Slide 1: Preliminary Results for the year ended 31 March 2017
Preliminary Results for the year ended 31 March 2017 First Property Group plc 8 June 2017 FPAM funds rank No.1 versus MSCI’s Central & Eastern European (CEE) Benchmark for the eleven years from the commencement of its operations in Poland in 2005 to December 2016, and for the periods from 2005 to 31
Slide 2: Contents
First Property Group plc Contents Company Description 3 Markets 25-28 Investment Approach 4-5 Investment Markets – Poland 26 Business Model 6-7 Investment Markets – Romania 27 Investment Markets – United Kingdom 28 Preliminary Results 8 Highlights 9-10 Outlook 29-30 Financial performance summary 11-
Slide 3: Company Description
First Property Group plc Company Description First Property Group plc 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. Its focus is on higher yi
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: active asset management
First Property Group plc Investment Approach An active approach to asset management (where possible): Largely exited the UK commercial property market in 2005, re-entered in 2009. We act dynamically; Reversed asset management policy of waiting until lease expiry to renew leases following onset
Slide 6: Group Structure
First Property Group plc Group Structure The Company operates via two divisions: Via its FCA regulated and AIFMD approved subsidiary, First Fund Property Asset Management Ltd (FPAM), which earns fees from investing for third parties in property. Management Principal investments by the Group to earn
Slide 7: Group Structure
First Property Group plc Group Structure Fund Management Group (FPAM) Properties AUM: £313m Market value: £164.5m Annualised fee income 10 commercial properties of £2.45 million and in Poland and Romania, rising; including 5 held by consolidated undertaking, FCA regulated and FOP (in which the
Slide 8: Preliminary Results - Highlights
Preliminary Results - Highlights Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 8
Slide 9: Financial Highlights
Preliminary Results Highlights Financial Highlights: Profit before tax up 24% to a record £9.14 million; Total assets under management up 35% to £477 million (2016: £353 million), third party assets under management up 60% to £313 million; Annualised fund management fee income at year-end up 4
Slide 10: Operational Highlights
Preliminary Results Highlights Operational Highlights: Ranked No.1 versus MSCI’s Central & Eastern Europe (CEE) Benchmark over the eleven years to 31 December 2016; UK Pension Property Portfolio LP ranked “Best Small Specialist Fund” at the MSCI/IPF Awards over the three years to 31 December 201
Slide 11: Financial Performance Summary
Preliminary Results Financial Performance Summary Unaudited year to 31 March 2017 Audited year to 31 March 2016 Percentage change Income Statement: Revenue £23.66m £21.96m +7.7% Statutory profit before tax £9.14m £7.35m +24.4% Diluted earnings per share 6.61p 4.28p +54.4% Total dividend per share 1.
Slide 12: Financial Summary (cont.)
Preliminary Results Financial Summary (cont.) Unaudited year to 31 March 2017 Audited year to 31 March 2016 Percentage change Group Direct Property Portfolio at year end: (excludes the Group’s non- controlling interests in six other FPAM managed funds) Book value £143.52m £134.53m +6.7% Market value
Slide 13: NAV per share 2007-2017
Preliminary Results NAV per share 2007-2017 60 EPRA NAV NAV Cash Adjusted NAV = in line 50 with European Public Real Estate Association (EPRA) methodology, 40 Pence per share which includes fair values of: financial instruments; 30 debt; deferred taxes. 20 External valuers 10 CBRE, BNP Paribas, Poli
Slide 14: Continued Growth in Dividend
Preliminary Results Continued Growth in Dividend 1.80 Proposed Final dividend: 1.60 1.15p 1.40 (2016: 1.115p) 1.20 Pence per share +3.1% 1.00 Total dividend for year to Mar-2017: 0.80 1.55p 0.60 (2016: 1.50p) 0.40 +3.3% 0.20 0.00 Ex div date: 31 Aug FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12
Slide 15: Segmental Analysis
Segmental Analysis Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 15
Slide 16: Profit before Tax by segment
Preliminary Results - Segmental Analysis Profit before Tax by segment (before unallocated central overheads) 14 FPAM (excl fees from FOP) Group Properties (incl FOP) Group Properties 12 – increase primarily 0.40 due to EUR 10 strengthening vs 1.38 GBP, but also due 4.44 to full year £ Million 8 2.
Slide 17: Segmental Analysis: Fund Management
Preliminary Results – Segmental Analysis Fund Management • AUM: £477m; 3.6% Fund • Eleven funds invested (2016: 14%) Management across UK, Poland & of profit before Romania; tax and via First Property • Annualised fee income unallocated Asset Management of £2.45 million (2016: central Ltd (FPAM) £1.
Slide 18: FPAM Overview
Segmental Analysis FPAM Overview 10 500 Performance Fee FPAM Revenue AUM AUM set to 9 450 continue to rise as 8 400 we invest undrawn cash 7 350 commitments; Revenue (£ Million) AUM (£ Million) 6 300 Underlying fund 5 250 management fee 4 200 income set to grow with AUM; 3 150 2 100 1 50 - - Mar
Slide 19: FPAM - breakdown of AUM
Segmental Analysis FPAM - breakdown of AUM (incl Group Properties) SIPS 31.8% Group Properties (excl. FOP) 20.1% Poland UK Pension Fprop 45.4% 51.4% By Fund By Investor 33.91% By Geography Funds 51.19% Category UK PPP FOP 19.5% 14.4% HNW 8.04% RPT Fprop 1.4% Krakow Ltd 5PT Family Romania Fprop Corso
Slide 20: Group Properties
Segmental Analysis Group Properties 1. Ten commercial properties in Poland 96.6% Group and Romania, including five held by (2016: 86%) Properties FOP (in which the Group is currently of profit the majority shareholder): before tax Principal investments • Book value £143.5m; and by the Group, to earn
Slide 21: Group Properties - overview
Segmental Analysis Group Properties - overview Group Properties: 14 Contribution to PBT from 12 Contributed £11.53m directly held properties (2016: £8.85m) to PBT and 10 unallocated central overheads; 8 £ Million Contribution to PBT from Group's share in FOP Represents 96.6% 6 (2016: 86.5%) of G
Slide 22: Group Properties - cash flows from properties
Segmental Analysis Group Properties - cash flows from 10 properties owned by Group & FOP Year to 31 March 2017 Year to 31 March 2016 €m. €m. Net operating income (NOI) 19.47 19.74 Interest expense on bank loans / finance leases (3.42) (3.59) NOI after interest expense 16.05 16.15 Current tax (1.40)
Slide 23: Group Properties - value of properties
Segmental Analysis Group Properties - value of 10 properties owned by Group & FOP 180 Market Value Properties are held in separate = £164.5m non-cross collateralised SPV’s 160 Book Value = which are non-recourse to the £143.5m Group; 140 Interest rates: Current weighted average 120 borrowing c
Slide 24: Group Properties - top 10 tenants
Segmental Analysis Group Properties - 10 properties owned by Group & FOP: top 10 tenants Tenant Sector % 1 Asseco S.A. Technology 29.3% 2 Citibank Europe Plc Finance 12.3% 3 Carrefour Food Retail 8.4% 4 Skanska S.A. Construction 6.1% 5 Tesco (Polska) sp z o.o. Food Retail 3.6% 6 Mazowiecki Odział Wo
Slide 25: Markets
Markets Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 25
Slide 26: Investment Markets - Poland
Investment Markets Poland GDP Growth: 2017: 3.2% (F) 2018: 3.4% (F) Commercial Property: Rent levels for office property in Warsaw and other main cities have generally softened over the past couple of years, as the pace of new development has increased; Capital values for prime property
Slide 27: Investment Markets - Romania
Investment Markets Romania GDP Growth: 2017: 4.2% (F) 2018: >4% (F) Commercial Property: Occupier and investor demand picking up from a relatively low level; New development beginning to pick up, but take-up rate matching this increased supply for now; Still a mismatch between buyer an
Slide 28: Investment Markets - United Kingdom
Investment Markets United Kingdom GDP Growth: 2017: c1.5% (F) 2018: c1.5% (F) Commercial Property: Commercial property values fell in the second half of 2016, in particular for properties with shorter leases, or requiring asset management, or those located in Scotland, due to heightened po
Slide 29: Outlook
Outlook Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 29
Slide 30: Outlook
Preliminary Results Outlook In-built earnings growth from additional fund management commitments, once invested; The assets we own and manage are performing well, as are the economies in which we operate. We expect continued earnings growth; The contribution to earnings from Group Properties h
Slide 31: Why invest in Fprop plc?
First Property Group plc Why invest in Fprop plc? 1. Expertise: Experienced, nimble management team; Excellent investment track record: 24.9% p.a. growth in net assets plus dividends between Apr-2012 and Apr-2017; Ranked No.1 vs MSCI’s Central & Eastern European Benchmark. 2. Reliable earnings
Slide 32: Appendix
Appendix Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 32
Slide 33: Appendix – Funds under management
Appendix – Fund Management (FPAM) Funds under management at 31 March 2017 Fund Country of Investment Fund expiry AUM 31-Mar-17 % of total AUM SAM & DHOW UK Rolling * * RPT Poland Aug 2020 £6.88m 1.44% 5PT Poland Dec 2022 £8.46m 1.77% UK PPP UK Feb 2022 £93.13m 19.50% - PDR UK May 2018 (commitment -
Slide 34: Reconciliation of movement in funds under management
Appendix – Fund Management (FPAM) 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 No. of All CEE No. of AUM No. of £m. £m. £m. prop’s £m. prop’s £m
Slide 35: Group Properties composition
Appendix – Group Properties composition Group Properties at 31-Mar-2017 Property No. of Book value (£) Market value Contribution to Contribution to properties (£) Group PBT before Group PBT before unallocated unallocated overheads – year to overheads – year to 31 Mar-17 (£) 31 Mar-16 (£) Poland 3 79
Slide 36: Non-controlling interests in funds and joint ventures
Appendix – Group Properties composition Non-controlling interests in funds and joint ventures managed by FPAM at 31-Mar-2017 Group’s share of Group’s share of Book value Current pre-tax profits % owned by First pre-tax profits Fund of First Property’s market value earned by fund Property Group earne
Slide 37: Shareholders > 3% at March 2017
Appendix Shareholders > 3% at 31 Mar-17 % held (of issued No of shares and fully paid) Ben Habib (Chief Executive Officer) 16,700,000 14.4% New Pistoia Income Ltd 15,090,000 13.0% J C Kottler Esq 12,206,783 10.5% Universities Superannuation Scheme Limited 9,550,000 8.2% Alasdair Locke (Non-Executive
Slide 38: Share Statistics
Appendix Share Statistics at 8 June 2017 FY 2017 FY 2016 LSE (AIM) Symbol FPO.L Issued & Fully Paid 116,601,115 116,601,115 Share price 54p Issued (excl Treasury) 115,992,699 115,967,111 Market Cap £62 million Shares held in Treasury 608,416 634,004 Dividend FY2017 FY2016 Outstanding share options 2
Slide 39: 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 Ansbach
Slide 40: 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 41: 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 41
Slide 42: FPAM Track Record: Existing funds
Appendix - FPAM Track Record Existing funds (excl SAM to 31-Mar-17) IRR pa - Implied ROE pa - since inception ROE FY 2016/17 - on original equity 60% 50% 40% 30% 20% 10% 0% RPT 5PT UK PPP FOP SIPS FRS FGC Implied IRR calculations use NAVs as at 31-Mar-2017. ROE’s since inception are calculated u
Slide 43: Awards
Appendix – First Property Group Awards FPAM funds rank No.1 versus MSCI’s Central & Eastern European (CEE) Benchmark for the eleven 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 a
Slide 44: 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