PIK GROUP 2Q 2014 Trading Update

PIK GROUP 2Q2014 Trading Update

MOSCOW, July 22, 2014 - PIK Group (LSE: PIK) released today its trading update for the six months ended June 30, 2014. The operational and financial data are based on management assessment only and have not been reviewed by external auditors.

1H2014 key operational highlights:

· Total cash collections decreased by 19.7% to RUB 27.3 billion (1H2013: RUB33.9 billion) primarily due to a planned decline in volume of wholesale transactions and in line with the current development schedule which envisaged a temporary slowdown in the number of new sales launches in 1H2014.

- Cash collections from sale of real estate to individuals decreased by 17.0% to RUB 21.5 billion (1H2013: RUB 25.9 billion)

- Cash collections from wholesale transactions decreased by 96.7% to RUB 0.08 billion (1H2013: RUB 2.5 billion)

- Cash collections from construction services and others stayed flat at RUB 5.6 billion

· New sales contracts to customers decreased by 25.1% to 218 th. sqm. (1H2013: 291 th. sq. meters). New sales contracts decreased in line with the development schedule which envisages an increase in the number of new project launches in 2H2014.

· In 1H2014, PIK launched sales at 26 new projects (including 19 project in Moscow Metropolitan Area) compared to 19 and 14 new projects respectively in 1H2013. The increase in launched projects occurred in June, 2014 and thus had limited effect on the volume of new sales contracts in 1H2014.

· Share of mortgage backed sales stayed flat compared to 1Q2014, reaching 36.8% in 2Q2014. The share of mortgage backed transactions declined slightly compared to 2013 full year average of 39.0%.

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Table 1 - Cash collections summary

Note: In line with PIK's accounting policies, these cash collections will be recognized as sales revenue once the residential real estate properties have been completed, approved by the local State commission established for acceptance of finished buildings and the larger share of proceeds is received upon the completed unit.

(1) Including offsets with suppliers

Source: Management accounts

Table 2 - New sales contracts to customers

Note: including contracted retail and wholesales

Source: Management accounts

Table 3 - New sales contracts to customers by region

Note: including contracted retail and wholesales

Source: Management accounts

Table 4 - Pre-sales launches summary table

Source: Management accounts

Table 5 - Share of mortgage backed retail sales

Note: Based on monthly averaged data from retail sales, calculated using apartments only

Source: Management accounts

Table 6 - Average PIK's net selling price dynamics

Note: PIK is preselling properties at different stages of construction. Selling prices vary depending on geographic location, size, floor location, stage of construction. Accordingly, average prices per square meters represent blended average price calculations of the above. Calculated on the basis of retail contracts on completed project and projects in active construction stage. Before 21 January 2014 the average price calculation methodology included only PIK's projects in active construction stage.

(1) Excluding business class projects, such as the 'English Town'

Source: Management accounts

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Some of the information in this press release may contain guidance, projections or other forward-looking statements regarding future events or the future financial performance of PIK Group. You can identify forward-looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might," or the negative of such terms or other similar expressions. These statements are only predictions and actual events or results may differ materially. PIK Group does not intend to or undertake any obligation to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in PIK Group's projections, guidance or forward-looking statements, including, among others, general economic and market conditions, PIK Group's competitive environment, risks associated with operating in Russia, rapid market change, and other factors specifically related to PIK Group and its operations.

This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of PIK Group, nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of PIK Group.