Latest news with #ADNHC
Zawya
24-02-2025
- Business
- Zawya
ADNH Catering plans further Saudi growth after Food Nation acquisition
Abu Dhabi-listed ADNH Catering (ADNHC) will expand further into Saudi Arabia after its recent acquisition of Food Nation Catering. The transaction, which is close to completion, allows ADNHC, which is a unit of Abu Dhabi National Hotels (ADNH), to expand further into the school food segment its CEO Clive Cowley said. The company will utilise Food Nation's expertise to grow in that area including in Saudi Arabia. Within three to five years, the school catering segment could bring in AED 250 million revenue, Cowley told Zawya. The addressable market for ADNHC in the UAE is AED 4 billion according to studies commissioned by the company. It expects a CAGR of 5% for the next five years across the business. Analysts said ADNHC has a ' promising ' outlook due to population and tourism growth in Abu Dhabi. While 70% of ADNHC's business is still focused on Abu Dhabi and the country's western region, there is further opportunity to grow in Dubai and the Northern Emirates, Cowley said. A shift to 60% of the business being in Abu Dhabi and 40% elsewhere is likely within 18 months. 'We are very much a broader based business in the UAE now, and our portfolio represents a more diverse contract base,' he said. ADNHC raised AED 864 million ($235 million) when it listed in Abu Dhabi last year and operates in private and public sectors, providing catering in healthcare, education and the defence sector. Other segments are dining services in workplaces including offices, factories and oil rigs as well as police and correctional facilities. It also provides support services such as cleaning, manpower supply and pest control, which already accounts for annual revenue of AED 500 million. Revenue rose 12% to AED 443 million in the fourth quarter of 2024 and profit grew to AED 44 million according to recent financial results. ADHNC expanded into Saudi Arabia and acquired a controlling stake in its joint venture Compass Arabia last year, with the healthcare sector seen as a 'high growth' opportunity in addition to education, Cowley said. Cowley described ADHNC as profitable, cash generative and light on capital expenditure in real terms with a positive cash outlook. The company is not keen on debt equity at this moment for expansion, Cowley said. 'We have already established a revolving credit facility for AED 250 million for any acquisitions going forward. 'We are in a position where we are able to fund our growth in the near-term with the facilities we already have available to us,' he added. (Reporting by Imogen Lillywhite; editing by Seban Scaria)
Zawya
31-01-2025
- Business
- Zawya
ADNHC outlook 'promising' due to Abu Dhabi population and tourism growth
ADNH Catering (ADNHC) should see share price gains in the long term as it capitalises on Abu Dhabi's tourism growth, although its financial performance so far may still indicate risk. ADNHC, a unit of Abu Dhabi National Hotels, listed on the Abu Dhabi Securities Exchange (ADX) in October. It has a trailing P/E (share price to earnings) of 14.7x, lower than GCC peers in the food services sector such as Tadawul-listed Catrion Catering, ADX's NCTH, Muscat-listed Al Jazeira Services and Kuwait-listed Kuwait Hotels, which have an average P/E of 25x. Junaid Ansari, Director and Head of Investment Strategy and Research, Kamco Invest, said a company trading at a lower P/E is either undervalued or reflects a fundamental issue. 'If there are no issues, the company does not deserve to trade at a lower P/E and is expected to see a gain in its share prices that aligns its PE with the rest of the peers,' he said. Century Financial put the catering and staffing services company's forward P/E at 13 compared to a sector-wide figure of 22.54, which was attributed to its recent financial performance. The company's first full-year results since its IPO are to be published in February, but for the first nine months of 2024, revenue fell to AED 1.22 billion ($332 million), down from AED 1.3 billion in 2023, with profits also declining. ADNHC announced on Wednesday that it had acquired school catering company Food Nation Catering. Century CIO Vijay Valecha described the outlook as 'promising' as earnings per share are expected to rise from AED 0.069 in 2024 to AED 0.077 in 2026. Valecha noted that Abu Dhabi's population reached 3.8 million in 2023, an increase of 83% on 2011, with the government expecting the population to double by 2040, boosting the top and bottom line. That, in addition to a booming tourism industry, increases the total addressable market, he said. (Reporting by Imogen Lillywhite; editing by Seban Scaria)
