First Property Group Plc · LSE:FPO
First Property — FY2024 Earnings Presentation
65 slides from First Property's earnings presentation, Jun 26, 2024
Slide 1: Preliminary Results for the financial year to 31 March 2024
Preliminary Results for the financial year to 31 March 2024 First Property Group plc 26 June 2024 Email jeremy.barkes@fprop.com Phone +44 20 7340 0270
Slide 2: Contents
First Property Group plc Contents Company Description and Structure 3-4 APPENDIX 57-64 Investment Approach 58-59 Preliminary Results 5-16 Shareholders >5% 60 Highlights 6-9 Share Statistics 61 NAV 10-11 Plc Management Team 62-63 Dividend 12 Awards 64 Outlook 13-14 Disclaimer 65 Markets 15-17 Investm
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 Market Capitalisation at 19p per share: £21m Fund Management Division Group Properties Division (FPAM) ▪ 12 funds; 7 directly owned properties ▪ 35 properties; ▪ 6 in Poland, 1 in Romania; ▪ Invested across the UK, Poland & ▪ Gross properties at market value:
Slide 5: Preliminary Results
First Property Group plc Preliminary Results Preliminary Results Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 5
Slide 6: Highlights
First Property Group plc Highlights ➢ Statutory loss before tax: £4.41 million (31 March 2023: profit before tax of £2.49 million) ➢ Cash: £4.63 million (31 March 2023: £7.65 million) ➢ Net debt: £22.99 million (31 March 2023: £22.01 million) ➢ Third party AUM: £222 million (31 March 2023: £400 mill
Slide 7: Income Statement
First Property Group plc Income Statement Year to 31 March 2024 Income Statement Year to 31 March 2023 Percentage change (unaudited) Statutory (loss)/profit before tax (£4.41m) £2.49m -277.1% Diluted earnings per share (4.04p) 1.70p -337.7% Total dividend per share - 0.50p -100% Average €/£ exchange
Slide 8: Financial Position at year end
First Property Group plc Financial Position at year end Statement of Financial Position 31 March 2024 31 March 2023 Percentage change Investment properties and Inventories at book £45.76m £47.01m -2.7% value Investment properties and Inventories at £51.90m £53.97m -3.8% market value Associates and i
Slide 9: Financial Position at year end
First Property Group plc Financial Position at year end Statement of Financial Position 31 March 2024 31 March 2023 Percentage change Gross debt (including deferred consideration) £27.62m £29.66m -6.9% Net debt £22.99m £22.01m +4.5% Gearing ratio at book value 41.5% 40.57% - Gearing ratio at market
Slide 10: NAV per share 2007-2024
First Property Group plc NAV per share 2007-2024 (excluding any value attributable to FPAM) 70 EPRA NAV • NAV per share at Book NAV 60 book value: 35.15p Cash (31 March 2023: 50 39.18p) Pence per share 40 • EPRA NAV per share: 39.41p 30 (31 March 2023: 46.50p) 20 • Cash per share: 10 4.18p (31 March
Slide 11: Adjusted NAV Bridge
First Property Group plc Adjusted NAV Bridge Adjusted NAV breakdown 31 Mar 2024 Associates and 17.93p £20.26m Investments Cash 4.09p £4.63m 7 directly owned 18.07p £20.42m properties less loans FPAM - - Other working capital (0.68p) (£0.78m) Total 39.41p £44.53m Adjusted NAV breakdown 31 Mar 2023 As
Slide 12: Dividend
First Property Group plc Dividend Dividend History 1.80 Interim dividend: Nil 1.60 (FY 2023: 0.25p) 1.40 Final dividend: 1.20 Nil 1.00 (FY 2023: 0.25p) 0.80 0.60 Total for FY 2024: 0.40 Nil (FY 2023: 0.50p) 0.20 - Interim Final Total Dividend Email jeremy.barkes@fprop.com Phone +44 20 7340 0270
Slide 13: CEO Comment
First Property Group plc CEO Comment Commenting on the results, Ben Habib, Chief Executive of First Property Group, said: ➢ The last year has been a challenging time for investing in commercial property. ➢ The combination of higher interest rates in the US, attracting capital out of other markets in
Slide 14: Why invest in Fprop plc?
First Property Group plc Why invest in Fprop plc? 1. Expertise: ▪ Experienced, nimble management team; ▪ Excellent investment track record: c18% p.a. growth in adjusted net assets, including dividends paid since 2006. 2. Diversified earnings: ▪ From Group Properties and from fund management fees; ▪
Slide 15: Markets
Markets Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 15
Slide 16: Investment Markets Poland
Investment Markets Poland Poland: ➢ GDP growth in 2023 decreased to 0.2% (2022: 5.3%), lower even than during the global financial crisis in 2009. It is forecast to grow by 2.6% in 2024. ➢ Unemployment has been at around 5.0% since mid-2023 (a historic low), which, in combination with strong nominal
Slide 17: Investment Markets United Kingdom
Investment Markets United Kingdom United Kingdom: ➢ Continued elevated interest rates, coupled with, inter alia, the cost of capital improvements in order to meet net zero emissions targets, and reduced tenant demand for regional offices and regional retail units, have exerted sustained pressure on
Slide 18: Segmental Analysis
Segmental Analysis Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 18
Slide 19: Fund Management (FPAM)
Fund Management (FPAM) Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 19
Slide 20: Fund Management Summary
Segmental Analysis: Fund Management Summary Fund • Third party AUM: £222m ➢ Revenue: £2.95m (31 Mar 2023: £400m); (31 Mar 2023: £2.52m); Management • 12 funds invested across UK, Poland & ➢ Contribution to PBT Romania; prior to deduction of unallocated central • Weighted average fund management over
Slide 21: Typical Fund Management Fees / Selection of Clients
First Property Group plc Typical Fund Management 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 equiva
Slide 22: Fund Management Revenue and AUM
Segmental Analysis: Fund Management Revenue and AUM 10 700 Performance Fee FPAM Revenue 3rd Party AUM 600 8 500 Annualised fee 6 income: £1.83m Revenue (£ Million) 400 AUM (£ Million) (31 Mar 2023: 4 £2.55m), 300 EXCLUDING 2 performance fees. 200 - 100 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-1
Slide 23: Reconciliation of movement in funds under management
Segmental Analysis: Fund Management 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 1 April 2023 241.4 159.0 400.4 53 Purchases - - - - Property sales/recl
Slide 24: Third Party funds under management
Segmental Analysis: Fund Management Third Party funds under management Assets Under Assets Under % of Total Third- Management at Market Management at Fund Country of Investment Fund Expiry Value at No. of Properties Party Assets Under Market Value at Management 31 Mar 2024 31 March 2023 SAM & DHOW U
Slide 25: AUM by geography, by sector, by asset class
Segmental Analysis: Fund Management AUM by geography, by sector, by asset class FULCRUM FCLFPL 4% 4%0% OFFICES Shopping Centres FKR 22% 7% 21% SPEC OPPS 6% POLAND 44% UKPPP UK By Geography 6% By Fund 52% Supermarkets/ By Sector supermarket led SIPS 10% Office 15% FGC 61% 10% Retail/Retail Warehousin
Slide 26: Split of third-party funds managed by asset class
Segmental Analysis: Fund Management Split of third-party funds managed by asset class UK Poland Romania TOTALS % of Total Offices £89.1m £37.2m £8.3m £134.6m 60.7% Retail warehousing £16.6m - - £16.6m 7.5% Supermarkets £9.3m £12.1m - £21.4m 9.6% Shopping centres - £49.2m - £49.2m 22.2% TOTALS £115.0
Slide 27: FPAM Track Record - Existing Funds
First Property Group plc FPAM Track Record - Existing Funds IRR pa - Implied ROE pa - since inception ROE FY 2023/24 on original equity 30% 20% 10% 0% 5PT UK PPP OFFICES SIPS FOP FGC SPEC OPPS FKR FCL FPL FUL -10% -20% -30% -40% -50% ▪ Implied IRR’s: assumed sale price = NAVs as at 31 March 2024; ▪
Slide 28: FPAM Track Record - Closed Funds
First Property Group plc FPAM Track Record - Closed Funds IRR pa - Actual 120% 100% 80% 60% 40% 20% 0% 1PT 2PT 3PT USS PDR RPT FRS -20% Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 28
Slide 29: Group Properties
Group Properties Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 29
Slide 30: Group Properties Overview
Segmental Analysis: Group Properties Overview Group 1. 7 directly owned properties (6 in ➢ Detraction from PBT prior to deduction Properties Poland valued at £48.29m, 1 in of unallocated central overheads for year Romania valued at £3.61m): to 31 March 2024: -£3.79m o Gross asset value: £51.90m (31
Slide 31: Contribution to PBT from directly owned properties and Associates
Segmental Analysis: Group Properties Contribution to PBT from the 7 directly owned properties and the 9 Associates and Investments Contribution to PBT (prior to deduction of unallocated central overheads) Corresponding net equity invested 14,000 12,000 10,000 8,000 6,000 Directly owned Associates an
Slide 32: 7 directly owned properties
7 directly owned properties Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 32
Slide 33: 7 directly owned properties at 31 March 2024
Segmental Analysis: Group Properties 7 directly owned properties at 31 March 2024 Blue Tower, Warsaw Gdynia, Poland Dr Felix Strada, Bucharest, Romania (Fprop 80% share: c18,000 m2) (c13,500 m2) (2,845 m2) MV: £26.69m (€31.2m) MV: £10.25m (€12.0m) MV: £3.61m (€4.2m) 5th Property Trading Ltd: consoli
Slide 34: Directly owned properties by geography, asset class, property
Segmental Analysis: Group Properties 7 directly owned properties by geography, by asset class, by property Dr Felix, Bucharest, ROMANIA Supermarkets/ supermarket led Romania 7% 5PT: Mokotaw, 7% Gdynia, Poland 17% Warsaw 20% 6% 5PT: Blonie, Warsaw 5% 5PT: Tulipan, Poznan 5% By Geography By Sector E&S
Slide 35: Directly owned properties activity in the year
Segmental Analysis: Group Properties 7 directly owned properties ➢ Loss £3.79m (31 March 2023: Contribution £2.56m) to Group PBT (prior to the deduction of unallocated central overheads); ➢ Book value: £45.76m, Market value: £51.90m; ➢ Activity in the year: ▪ Blue Tower, Warsaw: leased c2,100 sqm, o
Slide 36: 7 directly owned properties
Segmental Analysis: Group Properties 7 directly owned properties No. of Book value at Market value at *Contribution to Group Location Asset class properties 31 March 2024 31 March 2024 PBT 31 March 2024 Poland, Gdynia Offices 1 £10.25m £10.25m £0.82m Poland, Warsaw Offices 1 £23.11m £26.69m (£0.15m)
Slide 37: Directly owned properties debt and LTV
Segmental Analysis: Group Properties 7 directly owned properties 31 March 2024 31 March 2023 Book value £45.76m £47.01m Market value £51.90m £53.97m Gross debt (including £17.10m of non-interest £27.62m £29.66m bearing deferred consideration) LTV at book value % 60.81% 63.09% LTV at market value % 5
Slide 38: Blue Tower, Warsaw
Segmental Analysis: Group Properties Blue Tower (23,550 m2 over 24 floors of offices), Warsaw ➢ Prime location in Warsaw’s CBD above a subway station and at the main junction of the city’s bus and tram network. ➢ The Group owns: ▪ 80.3% of the tower (c18,000 m2 over 18 office floors): ▪ 90% of Corp
Slide 39: Office Building, Gdynia, Poland
Segmental Analysis: Group Properties Office Building (c13,500 m2), Gdynia, Poland ➢ Prime location in Gdynia city centre/CBD; ➢ Purchase price (Mar-2021): €16 million (€1,194 per m2); ➢ Equity invested: €4 million; ➢ Leverage: ▪ Interest bearing debt: nil ▪ Deferred consideration: €12m (due FY 2025)
Slide 40: Dr Felix St, Bucharest
Segmental Analysis: Group Properties Dr Felix St, Bucharest (3,200 m2 over 7 floors) ➢ Prime location in Bucharest’s CBD within walking distance from Victoriei Square, the financial centre of Bucharest. ➢ Leasing: ▪ Vacancy Rate: 0% ▪ NOI: c€306k pa. ▪ WAULT: 6 yrs, 3 mths ➢ Book value: £2.21m (£691
Slide 41: 5th Property Trading Ltd (5PT)
5th Property Trading Ltd (5PT) Consolidated Undertaking 5th Property Trading Ltd (5PT) Ground floor retail units, Office & Retail, Błonie, Warsaw Office, Tulipan, Poznań Mokotów, Warsaw MV: €3.2m (c2,300 m2) MV: €3.1m (c3,500 m2) MV: €3.4m (c1,000 m2) ▪ 3 properties in Poland ▪ Market value: €9.7m (
Slide 42: E and S Estates Ltd (E&S)
E and S Estates Ltd (E&S) Consolidated Undertaking E and S Estates Ltd (E&S) Mini supermarket, Praga ▪ 1 supermarket in Praga, a suburb of Warsaw (1,338 m2) ▪ Market Value: €3.61m (£3.09m) ▪ NOI: €267,000 pa ▪ Vacancy rate: nil ▪ Tenant: Jeronimo Martins ▪ Leverage: c46% LTV ▪ WAULT: 10 yrs, 7 mths
Slide 43: Top tenants of the directly owned properties
Segmental Analysis: Group Properties Top 10 tenants of the 7 directly owned properties Tenant Sector Jurisdiction % 1 Jeronimo Martins Supermarket Chain Poland 15.58% 2 Miasto Stołeczne Warszawa Government Poland 12.32% 3 Sąd Rejonowy w Gdynia District Court Poland 8.05% 4 HRK HR Poland 8.02% 5 Vulp
Slide 44: Associates and Investments
Segmental Analysis: Group Properties Associates and Investments Associates and Investments (minority shareholdings in 9 of FPAM’s 12 funds) Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 44
Slide 45: Associates and Investments
Segmental Analysis: Group Properties Associates and Investments ➢ Contribution of £112,000 (31 March 2023: £869,000) to Group PBT (prior to the deduction of unallocated central overheads). ➢ Decrease mainly due to reduction in fair value of (£0.97) million in respect of the Group’s investment in FOP
Slide 46: Associates and Investments
Segmental Analysis: Group Properties Associates and Investments Group’s share of Group’s share of Book value of First % owned by First Current market post-tax profits post-tax profits Fund Property's share in Property Group value of holding earned by fund earned by fund fund 31 March 2024 31 March 2
Slide 47: Minority shareholdings in 5 of FPAM's 12 funds
Segmental Analysis: Group Properties Associates and Investments Minority shareholdings in 5 of FPAM’s 12 funds accounted for as Associates (FOP, FPL, FGC, FCL, FKL) Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 47
Slide 48: Fprop Opportunities plc (FOP)
Fprop Opportunities plc (FOP) Associates & Investments Fprop Opportunities plc (FOP) ▪ BV of Group’s 45.7% share: £12.54m ▪ MV of Group’s 45.7% share: £12.54m ▪ Contribution to PBT of Group’s share: (£141k) Galeria Ostrowiec (19,400 m2) Zana 39, Lublin (10,600 m2) Comments: ▪ Galeria Ostroweic: o Re
Slide 49: Fprop Galeria Corso Ltd (FGC)
Fprop Galeria Corso Ltd (FGC) Associates & Investments Fprop Galeria Corso Ltd (FGC) – shopping centre in Świnoujście, Poland ▪ 10,000 m2 ▪ BV of Group’s 29.1% share: £2.97m ▪ 45 stores, 4 cinema screens, 160 parking places ▪ MV of Group’s 29.1% share: £3.19m ▪ Property value: €25.0m ▪ Contribution
Slide 50: Fprop Cluj Ltd (FCL)
Fprop Cluj Ltd (FCR) Associates & Investments Fprop Cluj Ltd (FCL) – Class A office tower in Cluj-Napoca, Romania ▪ 7,289 m2 (9 storeys) ▪ Book value of Group’s 21.2% share: £0.68m ▪ 43 underground parking places ▪ Market value of Group’s 21.2% share: £0.82m ▪ NOI: €835k ▪ Contribution to PBT from G
Slide 51: Fprop Kraków Ltd (FKR)
Fprop Kraków Ltd (FKR) Associates & Investments Fprop Krakow Ltd (FKL) – Class A office tower in Krakow, Poland ▪ 10,297 m2 (13 storeys) ▪ Book value of Group’s 18.1% share: £1.09m ▪ 149 underground parking places, 26 at ground level ▪ Market value of Group’s 18.1% share: £1.09m ▪ Eco Rating: LEED P
Slide 52: Minority shareholdings in 4 of FPAM's 12 funds
Segmental Analysis: Group Properties Associates and Investments Minority shareholdings in 4 of FPAM’s 12 funds accounted for as Investments (UK PPP, Fprop Offices, Spec Opps, Fulcrum) Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 52
Slide 53: UK Pension Property Portfolio LP
UK Pension Property Portfolio LP Associates & Investments UK Pension Property Portfolio (UK PPP) ▪ 7 properties ▪ Book value of Group’s 0.94% share: £196,000 ▪ Located across the UK ▪ Market value of Group’s 0.94% share: £196,000 ▪ Value: £13.6m ▪ Contribution to PBT from Group’s 0.94% share: £22,99
Slide 54: Fprop UK Spec Opps LP
Fprop UK Spec Opps LP Associates & Investments St Anne’s House, St Anthony’s House & St.Catherine’s House, Newbury Cirencester Office Park The Crown, Westerham Rightwell, House, Peterborough Fprop UK Special Opportunities LP ▪ 4 directly held properties valued at £12.7m ▪ Book value of Group’s 11.1%
Slide 55: Fprop Offices LP
Fprop Offices LP Associates & Investments Buildings A, B & D, St Mark’s Court, Horsham Imperial Place, Borehamwood Bartley Wood Business Park, Hook Fprop Offices LP ▪ 4 properties ▪ Book value of Group’s 1.64% share: £461,000 ▪ Value: £47.4m ▪ Market value of Group’s 1.64% share: £461,000 ▪ 14 tenan
Slide 56: Fprop Fulcrum LP
Fprop Fulcrum LP Associates & Investments Corum 1&2, Warmley, Bristol The Pinnacle, Crawley Fprop Fulcrum LP ▪ 2 properties ▪ Book value of Group’s 2.5% share: £174,000 ▪ Value: £7.7m ▪ Market value of Group’s 2.5% share: £174,000 ▪ 18 tenants ▪ Contribution to PBT from Group’s 2.5% share: £22,968 ▪
Slide 57: Appendix
Appendix Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 57
Slide 58: Investment Approach
Appendix 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 long term it is in
Slide 59: Investment Approach (cont.)
Appendix 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): ▪ 2005: largely exited the UK commercial property
Slide 60: Shareholders > 3% as at May 2024
Appendix Shareholders > 3% as at 20 May 2024 % held (of issued No of shares and fully paid) Peter Gyllenhammar AB / Galjaden Invest AB / Bronsstädet AB / Galjaden Holding AB / 26,632,852 24.02% Browallia Asset Management Ltd / Silversläggan Invest AB Ben Habib (Chief Executive Officer) 15,030,000 13
Slide 61: Share Statistics as at June 2024
Appendix Share Statistics as at 26 June 2024 LSE (AIM) Symbol FPO.L Issued & Fully Paid 116,601,115 Share price 19.0p Issued (excl Treasury) 110,882,332 Market Cap £21 million Shares held in Treasury 5,718,783 Dividends FY 2024 FY 2023 Interim - 0.25p Outstanding share options over 12,560,000 Ordina
Slide 62: 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 63: 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 64: 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 65: 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