Buy First Property at 15p
argues Tom Benyon of the Guild of Shareholders

First Property (FPO) is a tiny undiscovered AIM listed gem poised to announce substantial profits in March this year. I should declare an interest: I bought shares this company as soon as I had met its founder, 35 year old Ben Habib. Ben is a quietly confident man, clearly a master of his business and as he talks he makes it all sound easy although he has clearly achieved it through dedication and talent. Habib runs a well organized business and he can see increased profits already for this year and next and again the year after..

First Property was founded in March 2000 and subsequently reversed into AIM listed cash shell Hansom. The company has four distinct arms but there are clear synergies - each feeds of the other three. And all three are profitable and growing.

Firstly, the company provides property databases and web services to commercial property agents in the UK. This service comes in handy as also First Property sells commercial property faster and more cheaply than anyone else through the internet to its formidable client list. This service fits in well as First Property also underwrites property values for third parties who need a fixed price for their portfolios. This is a growing business, earning good money and little risk. Thirdly, it also runs a fast-track conveyancing service. Finally, First Property manages three property portfolios of around 4 million pounds each on behalf of small groups of wealthy individuals.

With its comprehensive range of complimentary services, it is easy for First Property to screen all the prime properties that are for sale right across the UK. It has refined its expertise in evaluating potential deals and it creams off the prime ones for its funds. First Property charges fees only on success: the client gets the first 10% income, free of charges. Above 10%, First Property charges a handsome 20% profit commission. In each of the last two years the average appreciation for the funds has been 20% per annum plus, so the fees First Property are generating are coming in nicely.

First Property has net cash of 2.4 million pounds and it made a pre-tax profit of 100,000 pounds in the year to March 31st 2003. But for this year I am looking for a pre-tax profit of around 500,000 pounds.

This company fits together like a watch. This stock seems to be what financial guru, Jim Slater, calls an "inevitable". As it relies on its nine expert staff, a tripling of its volume does not necessitate more people, so profits will fall below the line. Profits could easily reach seven figures this year. Hence I am looking for explosive earnings growth over the next 12 months. As such a market value of 11.5 million (if one strips out the cash) is not that demanding.

First Property is ripe for a re-rating. It is rumoured that there are three institutions sniffing around searching for stock. But at present this is a thin market and First Property is presently too small for institutional holders. However, Habib is an ambitious man and he will not stand still. A significant acquisition may be in the offing and that will transform the business. First Property seems to avoided the tipsheet radar screen for too long and if you have as much faith in Habib as I do, this may well be the time to get in on the ground floor. Buy.

Key Data

EPIC: FPO
Market: AIM
Market Cap: 13.9 million pounds
NMS: 1,000
Spread 14.5-15.5p


Tom Benyon Runs the Guild of Shareholders an organisation dedicated to bring companies and quoted companies closer together and to campaigning for investor rights..

Hi, I bought in at .17p a while ago, then it took a dive. Now it looks more promising. The company had just edged into the black when I bought, and reading your above posting Wizardsleeve, Hope it's going to continue on up. welcome more comments.