Dubai: The Dubai headquartered retailer Spinneys ticked all the boxes when it comes to growth for the first nine months of 2024, with revenues now at its highest point of Dh2.29 billion from Dh2.06 billion a year ago.
There are gains on the bottom line too, with profit at Dh182 million against Dh159 million a year ago.
The DFM-listed supermarket operator recently added Saudi Arabia to its network, and with the first sighting of returns showing up.
Spinneys recently paid an interim dividend of Dh102.6 million, or 2.85 fils per share, to shareholders.
It now has 12 signed leases in the UAE and Saudi Arabia to 'further support network expansion and tap into the compelling whitespace opportunity presented by both markets'.
Chasing higher margins
Spinneys also completed refurbishment and expansion at some of its outlets, expanding Spinneys RAK Al Hamra and Waitrose Saadiyat Beach, apart from introducing meal solutions and health and beauty sections. (The latter categories are seen as helping improve margins in the medium term, according to analysts.)
In the nine months this year, gross profit increased 12% to Dh948 million with a 'stable' profit margin of 41.2%. This was achieved through 'efficient sourcing and supply chain management' apart from higher returns through its 'highly successful private label strategy, emphasizing sales of high-margin products'.
Apart from adding to its UAE presence, the plan is to 'accelerate our expansion in Saudi Arabia, roll out new concepts and deepen our ecommerce offering', said Sunil Kumar, CEO of Spinneys.
The stock is trading at Dh1.52 on DFM against the IPO price of Dh1.53.
Saudi plans
The Spinneys’ target is to have a ‘minimum’ 10-12 stores in the Kingdom by 2028. But the creation of new upscale mixed-use communities in Riyadh and elsewhere in Saudi Arabia might add to the plans, according to the CEO.
The ‘unique positioning’ Spinneys has in the UAE can be replicated in Saudi Arabia, said Kumar.
‘The Kitchen’
Going forward, Spinneys hopes to fire up more margin power for itself through The Kitchen, it’s distinctly premium ready-to-serve meal provider, which has a flagship location at The Dubai Mall. “The concept was a test for whether we can deliver on margins and so far we are happy with what’s been achieved,” said Kumar.
More locations for The Kitchen will follow shortly in the UAE. On whether the target for this is geared for a younger shopper, Kumar said: "It's multi-ethnic meals that we are providing, whether for families or individuals. We believe there will be more of these concepts that we can open."
Serving and selling fresh sure is helping Spinneys with the numbers.
