LSR Group - Notes from Capital Markets Day
LSR Group held a capital markets day in St Petersburg on Monday. In addition to showcasing key projects under development and newly acquired land plots, the management provided its view on the sector after recent legislative changes, reasons for the poor operating results in 1H17 and strategies for turning around sales in 2H17. The outlook on industry consolidation and the proposals offered on cost savings bode well for the medium to longer term, but the current year's draw on cash may lead to lower DPS next summer. While we came away more upbeat, a turnaround in operational performance and the share price will largely depend on the management's ability to correctly anticipate market demand, adopt the right pricing and cost policy, and deliver. The earliest we could expect to see a turnaround in presales reflected in the numbers is in the 4Q17 operational results, which are due in mid-January. An improvement in cash flows and deleveraging may take longer.
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