Slide 1: Preliminary Results for the financial year ended 31 March 2019
Preliminary Results for the financial year ended 31 March 2019 First Property Group plc 6 June 2019 Email jeremy.barkes@fprop.com Phone +44 20 7340 0270
Slide 2: Contents
First Property Group plc Contents Company Description 3 Markets 29-32 Investment Approach 4-5 Investment Markets – Poland 30 Group Structure 6 Investment Markets – Romania 31 Investment Markets – United Kingdom 32 Preliminary Results 7 Financial Performance Summary 8-12 Outlook - Why invest in Fprop
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 Fund Management Group (FPAM) Properties AUM: £611m Market value: £95m FCA regulated and 9 wholly owned AIFMD approved; commercial properties in Poland & Romania; 13 funds. Non-controlling interests in 11 of the 13 funds managed by FPAM. Email jeremy
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 2019 31 March 2018 Income Statement: Statutory profit before tax £8.31m £9.23m -9.97% Diluted earnings per share 4.85p 5.70p -14.91% Total dividend per share 1.66 1.60p +3.75% Average £/€ rate u
Slide 9: Financial Performance Summary (cont.)
Preliminary Results Financial Performance Summary (cont.) Unaudited year to Audited year to Percentage change 31 March 2019 31 March 2018 Nine Wholly Owned Properties at year end: Book value £82.14m £84.10m* -2.33% Market value £94.61m £96.88m* -2.34% Gross debt (non-recourse to Group) £66.68m £68.1
Slide 10: Highlights: Operational Highlights
Preliminary Results Highlights Operational Highlights: Sales of shares in FOP reducing the Group’s interest in it to 40% and prompting its deconsolidation; Re-leasing of two thirds of the 10,000 m2 office space vacated in Chałubińskiego 8 (CH8, previously known as Oxford Tower) in February 2018;
Slide 11: Highlights: Financial Highlights (page 1 of 2)
Preliminary Results Highlights (page 1 of 2) Financial Highlights: Group’s profit before tax reduced by 10% to £8.31 million (2018: £9.23 million), mainly due to the reduction in income resulting from the vacancy in CH8; Net contribution to profit before tax from non-recurring items of £2.78 mil
Slide 12: Highlights: Financial Highlights (continued)
Preliminary Results Highlights Financial Highlights (continued): Main effects of deconsolidation of FOP: Turnover of the Group post 12 October 2018 reduced by £4.12 million; Group profit before tax post 12 October 2018 reduced by £1.17 million; Book cost of Group Properties reduced by £63.91
Slide 13: NAV per share 2007-2019
Preliminary Results NAV per share 2007-2019 • NAV per share at 60 EPRA NAV NAV Cash book value: 41.46p 50 • EPRA NAV per share: 57.48p 40 Pence per share • Cash per share: 30 8.75p 20 External valuers: 10 • CBRE; • BNP Paribas; 0 • Polish Properties Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 M
Slide 14: Continued Growth in Dividend
Preliminary Results Continued Growth in Dividend 1.80 Proposed Final 1.60 The full year dividend in FY 2019 is covered 2.98 times dividend: 1.40 1.22p (2018: 1.18p) +3.4% 1.20 Pence per share 1.00 Ex div date: 22 Aug Record date: 23 Aug 0.80 Payment date: 27 Sep 0.60 Total dividend for 0.40 year to
Slide 15: Segmental Analysis
Segmental Analysis Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 15
Slide 16: Profit before Tax by segment
Segmental Analysis Profit before Tax by segment 14 FPAM Group Properties 12 0.40 1.00 10 1.38 3.03 4.44 £ Million 8 2.63 6 11.53 11.18 8.85 4 7.99 2.84 6.57 6.32 2 2.07 - Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 16
Slide 17: Fund Management Summary
Segmental Analysis: Fund Management Summary Fund Contribution to PBT* • Third party AUM: £611 million; £3.03 million Management • Thirteen funds invested across UK, (2018: £1.00 million) 36% of PBT* Poland & Romania; (2018: 11%) • Annualised fee income at year end £4.3 million INCLUDING Fprop Of
Slide 18: Fund Management: Revenue and AUM
Segmental Analysis: Fund Management Revenue and AUM 10 800 AUM set to continue to Performance Fee FPAM Revenue AUM rise; 9 700 Annualised fee income 8 at year end (excl perf 600 7 fees) = Revenue (£ Million) £3.34 million AUM (£ Million) 500 6 (2018: £2.60 million); 5 400 Annualised payment 4
Slide 19: Fund Management: Breakdown of AUM
Segmental Analysis: Fund Management Breakdown of AUM Fprop Spec Opps, 5PT, 1.1% 2.7% FOP, 10.2% Fprop Offices, 20.8% Group Properties, 13.4% FRS, 0.1% FGC, 3.1% FKR, 3.3% SIPS, 23.1% FCL, 1.1% FPL, 8.8% UK PPP, 12.4% Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 19
Slide 20: Fund Management: Breakdown of AUM by investor and geography
Segmental Analysis: Fund Management Breakdown of AUM BY INVESTOR CATEGORY BY GEOGRAPHY 5% 2% 11% 24% 39% Group Properties Poland Pension Funds 59% UK Private Clients Romania 60% Endowments Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 20
Slide 21: Group Properties Summary
Segmental Analysis: Group Properties Summary Group £7.99m to PBT* • 9 wholly owned commercial properties in Poland Properties (2018: £11.18m) & Romania: o Book value £82.14 million (gross) o Market value £94.61 million (gross) 72.5% of PBT* (2018: 91.8%) • Non-controlling interests in 11 of the
Slide 22: Group Properties: Contributions to Profit before tax
Segmental Analysis: Group Properties Contributions to Profit before tax (prior to deduction of unallocated central overheads) 14 Contribution to PBT from non- 12 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 d
Slide 23: Group Properties: Loan terms and yields
Segmental Analysis: Group Properties Loan terms and yields Properties and their corresponding bank loans are held in separate non-cross collateralised SPV’s which are non-recourse to the Group; Finance Costs: £2.18 million (2018: £3.06 million). Reduction due to deconsolidation of FOP’s £49.1
Slide 24: CH8 and Gdynia
Segmental Analysis: Group Properties CH8 and Gdynia Chałubińskiego 8 (CH8, previously known as Oxford Tower), Poland February 2018 - Citi vacated some 10,000 m2 of office space, resulting in the net operating income reducing by €2.89 million; March 2019 - some 7,000 m2 of this space had been r
Slide 25: Associates and Investments
Segmental Analysis: Group Properties Associates and Investments Associates and Investments (minority shareholdings in 11 of FPAM’s 13 funds): Contributed £1.60 million (2018: £0.95 million) to Group profit before tax prior to the deduction of unallocated central overheads; 68% increase mainly
Slide 26: Tenant exposure
Segmental Analysis: Group Properties Tenant exposure Tenant Sector % 1 Technology Asseco S.A. 44 2 Insurance Mazowiecki Odział Wojewódzkiego Narodowego Funduszu Zdrowia 13 3 Financial Services First Property Poland Sp. z o.o. 13 4 Government Agency Miasto Stołeczne Warszawa 4 5 Government Agency Fir
Slide 27: Breakdown of value
Segmental Analysis: Group Properties Breakdown of value 36% Gdynia, Poland Oxford Tower, Warsaw, Poland Blue Tower, Warsaw, Poland Felix, Bucharest, Romania 23% 28% Tureni, Romania Praga, Poland Nastroj/Lodz, Poland Wawer, Poland Marki, Poland 4% 3% 2% 0.3% 2% 2% Email jeremy.barkes@fprop.com Ph
Slide 28: Value by Asset Type and Geography
Segmental Analysis: Group Properties Value by Asset Type and Geography 3% 6% 97% 91% 3% Office Industrial Retail Romania Poland Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 28
Slide 29: Markets
Markets Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 29
Slide 30: Investment Markets: Poland
Investment Markets Poland GDP Growth - continues to exceed that of most other EU nations 2018: 5.1% 2019: 4.2% (F); Inflation: c2.2% per annum; Government debt remains low by international standards at c54% of GDP. Commercial Property: Transaction volumes reached €7.2 billion in 2018,
Slide 31: Investment Markets: Romania
Investment Markets Romania GDP Growth: 2018: >4.1% 2019: >3.3% (F) Wage led private consumption growth continues to be the key driver. Commercial Property: Transaction volumes in 2018 €0.9 billion (2017: €1 billion), of which c40% was invested in Bucharest. Debt market: Senior loan m
Slide 32: Investment Markets: United Kingdom
Investment Markets United Kingdom GDP Growth: c1.8% on annualised basis Commercial Property: Total return from all commercial property in 2018: 6.3%; Total return from offices: 7.9% Total return from all retail: -1.8% (first negative year since 2012); Fprop favoured sectors: Offices
Slide 33: 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: 26.2% p.a. growth in net assets plus dividends since 2006. 2. Reliable earnings: Diversified income streams from investment returns and fund managem
Slide 34: Appendix
Appendix Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 34
Slide 35: Funds under management
Appendix Funds under management Fund Country of Investment Fund expiry AUM 31 Mar-2019 % of total AUM SAM & DHOW UK Rolling * * 5PT Poland Dec 2022 7.9 1.12% UK PPP UK Feb 2022 87.22 12.36% OFFICES UK Jun 2024 146.60 20.77% SIPS UK Jan 2025 163.13 23.12% FOP** Poland Oct 2025 71.84 10.18% FRS Romani
Slide 36: 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 37: 9 wholly owned Group Properties
Appendix 9 wholly owned 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-2019 to 31 March 2018 Poland 3 £72.85m £82.59m £2.3m £6.9m Romania 2 £4.04m £6.75m £0.2m £0.6m RPT/E&S (
Slide 38: 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 post-tax Book value of post-tax % owned by First market profits earned by Fund of First Property’s profits/(losses) Property Group value fund share in fund earned by fund 31 of holdings 31 March 2018 M
Slide 39: Shareholders > 5%
Appendix Shareholders > 5% % held (of issued No of shares and fully paid) Ben Habib (Chief Executive Officer) 14,450,000 13.0% J C Kottler Esq 9,664,283 8.7% Alasdair Locke (Non-Executive Chairman) 8,571,990 7.7% New Pistoia Income Ltd 7,507,500 6.7% Quaero Capital Funds (Lux) 6,353,581 5.7% Total 5
Slide 40: Share Statistics as at 6 June 2019
Appendix Share Statistics as at 6 June 2019 FY 2019 FY 2018 LSE (AIM) Symbol FPO.L Issued & Fully Paid 116,601,115 116,601,115 Share price 51.5p Issued (excl Treasury) 111,354,001 116,016,546 Market Cap £57 million Shares held in Treasury 5,247,114 584,569 Dividend FY2019 FY2018 Outstanding share op
Slide 41: 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 42: 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 43: 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 43
Slide 44: FPAM Track Record - existing funds
Appendix FPAM Track Record - existing funds 80% IRR pa - Actual IRR pa - Implied ROE pa - since inception ROE FY 2018/19 - on original equity 70% 60% 50% 40% 30% 20% 10% 0% 5PT UK PPP FOP SIPS FRS FGC FKR UK SPEC OPPS FPROP FPL OFFICES Implied IRR’s: assumed sale price = NAVs as at 31-Mar-2019;
Slide 45: 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 46: 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