·         Dividend amount and frequency increased

·         Record financial and operating results allow PIK Group to pay dividends without hampering the Company’s business strategy and with no risks to its financial stability

·         Logical step towards implementation of capital markets strategy aimed at achieving a fair valuation of the Company

Moscow, 23June 2017. – The Board of Directors of PIK Group ("PIK" or the "Company") (MOEX: PIKK), Russia’s biggest developer of residential real estate, has approved a new dividend policy that provides for the distribution of at least 30% of net cash from operating activities (OCF) in form of dividends twice per year, in line with best practice. This policy will be used for the first time to calculate dividends for FY 2017.

The new dividend policy was adopted as part of the Company’s capital markets strategy announced in March 2017, and aims to increase the amount and frequency of dividend payments. Following a series of acquisitions, combined with organic growth, PIK Group became Russia’s leading residential real estate developer by construction volume. The Board of Directors considered a number of options to further increase shareholder value. The decision to approve regular dividend payments will help increase the Company’s investment attractiveness, without hampering its business strategy and with no risk to its financial stability in the context of the Company’s record financial and operating results.

The new dividend calculation formula is clear and transparent and was chosen after a thorough analysis of best practices of Russian and international companies. Although most of PIK’s competitors still calculate dividends based on net income, many companies across various sectors are switching to a new formula based on cash flow or EBITDA. The Company believes that operating cash flow is the best and the fairest indicator of the quality of its income, as it does not take in to account paper profits and losses. Furthermore, given the specifics of the construction industry and the practice of pre-sales, incurred costs and cash inflows are displayed in the financial results of the reporting period, whereas revenues are registered upon the transfer of ownership rights, usually with a lag of 1.5-2 years.

The Board of Directors approved a flexible scheme for determining dividend payments, which acts as a balancing mechanism to ensure financial stability and protects the Company from possible macroeconomic shocks, ensuring uninterrupted implementation of the business strategy. Dividend amounts can be adjusted based on the Company’s need for free cash for debt servicing, compliance with financial covenants and implementation of investment programmes. This approach is highly effective in the context of increased economic and political fluctuations.

PIK Group expects that the new dividend policy will increase the Company’s investment attractiveness and attract new high-class investors.

Sergei Gordeev, President, Chairman of the Management Board of PIK Group, said:

“Thanks to continuous increases in operating efficiency, introduction of innovations and sensible acquisitions, we have achieved a level that allows PIK to make returns to its shareholders. The new dividend policy confirms our commitment to high standards of corporate governance and concern for shareholders, and does not affect the Company's business interests. The possibility of adjusting the dividend amount in accordance with the Company’s need for free cash for debt servicing complies with our strict discipline in capital management.

“We believe that our capital markets strategy, under which the new dividend policy was adopted, is beneficial for everyone. We will continue to fulfil our strategic objectives, in particular strengthening investor relations and optimising our cost of funding."

ABOUT PIK GROUP

PIK Group was founded in 1994 and today is the leading residential real estate developer in the Moscow Metropolitan Area and in Russia as a whole. The Company is present in nine regions of Russia with an extensive project pipeline focused on the lucrative Moscow Metropolitan Area. The Company has a proven track record with about 16 million sqm of residential real estate built since inception (0.9 million sqm in 2016).

PIK shares have been listed on Moscow Exchange since 2007. PIK Group has a strong reputation on the market and continues to demonstrate robust financial and operating results:

·         Record growth by all indicators in 2016: total cash collections grew by 47% year-on-year, new sales contracts to customers advanced by 52% year-on-year, 63 new properties were put on sale against 50 in 2015;

·         The share of mortgage-backed deals has grown sevenfold over the last seven years thanks to a disciplined and customer-centric approach;

·         Comfortable leverage profile without exposure to currency risks which creates room for further sustainable growth.

In 2017 the Company intends to maintain its market leadership on the affordable housing market, and expects total new sales to customers of 1.7-1.9 million sqm and total cash collections of RUB 190-200 billion.

ENQUIRIES

PIK contacts

Investors                                                                     Media

Polina Kurshetsova                                                      Tatyana Seyranyan

Tel: +7 495 505 97 33 ext. 3785                                  Tel: +7 919 777 21 87 

E-mail: ir@pik.ru                                                         E-mail: pressa@pik.ru

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