A stream of smart property deals explains the sharp jump in half-year earnings at real estate fund manager First Property (FPO). That was achieved despite the strong pound, which delivered a £177,000 currency hit.
Around two-thirds of assets under management are in Poland. Supported by a healthy local economy, the commercial property fundamentals there remain robust. The group consequently increased its interest in Blue Tower - an office in Warsaw's business district - from 28.5 per cent to 48.2 per cent, which bolstered the property's profit contribution by 31 per cent to £741,000. Blue Tower is valued at cost, which significantly understates its worth. That value should be crystalised once 100 per cent ownership is reached and the group can sell it on. Two other Polish investments also contributed £585,000 to profits.
Meanwhile, the Fprop PDR fund, which invests in the conversion of UK office space to residential use, sold six properties and generated £1.9m in performance fees. Looking forward, chief executive Ben Habib reckons opportunities here are "not as plentiful" as they have been, reflecting competition and the expiry in 2016 of the relevant planning exemption. That exemption could, however, be extended until 2019.
Broker Arden Partner expects adjusted full-year EPS of 4.6p, from 4.8p in 2014.
FIRST PROPERTY (FPO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 29p | MARKET VALUE: | £33m | |
| TOUCH: | 29-30p | 12-MONTH HIGH: | 33p | LOW: 24p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 4 | |
| NET ASSET VALUE: | 23p | NET DEBT: | 168% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 4.3 | 1.9 | 1.3 | 0.33 |
| 2014 | 7.8 | 5.4 | 4.2 | 0.35 |
| % change | +81 | +184 | +223 | +6 |
Ex-div:18 Dec Payment:15 Jan | ||||
