The purchase of the Reem Al Bawadi restaurant chain by Marka could add about Dh45 million in earnings to the Dubai-listed company.
The disclosure was contained in an interview with Khaled Almheiri, the vice chairman and managing director of Marka, that was posted on the Dubai Financial Market.
Marka took full ownership of the home-grown brand serving Middle Eastern cuisine for Dh315 million earlier this month. The 14-year-old Reem Al Bawadi owns and operates four outlets in Dubai. It also has three franchised outlets, in Dubai, Jeddah and Karachi.
The statement outlines the price paid for the operation at six to eight times earnings before interest, taxes, depreciation and amortization, suggesting the retailer earns about Dh45m per year. “Reem Al Bawadi operates four branches with a total number of 2,000 seats, besides franchises,” the statement said. “The average revenue per seat is more than Dh65,000 annually.” The statement also outlined the plans for expansion and the expected return on investment.
“Marka plans to open four additional branches within the next 18 months, two of which will be in Dubai and two others in Abu Dhabi, and is currently putting the final touches on the plan.
“We also expect to seal three additional franchise deals reached by the end of this year. We expect a 25 per cent annual earnings growth rate in the coming years.”
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