REG - Etalon Group PLC - Etalon Group Board of Directors Meeting Results

EtalonAnnouncement

27/04/2018 16:30

2018-04-27T15:30:01.408Zreuters.comtag:reuters.com,2018-04-27:newsml_RSa4534Ma:13TXT
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RNS Number : 4534M
Etalon Group PLC
27 April 2018
 

 
27 April 2018
 
Etalon Group Board of Directors Meeting Results
 
ETALON GROUP PLC ("Etalon Group" or the "Company"), one of Russia's largest and longest-established development and construction companies, announces that its Board of Directors held a meeting on 27 April 2018 in Limassol, Cyprus.
 
Changes to the Board of Directors and Committees
 
The Board of Directors accepted the resignation of Dmitry Zarenkov as Chairman of the Board of Directors, and unanimously elected Viacheslav Zarenkov as its new Chairman. The Board also accepted the resignations of Michael Calvey and Marios Theodosiou, and approved the appointment of Maxim Berlovich, Head of Etalon Group's unified construction and maintenance division, as an Executive Director of the Company. The Board of Directors also approved new compositions of the Board Committees. The new compositions of the Board and its Committees are listed below:
 
Board of Directors
 
·    Viacheslav Zarenkov, Chairman of the Board of Directors, Non-Executive Director
·    Dmitry Zarenkov, Non-Executive Director
·    Alexey Kalinin, Non-Executive Director
·    Dmitry Kashinsky, Executive Director
·    Kirill Bagachenko, Executive Director
·    Maxim Berlovich, Executive Director
·    Martin Cocker, Independent Non-Executive Director
·    Charalampos Avgousti, Independent Non-Executive Director
·    Boris Svetlichny, Independent Non-Executive Director
 
Strategy Committee
 
·    Dmitry Kashinsky, Committee Chairman, Executive Director
·    Viacheslav Zarenkov, Chairman of the Board of Directors, Non-Executive Director
·    Dmitry Zarenkov, Non-Executive Director
·    Alexey Kalinin, Non-Executive Director
·    Kirill Bagachenko, Executive Director
·    Maxim Berlovich, Executive Director
·    Alexander Tyapin, Investment Director at Baring Vostok funds
 
Audit Committee
 
·    Martin Cocker, Committee Chairman, Independent Non-Executive Director
·    Boris Svetlichny, Independent Non-Executive Director
·    Gabbas Kazhimuratov, Chief Financial Officer at Baring Vostok funds
 
Remuneration and Nomination Committee
 
·    Viacheslav Zarenkov, Committee Chairman, Chairman of the Board of Directors, Non-Executive Director
·    Dmitry Zarenkov, Non-Executive Director
·    Alexey Kalinin, Non-Executive Director
·    Kirill Bagachenko, Executive Director
·    Martin Cocker, Independent Non-Executive Director
·    Charalampos Avgousti, Independent Non-Executive Director
 
Information Disclosure Committee
 
·    Kirill Bagachenko, Committee Chairman, Executive Director
·    Victoria Tsytrina, Chief Legal Officer
·    Ksenia Savchuk, Head of PR
 
Management changes
 
Following Viacheslav Zarenkov's appointment as the Chairman of the Board of Directors and as part of Etalon Group's management succession plan, the Board of Directors unanimously approved the appointments of COO Dmitry Kashinsky as Chief Executive Officer and Vice-President Kirill Bagachenko as Chief Financial Officer. Dmitry Kashinsky will continue to serve as Chairman of the Management Board, which will consist of:
 
·    Dmitry Kashinsky, CEO
·    Kirill Bagachenko, CFO
·    Gennadiy Shcherbina, Head of St Petersburg Operations
·    Ivan Bogatov, Head of Moscow Operations
 
Management incentive programme
 
To ensure a smooth succession process, close alignment of management and shareholder interests, as well as successful implementation of Etalon Group's long-term strategic goals, the Board of Directors has approved the distribution to the Management Board of 2% of the total issued share capital of Etalon Group in the form of global depositary receipts ("GDRs") repurchased under the Company's buyback programmes. GDRs awarded under the incentive programme will be distributed with a lock-up period of 7 years.
 
Dividends
 
The Board of Directors has recommended that the Company pay a final dividend for the year ended 31 December 2017 of USD 0.18 per ordinary share/GDR, which represents 50% of the Company's consolidated IFRS net profit for 2H 2017 (based on the official Central Bank of Russia exchange rate as of 27 April 2017).
 
The final dividend recommended by the Board of Directors is in line with Etalon Group's updated dividend policy, under which the Company aims to pay out between 40% and 70% of IFRS net profit. If approved, the dividend paid for 2H 2017 will represent a year-on-year increase of 68%. Total dividends paid for 2017, if the final dividend is approved, will amount to USD 0.22 per ordinary share/GDR, which represents 51% of IFRS net profit for FY 2017 (based on official Central Bank of Russia exchange rates as of 10 November 2017 and 27 April 2018), an increase of 61% year-on-year.
 
The recommendation will be subject to shareholder approval at the Company's Annual General Meeting of Shareholders ("AGM") to be held on 25 May 2018. If the dividend recommendation is approved by shareholders, dividends will be paid by 21 August 2018. The record date will be 10 August 2018.
 
Etalon Group Board of Directors Chairman Viacheslav Zarenkov said:
 
"The appointments of Dmitry Kashinsky as CEO and Kirill Bagachenko as CFO, as well as the completion of the formation of the Etalon Group Management Board, represent the next milestone in the gradual and successful management succession process at Etalon Group. I have every confidence in the high quality of the management team that is now in charge of day-to-day operations. The Company's excellent performance in 2017 is the result of coherent teamwork under Dmitry Kashinsky's leadership, which focused on refining business processes and introducing the latest management practices, and paid constant attention to optimising costs and increasing efficiency.
 
"I am confident that the decision to distribute GDRs to the Management Board will help to significantly align the interests of Etalon Group's management and shareholders, while also ensuring that the leadership team is highly motivated to achieve long-term growth of the Company's market capitalisation.
 
"I am also happy to note that, thanks to Etalon Group's strong financial results in 2017, the Annual General Meeting has been asked to approve a record dividend payment. Under the updated dividend policy, which aims to pay out between 40% and 70% of net profit, investors have a high probability of receiving good returns in the future."
 
Etalon Group CEO and Chairman of the Management Board Dmitry Kashinsky said:
 
"On behalf of the management team I would like to express our gratitude to the Board of Directors for its confidence and recognition of the good results we have achieved. Over the past several years we have consistently worked towards the goal of maximising shareholder value at Etalon Group. During that time, we have made a number of organisational and staffing changes aimed at improving efficiency, such as enhancing our sales system, refining our product and eliminating duplicate management functions, as well as strengthening the management of our Moscow operations. I would highlight the efficient work of Gennadiy Shcherbina and Ivan Bogatov, the heads of our St Petersburg and Moscow operations, as well as Maxim Berlovich, who has joined the Board of Directors as an Executive Director, in implementing these changes.
 
"I am pleased that in 2017 we saw the first results of the organisational changes. We increased profitability and sales, and improved capital turnover. Etalon was able to acquire several high-quality projects, including three business-class developments in St Petersburg and Moscow, while maintaining positive operating cash flow and a solid financial position.
 
"Etalon Group is well-positioned to face new challenges, and we look to the future with confidence. Our goal is to further strengthen Etalon Group's leading market position, and to deliver continued growth in shareholder value by increasing returns on capital and, as a result, higher dividend payments."
 
This and other recent announcements are available on the Etalon Group website: http://www.etalongroup.com/investors/news/ 
 
Etalon Group IR Team
T: +44 20 8123 1328
E: info@etalongroup.com
 
EM
Sam VanDerlip
T: +44 7554 993 032
T: +7 499 918 3134
E: vanderlip@em-comms.com
 
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 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 5.8 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 31 December 2017, Etalon Group's assets comprised 38 projects, with a total of 2.82 million sqm of unsold net sellable area, and a construction and maintenance division. Knight Frank valued the Company's assets at RUB 135,197 million.
 
For the year ended 31 December 2017, Etalon Group's new contract sales totalled 512 ths sqm, or RUB 50,240 million. Deliveries in 2017 amounted to 423 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.
 



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