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First Property to focus on Poland as profits rise

Profits for the half year rose to £5.93mln, with net assets 20% higher
First Property to focus on Poland as profits rise
Broker Arden believes investment case for Polish property is compelling

--adds broker comment --

First Property (LON:FPO) increased its interim dividend by 10% as its growing portfolio in Poland and Romania offset lower fund management income.

Profits for the half year rose to £5.93mln (£5.42mln), with net assets 20% higher at £32mln and £14mln of cash at the period end.

Ben Habib, chief executive, said the aim was to continue to invest in high income generating property, most likely in Poland and ideally in partnership with third parties.

House broker Arden Partners said the half year had seen a marked improvement in earnings quality with significant one off and short term revenues a year ago largely replaced by recurring income.

It is forecasting profits of £7.3mln next year and £6.4mln in 2017, though by then it says its forecast are based solely on recurring revenues.

“Importantly, with over £14mln of cash available for investment, the group has the capacity to make further earnings enhancing property acquisitions.

“We think the investment case for Polish property is compelling. The country is seeing good GDP growth yet capital values remain largely unchanged from the credit crunch lows.”

Shares rose 1.5% to 47.5p.

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In Romania, the group has said the outlook is “strong” and that it would be looking to growing its presence there, although in March it sold off one of its Romanian properties

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