Majid Al Futtaim Ventures, a unit of the Dubai-based Majid Al Futtaim (MAF) Group, plans to seek acquisitions and boost its investments over the next five years as it considers entry into East Africa, Pakistan and possibly Iran, its chief executive said.
The conglomerate, which controls the Carrefour supermarket chain in the Middle East and operates Ski Dubai, is planning to double its revenue over the next five years and is eyeing new markets to feed that growth.
MAF Ventures runs all the leisure, entertainment and cinema facilities at MAF malls and third-party malls around the region. It also represents fashion brands, and is responsible for the consumer finance and healthcare business of the group.
“We are accelerating our capital investment programme, but we always leave spare capacity within our funding to look at acquisition opportunities,” said Ahmed Ismail, the chief executive of MAF Ventures.
“Despite the fact that you see a lot of economic challenges and headwinds around us here in the region, we remain firmly focused on the long term and investing in the long term. Whereas some competitors might be rethinking their capital expenditure programme, we see this as an opportunity to grab market share.”
MAF Ventures is seeking entry to East Africa, most probably through Nairobi, Pakistan and Iran because of their big middle-class populations. Iran will be attractive once sanctions are lifted.
“I think potentially we are looking at Pakistan and East Africa entry at the same time in the coming 12 to 18 months if we can find the right opportunities and are able to execute them,” said Mr Ismail. “We are most likely going to lead in with our cinema business, and the reason for that is the fact that the cinema business has a more strategic focus on growing the next-horizon markets.”
MAF Retail, which operates Carrefour stores across 13 countries in the Middle East, Central Asia and North Africa, plans to open a store in Nairobi.
MAF Ventures is hunting for new investment opportunities because it expects its core markets in the Arabian Gulf region to mature in the coming years.
“Next-horizon markets for us are markets where we believe there is going to be a longer runway for growth beyond the next five years or so, and we are starting to plant seeds for future growth,” said Mr Ismail.
“The strategic logic for us is very simple. Our market share is relatively high in the GCC, and although these markets continue to grow they are fundamentally limited in terms of size.”
MAF Ventures is planning to boost investments by 30 per cent to Dh1 billion next year compared with this year as it prepares to open Ski Egypt – the first indoor ski slope in Africa – and other projects around the region.
MAF Ventures revenue rose 21 per cent to Dh609 million in the first half of this year compared with the year-earlier period.
It is expecting to at least maintain revenue growth of 20 per cent as it boosts its investments.
“Our objective is to maintain and accelerate that rate of growth next year and over the next five years,” said Mr Ismail. “Doubling in size in five years will require a compound annual growth rate in excess of 20 per cent. The investment programme is geared towards achieving these long-term targets.”
MAF Ventures plans to finance its investments through a mixture of bond issuance and its own resources.
MAF is rated BBB by the ratings agencies Fitch and Standard & Poor’s.
“It is a very strong balance, and that balance sheet is obviously strengthened by continued positive performance. We continue to reinvest almost all of our returned earnings back into the business,” said Mr Ismail.
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