The geopolitical ructions over Russia and consequent depreciation of the rouble took an inevitable toll on the balance sheet of warehouse developer Raven Russia (RUS) last year. Revaluation losses on the company's properties amounted to $145m (£96m), compared with a $55m gain in 2013.
The company still managed to increase its net operating income - its gross revenue minus the cost of operating properties - by 3 per cent to $192m, as recent developments attracted tenants. As a result, underlying profits rose 11 per cent to $67m, fully covering the big increase in the dividend.
But chief executive Glyn Hirsch makes no effort to conceal the challenges. "If we are lucky it will be a couple of difficult years and then a return to normal service," he says. That's because the vast majority of the company's leases are contracted in US dollars, while its corporate tenants have revenues in roubles. The developer is working to soothe the resulting pain for its customers by increasing the proportion of its rouble-linked rents. These could reach 10-20 per cent of its rental income in the next two years, Mr Hirsch said.
The company has put its acquisition and development plans on hold. It has a big cash pile of $247m, but Mr Hirsch downplayed the prospect of further dividend increases "until we can see how all of the current uncertainties unfold". Broker N+1 Singer expects adjusted book value of $1.11 at the year-end.
| RAVEN RUSSIA (RUS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 44p | MARKET VALUE: | £325m | |
| TOUCH: | 43.5-44p | 12M HIGH: | 78.75p | LOW: 37.25p |
| DIVIDEND YIELD: | 13.6% | DEVELOPMENT PROP: | $48m | |
| DISCOUNT TO NAV: | 34% | |||
| INVESTMENT PROP: | $1.59bn | NET DEBT: | 157%* | |
| Year to 30 Jun | Net asset value (¢) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p)† |
|---|---|---|---|---|
| 2010 | 116 | 56 | 8.4 | 2.0 |
| 2011 | 118 | 129 | 16.7 | 3.00 |
| 2012 | 122 | 63 | 5.2 | 3.75 |
| 2013 | 122 | 28 | -0.7 | 5.00 |
| 2014 | 101 | -98 | -12.3 | 6.00 |
| % change | -17 | -444 | - | +20 |
Ex-div: na Payment: na £1=$1.51 †Including equivalent tender offer buybacks. *Includes preference shares of $164m. | ||||
