Cash is King
​Raven Russia's Interim results, for the 6 months to end June, released this morning, show IFRS earnings after tax $8.8 million (30 June 2015: loss of $20.6 million), and basic underlying earnings per share 4.8 cents (30 June 2015: 5.0 cents). These results were better than anticipated. Given the trying Russian market background over the last couple of years, Raven Russia's performance has been very resilient. As is always the case, management of the completed portfolio has been very tight.
At the start of H2, Raven Russia raised £109 million through the placing of new 6.5% convertible redeemable preference shares: as a result of this, and continuing astute cash management, the group's cash balance today stands at $331 million.
There are signs that the Russia economy is stabilising, with the IMF expecting 1% GDP growth next year. We have raised our full year 2016 estimates, and, bearing in mind that Raven Russia is financially much more robust than when we last reviewed the company, with the NAV of 53.8p per share (pro forma), the upside outweighs the downside. We raise our price target from 40p per share to 50p.
Raven Property Group is a property investment group focusing on commercial real estate in Russia. Co. has three operating segments: Property Investment, which acquires, develops and leases commercial property in Russia; Roslogistics, which is engaged in the provision of warehousing, transport, customs brokerage and related services in Russia; and Raven Mount, which sells residential property in the U.K.
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