16th Mar 2020 11:56
(Alliance News) - Raven Property Group Ltd reported a swing to an annual profit from a loss on Monday, benefiting from lower operating expenses and a gain on property revaluation versus a loss the prior year.
Russia-focused warehouse property investor Raven posted a pretax profit of GBP65.1 million for 2019, swinging from a GBP114.9 million loss the previous year.
This resulted mostly from a swing to a GBP47.8 million unrealised profit on the revaluation of its investment property, compared to a GBP121.8 million loss in 2018.
Another contributing factor in the profit swing was a very sharp drop in operating expenditure to GBP3.4 million from GBP30.5 million.
Diluted net asset value per share increased to 75 pence from 48p.
Raven also announced the upcoming departure of Senior Independent Non-Executive Director Christopher Sherwell at its annual general meeting.
The company was given the opportunity to buy 38% of its own shares from two major investors, Woodford Investment Management and Invesco Asset Management Ltd at an almost 50% discount to NAV per share. In 2019, it purchased 16% of this stake, including all of Woodford Investment Management's holding.
"Although this has led to a diversion of our cash resources away from property acquisitions it is an opportunity too good to miss," said Raven Chief Executive Glyn Hirsch.
The company intends to make a final 2.25 pence per share distribution, taking the total for the year to 3.5p. However, the timing and structure of the distribution will be determined once market volatility calms down.
Hirsch said: "We are yet to see any immediate impact on our operating business due to the coronavirus situation but we have delayed the acquisition of [Invesco Asset Management's] various shareholdings until we can see some stability returning. As with the majority of international businesses we have implemented a number of preventative measures."
The CEO added: "We know that the Russian economy is heavily influenced by the oil market. Recent movements have impaired external sentiment but at this early stage our day to day business of renting warehouses has not been affected. Inevitably the coronavirus and a volatile oil market will lead us to adopt a more financially cautious approach which is a frustration given the positive trends we were seeing across all aspects of our business."
Shares in Raven Property were down 6.4% at 33.50 pence in London on Monday and untraded in South Africa at ZAR9.50.
By Anna Farley; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
RAV.L