First Property Group Plc · LSE:FPO
First Property — H1 FY2024 Earnings Presentation
68 slides from First Property's earnings presentation, Nov 23, 2023
Slide 1: Interim Results for the period to 30 September 2023
Interim Results for the period to 30 September 2023 First Property Group plc 23 November 2023 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 62-70 Investment Approach 63-64 Interim Results 5-16 Shareholders >5% 65 Highlights 6-10 Share Statistics 66 NAV 11-12 Plc Management Team 67-68 Dividend 13 Awards 69 Outlook 14-16 Disclaimer 70 Markets 17-19 Investment
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 16.5p per share: £18m Fund Management Division Group Properties Division (FPAM) 12 funds; 7 directly owned properties 51 properties; 6 in Poland, 1 in Romania; Invested across the UK, Poland & Gross properties at market valu
Slide 5: Interim Results
First Property Group plc Interim Results Interim Results Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 5
Slide 6: Highlights
First Property Group plc Highlights Statutory loss before tax: £0.65 million (30 September 2022: profit before tax of £2.39 million) Cash: £6.71 million (31 March 2023: £7.65 million) Net debt: £22.22 million (31 March 2023: £22.01 million) Third party AUM: £304 million (31 March 2023: £400
Slide 7: Income Statement
First Property Group plc Income Statement Period to 30 Sept 2023 Period to 30 Sept 2022 Income Statement Year to 31 March 2023 Percentage change (unaudited) (unaudited) Statutory (loss)/profit (£0.65m) £2.39m £2.49m -127.2% before tax Diluted earnings per (0.99p) 1.83p 1.70p -154.1% share Total divi
Slide 8: Financial Position at period end
First Property Group plc Financial Position at period end Statement of Financial Position 30 Sept 2023 31 March 2023 Percentage change Investment properties and Inventories at book £47.13m £47.01m +0.3% value Investment properties and Inventories at £53.28m £53.97m -1.3% market value Associates and
Slide 9: Financial Position at period end
First Property Group plc Financial Position at period end Statement of Financial Position 30 Sept 2023 31 March 2023 Percentage change Gross debt (including deferred consideration) £28.93m £29.66m -2.5% Net debt £22.22m £22.00m +1.0% Gearing ratio at book value 41.0% 40.57% - Gearing ratio at market
Slide 10: NAV per share 2007-2023
First Property Group plc NAV per share 2007-2023 (excluding any value attributable to FPAM) 70 EPRA NAV • NAV per share at Book NAV 60 book value: 37.56p Cash (31 March 2023: 50 39.18p) Pence per share 40 • EPRA NAV per share: 43.56p 30 (31 March 2023: 46.50p) 20 • Cash per share: 10 6.05p (31 March
Slide 11: Adjusted NAV Bridge
First Property Group plc Adjusted NAV Bridge Adjusted NAV breakdown 31 Mar 2023 Associates and 22.37p £25.27m Investments Cash 6.77p £7.65m 7 directly owned 18.47p £20.87m properties less loans FPAM - - Other working capital (1.10p) (£1.25m) Total 46.50p £52.54m Adjusted NAV breakdown 30 Sep 2023 As
Slide 12: Dividend History
First Property Group plc Dividend Dividend History 1.80 1.60 Interim dividend: 1.40 Nil (FY23: 0.25p) 1.20 1.00 Total for FY 2023: 0.80 0.50p 0.60 (FY2022: 0.50p) 0.40 0.20 - Interim Final Total Dividend Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 12
Slide 13: New product: senior loans for commercial property
First Property Group plc New product: senior loans for commercial property New product: senior loans secured against commercial property Since its establishment in June, this division has originated over £600 million in enquiries for new senior loans. The loans being offered are generally up to
Slide 14: CEO Comment
First Property Group plc CEO Comment Commenting on the results, Ben Habib, Chief Executive of First Property Group, said: Markets have been as challenging over the last year as I have ever known them. The rapid increase in interest rates, with a commensurate collapse in demand for commercial prope
Slide 15: CEO Comment
First Property Group plc CEO Comment Commenting on the results, Ben Habib, Chief Executive of First Property Group, said: We also have occupational demand for the vacant space in the office blocks we own in Warsaw and Gdynia, with particular demand for the former. As we lease up this space, we wil
Slide 16: Why invest in Fprop plc?
First Property Group plc Why invest in Fprop plc? 1. Expertise: Experienced, nimble management team; Excellent investment track record: c20% p.a. growth in adjusted net assets, including dividends paid since 2006. 2. Diversified earnings: From Group Properties and from fund management fees;
Slide 17: Markets
Markets Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 17
Slide 18: Investment Markets Poland
Investment Markets Poland Poland: GDP growth contracted by 0.8% per annum in the first half of 2023, resulting in forecasters downgrading their full year GDP growth estimates to 0.2% per annum, the lowest it has been in our entire time investing in Poland. GDP growth is expected to rebound in 2024
Slide 19: Investment Markets United Kingdom
Investment Markets United Kingdom UK: The Bank of England held interest rates at 5.25% per annum in September and again in October, unchanged for the first time in 15 meetings of the Monetary Policy Committee (“MPC”). The Consumer Price Index (“CPI”) increased by 4.7% on an annualised basis in O
Slide 20: Segmental Analysis
Segmental Analysis Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 20
Slide 21: Fund Management (FPAM)
Fund Management (FPAM) Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 21
Slide 22: Fund Management Summary
Segmental Analysis: Fund Management Summary Fund • Third party AUM: £305m Revenue: £1.26m (31 Mar 2023: £400m); (30 Sept 2022: £1.66m); Management • 12 funds invested across UK, Poland & Contribution to PBT Romania; prior to deduction of unallocated central • Weighted average fund management ove
Slide 23: 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 24: Fund Management Revenue and AUM
Segmental Analysis: Fund Management Revenue and AUM 10 Performance Fee 800 9 FPAM Revenue 700 Annualised fee 8 3rd Party AUM income: 600 £2.06m 7 (31 Mar 2023: 500 £2.55m), 6 Revenue (£ Million) EXCLUDING AUM (£ Million) 5 400 performance fees and the profit 4 share from Fprop 300 Offices LP. 3 200
Slide 25: 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 26: 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 30 Sept 2023 31 March 2023 SAM & DHOW
Slide 27: AUM by geography, sector, asset class
Segmental Analysis: Fund Management AUM by geography, by sector, by asset class FCL FULCRUM 3% 3% Supermarkets/ FPL supermarket led FKR 1% OFFICES 13% 5% 17% SPEC OPPS POLAND 5% 34% UKPPP Shopping Centres 7% 16% By Fund By Geography By Sector Office 52% FGC 7% UK 63% SIPS ROMANIA 32% 3% Retail/Retai
Slide 28: 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 £109.3m £41.5m £8.6m £159.4m 52.3% Retail warehousing £56.9m - - £56.9m 18.7% Supermarkets £26.6m £12.0m - £38.6m 12.7% Shopping centres - £49.7m - £49.7m 16.3% TOTALS £1
Slide 29: 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 30 September 2023
Slide 30: 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 30
Slide 31: Group Properties
Group Properties Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 31
Slide 32: Group Properties Overview
Segmental Analysis: Group Properties Overview Group 1. 7 directly owned properties (6 in Contribution to PBT prior to deduction Properties Poland valued at £49.46m, 1 in of unallocated central overheads for Romania valued at £3.82m): period to 30 September 2023: o Gross asset value: £53.28m £0.09m
Slide 33: 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 Corresponding net equity invested (prior to deduction of unallocated central overheads) 9,000 8,000 7,000 6,000 Directly owned Associates and 5,000 p
Slide 34: 7 directly owned properties
7 directly owned properties Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 34
Slide 35: 7 directly owned properties at 30 September 2023
Segmental Analysis: Group Properties 7 directly owned properties at 30 September 2023 Blue Tower, Warsaw Gdynia, Poland Dr Felix Strada, Bucharest, Romania (Fprop 80% share: c18,000 m2) (c13,500 m2) (2,845 m2) MV: £23.89m (€27.5m) MV: £14.32m (€16.5m) MV: £3.82m (€4.4m) 5th Property Trading Ltd: con
Slide 36: 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, 5PT: Bucharest, ROMANIA Supermarkets/ Mokotaw, Romania 7% supermarket led Warsaw 7% 5PT: 16% 5% Blonie, Gdynia, Poland Warsaw 27% 5% 5PT: Tulipan, Poznan 5% By Geography By Sector E&S
Slide 37: 7 directly owned properties
Segmental Analysis: Group Properties 7 directly owned properties Contributed £0.27m (30 September 2022: £0.98m) to Group PBT (prior to the deduction of unallocated central overheads); Book value: £47.13m, Market value: £53.28m; Activity in the six months to 30 Sep 2023: Blue Tower, Warsaw: l
Slide 38: 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 30 Sept 2023 30 Sept 2023 PBT 30 Sept 2023 Poland, Gdynia Offices 1 £14.20m £14.32m (£0.14m) Poland, Warsaw Offices 1 £20.71m £23.89m £0.46m Po
Slide 39: 7 directly owned properties: debt and LTV
Segmental Analysis: Group Properties 7 directly owned properties 30 Sept 2023 31 March 2023 Book value £47.13m £47.01m Market value £53.28m £53.97m Gross debt (including £16.95m of non-interest £28.93m £29.66m bearing deferred consideration) LTV at book value % 61.38% 63.09% LTV at market value % 54
Slide 40: Office Building, Gdynia, Poland
Segmental Analysis: Group Properties Office Building (13,403 m2), Gdynia, Poland Prime location in Gdynia city centre/CBD; Purchase price (Mar-2021): €16 million (€1,193 per m2 / £111 per ft2); Equity invested: €4 million; Leverage: Bank debt: nil Deferred consideration: €12m (due FY 202
Slide 41: 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 42: 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€304k pa. WAULT: 5 yrs, 11 mths Book value: £2.32m (£72
Slide 43: 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: €3.0m (c2,300 m2) MV: €3.3m (c3,500 m2) MV: €3.3m (c1,000 m2) 3 properties in Poland Market value: €9.6m (
Slide 44: 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: €3.35m (£2.91m) NOI: €160,000 pa Vacancy rate: nil Tenant: Jeronimo Martins Leverage: c50% LTV WAULT: 11 yrs, 7 mths
Slide 45: 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 Polska S.A Supermarket Chain Poland 18.27% 2 HRK HR Poland 17.33% 3 Urząd Miasta Government Poland 13.08% 4 Vulpoi & Toader Management Professional / Accounting Serv
Slide 46: 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 46
Slide 47: Associates and Investments
Segmental Analysis: Group Properties Associates and Investments Contributed loss of £185,000 (30 Sept 2022: profit of £1,419,000) to Group PBT (prior to the deduction of unallocated central overheads). Decrease mainly due to reduction in fair value of (£0.82) million in respect of the Group’s in
Slide 48: 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 30 Sept 2023 30 Sept 202
Slide 49: Minority shareholdings in 5 funds accounted for as Associates
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 49
Slide 50: Fprop Opportunities plc (FOP)
Fprop Opportunities plc (FOP) Associates & Investments Fprop Opportunities plc (FOP) BV of Group’s 45.7% share: £12.31 MV of Group’s 45.7% share: £12.31 Contribution to PBT of Group’s share: (£374k) Galeria Ostrowiec (19,400 m2) Zana 39, Lublin (10,600 m2) Comments: Galeria Ostroweic: o Rent
Slide 51: Fprop Phoenix Ltd
Fprop Phoenix Ltd Associates & Investments Fprop Phoenix Ltd BV of Group’s 23.4% share: £0.00m MV of Group’s 23.4% share: £1.7m Contribution to PBT of Group’s share: (£60,500) Comments: 51,000 m2 office park near Kraków Airport, Poland; 14km’s from city centre; Train station on the park
Slide 52: 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: £2.92m 45 stores, 4 cinema screens, 160 parking places MV of Group’s 29.1% share: £3.14m Property value: €25.0m Contribution
Slide 53: 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: £652,000 43 underground parking places Market value of Group’s 21.2% share: £901,000 Vacancy rate: 6.7% Contribution t
Slide 54: 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: £1.18m 149 underground parking places, 26 at ground level Market value of Group’s 18.1% share: £1.25m Eco Rating: LEED P
Slide 55: Minority shareholdings in 4 funds accounted for as Investments
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 55
Slide 56: UK Pension Property Portfolio LP
UK Pension Property Portfolio LP Associates & Investments UK Pension Property Portfolio (UK PPP) Book value of Group’s 0.94% share: £196,000 Market value of Group’s 0.94% share: £196,000 Contribution to PBT from Group’s 0.94% share: £9,318 NB. Fprop UK Special Opportunities LP, in which the Gr
Slide 57: 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 £14.4m Book value of Group’s 11.1%
Slide 58: 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: £429,680 Value: £26.2m Market value of Group’s 1.64% share: £429,680 18 tenan
Slide 59: 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: £172,000 Value: £6.9m Market value of Group’s 2.5% share: £172,000 18 tenants Contribution to PBT from Group’s 2.5% share: £11,343
Slide 60: Appendix
Appendix Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 60
Slide 61: 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 62: 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 63: Shareholders > 3%
Appendix Shareholders > 3% as at 20 September 2023 % held (of issued No of shares and fully paid) Peter Gyllenhammar AB / Galjaden Invest AB / Bronsstädet AB / Galjaden Holding AB / 22,214,283 20.03% Browallia Asset Management Ltd / Silversläggan Invest AB Ben Habib (Chief Executive Officer) 15,030,
Slide 64: Share Statistics
Appendix Share Statistics as at 30 September 2023 LSE (AIM) Symbol FPO.L Issued & Fully Paid 116,601,115 Share price 16.50p Issued (excl Treasury) 110,882,332 Market Cap £18 million Shares held in Treasury 5,718,783 Dividends FY 2024 FY 2023 Interim - 0.25p Outstanding share options over 12,560,000
Slide 65: 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 66: 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 67: 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 68: 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
First Property Group — H1 FY2024 Earnings Presentation on 6ix