Dubai: Spinneys' shareholders will receive their first post-IPO interim dividend of Dh102.6 million - or 2.85 fils a share - this month. This was confirmed after the DFM-listed retailer announced first six month 2024 revenues of Dh1.6 billion, up 9.9 per cent, and profit of Dh146 million, higher by 15.2 per cent.
Th grocer points to the profit growth coming 'despite impact of 9 per cent UAE corporate tax'. It will also be pleased with the 22 per cent increase in sales volumes to Dh217 million brought in via the ecommerce channel. These account for 14 per cent of the group's H1-2024 sales.
“During the first-half of the year, we made a number of important steps in the execution of our strategy, expanding our footprint by opening four new stores including our new innovative foodhall concept, The Kitchen, by Spinneys," said Sunil Kumar, CEO. "We also opened our first-ever store in Saudi Arabia, entering a compelling market where we see immense potential for growth."
"The La Strada Yard store in Riyadh has already experienced an exceptional response from customers, highlighting the strong demand that exists for our offering, with early performance reinforcing our already very positive outlook for Spinneys in the Kingdom."
While our focus remains on the Kingdom, the UAE and Oman, we will not say 'No' to any opportunity that arises in new markets. But that's not a priority.
While initial results from its first Saudi store are ‘beyond expectations’, Spinneys is gearing for a second location, which will be at the King Abdulaziz Financial District, most likely to be in October. A third will follow before the end of 2024.
"The entry into Saudi Arabia is a key milestone for Spinneys, given our heritage of 100 plus years," said Kumar. "While our focus remains on the Kingdom, the UAE and Oman, we will not say 'No' to any opportunity that arises in new markets. But that's not a priority."
On whether Spinneys will take to ecommerce channels in Saudi Arabia soon, the CEO said that's a live possibility. Initially, rather than launch its own branded online and delivery platform. Instead, it will tap third-party ecommerce operators to do the needful. (Analysts reckon that Spinneys will be on to a good thing if the Saudi online sales channels are activated at the earliest, and leveraging the name recognition the brand enjoys in the physical retail space.)
9.2 %
Spinneys' net profit margin Spinneys’ net profit margin, which is a 50 basis point improvement from a year ago.Spinneys had 79 stores as of end June. The new store openings were 'partially offset by the closure of two locations in the corresponding period of the previous year'.
"Spinneys remains committed to expanding its store footprint, with a healthy pipeline of new locations planned in the UAE, as well as in Saudi Arabia," said a statement.
'High margin' kitchen
And then through The Kitchen, by Spinneys (located at The Dubai Mall), the company targets 'margins well above grocery retail margins' and with further locations set to open in the UAE later this year.
Having got a taste of the cloud kitchen concept, Spinneys will recreate a second location in Dubai, at the Creek Harbour. It will be of similar proportions, between 400-600 square metres as the Dubai Mall one. "We will look to have more locations, whether in office towers or within a location such as the Sobha District," said the CEO. "These could even be within 200 square metres in terms of space needed."
