10th Mar 2014 09:06
LONDON (Alliance News) - Property investment company Raven Russia Ltd Monday reported a fall in pretax profit for the full year, after last year's results benefited from a significant sum of unrealised profit on the revaluation of investment property.
The firm, which specialises in commercial property in Russia, posted pretax profit of USD28.5 million for 2013, down from USD62.6 million, even though revenue rose to USD272.3 million from USD225.3 million.
In 2012, the Guernsey-registered firm recorded a USD68.1 million profit on revaluation of investment property compared with USD48.6 million for 2013. The company also suffered a charge on preference share conversion of GBP86.0 million in 2013, compared with none for 2012.
However, Raven Russia said revenue was boosted by strong demand for its properties in Russia's capital, with underlying net renal and related income rising to USD186.5 million from USD143.2 million in 2012.
During the year, the company said it had had net lettings of 69,684 square metres in Moscow, increasing income by around USD12 million a year. Rents have remained around USD130 to USD135 per square metre for Grade A warehousing throughout the year, it said.
Underlying earnings, which the company said is one of its key measures to assess the return on holding investment assets for the long term, amounted to a profit of USD60.3 million compared with USD20.2 million in 2012.
Underlying earnings consists of the EPRA earnings measure, with additional group adjustments such as share-based payments. EPRA is the European Public Real Estate Association, the industry body for European REITs.
Following a preference share conversion exercise, adjusted fully diluted net asset value per share increased during the year to USD1.26 from USD1.25.
Financially, net debt rise sightly to USD851.2 million compared with USD803.0 million. However Raven Russia said it has USD229 million of free cash at its disposal.
Chairman Richard Jewson said the company has prime development land in Moscow, and "we intend to build that out over the next four years with a mixture of pre-let and speculative space, if demand remains at current levels"
"Acquisition opportunities are increasing in our market, and we will take those opportunities if they meet our quality criteria and are earnings accretive for ordinary shareholders," he added.
Instead of an interim dividend for 2013, the company implemented a tender offer buy back of ordinary shares on the basis of 1 in every 40 shares at a tender price of 80 pence per share, the equivalent of a dividend of 2 pence per share.
The company did not give details regarding a final dividend.
Raven Russia shares were up 3.9% at 77.91 pence early Monday.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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