ROSE GROUP LTD
Monday 28 July 2014
Rose Group Limited
(AIM: RGI)
Q2 2014 Trading Update
Rose Group Limited ("RGI" or the "Company"), the AIM listed developer of quality residential properties in Moscow and the surrounding areas, today announces the following update to the market regarding its trading in Q2 and the first half of 2014.
Highlights:
Microgorod «V Lesu»
· First residents move into Microgorod «V Lesu»
· Strong sales of 311 apartments for the first half of 2014 (H1 2013: 233)
· By the end of H1 2014 at V Lesu Phase 1 1,086 apartments (72,301 sq. m.) had now been sold, representing 91% of available units, since commencing pre-sales in September 2011
· Initiated construction and sales of Phase 2 buildings 13 and 15. Since Phase 2 sales began in February 2013, 459 apartments (32,210 sq. m.) had been sold representing 28% of available units
· Construction on track across the development
Tsvetnoy
· H1 Tsvetnoy footfall up 23% to 1,130,000 (2013: 920,000)
· Revenue increased 39% to RUR 437m (US$12.5m) for (H1 2013: RUR 315m, US$10.1m)
· Name officially changed to Rose Group Limited, reflecting strong brand association in Moscow
Microgorod «V Lesu»
Sales of apartments at «V Lesu» in Q2 remained strong, despite a difficult economic environment. We are pleased to report 144 apartments were sold at «V Lesu», in Q2, an increase of 27% on Q2 2013. The total sold in Phase 1 is now 1,086, or 91% of the total available, while 459 units have been sold in Phase 2, representing 28% of the total.
Operating result
H1 2014 | H1 2013 | Change, % | |
Number of contracts | 311 | 233 | 33% |
New sales, sqm | 21,705 | 16,606 | 31% |
New sales, RUR m | 2,643 | 1,854 | 43% |
Cash collections, RUR m | 2,846 | 1,829 | 56% |
Average sales price, RUR/sq. m | 121,766 | 111,648 | 9% |
Share of mortgages, % | 56% | 53% | 3% |
V Lesu continued to outperform the market, as prices remained firm, with average sales prices across the development increasing 11% to RUR 123,300 (Q2 2013: RUR 111,400). Phase 1 prices increased on average 8%, while Phase 2 sales achieved a 17% increase in price per sq. m. over 2013. The share of sales financed by mortgage contracts in H1 2014 was approximately 56% (H1 2013: 53%).
Deliveries of Phase 1 apartments, which commenced in late March, continued throughout the quarter, with 595 apartments transferred to buyers by the end of June. Due to the fact that buyers received a fitted out apartment, a large number of apartments are already occupied.
Construction remained on track across the development. The remaining fit-out works in Phase 1 are minimal and expected to complete during the summer. The school and kindergarten are on schedule to open for students in September. RGI broke ground on Buildings 13 and 15 in Phase 2 following a redesign to improve those buildings' efficiency.
In April 2014, the Company announced that it had entered into a loan agreement with Sberbank CIB for RUR 5.8bn (US$161m). The Company will not require any additional third party funding to complete phase 2 of the construction.
Tsvetnoy Central Market
Operating results:
H1 2014 | H1 2013 | Change % | |
Footfall thousand visitors | 1,131 | 920 | 23% |
Tsvetnoy Revenues ( RUR m, ex-VAT) | 437 | 315 | 39% |
Tsvetnoy Revenues ( US$ m, ex-VAT) | 12.5 | 10.1 | 23 % |
Own-bought Revenues ( RUR m, ex-VAT) | 155 | 112 | 38% |
Own-bought Revenues ( US$ m, ex-VAT) | 4.4 | 3.6 | 23 % |
Tsvetnoy continued to demonstrate growth of footfall with 770 thousand visitors recorded in Q2 (2013: 727), contributing to a 23% increase for the half year. Tsvetnoy's total revenue, including revenue from concessionaires and own-bought goods, increased 39% year on year. Tsvetnoy's own-bought goods represented 35% of total revenue, virtually unchanged from 2013.
Other Projects
Rose Group continued to advance its other Moscow projects, including Forum and Kvazar. Planning for Forum, the reconstruction of one of Russia's oldest cinemas, has involved working with architects on various concepts to optimise the project's economics, while also advancing discussion with city authorities on details of restoration works. Kvazar, RGI's innovative office park, is in initial planning stages and on track to receive a building permit in 2015.
Commenting, Chief Executive Andrey Nesterenko said:
" We continue to see stable growth in our residential development business, as well as at Tsvetnoy. The reactions from new residents in Microgorod «V Lesu» have been overwhelmingly positive and we are confident that we will receive additional referrals from satisfied buyers. The fact that we have seen strong growth in our two key businesses despite continuing declines in consumer confidence validates our belief that our business model is well balanced. We continue to monitor the economic environment and particularly the impact any current geopolitical situation may have on our business. "
Enquiries:
Rose Group David Wood, Chief Financial Officer Anna Orlova, Head of Marketing and PR | +7 495 933 6180 |
Citigate Dewe Rogerson - Financial PR Adviser Tom Baldock Jos Bieneman | +44 (0) 20 72822889 |
Shore Capital - Nominated Adviser Stephane Auton Edward Mansfield | +44 (0) 207 408 4090 |
About Rose Group
Rose Group Limited has been successfully creating new markets in Moscow real estate since 1993. The Company's innovative drive played a key role in the transformation of Moscow's Golden Mile in the 1990s, when new landmark buildings were constructed that set the benchmark for modern living and working spaces in the rapidly changing Russian capital. Today the Company is focused on serving Moscow's growing middle class professionals by building aspirational, design led, residential communities. Its pioneering Microgorod « V Lesu » project has set new standards for the Moscow residential sector by offering homebuyers a well configured development, with good facilities and apartments finished to a high quality. In addition to its distinctive residential properties, RGI developed, owns and operates Tsvetnoy Central Market, Moscow's first iconic department store on Tsvetnoy Boulevard. The Company is listed on the LSE's AIM market and has significant land holdings in central Moscow.
This information is provided by RNS
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