Complex Made Simple

Marka achieves operational profitability on an adjusted EBITDA basis

Results for third quarter announced, revenue of AED 84.08 million reported

Marka PJSC (DFM: MARKA), the first public joint stock retail operator in the UAE, announced the interim financial results for the three months ending 30 September 2015.

The results reflect the impact of the significant acquisition activity undertaken by Marka during 2015 and include positive impact from operations, which delivered AED 84.08 million of total revenue during the period and AED 1.03 million of EBITDA on an adjusted basis. At the same time, acquisition costs of AED 7.36 million and other expenses such as depreciation and interest expenses were recognized, resulting in a net loss of AED 14.72 million reported for Q3 2015.

Khaled Almheiri, Vice-Chairman and Managing Director of Marka, said: “I am very pleased with the progress Marka has achieved year-to-date. During the last quarter, we were able to fully recognize the contributions from four of our five acquisitions, enabling us to achieve operational profitability on an adjusted EBITDA basis during the slowest period in UAE retail calendar – summer and Ramadan.”

“Our outlook is very strong and we are confident that Marka will be in a profit generating position during 2016,” he said.

Since listing on the Dubai Financial Market in September 2014, Marka has pursued a growth strategy focused on acquisitions, franchise agreements and launching unique home-grown concepts.

“We have made rapid progress on our strategy to develop a balanced, diversified retail portfolio that will generate value for our shareholders,” Mr. Almheiri added. “We are taking proactive measures to manage our cost base and are working actively to add value and drive growth across our three divisions – Sports, Fashion and Hospitality,” he concluded.

Marka currently has 39 retail outlets under management and plans to operate 64 outlets during 2016, representing more than 360,000 sq. feet of retail space. Since acquiring the award winning Middle Eastern themed restaurant chain Reem Al Bawadi in April, Marka has opened three new locations in Sharjah, Al Ain and Jeddah, Saudi Arabia, and confirmed additional upcoming outlets in Ras Al Khaimah and Bahrain. To date, Marka has added 1,658 new seats, bringing the total capacity to 2,160 at owned outlets and 2,480 across franchise outlets.

Marka integrated the operations of four profitable companies during the first half of the year: Retailcorp UAE LLC, Cheeky Monkeys, Icons and Reem Al Bawadi. During the third quarter of 2015, Marka acquired the Middle East master franchise rights for the luxury ice-cream brand Morelli’s Gelato, with five prime locations including.

Marka also announced three additions to its Fashion portfolio during the third quarter: French jewelry brand, dinh van; Paris based ready-to-wear fashion brand, Carven; and the leading global contemporary plus-size fashion brand, City Chic. The company also confirmed plans to open the first mono-brand Carven and dinh van stores in Dubai at City Walk phase II, and three City Chic outlets before the end of 2015.