Arras Group S.p.A. /02.08.2023

Ultima Ricerca Arras Group S.p.A.

• BREAKING NEWS – 16.01.2024

  In a press release of January 12th, 2024, Arras Group, a technology company for real estate development of second homes mainly in Sardinia, listed on the Euronext Growth Milan market (EGM), announces an update on the progress of its projects.  Specifically, the vehicles as of December 31st, 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) and Blu Wave 17 – 53 Srl. It should be noted that the vehicles Castel View Srl, Blu Wave 17 – 53 Srl and Blu Wave Two Srl were built for the development of three new Real Estate projects located in Sardinia, following the start of trading of Arras Group’s ordinary shares and warrants on the Professional segment of the EGM market on August 4th, 2023. Specifically, work on the Castel View project has already been started. As for the other projects, however, the marketing phase is still ongoing. At the end of 2023, the “Il Maestrale” Real Estate project appears to be the only one concluded, following the signing of the final contracts for the sale of the 5 apartments from which it is composed. The finalization of the Blu Wave, Emerald and The View projects, which were scheduled for completion in the last quarter of 2023, has been postponed to 2024, due to some delays in construction activities entrusted to general contractors beyond Arras Group’s responsibility. Specifically, Blu Wave (state of progress greater than 95.0 %) will be completed by the first quarter, Emerald (state of progress greater than 75.0%) by the first half of the year, and The View (state of progress greater than 60.0%) by the third quarter. The delays were partly caused by customer requests for enlargements and variations from the initial design, which caused the timeline to be extended, although with a positive change in projected revenues. In order to ensure greater control over the progress of work, guaranteeing compliance with the timelines set by the Budget and production GANTT, the Company decided to strengthen its organizational structure by integrating 3 project managers dedicated to supervising operational activities by February 2024. It should be noted that delays in the deeds scheduled for 2023, related to Blu Wave, Emerald and The View, have caused a reduction in the expected turnover for 2023 of approximately 65.0%. The projects that were expected to be completed in 2024 have also been delayed due to the above causes. Therefore, the Company prudentially estimates a postponement of the dates for the completion of the White Pearl project to the first half of 2024 (instead of the fist quarter of 2024) and the Sunrise Cannigione project to the fist quarter of 2025 (instead of the last quarter of 2024). An update on the Diamonds project will follow. In the third quarter of 2023,  the Company replaced the CFO and optimized the management control system by internalizing accounting. On the commercial side, Arras Group achieved major successes by recording:  an expansion of the pipeline with 7 new initiatives (The tower, Country side, Acqua Marina Palau, Seaside, Blue wave two, Blue wave 17, and Blue wave 53), for a total of 16 projects;  the construction of 3 new assets, for a total of 14 assets; 28 new housing units related to the 7 new initiatives in the pipeline, for a total of 92;  67 preliminary purchase agreements, for a total value of € 20.20 million. Waiting to meet the management and consider the results for 2023, we confirm our recommendation: target price € 1.40, BUY rating and risk Medium.

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