Raven Russia

Russia-focused real estate investor Raven Russia (RUS) reported an 11.4% increase in its NAV amidst signs of a recovery in the Russian property market.

The FTSE Small Cap constituent reported a NAV of $1.17 (2010: $1.05) with NOI (net operating income) rising to $37.4m for the six months to June. The value of its assets stood at $1.078bn (December 2010: $974.2m) while net debt increased from $324m to $363m. Raven noted that it has now let out 84% of its portfolio, primarily warehouses let out to a variety of local and international retailers.

In an interview with Growth Company Investor chief executive officer Glyn Hirsch remarked that internationally many had 'ignored' Russia due to a perception that 'it is a very difficult place to do business' something he argued was wrong. Hirsch noted that the buoyant oil and gas markets were propelling Russia's growth and observed that Raven 'had increased our rent, seen our valuations rise and have increased the percentage of our portfolio that is let out.'

Analysts at house broker Singer Capital Markets are forecasting recurring pre-tax profits of $15.4 million (3.1 cents) for the year to December 2012 and recurring profits of $26.4 million (5.4 cents) in 2013.

Last recommended by Growth Company Investor in October at 49.75p the shares currently trade at 50.5p. With increases in its rent and upward valuations the company is on an upwards trajectory despite the sizeable debt pile. Russia is a country growing at an impressive speed, something overlooked by those focused on China's growth. We retain our buy/hold rating.