPP UK Feb 2022 93.53 14.95% PDR UK May 2018 - - SIPS UK Jan 2025 165.74 26.49% FRS Romania Jan 2026 6
Slide 35: Reconciliation of movement in funds under management
Appendix Reconciliation of movement in funds under management Funds managed for third parties (including funds in Group Properties Totals which the Group is a minority shareholder) (including FOP) UK CEE Total All CEE AUM No. of No. of prop’s No. of prop’s £m. £m. £m. £m. £m. prop’s As at 31 Mar-201
Slide 36: 10 directly held Group Properties
Appendix 10 directly held Group Properties Property No. of Book value Market value Contribution to Group Contribution to Group properties profit before tax – year profit before tax - year to 31 Mar-2018 to 31 March 2017 Poland 3 £79.9m £91.7m £6.9m £6.0m Romania 2 £4.2m £5.1m £0.6m £0.9m FOP (Poland
Slide 37: Non-controlling interests in funds managed by FPAM
Appendix Non-controlling interests in funds managed by FPAM Group’s share Group’s share Current of pre-tax profits Book value of pre-tax % owned by First market earned by fund Fund of First Property’s profits/(losses) Property Group value 31 March 2017 share in fund earned by fund 31 of holdings Mar
Slide 38: Shareholders > 3%
Appendix Shareholders > 3% % held (of issued No of shares and fully paid) Ben Habib (Chief Executive Officer) 16,850,000 15.1% New Pistoia Income Ltd 15,090,000 13.6% J C Kottler Esq 9,664,283 8.7% Alasdair Locke (Non-Executive Chairman) 8,571,990 7.7% Total 50,176,273 45.1% Email jeremy.barkes@fp
Slide 39: Share Statistics as at 8 June 2018
Appendix Share Statistics as at 8 June 2018 FY 2018 FY 2017 LSE (AIM) Symbol FPO.L Issued & Fully Paid 116,601,115 116,601,115 Share price 54p Issued (excl Treasury) 111,241,546 115,992,699 Market Cap £60 million Shares held in Treasury 5,359,569 608,416 Dividend FY2018 FY2017 Outstanding share opti
Slide 40: Plc Management Team
Appendix Plc Management Team Non-Executive Chairman — Alasdair Locke, MA (Oxon) Alasdair began his career in banking. In 1982 he established a Singapore-based business providing finance for and investing in shipping and offshore oil service companies which was subsequently acquired by Henry Ansbache
Slide 41: Plc Management Team
Appendix Plc Management Team Group Chief Executive & FPAM Chief Investment Officer — Ben Habib, MA (Cantab) Ben founded and is CEO of First Property Group plc, an award winning commercial property fund manager with operations in the United Kingdom and Central Europe. Prior to setting up First Proper
Slide 42: FPAM Track Record - closed funds
Appendix FPAM Track Record - closed funds IRR pa - Actual 110% 100% 90% 40% 30% 20% 10% 0% 1PT 2PT 3PT USS PDR -10% Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 42
Slide 43: FPAM Track Record - existing funds
Appendix FPAM Track Record - existing funds IRR pa - Actual IRR pa - Implied ROE pa - since inception ROE FY 2017/18 - on original equity 100% 80% 60% 40% 20% 0% RPT 5PT UK PPP FOP SIPS FRS FGC FKR UK SPEC OPPS FPROP OFFICES -20% Implied IRR’s: assumed sale price = NAVs as at 31-Mar-2018; ROE’s
Slide 44: Awards
Appendix Awards FPAM funds rank No.1 vs MSCI’s Central & Eastern European (CEE) Benchmark for the twelve years from the commencement of its operations in Poland in 2005, and for the periods from 2005 to 31 December 2008, and to the end of each of the years thereafter. In addition, FPAM’s UK Pension
Slide 45: Disclaimer
Disclaimer Certain statements made in this presentation may not be based on historical information or facts and may be "forward- looking" statements, including those relating to the Company's general business plans and strategy, its future financial condition and growth prospects, and future develop