First Property’s (FPO) return to residential property development last year was the main driver behind a sharp increase in profits. The real-estate fund manager bought two defunct office blocks in Woking and Bracknell for £3.4m, obtained planning consent for conversion into flats and sold them for a profit of £3.8m.
While chief executive Ben Habib admitted this would not be easy to repeat, a new £41m fund established last October has already invested £22m in offices for conversion. The attraction of this business is that a government ruling, which removed previous powers used by local authorities to delay or veto such schemes, has speeded up the planning process significantly.
The group still has two-thirds of its assets under management in Poland. Improving economic growth has been attracting international investors back to the country, and one of First Property's funds spent a total of €35m (£28m) on Polish commercial property during the period. Investor demand is currently centred on prime Warsaw offices and major shopping centres, and has yet to filter down into the secondary property market. But Mr Habib reckons there are good opportunities here for purchasers taking a longer term view.
Broker Arden Partners expects adjusted pre-tax profits of £4.5m in the current year, giving EPS of 2.7p (from £6.6m/4.8p in 2014).
| FIRST PROPERTY GROUP (FPO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 31p | MARKET VALUE: | £35m | |
| TOUCH: | 30-32p | 12-MONTH HIGH: | 32p | LOW: 18p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 6 | |
| NET ASSET VALUE: | 20p | NET DEBT: | 172% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 9.5 | 2.6 | 2.0 | 1.03 |
| 2012 | 7.1 | 3.0 | 2.0 | 1.06 |
| 2012 | 9.3 | 4.0 | 2.9 | 1.08 |
| 2013 | 10.6 | 3.5 | 2.3 | 1.08 |
| 2014 | 18.0 | 6.6 | 4.8 | 1.12 |
| % change | +70 | +89 | +109 | +4 |
Ex-div:20 Aug Payment:25 Sep | ||||
