In post-IPO results, F&B giant Americana reports a healthy profit of $259.2 million on sales of $2.37 billion

Dubai: The Middle East’s largest restaurant operator, Americana, reported healthy profit growth of 27.1 percent to $259.2 million in 2022, up from $203.91 million a year before the 2021 IPO. Revenues came in at 2 $.37 billion, up from $2.05 billion a year earlier.

Americana, listed on ADX and Saudi Tadawul, had a very successful IPO late last year and the funds raised were earmarked for further expansion. Americana, which operates the Pizza Hut and KFC franchises among many others, is currently trading at Dh3.84 and was up 6.8 percent on Monday (February 13). (She had her shares priced at Dh2.62 in the offering.)

These are preliminary results and do not mention the expected dividend payout for the year. “The market and investors would expect a return of at least 50 percent – the stock’s activity on Monday (February 13) indicates investor preparedness,” said one analyst.

Look out for dividends

Americana, which is chaired by Mohammed Alabbar, saw a spike in listings on day one and has continued the momentum ever since. “The stock is up almost 46 percent since the listing and is expected to grow even more post-earnings,” said Vijay Valecha, chief investment officer at Century Financial. “The stock appears to be a good long-term pick, although dividend payout status isn’t entirely clear just yet.”

“We should expect a payout of at least 50 percent, and the company has good cash reserves to ideally pay dividends.”

What about expansion?

Americana has added the first row of stores for its newly acquired franchise, specialty coffee brand Peet’s. According to retail industry sources, the company would increasingly go down this path — launching higher-margin niche brands while expanding with its legacy brands — KFC, Pizza Hut, etc. — in relatively underserved markets.

“The out-of-home F&B industry has yet to see some growth in the Middle East – there’s no sign yet that consumers in the GCC have drastically cut back on grocery spending or outings due to inflation,” he said, a retail analyst.