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Raven Russia still flying high

RESULTS: Shares in Russian Warehouse developer Raven Russia have been hit by the crisis in the Ukraine, but that shouldn't detract from a robust trading performance
March 11, 2014

The slide in Russian warehouse developer Raven Russia's (RUS) reported earnings merely reflects an $86m (£51m) exceptional charge relating to the year-end conversion of preference shares into ordinary stock. The company's performance last year actually beat analysts' expectations, with underlying pre-tax profit more than doubling to $70m.

IC TIP: Buy at 77p

That progress reflects robust demand in the Russian warehouse and logistics market, combined with continued undersupply. The occupancy rate within Raven's 1.4m square metre estate has reached 97 per cent and expansion remains on the agenda. The group boasts prime development land in Moscow, which will be built out over the next four years, while management is also looking to acquire existing warehouses.

Raven's bottom line is also benefiting from significant operational gearing. Administrative costs fell 17 per cent in 2013, so income growth is falling straight through to the bottom line. That's good news for dividends, and N+1 Singer expects the payout to rise 10 per cent in 2014 to 5.5p. The broker also expects adjusted EPS of 11.2¢ this year (from 10.3¢ in 2013) and adjusted NAV to jump to 136¢ from 126¢.

RAVEN RUSSIA (RUS)

ORD PRICE:77pMARKET VALUE:£580m
TOUCH:77-78p12-MONTH HIGH:87pLOW: 66p
DIVIDEND YIELD:6.5%PE RATIO:na
PREMIUM TO NAV:5%DEVELOPMENT PROP:$119m
INVESTMENT PROP:$1.63bnNET DEBT:95%

Year to 31 DecNet asset value (¢)Pre-tax profit ($)Earnings per share (¢)Dividend per share (p)†
2009114-14828.51
2010116568.42
201111812916.73
2012122635.23.75
210312228-0.75
% change--56-+33

Ex-div: na

Payment: na

†Including equivalent tender offer buy backs

£1=$1.67