• Company published first unaudited pro forma financials since IPO on ADX
  • The Company serves more than 11 million meals per month, annualized, and cleans 184 facilities as at the end of September 2024
  • Total contracts in the UAE grew by 8.1% year-on-year to 385
  • As disclosed during the IPO process, ADNH Catering intends to pay a dividend of AED 60 million in April 2025 for the 2024 financial year, and a dividend of AED 180 million for the 2025 financial year

 Abu Dhabi, UAE – ADNH Catering plc (the “Company” or “ADNH Catering”), a leading food and support services provider in the UAE, has announced its unaudited financial results for the three-month and nine-month periods ended 30 September 2024. On a pro forma basis, ADNH Catering reported revenue of AED 1.2 billion during the first nine months of 2024, resulting in EBITDA of AED 167 million at an EBITDA margin of 13.7%. Pro forma net profit of AED 110 million at a robust net profit margin of 9.0% reflected ADNH Catering’s efficient supply chain management, operational efficiencies and proactive contract management.

Commenting on the results, Clive Cowley, CEO of ADNH Catering, said: 

“We are pleased to report our first set of results since listing on ADX, with a solid revenue base, sound EBITDA margins and robust free cash flow for the nine months ended September 2024. Over the course of this period we have achieved healthy growth in contracts, particularly for our support services segment, underscoring our commitment to strategic expansion across key verticals and geographies. As we continue to focus on diversifying our service offering to meet client needs, driving value, and deepening our market presence in high-growth sectors, we are pressing ahead with our plans to grow and consolidate our presence both in Saudi Arabia and the UAE. We remain focused on building on this strong foundation to deliver exceptional client service, profitable growth and sustainable shareholder value creation.” 

Strategy Execution and Growth Drivers 

ADNH Catering’s growth strategy is centered on both organic and inorganic expansion to drive long-term growth.

The core focus on winning new business and retaining key clients through active tender participation has delivered 37 new contracts and 20 clients over the last nine months, with 15 new contracts and seven new clients secured in the most recent quarter, with a retention rate of over 97% on average for the last 12 months.  The Company is also actively pursuing inorganic growth through targeted bolt-on acquisitions outside its core catering operations, aimed at broadening service offerings and expanding into high-potential sectors and underserved regions, including in education and energy. ADNH Catering is also actively pursuing growth opportunities in Saudi Arabia, where it is in talks to increase its stake in its existing joint venture, and where it sees compelling opportunities in the Eastern Region, Jeddah and Riyadh, particularly in private healthcare. ADNH Catering is also committed to driving margins by enhancing efficiency, improving productivity, and implementing strategic pricing initiatives to strengthen its market position.

Key Financial Indicators 

Revenue: On a pro forma basis, revenue for the nine-month period ended 30 September 2024 (9M 2024) stood at AED 1.2 billion, supported by a focus on strategic business selection and operational scale-up. While 9M 2024 base revenue increased by 12.1% year-on-year due to proactive business selection in tandem with scaling of operations, actual revenue fell on a comparative basis due to a change in its revenue recognition model for part of its support services business and as a result of a voluntary decision in 2023 to de-risk the business by opting out of a contract that did not deliver on ADNH Catering’s strict profitability requirements. As such, resources were reallocated to focus on more profitable areas and to reduce reliance on large contracts. With growing diversification in its contract base, the Company’s dominant catering business is well balanced across sectors. 

Profitability: Despite a high inflationary period, the Company’s stable base of contract profitability continued to see higher costs mitigated by effective supply chain management, operational efficiencies and proactive contract management. For 9M 2024, EBITDA stood at AED 167 million at an industry-leading double-digit margin of 13.7%, with EBIT of AED 120 million at an EBIT margin of 9.9%. Net profit for the period stood at AED 110 million at a margin of 9.0%.  

Dividend policy: ADNH Catering has implemented a dividend policy that aligns with its financial performance, with semi-annual cash dividend payments. For the financial year 2024, the Company intends to distribute a cash dividend of AED 60 million in April 2025. In 2025, the Company aims to pay a total cash dividend of AED 180 million. In 2026, ADNH Catering plans to increase the annual dividend by at least 5% over the previous year, demonstrating management and the Board’s confidence in its future earnings and cash flow generation. From 2027 onwards, the Company intends to maintain a progressive dividend policy linked to financial performance, with semi-annual cash dividend distributions. 

Management Outlook 

ADNH Catering maintains a positive outlook on its growth prospects, as its expanding addressable market offers compelling opportunities to increase market share. The Company’s focus continues to be on maintaining high client retention rates above 95% over the near- and medium-term, as it strengthens its position in key sectors. With a disciplined approach to scaling operations, ADNH Catering aims to drive revenue growth by 5-7% annually from 2025 over the near- and medium-term, while achieving an EBITDA margin of 13-14% over the same periods.

Note Regarding Pro Forma Financials 

ADNH Catering plc was incorporated in the Abu Dhabi Global Market on 22 June 2024. On 30 June 2024, ownership of the catering and support services businesses in the UAE and the Kingdom of Saudi Arabia were contributed by ADNH Catering’s parent company, Abu Dhabi National Hotels PJSC (“ADNH”), into the Company as part of a reorganisation (the “Reorganisation”) using the Business Combination method.  This method requires the Company to adopt the history of the entity it acquires for reporting purposes. The statutory accounts of ADNH Catering published on 7 November 2024 therefore correspond to the 12-month period ending 30 Sept 2024, and comprise:

  • A D N H CATERING L.L.C.-O.P.C (“ADNH Catering Abu Dhabi”) for the full 12-month period;
  • A D N H Catering L.L.C. (“ADNH Catering Dubai”) and A D N H Compass L.L.C SP (“ADNH Catering Sharjah”) trading from 1 April 2024, the first day of full ownership by ADNH of ADNH Catering Dubai and ADNH Catering Sharjah; and
  • 30% shareholding of Compass Arabia from 1 July 2024, the date the shareholding was acquired by ADNH Catering Abu Dhabi

The prior year comparative financial information for the 12 months ending 30 Sept 2023 only reflects the performance of ADNH Catering Abu Dhabi. 

Given this series of acquisitions by ADNH Catering throughout the year, the Company believes that presenting unaudited unreviewed Proforma Combined Income Statements is the most effective and informative way of communicating its financial results. Unaudited, unreviewed Proforma Combined Income Statements are therefore used in this document showing the impact of the Reorganisation as if it had taken place on 1 October 2023.  These additional unaudited and unreviewed income statements have been prepared for illustrative purposes only and are based on available information and certain assumptions and estimates that the Company believes are reasonable.

Appendix

Unaudited unreviewed Proforma Combined Income Statement for the 12-month period ending 31st December and the 9-month period ending 30 September:

in AED (FYE 31-Dec)

2022

2023

9 months ended 30 Sept 2023

9 months ended 30 Sept 2024

Food services

1,243,223,746

1,013,283,034

768,309,865

753,865,265

Support services

751,141,464

691,985,610

541,274,865

464,787,923

Revenue

1,994,365,210

1,705,268,644

1,309,584,730

1,218,653,188

Cost of revenue

(1,689,732,317)

(1,429,519,780)

(1,089,857,521)

(1,037,006,775)

Admin expenses

(76,469,522)

(48,062,285)

(33,050,601)

(61,259,238)

Other income, net

1,094,731

109,158

100,313

13,824

Impairment loss of trade receivables

(4,323)

(17,576,077)

(17,576,077)

-

Add-back: Depreciation on PP&E

11,833,322

11,455,333

8,491,293

11,414,855

Add-back: Depreciation on ROU

36,257,497

42,981,472

32,602,030

29,951,761

Add-back: Amortization of intangible assets

282,583

28,520

4,391

72,387

Add-back: Amortization of intangible assets (client relationship)(1)

-

-

-

5,002,500

EBITDA

277,627,181

264,684,985

210,298,559

166,842,503

% margin

13.9%

15.5%

16.1%

13.7%

Less: Depreciation on PP&E

(11,833,322)

(11,455,333)

(8,491,293)

(11,414,855)

Less: Depreciation on ROU

(36,257,497)

(42,981,472)

(32,602,030)

(29,951,761)

Less: Amortization of intangible assets

(282,583)

(28,520)

(4,391)

(72,387)

Less: Amortization of intangible assets (client relationship) (1)

-

-

-

(5,002,500)

EBIT

229,253,779

210,219,660

169,200,844

120,400,999

% margin

11.5%

12.3%

12.9%

9.9%

Net finance cost

(2,241,485)

(160,793)

380,788

(354,302)

Share of profit from Joint venture (1st Jul-30th Sep 24)

-

-

-

651,257

EBT

227,012,294

210,058,866

169,581,632

120,697,954

Income tax expense

-

(3,642,951)

-

(11,207,148)

Deferred tax  (1)

-

-

-

450,225

Net Profit

227,012,294

206,415,915

169,581,632

109,941,031

% margin

11.4%

12.1%

12.9%

9.0%

Results excluding provision release:

    

Charge / Release of specific provision

11,722,948

(25,210,000)

(25,210,000)

-

EBITDA (excl. Provision release)

289,350,129

239,474,985

185,088,559

166,842,503

% margin

14.5%

14.0%

14.1%

13.7%

EBIT (excl. Provision release)

240,976,727

185,009,660

143,990,844

120,400,999

% margin

12.1%

10.8%

11.0%

9.9%

     

(1) Amortization of intangibles (client relationship) from Apr to Sep- 24.

Proforma Combined Income Statement for the 12-month period ending 30th September:

  

in AED (FYE 30-Sep)

2022
(Audited)

2023
(Audited)

2024
(Unaudited and unreviewed)

 

Food services

1,284,734,059

1,072,997,335

998,838,434

 

Support services

705,020,389

744,495,824

615,498,669

 

Revenue

1,989,754,448

1,817,493,159

1,614,337,102

 

Cost of revenue

(1,674,007,388)

(1,523,903,424)

(1,376,758,420)

 

Admin expenses

(76,298,964)

(50,527,123)

(76,269,701)

 

Other income, net

2,195,106

(1,941,979)

110,834

 

Impairment loss of trade receivables

(9,308)

(17,576,077)

-

 

Add-back: Depreciation on PP&E

9,743,018

11,016,675

14,378,896

 

Add-back: Depreciation on ROU

31,738,173

43,183,013

40,331,203

 

Add-back: Amortization of intangible assets

291,534

72,800

96,516

 

Add-back: Amortization of intangible assets (client relationship) (1)

-

-

5,002,500

 

EBITDA

283,406,619

277,817,043

221,228,930

 

% margin

14.2%

15.3%

13.7%

 

Less: Depreciation on PP&E

(9,743,018)

(11,016,675)

(14,378,896)

 

Less: Depreciation on ROU

(31,738,173)

(43,183,013)

(40,331,203)

 

Less: Amortization of intangible assets

(291,534)

(72,800)

(96,516)

 

Less: Amortization of intangible assets (client relationship) (1)

-

-

(5,002,500)

 

EBIT

241,633,895

223,544,555

161,419,815

 

% margin

12.1%

12.3%

10.0%

 

Net finance cost

(1,641,082)

(436,953)

(895,884)

 

Share of profit from Joint venture (1st Jul-30th Sep 24)

-

-

651,257

 

EBT

239,992,813

223,107,602

161,175,187

 

Income tax expense

-

-

(14,850,099)

 

Deferred tax  (1)

  

450,225

 

Net Profit

239,992,813

223,107,602

146,775,313

 

% margin

12.1%

12.3%

9.1%

 
     

Results excluding provision release:

    

Charge / Release of specific provision

11,722,948

(25,210,000)

-

 

EBITDA (excl. Provision release)

295,129,567

252,607,043

221,228,930

 

% margin

14.8%

13.9%

13.7%

 

EBIT (excl. Provision release)

253,356,843

198,334,555

161,419,815

 

% margin

12.7%

10.9%

10.0%

 
     

(1) Amortization of intangibles (client relationship) from Apr to Sep-24.

   

 

Condensed consolidated interim statement of profit or loss

 

Three-month period ended 30 September

Twelve-month period ended 30 September

 

2024
(Unaudited)

2023
(Unaudited and unreviewed)

2024
(Unaudited)

2023
(Unaudited and unreviewed)

Food services

255,878,085

169,737,034

890,623,535

874,867,984

Support services

151,368,351

122,298,374

558,519,465

513,924,216

Revenue

407,246,436

292,035,408

1,449,143,000

1,388,792,200

Cost of revenue

(342,597,351)

(223,326,215)

(1,223,923,140)

(1,124,771,033)

Admin expenses

(21,902,488)

(19,598,044)

(72,636,923)

(74,955,882)

Provision for impairment of financial assets

-

(897,915)

-

(904,989)

Other income, net

33,635

22,650,173

374,738

23,275,823

     

Add-back: Depreciation on PP&E

3,365,968

2,159,741

12,844,755

8,165,846

Add-back: Depreciation on ROU

9,858,894

8,141,645

35,777,978

31,468,505

Add-back: Amortization of intangible assets

24,129

4,015

5,099,017

72,800

EBITDA

56,029,222

81,168,809

206,679,425

251,143,270

% margin

13.8%

27.8%

14.3%

18.1%

Less: Depreciation on PP&E

(3,365,968)

(2,159,741)

(12,844,755)

(8,165,846)

Less: Depreciation on ROU

(9,858,894)

(8,141,645)

(35,777,978)

(31,468,505)

Less: Amortization of intangible assets

(24,129)

(4,015)

(5,099,017)

(72,800)

EBIT

42,780,232

70,863,407

152,957,675

211,436,119

% margin

10.5%

24.3%

10.6%

15.2%

Finance (costs)/income, net

(1,501,805)

899,081

(721,563)

(393)

Share of profit from joint venture

651,257

-

651,257

-

EBT

41,929,684

71,762,488

152,887,369

211,435,726

Income tax expense

(3,715,187)

-

(13,792,335)

-

Net Profit

38,214,497

71,762,488

139,095,034

211,435,726

% margin

9.4%

24.6%

9.6%

15.2%

About ADNH Catering

ADNH Catering has a strong heritage in the UAE, built on over 45 years of experience in the food and support services industry. The Group offers a comprehensive range of services, including food preparation and service, as well as support services including general (non-technical) cleaning, housekeeping, pest control, and procurement services. With a significant market presence in the UAE and operations extending to the Kingdom of Saudi Arabia, ADNH Catering has earned a reputation for excellence.

Recent awards received by ADNH Catering include the 'Best Company to Work For – Large' and 'Best Retention & Recruitment Strategy' awards at the UAE Employee Happiness Awards 2022/23. In 2024, ADNH Catering became fully owned by ADNH and further expanded its portfolio with major contracts in hospitality and healthcare.

INVESTOR ENQUIRIES
ADNH Catering
Usman Saeed, Head of Investor Relations
usman.saeed@adnhc.ae 

MEDIA ENQUIRIES
Teneo
Farah Mouallem, Vice President
ADNHC@teneo.com