Join our community of smart investors

Raven reduces dollar exposure

Business in Moscow is booming, but the rouble remains depressed
March 19, 2019

Exposure to currency weakness again proved to be an issue with Raven Property (RAV) as all of its assets are in Russia. Translating headline figures back into sterling doesn’t make pleasant reading, but in local currency terms the business is going from strength to strength.

IC TIP: Buy at 41.1p

Demand for logistics and office space in and around Moscow reached record levels in 2018, with the take-up of 1.6m square metres far exceeding new supply of 918,000 square metres. With the demand/supply imbalance firmly entrenched, Raven’s warehouse occupancy level rose from 81 per cent in the previous year to 89 per cent, and has ratcheted-up further since the period-end. And further gains are expected because the e-commerce market is beginning to gain traction, which will help to underpin rental growth.

Exposure to dollar-denominated debt has been reduced significantly, with a switch to a rouble/euro mix, and all dollar debt facilities will be removed in the current year. Dollar-denominated leases account for 26 per cent of the gross lettable area, but all these are expected to mature over the next three years.

Analysts at N+1 Singer are forecasting adjusted year-end net asset value of 49.4p a share, against 48.1p in 2018.

RAVEN PROPERTY (RAV)  
ORD PRICE:41.1pMARKET VALUE:£256m
TOUCH:41.1-42.8p12-MONTH HIGH:50pLOW: 37p
DIVIDEND YIELD:7.3%DEVELOPMENT PROPERTIES:£30.5m
DISCOUNT TO NAV:14%  
INVESTMENT PROPERTIES:£1.17bnNET DEBT:£902m 
Year to 31 DecNet asset value (¢)Pre-tax profit ($m)Earnings per share (¢)Dividend per share (p)
2014101-98-12.36
201572-205-28.82
201676221.172.5
 (p)(£m)(p)(p)
20176068.36.53
201848-115-18.8
% change-20---
Ex-div:-   
Payment:-   
£1=$1.327. † Half-year dividend for 2018 was a one for 44 buyback at 55p a share, equivalent to 1.25p. Plus final buyback of 2 in 51 shares at 45p, equating to 1.75p per share, giving full year distribution of 3p.