Dubai: Abu Dhabi National Hotels will be acquiring the 50 per cent stake held by Compass Group International in their joint venture operations in the UAE.
This is part of ‘ADNH’s strategic plan to boost revenues and profit margins from key business segments’, said a statement.
The expected financial returns from the deal – expected to be completed soon – could lead to an additional annual net profit of around Dh100 million.
The UAE JV, ADNH Compass, is rated as the biggest provider of food and manpower services to corporates and organisations. Compass Group, listed on the FTSE, had its best ever revenues of 31 billion pounds in 2023.
The ADX-listed ADNH stock is up a stellar 43 per cent year-on-year, and is trading at Dh0.65. Last year, ADNH had revenues of Dh1.6 billion against Dh1.46 billion in 2022, while net profit closed at Dh422 million (from Dh415 million).
Following this, the company announced a cash and stock dividend. This takes the form of a 20 per cent cash dividend (amounting to a payout of Dh240 million) and 5 per cent in bonus shares, representing 60 million shares in all.
Major deal and spending spree
Over the last 6 years, ADNH has been steadfast in building its hotel portfolio in the UAE, through acquisitions such as the one that got it five properties from Emaar. Late last year, these were placed under new hospitality management contracts.
There have been other deals, such as for a new resort on Ras Al Khaimah's Al Marjan Island.
"The Compass Group stake buyout continues the ADNH move to grow bottom-line numbers where possible," said an analyst. "The joint venture entity is well established and contracts with some of the biggest organisations in the country. On its own, ADNH can further grow on that."
