Strategic Financial Objectives
SRV’s strategy and all of its operations are guided by the 2018–2022 strategic financial objectives that were approved in February 2018:
- After a phase of rapid revenue growth, SRV primarily seeks to increase annual operative operating profit.
- The operative operating profit margin of construction will rise to 8 per cent. Of this objective, 6 percentage points will arise from construction margin and 2 percentage points from shopping centre rental income as part of associated company holdings.
- Return on equity will be at least 15 per cent by the end of the strategy period.
- Return on investment will rise to at least 12 per cent by the end of the strategy period.
- The equity ratio will remain above 35 per cent.
- The long term objective is to distribute dividend of 30–50 per cent of the annual result, taking into account the capital needs of business operations.
The achievement of these strategic objectives will be based on moderate but steady economic growth in Finland, and Russia’s economy stabilising at a slightly stronger level. Growth in SRV’s developer-contracted projects is also required. SRV seeks to divest shopping centres that are in the management phase when the market situation allows.
SRV will continue to develop projects in Russia that can be launched when the Group’s capital structure allows and the financial criteria of the properties are fulfilled. Reaching the profitability targets requires not only boosting the efficiency of the company’s own operations, but also the more prudent selection of new projects with regard to profitability and capital commitment.