The Board of Directors of ETALON GROUP PLC (“Etalon Group” or the “Company”), one of Russia’s largest and longest-established development and construction companies, announces that, in the context of economic and regulatory changes affecting Russia’s residential real estate sector, it has mandated the Company’s management to explore potential acquisitions of companies that operate in Etalon Group’s current geographies and market segments.
In order to ensure that a potential transaction is value accretive for the Company, the members of the Board of Directors decided that, prior to being put before the Board of Directors, the proposed deal must first be subject to review by a Special Committee established by the Board. In line with good corporate governance practices and to facilitate transparency, the Special Committee will consist only of independent directors: Martin Cocker, Boris Svetlichny and Dennis Vinokourov.
The Board of Directors believes that Etalon Group’s excellent reputation, strong balance sheet, scalable business model and experienced management team make it one of the best-positioned companies in the sector to act as a consolidator of Russia’s fragmented residential real estate market. Furthermore, in view of the record-setting sales performance reported in 2018, the Board of Directors believes that the acquisition of an existing company may represent an effective way to quickly replenish Etalon Group’s project portfolio and expand its market share.
Etalon Group IR Team
T: +44 20 8123 1328
T: +44 7554 993 032
T: +7 499 918 3134
About Etalon Group
Founded in 1987 by Viacheslav Zarenkov, Etalon Group has become one of Russia's largest development and construction corporations. The Company focuses on middle class residential real estate in the Moscow and St Petersburg metropolitan areas, where it operates through Etalon Invest and Etalon LenSpetsSMU subsidiaries. With a more than 30-year history, Etalon Group has one of the longest and most successful track records in the Russian real estate industry - since its inception, Etalon Group has commissioned 6.3 million sqm.
Etalon Group's strong reputation among consumers supports its pre-sales business model, which helps the Company to minimise external financing needs for on-going projects while maintaining a secure liquidity position: net debt as of 31 December 2017 was RUB 9.7 billion.
The Company is vertically integrated, which helps it to control costs, quality and timing, as well as to demonstrate best-in-class profitability. Etalon Group employs 5 thousand people, and its nationwide sales and marketing network covers 52 Russian cities.
As of 30 June 2018, Etalon Group's assets comprised 39 projects and a construction and maintenance division, with a total of 2.73 million sqm of unsold net sellable area. Knight Frank valued the Company’s assets at RUB 132,487 million.
For the year ended 31 December 2018, Etalon Group's new contract sales totalled 628 ths sqm, or RUB 68,731 million. Deliveries in 2018 amounted to 479 ths sqm.
The Company recorded revenue of RUB 70.6 billion and EBITDA of RUB 13.2 billion for the year ended 31 December 2017.
Etalon Group’s GDRs have been traded on the Main Market of the London Stock Exchange since 20 April 2011.
22 January 2019