Slide 1: Preliminary Results for the year ended 31 March 2020
Preliminary Results for the year ended 31 March 2020 First Property Group plc 25 June 2020 Email jeremy.barkes@fprop.com Phone +44 20 7340 0270
Slide 2: Contents
First Property Group plc Contents Company Description and Structure 3-4 Top ten tenants 30 Investment Approach 5-6 Values and leverage 31-32 Prokom building 33 Interim Results 7 Blue tower 34 Highlights 8 2. Associates and Investments 35-37 Financial Performance Summary 9-10 NAV per share 2007-2020
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. Its earnings are derived from: Fund Management - via its FCA regulated and AIFMD approved subsidiary, Fi
Slide 4: Group Structure
First Property Group plc Group Structure Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 4
Slide 5: 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 6: 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 7: Preliminary Results - Highlights
Preliminary Results - Highlights Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 7
Slide 8: Highlights
First Property Group plc Investment Approach (cont.) Highlights: Sale of Chałubińskiego 8 (CH8), the Group’s largest directly owned property for €44 million; Significant cash reserves: £23.6 million as at 23 June 2020; Have not drawn on any government support for COVID-19; Final dividend mai
Slide 9: Financial Performance Summary
Preliminary Results Financial Performance Summary Unaudited year to 31 March Audited year to 31 March Percentage change 2020 2019 £5.52m £8.31m -33.6% Statutory profit before tax (£7.25m proforma)* -23.9%* Diluted earnings per share 4.29p 4.85p +11.5% Dividend per share 1.67p 1.66p +0.6% Average £/€
Slide 10: Financial Performance Summary: Balance Sheet
Preliminary Results Financial Performance Summary Unaudited year to Audited year to Balance Sheet at year end: Percentage change 31 March 2020 31 March 2019 Net debt *£57.20m £56.94m +0.5% Gearing ratio at market value **50.94% 50.44% - Gearing ratio at book value ***57.32% 59.09% - Net assets per s
Slide 11: NAV per share 2007-2020
Preliminary Results NAV per share 2007-2020 (excluding any value attributable to FPAM) 70 • NAV per share at EPRA NAV Book NAV Cash Share Price 60 book value: 43.53p • EPRA NAV per 50 share: 55.00p Pence per share 40 • Cash per share: 21.4p (includes cash 30 from sale of CH8) 20 10 External valuers:
Slide 12: NAV bridge
Preliminary Results NAV bridge (excluding any value attributable to FPAM) 70 Group properties less loans Associates and other investments Cash Other working capital Share Price 59.65 10 60 57.48 1.31 0.08 0.07 55.00 53.07 2.07 2.22 0 50 47.64 -0.09 -1.20 -0.44 43.01 -5.82 -10 40 Pence per share 35.7
Slide 13: Continued Growth in Dividend
Preliminary Results Continued Growth in Dividend 1.80 Final Proposed Final dividend: Interim 1.60 Total Dividend 1.22p (2019: 1.22p) 1.40 Dividend cover: 1.20 2.6X (annualised) Pence per share 1.00 Ex div date: 20 Aug 2020 0.80 Record date: 21 Sep 2020 0.60 Payment date: 25 Sep 2020 0.40 Total divid
Slide 14: Segmental Analysis
Segmental Analysis Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 14
Slide 15: Fund Management (FPAM)
Fund Management (FPAM) Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 15
Slide 16: Fund Management Summary
Segmental Analysis: Fund Management Summary Fund • Third party AUM: £567m; Contribution to PBT* £1.34m Management • Twelve third party funds invested (prior to deduction of across UK, Poland & Romania; unallocated central overheads); • Weighted average fund management contract term: 5 yrs, 0 mths;
Slide 17: Fund Management Revenue and AUM
Segmental Analysis: Fund Management Revenue and AUM Annualised fee income: 10 Performance Fee FPAM Revenue AUM 800 £3.13 million EXCLUDING 9 700 performance fees and 8 the profit share from 600 Fprop Offices LP; 7 Revenue (£ Million) AUM (£ Million) 6 500 Possible annualised payment entitlements
Slide 18: Breakdown of AUM by geography, by fund, by client type
Segmental Analysis: Fund Management Breakdown of AUM by geography, by fund, by client type Romania 2% Poland Fprop Romanian 32% Supermarkets Fprop Special Cluj Opps 5PT FOP Fprop Offices Krakow Corso Phoenix (KBP) UK 66% SIPS UK PPP Endowments 6% Private Clients 25% Pension Funds 69% Email jeremy.
Slide 19: Split of third party funds managed by asset class
Segmental Analysis: Group Properties Split of third party funds managed by asset class UK Poland Romania TOTALS % of Total Offices £215.67m £105.36m £7.82m £328.85m 58.0% Retail warehousing £100.45m - - £100.45m 17.7% Supermarkets/ £51.58m £19.68m £0.98m £72.24m 12.8% Supermarket led schemes Shoppin
Slide 20: Typical Fees / Selection of clients
Segmental Analysis: Fund Management Typical Fees / Selection of clients Typical fees in UK: Typical fees in Poland & Romania: Selection of clients: • Management: 0.6-1% of GAV p.a.; • Management: 1% of GAV p.a.; • Outperformance: 20% of excess returns • Outperformance: 20% of excess >IRR equivalent
Slide 21: Group Properties
Group Properties Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 21
Slide 22: Group Properties Overview
Segmental Analysis: Group Properties Overview Group 1. Directly owned properties: Contribution to PBT: Properties o 1 sold in year (CH8); £6.24m prior to o 8 remaining (6 in Poland, 2 in Romania); deduction of Gross asset value: £56.3m; unallocated central Gross debt: £42.0m; Net equity inve
Slide 23: Contribution to PBT
Segmental Analysis: Group Properties Contribution to PBT Contribution to PBT Corresponding net equity invested (prior to deduction of unallocated central overheads) 14 8 Directly Owned Contribution to PBT from Properties, 12 directly held properties £14.3m 10 8 £ Million Contribution to PBT from Gro
Slide 24: Directly owned properties
Directly owned properties Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 24
Slide 25: Sold property: CH8, Central Warsaw
Segmental Analysis: Group Properties Sold property SOLD: Chałubińskiego 8 / CH8, Central Warsaw Sold for €44m (£38m) – completed on 24 April 2020; Cash proceeds: £16.7m; Profit: £1.53m; IRR: 63% per annum from purchase in December 2014. Email jeremy.barkes@fprop.com Phone +44 20 7340 0
Slide 26: Remaining directly owned properties
Segmental Analysis: Group Properties Remaining 8 directly owned properties Contribution to Contribution to No. of Group profit before Group profit before Country Sector Book value Market value properties tax year to tax year to 31 March 31 March 2020* 2019* Poland Offices 2 £37.68m £43.70m £5.1m **£
Slide 27: Directly owned properties by geography, property, asset class
Segmental Analysis: Group Properties 8 directly owned properties by geography, by property, by asset class Blue Tower, Poland, Warsaw, Poland 88% 32% Gdynia, Poland 45% Felix, Bucharest, Romania 7% Romania, 12% Tureni, Romania 5% Praga, Poland 3% 5% Nastroj/Lodz, 11% Marki, Poland Wawer, Poland Pola
Slide 28: 8 directly owned properties
Segmental Analysis: Group Properties 8 directly owned properties Two account for 78% by value (£43.7m); Both are office buildings in Poland; one in Warsaw (11,000 m2), the other in Gdynia (15,500 m2); Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 28
Slide 29: 8 directly owned properties
Segmental Analysis: Group Properties 8 directly owned properties The balance of 22% by value (£12.6m) is invested in three mini-supermarkets in Poland, a development site in Warsaw, an office in Bucharest and a logistics warehouse in Romania. Email jeremy.barkes@fprop.com Phone +44 20 7340 027
Slide 30: Top tenants of the remaining directly owned properties
Segmental Analysis: Group Properties Top 10 tenants of the remaining 8 directly owned properties Tenant Sector % 1 Technology Asseco S.A. 69.9 2 HR HRK 3.7 3 Supermarket chain Jeronimo Martins Polska 3.2 4 Financial Services Vulpoi & Toader Management SRL 2.8 5 Manufacturing Teconnex 2.4 6 Financial
Slide 31: Directly owned properties: values and leverage
Segmental Analysis: Group Properties 8 directly owned properties: values and leverage 31 March 20120 31 March 2019 % change Book value £47.09m £82.14m -42.7%* Market value £56.30m £94.61m -40.5% Gross debt (all non-recourse to Group) £41.97m** £66.68m -37.1% LTV at book value 89.13%** 81.18% LTV at
Slide 32: Loan terms and yields
Segmental Analysis: Group Properties Loan terms and yields Properties and corresponding bank loans held in separate non-cross collateralised non-recourse SPV’s; No loan to value covenant breaches based on current market values; The loan against the building in Gdynia is technically in default
Slide 33: Prokom Building, Gdynia, Poland
Segmental Analysis: Group Properties Prokom Building, Gdnyia, Poland Has been single let to Warsaw Stock Exchange listed Asseco since it was first built in 2005. Asseco is no longer in full occupation and has sub-let parts; Lease scheduled to expire on 28 October 2020; Discussions with Asseco
Slide 34: Blue Tower, Warsaw
Segmental Analysis: Group Properties Blue Tower, Warsaw Excellent location in Warsaw’s central business district; The Group owns 48% of the tower and 90% of Corp Sp. z o.o., the company which is constitutionally tied to manage the building; The Group’s 48% share (valued at €20.5m) is broadly f
Slide 35: Associates and Investments
Associates and Investments (minority shareholdings in 10 of FPAM’s 12 funds) Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 35
Slide 36: Non-controlling interests in funds managed by FPAM
Segmental Analysis: Group Properties Non-controlling interests in funds managed by FPAM (accounted for as Associates and Investments) Group’s share PROFORMA Book value Current of post-tax Group’s share % owned by First of post-tax profits Fund of First Property’s market value profits/(losses) Proper
Slide 37: Associates and Investments
Segmental Analysis: Group Properties Associates and Investments Contributed £1.54m (2019 proforma: £3.08m) to Group PBT (prior to the deduction of unallocated central overheads). Reduction in profit mainly attributable to: Fprop Phoenix Ltd: -£141,000 (2019: £1.05m); Comparative period (2019
Slide 38: Markets
Markets Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 38
Slide 39: Investment Markets Poland
Investment Markets Poland Poland likely to be one of least affected in EU by the pandemic and one of just four in the bloc expected to return to 2019 levels of economic productivity by end of 2021 (according to EU Commission and World Bank); Government debt - low prior to crisis (circa 46% of GD
Slide 40: Investment Markets Romania
Investment Markets Romania Like 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; Expected to recover faster than most EU countries. Ema
Slide 41: Investment Markets United Kingdom
Investment Markets United Kingdom According to Bank of England forecasts the economy will shrink by around 14% this year; Government measures to combat the effects of lockdown have temporarily masked the economic impact - when the furlough scheme ends in October unemployment is likely to rise fu
Slide 42: 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: 22.7% p.a. growth in net assets (incl dividends paid) over past 10 years. 2. Reliable earnings: Diversified income streams from investment returns a
Slide 43: Appendix
Appendix Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 43
Slide 44: Third Party funds under management
Segmental Analysis: Fund Management Third Party funds under management Fund Country of Investment Fund expiry % of total AUM AUM 31 March 2020 SAM & DHOW UK Rolling * * 5th Property Trading Poland Dec 2022 1.29 8.0 UK Pension Property Portfolio UK Feb 2022 11.28 70.3 Fprop Krakow Poland Mar 2027 3.6
Slide 45: Reconciliation of movement in funds under management
Appendix Reconciliation of movement in funds under management Funds managed for third parties (including funds in which the Group is a minority shareholder) UK CEE Total No. of prop’s £m. £m. £m. As at 31 March 2019 415.95 195.12 611.07 71 Purchases: - - - - -Existing funds - - - - -New funds - - -
Slide 46: Shareholders > 5%
Appendix Shareholders > 5% % held (of issued No of shares and fully paid) Ben Habib (Chief Executive Officer) 14,940,000 13.5% J C Kottler Esq 9,664,283 8.8% Alasdair Locke (Non-Executive Chairman) 8,571,990 7.8% New Pistoia Income Ltd 7,507,500 6.8% Quaero Capital Funds (Lux) 6,353,581 5.8% Total 4
Slide 47: Share Statistics
Appendix Share Statistics as 24 Mar 2020 LSE (AIM) Symbol FPO.L Issued & Fully Paid 116,601,115 Share price 40.0p Issued (excl Treasury) 110,382,332 Market Cap £41 million Shares held in Treasury 6,218,783 Dividends FY2020 FY2019 Outstanding share options over 2,610,000 Interim Ordinary shares 0.45p
Slide 48: 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 49: 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 50: 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 50
Slide 51: FPAM Track Record - existing funds
Appendix FPAM Track Record - existing funds IRR pa - Implied ROE pa - since inception ROE FY 2019/20 - on original equity 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 5PT UK PPP FOP SIPS FRS FGC FKR UK SPEC FPROP FCL Cluj FPL OPPS OFFICES Implied IRR’s: assumed sale price = NAVs as at 31-Mar-2020; ROE’
Slide 52: 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 53: 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