Doubling rents without losing tenants is a tough ask; Raven Russia (RUS) faced that challenge after economic sanctions and the tumbling oil price meant the value of the Russian rouble halved in less than a year. But the warehouse developer proved resilient once again: net operating income - gross revenue minus the cost of operating properties - fell by 2.4 per cent, but underlying operating profits were essentially flat at about $81m (£52m).
Raven owns more than a dozen top-quality warehouses - chiefly located on major highways on the outskirts of Moscow and St Petersburg - which it rents out to logistics companies such as DHL and some of Russia's largest general and food retailers. It was forced to stomach $51m in revaluation losses, compared with a $20m gain in the first half of 2014. Management responded to the stiff trading conditions by cutting the dividend and delaying construction projects. It also raced to secure leases nearing maturity: renegotiating more than half of those ending this year, and 37 per cent of those concluding in 2016. The upshot was that the group's 1.5m square metre portfolio was 89 per cent let at the half-year mark.
Broker N+1 Singer slashed its earnings forecasts for the next two years. It expects adjusted NAV per share of 103¢ (2014: 106¢).
| RAVEN RUSSIA (RUS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 42.8p | MARKET VALUE: | £298m | |
| TOUCH: | 42.8-43.5p | 12-MONTH HIGH: | 76p | LOW: 37p |
| DIVIDEND YIELD: | 6.8% | DEVELOPMENT PROPERTIES: | $50m | |
| DISCOUNT TO NAV: | 31% | |||
| INVESTMENT PROPERTIES: | $1.53bn | NET DEBT: | 136%* | |
| Half-year to 30 Jun | Net asset value (¢) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p)† |
|---|---|---|---|---|
| 2014 | 126 | 57.9 | 6.2 | 2.5 |
| 2015 | 99 | -18.1 | -3.0 | 1.0 |
| % change | -21 | - | - | -60 |
£1=$1.55 †Includes equivalent tender offer buybacks *Includes preference shares of $166m | ||||
