BREAKING NEWS – 24.06.2024

In the press release of May 28, 2024, Arras Group, a technology company for real estate development of second homes mainly in Sardinia, listed on the Euronext Growth Milan (EGM) market, announced the Board of Directors’ approval of its results as of December 31, 2023.  As of December 31, 2023, the Group generated a Value of Production of € 3.22 million recording a growth of 99.0% compared to the previous period when it amounted to € 1.62 million. The growth included both the completion of the Maestrale project in the amount of approximately € 0.70 million and the change in inventories recorded in the period due to the work progress of construction sites in the amount of € 2.29 million. EBITDA at the end of the year stood at € – 2.14 million compared to a figure of € – 0.90 million in the previous period, thus showing a decrease of 136.6%. Similarly, the EBITDA margin decreased to a value of -66.3%, compared to the FY22A figure of -55.8%. It should be noted that this result is mainly attributable to a delay in the progress of work. Regarding the Blu Wave project, the Company expects to proceed with the transfer of one housing unit by signing a notarial deed by June 30, 2024. In relation to 51 housing units of the Emerald, White Pearl, The View, Castel View and Badesi Mare Lotto 1 projects, on the other hand, the sale by signing a notarial deed is expected by December 31, 2024. Finally, the expected date for the deed of the White Pearl and Emerald projects is scheduled for the third quarter of 2024. EBIT, after amortization and depreciation of € 0.22 million (€ 0.03 million in FY22A), was negative at € – 2.35 million, worsening compared to the FY22A figure of € – 0.93 million. Net Income amounted to € – 2.40 million, registering a decrease from the figure for the previous fiscal year of € – 0.96 million. NFP is cash positive at € 0.19 million, marking an improvement over the 2022 year-end figure for € 0.25 million of debt.  It is also reported that the item Net Consolidated Assets is negative by € – 0.69 million due to the overall loss recorded at Group level. It should be noted that the Net Assets of the subsidiaries included in the scope of consolidation, except for Blue Wave 2 Srl (for which a capital contribution was made in the days prior to the preparation of the financial statements to bring its Equity back to positive), are positive and no entity is in the conditions provided for by Articles 2446 and 2447 of the Civil Code (or, for limited liability companies, by Articles 2482-bis and 2482-ter of the Civil Code). Finally, all subsidiaries maintain integral share capital, thanks in part to the Parent Company’s waiver of receivables. It should be noted that the active operating vehicles as of December 31, 2023 are as follows: IL MAESTRALE SRL VILLA THE WAVE SRL (BLUE WAVE) WHITE PEARL SRL VIEW SRL (THE VIEW) I VILLINI DEL POETTO SRL SUNRISE CANNIGIONE SRL BADESI MARE SRL PALAZZO GAUDINA SRL WHITE PEARL SRL DIAMONDS SRL CASTEL GROUP SRL (CASTEL VIEW) SEASIDE SRL BLU WAVE 2 SRL (BLU WAVE TWO) BLU WAVE 17 – 53 SRL Based on the above, while waiting for the auditing firm to come up with an opinion, we modify our recommendation: target price U/R, rating U/R and risk MEDIUM.

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