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First Property expects rise in contribution from fund management

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“The quality of our earnings has continued to improve with very nearly all our profits being earned from activities of a recurring nature,” said CEO Ben Habib.

The adjusted net asset value (NAV) per share of First Property Group PLC (LON:FPO) rose sharply in the year to end-September.

The commercial property investor and fund manager revealed in its interim results that the adjusted NAV per share stood at 45.8p at the end of September, up 19.8% from 38.27p a year earlier.

Total assets under management rose from £283mln to £405mln in 12 months.

Profit before tax in the six months to 30 September edged up to £4.47mln from £4.46mln the year before, when profits were boosted by £1.58mln of non-recurring items, compared to just £290,000 of one-off boosts this time round.

The annualised fund management fee income at the end of the reporting period, excluding performance fees, had increased by 46% to some £1.9mln from £1.3mln the previous year.

Revenue advanced to £11.12mln in the six month period from £10.95mln the year before.

Chief executive Ben Habib said the group has additional fund management commitments which, once invested, will result in further growth.

“The quality of our earnings has continued to improve with very nearly all our profits being earned from activities of a recurring nature,” Habib said.

“The assets we own and manage are performing well, as are the economies in which we operate and we expect continued earnings growth,” he added.

First Property invests in central European countries, especially Poland and Romania where it has 11 commercial properties, as well as the UK. The company said it had received a £620,000 boost to pre-tax profits from the weakness of sterling versus the euro.

“The contribution to earnings from group properties has increased substantially in recent years as a result of us taking advantage of opportunities for which we had no fund management mandates. Going forward, we expect the relative contribution from fund management to rise. The synergies between these two activities further balance the business,” Habib said.

“We are confident that our strong balance sheet, operational gearing and experienced team will continue to drive the group’s growth and look forward to taking advantage of the in-built opportunities available to us,” Habib said.

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Paul

The author Paul