- Down valuation of office property in Poland leads to pre-tax loss.
- Final dividend passed.
- Company to book €9m gain in new financial year.
- Expect news flow on pipeline of investments to recycle cash pile.
Shares in Aim-traded UK and eastern European property fund manager and investor First Property (FPO:29.5p) lost 16 per cent of their value following the company’s annual results, a massive overreaction caused mainly by a quirk of accounting.
A high proportion of the 22 per cent decline in net asset value (NAV) to £48.4m (42.8p a share) reflects a £7m down valuation of the company’s 13,500 square metre office property in Gydnia, Poland. First Property had a short non-recourse €25m finance lease on the property which it could have walked away from in February this year, but decided to renegotiate a new deal with the bank which resulted in the debt being slashed by the lender to €16m post the company’s 31 March 2021 financial year-end. First Property has since reduced these borrowings by €4m (£3.4m) with the balance of €12m now due to be repaid in June 2024.