Raven Property Group

LN: RAV

Market Cap£22m

Last Close 3.82p

Raven Property Group invests mainly in Class A warehouses in Russia let to large Russian and international companies, commercial office space in St Petersburg and a third-party logistics company in Russia. It aims to deliver progressive distributions to shareholders over the long term.

Investment summary

We expect 2021 results to be published in March. H121 results showed strong occupancy and increasing rents, driving property valuation gains. Reported in sterling, operational gains were obscured by a lower average rouble value (down 15% vs H120) and while NOI increased from RUB5.2bn to RUB5.4bn it was 13% lower in sterling (H1 closing rate: £/RUB=100). Underlying earnings nevertheless improved to £17.3m (H120: £10.4m loss) and the balance sheet showed little FX impact with revaluation gains the main driver of 13% growth in NAV or 25% growth in NAV/share to 50p. Interest rates continue to increase (to 9.5% in February) to combat rising inflation, lifting rouble borrowing costs above our forecasts, although these are capped at c 7.6% by hedging. Earlier H2 strength in the rouble has been eroded by the threat of further international sanctions.

Y/E Dec	Revenue (£m)	EBITDA (£m)	PBT (£m)	EPS (p)	P/E (x)	P/CF (x)
2019A	127.0	N/A	54.0	6.4	0.6	0.2
2020A	113.0	N/A	(25.0)	(6.9)	N/A	0.2
2021E	N/A	N/A	N/A	N/A	N/A	N/A
2022E	N/A	N/A	N/A	N/A	N/A	N/A

Industry outlook

Russian GDP growth is expected to slow from an expected c 4.5% in 2021 to c 3.0% in 2022. Economic growth and structural supply shifts continue to generate demand for warehouse space, especially driven by e-commerce activity, combined with low vacancy, a lack of new supply, and increased construction costs are generating increased rents and valuations.

Last updated on 17/03/2022