Spinneys to offer 900m shares in Dubai IPO

Spinneys

• Supermarket chain to sell 25%
• Semi-annual dividends planned
• Expansion into Saudi Arabia

Supermarket operator Spinneys will sell 25 percent of its business in an initial public offering (IPO) on the Dubai Financial Market (DFM), according to an intention to float document released on Tuesday.

The company’s offering will be open from April 23 to April 29 for retail investors, while institutional investors can subscribe until April 30, according to the notice.

A total of 900 million shares, each with a nominal value of AED 0.01, will be made available in the offering, representing a quarter of the retailer’s total issued share capital.

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Spinneys said it intends to pay dividends on a semi-annual basis in April and October of each year, with the first payment targeted for October 2024.

Shares are expected to begin trading in Dubai in May this year. Rothschild & Co Middle East Limited has been appointed as Independent Financial Adviser. Emirates NBD Capital PSC has been appointed as Listing Adviser.

The company, which operates 75 grocery retail supermarkets under the Spinneys, Waitrose and Al Fair brands in the UAE and Oman, is planning to expand into Saudi Arabia.  

“We have a proven track record for growth, driven by the expansion of our store network, increasing online penetration, a growing private label offering, and a vertically integrated supply chain, resulting in robust financial performance with a track record of like-for-like growth and strong margins,” CEO Sunil Kumar said in a press statement.

Spinneys’ revenue in 2023 grew to AED2.9 billion, at a CAGR of 8.2 percent from 2019. Profit for the year 2023 stood at AED254 million, growing by nearly a fifth from 2022. 

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Nearly 30 companies in the Middle East and North Africa plan to launch IPOs this year, despite mixed share price performance from many regional businesses that went public last year, according to a report by consultants EY.

Businesses from Saudi Arabia and the UAE are expected to dominate.

IPOs in the Mena region last year raised $10.7 billion in 2023, down 51 percent year on year, EY said.

The number of IPOs also declined slightly over the same period to 48.

Matein Khalid, chief investment officer in the private office of Abdulla Saeed Al Naboodah and CEO designate of a venture capital firm, said Dubai’s spectacular property boom and a fall in interest rate expectations, higher government spending and a number of bellwether IPOs spawned Dubai’s DFM bull market in 2023.

The DFM saw an increase of 124 percent in net profit to AED329.4 million, compared to AED147.1 million in 2022.

“It is reasonable to expect that UAE stock markets will continue to lead the GCC equity performance league table,” he said.

“The UAE is the most networked and globalised economy in the Middle East and its policy to use IPOs as a magnet to attract global capital flows is bullish for its stock markets.”

Spinneys operates more than 65 stores in the UAE and at least seven in Oman, with annual turnover exceeding $1 billion.

Spinneys owner Albwardy Investment, which says it has annual turnover above $1 billion, also holds franchise rights for the British supermarket chain Waitrose. Albwardy also operates in hospitality, engineering, insurance, agribusiness and property.

The IPO would expand the regional food retail sector on the DFM, after Americana Restaurants’ dual listing in Abu Dhabi and Riyadh in December.

The UAE’s retail conglomerate LuLu Group International, which is among the largest hypermarket chain operators in the Middle East, has also appointed local and international banks to lead its proposed $2 billion IPO.