Shoemaker and retailer Obuv Rossii rallies on buyback announcement

Shoemaker and retailer Obuv Rossii rallies on buyback announcement
Obuv Rossii is one of Russia's leading shoe retailers / Obuv Rossii
By bne IntelliNews October 26, 2018

Russian shoe manufacturer and retailer Obuv Rossii (OR) said it will spend up to RUB900mn ($14mn) on a share buyback, which could result in buying up to 10% of its shares, the company said on October 26.

As the buyback, to be organised by BCS Global Markets that also organised the company’s IPO last year, was announced the shares of OR jumped by 10% on Moscow Exchange to RUB90.7 per share, correcting back to RUB83.2 by mid-session. The company raised $150mn with a rare IPO in October 2017 and has used the money to grow its market share, especially in Russia’s regions.

OR reported second-quarter revenue growth of 23%, a gross profit increase of 24% year-on-year to RUB1.45bn ($171mn), and net income growth of 14% to RUB230mn. The company's Ebitda declined by 3.4% in 2Q at the margin of 23.8%. The results of the company showed an improvement of like-for-like sales and gross margin trends, and were met positively by the analysts

As of July 2018 44% stake in the company was held by the CEO Anton Titov, 16% by billionaire Mikhail Prokhorov, with 38% of the shares free floated. The shares that will be bought back could be used to finance the current operation or for the management incentive programme.

Obuv is a classic Russian retail story. Its offering is priced in the mid-market and focuses on the burgeoning middle class living in the regions. Russia’s footwear market is in recovery mode and has long-term growth potential as Russians own a fraction of the shoes that their western peers do, Titov told bne IntelliNews at the time of the IPO.

As of end od 2018 the company operated 677 stores in 212 Russian cities under brands Westfalika, Peshehod, Emilia Estra, and Lisette.

 

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