Raven flying high with strong assets in Russia
CAPE TOWN – Raven Property Group distributed 1.25 pence (R0.28) per share in the six months to June 30, in line with last year, and the group was looking forward to the future with confidence, chief executive Glyn Hirsch said on Tuesday.
He said although Russia was not for everyone, it was one of the strongest and least leveraged economies in the world.
“We own a high-quality portfolio of assets, with a 15-year track record of reliable cash flows. These assets are valued on a yield of 11 percent, with underlying income in roubles and annual indexation of around 5 percent,” he said on Tuesday at the release of the results.
The Raven Property Group, listed in London with secondary listings on the JSE and Moscow stock exchanges, was founded in 2005 to build a portfolio of warehouse complexes in Russia.
Its property investment value stood at £1.3 billion (R29bn) at the end of the interim period, and average rental recovery was 99 percent. Occupancy at June 30 increased to 93 percent from 90 percent at December 31, 2019, with 142 000 square metres of new lettings and 176 000 square metres of maturity extensions in the period.
Underlying earnings of £13.4 million were in line with that of June 30. Unrealised foreign exchange losses of £23.8m (June 30, 2019: profit of £18.9m) were recorded on a weaker rouble. An IFRS loss of £31.7m (June 30, 2019: profit of £26.2m) arose after the unrealised foreign exchange movements and loss on revaluation of £12.5m (profit £18.2m.)
The cash balance stood at £85m (December 31, 2019: £68.1m). The rouble value of investment property portfolio was down by only 0.3 percent since December 31, 2019. Diluted net asset value per share of 58p (75p) was mainly due to the weaker rouble.
Hirsch said with global interest rates likely to stay low for some time, and with reliable investment yields likely to become a scarce commodity, it was reasonable to expect high quality yielding assets to increase in value.
Net rental and related income fell to £59.6m from £64.3m, while operating profit was down substantially to £12.4 from £88.9m. Chairperson Sir Richard Jewson said its assets had continued in operation throughout the lockdown, logistics networks being an essential part of the supply chain, allowing supermarkets, their suppliers and e-commerce arms to continue to operate.