Slide 1: Interim Results for the half year ended 30 September 2015
Interim Results for the half year ended 30 September 2015 First Property Group plc 26 November 2015 FPAM funds have ranked No.1 versus the Investment Property Databank (IPD) Central & Eastern European (CEE) universe for the annualised periods from the commencement of its operations in Poland in 2005
Slide 2: Contents
First Property Group plc Contents Company Description 3 Investment markets – Poland 22 Awards 4 Investment markets – UK 23 Investment Approach 5 Outlook 24 Prelims Highlights – Financial Highlights & Explanatory Notes 6-8 Pending investments 25-26 Segmental Analysis 9-21 Appendices 27-40 Operating p
Slide 3: Company Description
First Property Group plc Company Description First Property Group plc is a 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, First Property Asset Manageme
Slide 4: Awards
First Property Group plc Awards FPAM funds FPAM fundshave haveranked ranked No.1 versus the No.1 versus Property Investment the Investment Databank (IPD) Property Databank (IPD) Central & Eastern European (CEE) universe Central & Eastern European for the annualised periods from the (CEE) universe fo
Slide 5: Investment Approach
First Property Group plc Investment Approach A fundamental approach to investing (sentiment may chase a theme but does not justify the theme). Thinking from first principles. Sustainable income is a priority: The yield at purchase of any property investment must ALWAYS exceed borrowing costs;
Slide 6: Interim Results Financial Highlights
Interim Results Financial Highlights Unaudited six Unaudited six Percentage Notes months to months to change 30-Sep-2015 30-Sep-2014 Income Statement Statutory profit before tax £5.93m £5.42m +9.4% Increase attributable to Group Properties Diluted earnings per share 4.13p 4.07p +1.5% Dividend per sh
Slide 7: Interim Results Financial Highlights
Interim Results Financial Highlights Unaudited six Unaudited six Percentage Notes months to months to change 30-Sep-2015 30-Sep-2014 Property Portfolio Group Properties at book value £125.9m £63.1m +99.5% Comprises 11 properties held by Group and FOP. Excludes the Group’s non-controlling interests i
Slide 8: Operational Highlights and Explanatory Notes
Interim Results Operational Highlights and Explanatory Notes Interim dividend increased by 10% to 0.385 pence per share; The contribution to Group profit before tax and unallocated central overhead costs from Group Properties increased to £5.22 million (2014: £2.97 million) largely due to the co
Slide 9: Segmental Analysis: Profit before Tax by segment
Segmental Analysis Profit before Tax by segment (before unallocated central overheads) 7 FPAM (excl fees from FOP) Group Properties (incl FOP) 6 £1.19m 5 £2.90m £ Million 4 3 £5.22m 2 £1.41m £2.97m 1 £0.89m - Sep-13 Sep-14 Sep-15 Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 9
Slide 10: Segmental Analysis – Fund Management (FPAM) Overview
Segmental Analysis – Fund Management (FPAM) OVERVIEW Fund Management (FPAM): Contributed profit before tax and unallocated central overheads of £1.19 million (2014: £2.90 million), representing 18.5% (2014: 49.4%) of Group profit before tax and unallocated central overheads. 10 400 Performance Fee F
Slide 11: Segmental Analysis – Fund Management (FPAM) Fees
Segmental Analysis – Fund Management (FPAM) Fees Management fees: Fees earned from USS fund declined to £301,000 (2014: £908,000) due to property disposals ahead of its expiry in August 2015; Following the expiry of the USS fund, third party fund management fee income excluding performance fees
Slide 12: Fund Management – Assets under Management
Segmental Analysis – Fund Management (FPAM) Assets under Management (incl Group Properties) Fund Country of Fund expiry Commitment AUM % of AUM investment (unless 30 Sep-2015 total AUM 30 Sep-2014 extended) Not subject to n/a n/a 1. SAM Property Company Ltd (SAM) UK Rolling Fully invested revaluatio
Slide 13: Breakdown of AUM (incl Group Properties)
Segmental Analysis – Fund Management (FPAM) Breakdown of AUM (incl Group Properties) 5PT Fprop PDR RPT 2.8% 0.0% 2.2% HNW / FO SIPS 8% 9.9% Poland 53.8% FOP 19.6% Fprop UK By Fund By Investor By Geography 43.6% 48% UK PPP Pension Category 33.7% Funds 44% Group Properties 31.8% Romania 2.6% Assets
Slide 14: Segmental Analysis – Group Properties Overview
Segmental Analysis – Group Properties OVERVIEW Group Properties: 6 Contributed profit Contribution to before tax and PBT from directly unallocated central 5 held properties overheads of £5.22 million (2014: £2.97 million), representing 4 81.5% (2014: 50.6%) of Contribution to Group profit before tax
Slide 15: Eleven properties owned directly by the Group and FOP
Segmental Analysis – Group Properties Eleven properties owned directly by the Group and FOP Property No. of properties Book value Market value Contribution to Group Contribution to Group profit before tax to profit before tax to 30 Sep-2015 30 Sep-2014 Poland 3 £69.9m £82.4m £2.79m £0.72m Romania 3
Slide 16: Group Properties: cash flows and FX
Segmental Analysis – Group Properties (cont) Eleven properties owned directly by the Group and FOP Cash flows: Assumes current rent levels, FX rates and interest payments. Net rent c£15m pa. (after property operating costs) Interest payments c£2.85m Tax c£0.75m Loan amortisation c£5.40m Free cash
Slide 17: Group Properties: loan to equity, interest rates, valuation
Segmental Analysis – Group Properties (cont) Eleven properties owned directly by the Group and FOP 160 Market value Properties are held in separate non- = £145.3m cross collateralised SPV’s which are 140 Book value non-recourse to the Group. = £125.9m Equity = 25% Interest rates: 120 Equity = 14
Slide 18: Group Properties: Top 10 tenants
Segmental Analysis – Group Properties (cont) Eleven properties owned directly by the Group and FOP Top 10 tenants: 1 Asseco S.A. Technology 26.90% 2 Citibank International PLC Finance 11.75% 3 Carrefour Food Retail 7.91% 4 Aquila Logistics 6.31% 5 Skanska S.A. Construction 6.04% 6 Tesco (Polska) s
Slide 19: Non-controlling interests in funds managed by FPAM
Segmental Analysis – Group Properties (cont) Non-controlling interests in funds managed by FPAM Non-controlling interests in funds managed by FPAM: Contributed £257,000 (2014: £137,000), the increase being attributable to Fprop PDR LP. Contribution to Contribution to Group’s Book value Market Value
Slide 20: Dividend
Interim Results Dividend 1.60 Interim dividend: Interim Final Total 1.40 0.385p (2014: 0.35p) = +10.0% 1.20 Total dividend for year to Mar- Pence per share 1.00 2015: 0.80 1.35p (2014: 1.12p) = +20.5% 0.60 0.40 Ex-Dividend 3-Dec-2015 0.20 Record Date 4-Dec-2015 0.00 Payment Date 31-Dec-2015 FY 12/13
Slide 21: NAV per share 2007-2015
Interim Results NAV per share 2007-2015 45 Adjusted NAV = Adjusted NAV NAV Cash adjusted to market 40 value in line with EPRA (European 35 Public Real Estate Association) triple net valuation 30 methodology, which Pence per share includes fair values of: 25 (i) properties; 20 (ii) financial instrume
Slide 22: Investment Markets Poland
Investment Markets Poland GDP growth: 2015: 3.5% (E) 2016: 3.5% (E) Commercial Property: Rent levels generally sustainable, subject to location; Capital values of secondary property remain largely unchanged from their credit crunch lows. Yield c2-3% more than equivalent property in Weste
Slide 23: Investment Markets United Kingdom
Investment Markets United Kingdom GDP growth: 2015: 2.6% (E) 2016: 2.4% (E) Commercial Property Occupier Market: o Tenant demand growing; o Tenant default rates declining; o Leading to increased industrial and office rents, particularly in South East. Investment Market: o Demand, includi
Slide 24: Outlook
Outlook FPAM Group Properties Fund management fee income, excluding Contributed £5.22 million to Group profit before performance fees, is currently being earned at central overheads and tax during the period. the rate of £1.3 million per annum. We expect this to increase from: Capital values i
Slide 25: Pending investment – shopping centre, Poland
Outlook Pending investment – shopping centre, Poland Purchase: Newly completed medium size (c10,000m2) shopping centre; Purchase price = c€25m; Potential for rental growth; Medium term lease lengths; Loan: 75% LTV. Business Plan: Hold for high ROE – 18% p.a. at purchase Income growth –
Slide 26: Pending investment – portfolio of retail properties, Romania
Outlook Pending investment – portfolio of retail properties, Romania Purchase: Purchase price = c€10 million (yield of 11.3%, 15% discount to independent valuation); Sustainable rent, subject to annual indexation (upward only); Weighted average unexpired lease term [WAULT] c7.5 years; Loan a
Slide 27: Appendices
Appendices Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 27
Slide 28: Shareholders > 3% at Oct-2015
Appendix Shareholders > 3% at 21 Oct-2015 % held (of issued No of shares and fully paid) Ben Habib (Chief Executive Officer) 16,700,000 14.6% J C Kottler Esq 15,006,783 13.1% New Pistoia Income Ltd 10,285,000 9.0% Universities Superannuation Scheme Limited 9,550,000 8.4% Alasdair Locke (Non-Executiv
Slide 29: Share Statistics at 26-Nov-2015
Appendix Share Statistics at 26-Nov-2015 30 Sep- 30 Sep- % change 2015 2014 LSE (AIM) FPO.L Symbol Issued & Fully Paid 114,851,115 114,851,115 - Share price 46p Issued (excl Treasury) 114,205,912 113,669,360 +0.47% Market Cap £52.5 million Dividend Interim 0.385p Shares held in Treasury 645,203 1,18
Slide 30: Plc Management Team
Appendix Plc Management Team Non-Executive Chairman — Alasdair Locke, MA (Oxon) Alasdair is the former executive Chairman of Abbot Group plc, an oil services company which he founded in 1992. It was listed on the London Stock Exchange from 1995 until its sale in 2008 for £906 million to Turbo Alpha
Slide 31: FPAM Track Record All Funds to 30-Sep-2015
FPAM Track Record All Funds (excl SAM) to 30-Sep-2015 Fund performance at 30 September 2015 (USS to 31-Mar-2015): 100% IRR pa - Actual IRR pa - Implied ROE pa - since inception ROE HY 2015/16 - on original equity 85% 70% 55% 40% 25% 10% -5% 1PT 2PT 3PT RPT 5PT USS UK PPP FOP PDR SIPS Implied IRR c
Slide 32: Case Studies - Poland: Blue Tower, Warsaw
Case Studies - Poland Blue Tower, Warsaw Aggregate purchase price to date: 48.2% of Tower - £12.5 million in Dec 2008 & Nov 2013; 90% of Tower’s management co (Corp SA) - £300,000 – in Dec-2008, Nov-2009, Dec-2013; = £12.8m (vs Mar 2015 valuation of £14.2m, excl Corp SA) At purchase: Rents c25
Slide 33: Case Studies - Poland: Oxford Tower, Warsaw
Case Studies - Poland Oxford Tower, Warsaw At first purchase (50.3%) for USS (Aug-2007): NOI = €2.6 million pa.; Let at average rent of c€8-10m2 per month; WAULT = < 1 year Total return: €4.5m (IRR = infinite because equity refinanced out of deal within 3 months of purchase.) At second purch
Slide 34: Case Studies - Poland: Hypermarket single let Carrefour, Lodz
Case Studies - Poland Hypermarket single let Carrefour, Lodz, Central Poland Description: Large format (15,900m2) hypermarket constructed in 2000 with large car park (550 spaces); Single let to Carrefour Polska on a long lease guaranteed by French parent company, Carrefour S.A. (Euronext listed)
Slide 35: Case studies - UK: Union Park, Uxbridge
Case studies - UK Union Park, Packet Boat Lane, Uxbridge, London Description: Office park in a mixed-use area beside the Grand Union Canal, mid-way between Heathrow and Uxbridge; 8x self-contained units arranged within 3x separate buildings totalling c70,000 ft2 of net internal space + 318 car p
Slide 36: Poland Economy
Poland Economy GDP growth: Since 2009: >20% (cumulative). Highest in OECD. Only euro zone country NOT to enter recession in 2009 2015: 3.5% 2016: 3.5% (E) GDP per capita: 1995: 43% of the average of EU countries 2000: 48% 2008: 56% 2012: 67% EU Cohesion Policy (transfer payments
Slide 37: Poland Commercial Property Market
Poland Commercial Property Market COMMERCIAL PROPERTY MARKET: Opaque – creates opportunity; Occupier Market: Tenant demand is generally robust - because of continued GDP growth; But is insufficient in some sectors (eg. Warsaw non-CBD offices) to match pending supply. Investment Market: R
Slide 38: Poland Commercial Property Finance
Poland Commercial Property Finance COMMERCIAL PROPERTY FINANCE: Debt: Readily available, enabling income returns on equity from rent alone >mid-high teens per annum; Favourable terms for smaller loans against commercial property; Larger loans require syndication and are generally subject to
Slide 39: Disclaimer
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