Spinneys 1961 (SPINNEYS) Q3 2024 earnings summary

Executive summary

• Achieved record revenue of AED 2,298.9 million for the first nine months of 2024, up 11.4% year-over-year, with profit before tax rising 27.1% to AED 203 million and net profit attributable to equity holders at AED 192.2 million, despite new corporate tax impacts.

• Like-for-like revenue grew 11.1% and adjusted EBITDA margin remained strong at 18.3%, reflecting robust operational performance.

• Store footprint expanded with four new stores since October 2023, and online sales penetration increased to 14.5%.

• Strategic initiatives included expansion in Saudi Arabia, launch of a 60-minute delivery service, and significant investments in warehousing and food production facilities.

• The group completed its reorganisation and public listing on the Dubai Financial Market in May 2024.

Financial highlights

• Gross profit for 9M 2024 reached AED 948 million, up 12% year-over-year, with gross margin stable at 41.2%-41.3%.

• Adjusted EBITDA for 9M 2024 was AED 421 million (+8.8% YoY), with a margin of 18.3%.

• Free cash flow conversion was 37.4%, with AED 299.9 million in cash and bank balances and net debt at AED 640 million (1.52x net debt/adj. EBITDA).

• Interim dividend of AED 102.6 million paid during the period.

• Basic and diluted EPS for the nine months was AED 0.053.

Outlook and guidance

• Positive macroeconomic environment with strong GDP growth and a growing affluent population in the UAE.

• Continued expansion planned in the UAE and Saudi Arabia, with a healthy pipeline of new stores and further roll-out of delivery and dining concepts.

• Focus on enhancing customer experience and operational efficiency through new product launches and digital initiatives.

• Management expects moderate seasonal fluctuations due to Ramadan, summer holidays, and festive periods, with quarterly results not necessarily indicative of the full year.

• No significant uncertainties identified regarding the group’s ability to continue as a going concern.