Abu Dhabi's food company Agthia is working up an appetite for acquisitions - and that's good
Agthia's buy of healthy snacks company BMG Group is a good portfolio fit
Agthia Group, the region’s leading food and beverage company with a market cap at Dh5.2 billion, has bought all of BMB Group in Dubai, a leading healthy snacks company in the Gulf. The deal sees Agthia expand its healthy food category and leverage BMB’s capabilities to accelerate growth in the snacking segment.
With the global healthy snacks market forecast to reach almost $98 billion by 2025, according to Euromonitor, Agthia is positioning itself well in an expanding segment with a roster of scalable brands. The Abu Dhabi group had a first-half net profit of Dh67.9 million and revenues of Dh1.32 billion, representing 61 per cent and 21 per cent year-on-year growth, respectively.
Acquisitions helped with the revenue boost and the Group remains well-positioned to harness regional growth opportunities with the recent consolidations of Al Foah dates, Al Faysal Bakery & Sweets and Nabil Foods under the Consumer Business Division (CBD). The net revenue contribution by this division increased 20 per cent year-on-year to 65 per cent. Agthia’s performance was also driven by additional cost optimization.
Serving up dividends
In line with the semi-annual dividend distribution policy announced at the beginning of the year, Agthia pays 8.25 fils per share for the first-half, indicating a dividend yield of 1.26 per cent. The strong performance of the company coupled with the acquisitions would go a long way in unlocking shareholder value.
Agthia Group was included in the Morgan Stanley Capital International (MSCI) Emerging Markets Small Cap Index effective from May 27. Not only will the inclusion have a positive impact on Agthia, it will boost global fund flows into ADX.
Agthia’s acquisitions are opening the doors to new revenue streams and markets, and with the added bonus of of exploring possible product innovation. The group is on track to unleash an updated growth strategy to be an F&B leader in the MENA region and delivering sustainable stakeholder value.