Slide 1: Preliminary Results for the year ended 31 March 2016
Preliminary Results for the year ended 31 March 2016 First Property Group plc 9 June 2016 FPAM funds rank No.1 versus MSCI’s Investment Property Databank (IPD) Central & Eastern European (CEE) Benchmark for the ten years from the commencement of its operations in Poland in 2005 to 31 December 2015,
Slide 2: Contents
First Property Group plc Contents Company Description 3 Investment markets – Poland 23 Investment Approach 4 Investments - Romania 24 Financial Summary 5-6 Investment markets – UK 25 Highlights 7-8 Outlook 26 CEO comment 9 Dividend 10 Appendices 27-39 NAV per share 11 Shareholders >3% 28 Share stati
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: 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 debt service cost
Slide 5: Financial Summary
Preliminary Results Financial Summary Unaudited Audited year Percentage Notes year to to change 31 Mar-2016 31 Mar-2015 Income Statement: Revenue £21.96m £18.52m +18.6% Statutory profit before tax £7.35m £8.08m -9.0% Non-recurring income £1.29m £3.99m Mainly related to Fprop PDR Diluted earnings per
Slide 6: Financial Summary
Preliminary Results Financial Summary Unaudited Audited year Percentage Notes year to to change 31-Mar-2016 31-Mar-2015 Group Property Portfolio at year end: (excluding the Group’s non-controlling interest in six FPAM managed funds) Book Value £134.53m £126.90m +6.0% Market Value £156.92m £142.04m +
Slide 7: Highlights
Preliminary Results Highlights Total AUM up 8% to £353m, despite major fund expiry; UK PPP fund life extended by 5 years to Feb-2022; 2 new investment companies established (which invested some €35m in Poland and Romania); Good cash generation – Group cash balances would have increased by so
Slide 8: Highlights
Preliminary Results Highlights Final dividend increased to 1.115p per share (2015: 1p per share), an increase of 11.5%; Funds under management once again ranked No.1 vs MSCI’s Investment Property Databank (IPD) Central & Eastern Europe (CEE) Benchmark: for the ten years from 2005 to 31 Dec-201
Slide 9: CEO comment
Preliminary Results CEO comment Commenting on the results, Ben Habib, Chief Executive of First Property Group, said: “The Group is trading well across the board and the number and value of assets under management is increasing. In the financial year just ended the Group benefitted from a full year o
Slide 10: Dividend
Preliminary Results Dividend 1.60 Final dividend: 1.40 1.115p (2015: 1.00p) = +11.5% 1.20 Total dividend for year to Mar- Pence per share 1.00 2016: 0.80 1.50p (2015: 1.35p) = +11.1% 0.60 Ex-Dividend 1 Sep-16 0.40 Record Date 2 Sep-16 0.20 Payment Date 30 Sep-16 0.00 FY03 FY04 FY05 FY06 FY07 FY08 FY
Slide 11: NAV per share 2007-2016
Preliminary Results NAV per share 2007-2016 50 Adjusted NAV NAV Cash Adjusted NAV = in 45 line with European Public Real Estate 40 Association methodology, which 35 includes fair values of: Pence per share 30 (i) financial instruments; 25 (ii) debt; (iii) deferred taxes. 20 15 External valuers 10 CB
Slide 12: Profit before Tax by segment
Segmental Analysis Profit before Tax by segment (before unallocated central overheads) 12 FPAM (excl fees from FOP) Group Properties (incl FOP) 10 1.38 4.44 8 2.63 £ Million 6 8.85 4 2.84 6.32 6.57 2 2.07 - Mar-13 Mar-14 Mar-15 Mar-16 Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 12
Slide 13: Segmental Analysis – Fund Management (FPAM) Overview
Segmental Analysis – Fund Management (FPAM) OVERVIEW Fund Management (FPAM): Contributed profit before tax and unallocated central overheads of £1.38 million (2015: £4.44 million), representing 14% (2015: 40%) of Group profit before tax and unallocated central overheads. 10 400 Performance Fee FPAM
Slide 14: Reconciliation of movement in funds under management
Segmental Analysis – 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.
Slide 15: Funds under management at 31 March 2016
Segmental Analysis – Fund Management (FPAM) Funds under management at 31 March 2016 Country of AUM % of total AUM Fund Fund expiry Commitment investment 31 Mar-2016 AUM 31 Mar-2015 1. SAM Property Company Ltd (SAM) UK Rolling Fully invested * * * 2. Regional Property Trading (RPT) Poland Aug 2020 Fu
Slide 16: Breakdown of AUM (incl Group Properties)
Segmental Analysis – Fund Management (FPAM) Breakdown of AUM (incl Group Properties) Fprop PDR 0.0% 5PT HNW 2.2% SIPS 7.9% 16.9% RPT Poland 1.9% FOP 51% 17.4% UK Fprop By Fund By Investor 43.8% By Geography 44% Pension Category Funds UK PPP Group 43.7% 27.0% Properties 27.0% Fprop Romanian Family Fp
Slide 17: Segmental Analysis – Group Properties Overview
Segmental Analysis – Group Properties OVERVIEW Group Properties: 10 Contributed £8.85m 9 Contribution to PBT from directly held properties (2015: £6.57m) 8 to PBT & unallocated 7 central overheads; 6 Contribution to PBT from £ Million Group's share in FOP Represents 87% 5 (2015: 60%) 4 of Group
Slide 18: Directly owned properties at 31 Mar-2016
Segmental Analysis – Group Properties composition Directly owned properties at 31 Mar-2016 Property No. of properties Book value Market value Contribution to Group Contribution to Group PBT to PBT to 31 Mar-2016 31 Mar-2015 Poland 3 74.6m 86.9m 5.7m 2.7m Romania 3 5.5m 8.5m 0.9m 0.6m FOP (Poland – c
Slide 19: Non-controlling interests in funds managed by FPAM
Segmental Analysis – Group Properties composition Non-controlling interests in funds managed by FPAM at 31 Mar-2016 Group’s share of Group’s share of Book value Current % owned by First pre-tax profits pre-tax profits Fund of First Property’s market value Property Group earned by fund earned by fund
Slide 20: Cash flows from eleven directly held properties
Segmental Analysis – Group Properties Cash flows from eleven directly held properties: Year to 31 March 2016 Year to 31 March 2015 €m. €m. Net operating income (NOI) 19.74 11.08 Interest expense on bank loans / finance (3.59) (2.70) leases interest NOI after interest expense 16.15 8.38 Current tax (
Slide 21: Eleven properties owned directly by the Group and FOP
Segmental Analysis – Group Properties Eleven properties owned directly by the Group and FOP 250 Properties are held in separate non- cross collateralised SPV’s which are Market value = €197.9m non-recourse to the Group. 200 Book value Interest rates: = €169.7m Equity = 37% Current weighted ave
Slide 22: Eleven directly owned properties – top 10 tenants
Segmental Analysis – Group Properties Eleven directly owned properties – top 10 tenants Tenant Sector % 1 Asseco S.A. Technology 27.5 2 Citibank International PLC Finance 11.6 3 Carrefour Food Retail 7.9 4 Aquila Logistics 6.3 5 Skanska S.A. Construction 6.1 6 Tesco (Polska) sp z o.o. Food Retail 3.
Slide 23: Investment Markets Poland
Investment Markets Poland GDP growth: 2016: 3.9% (F) 2017: 3.5% (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 24: Investment Markets Romania
Investment Markets Romania GDP growth: 2016: 4.2% (F); 2017: 3.7% (F); Wages growing, private consumption accelerating (aided by VAT cuts); Anti-corruption measures working; Conducive economic and political environment for property investment. Commercial Property: Rent levels general
Slide 25: Investment Markets United Kingdom
Investment Markets United Kingdom GDP growth: Expected to grow at just over 2% for next few years. Held back by continued fiscal tightening in order to eliminate budget deficit. Commercial Property Occupier Market: o Tenant demand growing; o Tenant default rates declining; o Leading to inc
Slide 26: Outlook
Preliminary Results Outlook FPAM Group Properties Fund management fee income, excluding Contributed £8.85m to Group profit before performance fees, is currently being earned at central overheads and tax in FY2016; the rate of £1.68m per annum. We expect this to increase from: All of it is of a
Slide 27: Appendices
Appendices Email jeremy.barkes@fprop.com Phone +44 20 7340 0270 27
Slide 28: Shareholders > 3% at May-2016
Appendix Shareholders > 3% at 6 May-2016 % held (of issued No of shares and fully paid) Ben Habib (Chief Executive Officer) 16,700,000 14.4% New Pistoia Income Ltd 15,000,000 12.9% J C Kottler Esq 12,206,783 10.5% Universities Superannuation Scheme Limited 9,550,000 8.2% Alasdair Locke (Non-Executiv
Slide 29: Share Statistics at May-2016
Appendix Share Statistics at 6 May-2016 FY 2016 FY 2015 LSE (AIM) Symbol FPO.L Issued & Fully Paid 116,601,115 114,851,115 Share price 45p Issued (excl Treasury) 115,967,111 113,792,541 Market Cap £52 million Dividend FY2016 FY2015 634,004 1,058,574 Shares held in Treasury Interim 0.385p 0.35p Outst
Slide 30: 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 Ansbac
Slide 31: Plc Management Team
Appendix Plc Management Team Group Chief Executive & FPAM Chief Investment Officer — Ben Habib, MA (Cantab) Ben founded First Property Group plc in 2000. He is responsible for all aspects of the operations of Fprop and its fund management business. Prior to setting up Fprop, Ben was Managing Directo
Slide 32: FPAM Track Record: All Funds to 31-Mar-2016
FPAM Track Record All Funds (excl SAM) to 31-Mar-2016 Fund performance at 31 March 2016: 110% IRR pa - Actual IRR pa - Implied ROE pa - since inception ROE FY 2015/16 - on original equity 90% 70% 50% 30% 10% 1PT 2PT 3PT USS RPT 5PT UK PPP FOP PDR SIPS -10% Implied IRR calculations use NAVs at 31-M
Slide 33: FPAM Track Record Awards
FPAM Track Record Awards FPAM funds rank No.1 versus MSCI’s Investment Property Databank (IPD) Central & Eastern European (CEE) Benchmark for the ten years from the commencement of its operations in Poland in 2005 to 31 December 2015, and for the annualised periods from 2005 to the end of each of th
Slide 34: Case Studies - Poland: Blue Tower, Warsaw
Case Studies - Poland Blue Tower, Warsaw At purchase: Rents c25% below market and denominated in mixture of €, $ & PLN; Weighted average unexpired lease term (WAULT) c.2 years; Subject to high service charge (c.1.5x market) levied by tied management company (Corp Sp. z o.o.). Business Plan:
Slide 35: Case Studies - Poland: 50.3% of Oxford Tower, Warsaw
Case Studies - Poland 50.3% of Oxford Tower, Warsaw At first purchase 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 purc
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: 3.9% (F) 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
Disclaimer These presentation materials (the "Presentation Materials”) are being solely issued to the information, opinions or beliefs contained in this document. Save in the case of and directed at (a) persons having professional experience in matters relating to fraud, no liability is accepted for