Here’s what you need to know about Americana Restaurants ahead of IPO

Americana Restaurants International PLC, which is set for dual listing on Saudi Arabia and Abu Dhabi stock markets, said it is the leading out-of-home dining (OOHD) and quick service restaurant (QSR) operator in a $56 billion total OOHD market. It operates across the 12 markets of its presence in the MENA region and Kazakhstan.

The company has the largest OOHD market share in the countries where it operates. It expanded its market share to 3.2% in 2020 and 3.6% in 2021.

Americana also holds the largest share in QSR, growing from 7.6% in 2019 to 9.3% in 2021.

Financial Performance

The company posted net earnings of $195.8 million (2.3 cents per share) for the first nine months of 2022, compared with $154.4 million a year earlier. 

The nine-month revenues reached $2.05 billion in 2021, rising 8.5% from 2019. Net profit attributable to parent company amounted to $204 million, with a net margin of 9.9%.

The company said the group's capital was orderly deployed, with a primary focus on the opening of new restaurants, investment in technology and redesigning of restaurants. It added that the efficient restaurant designs and strict organizational management empowered the group to secure a leading position in the sector in terms of capital recovery periods related to new openings.

Partial Dividend Payout at 75% of the Parent Company's Net Earnings

Americana Restaurants plans to maintain a strong dividend policy and targets a partial dividend at nearly 75% of the parent company's net earnings for the six-month period ended Dec. 31, 2022. The dividends are expected to be paid in the six-month period ending June 30, 2023.

Starting 2023, the company expected to adopt an annual dividend policy. It intends to distribute at least 50% of the parent company's net profit, and any additional cash not specifically allocated for the general corporate purposes, growth investments, or merger and acquisition (M&A) activities.

The company added that the 2023 dividends will be paid in full during the six-month period ending June 30, 2024.

Overview of Americana Restaurants

The company was founded in 1964 in Kuwait and began with its “Wimpy” brand operations in 1970, then KFC in 1973.

From 1964 to 2016, the group diversified franchise partnerships to include Pizza Hut in 1979, Hardee's in 1980 and TGIF in 1994, Krispy Kreme in 2006.

The group during the same period also expanded its operations to include the opening of restaurants in the UAE in 1979, Saudi Arabia in 1980, Morocco in 2001 and Kazakhstan in 2008. As recently as 2022, the group added Peet's Coffee to its famous brand portfolio.

Saudi Arabia’s Public Investment Fund (PIF) and Mohammed Alabbar acquired a majority stake in the Former Parent Company through their joint investment subsidiary, Adeptio AD Holdings LTD in 2016.

This acquisition was followed by the mandatory offering, increasing Adeptio’s actual ownership in the Former Parent Company to 96.03% (including treasury shares), while the remaining 4% still belongs to 180 minority shareholders. As a result, the Former Parent Company on 23 April 2018 voluntarily cancelled its listing on the Kuwait Stock Exchange (KSE).

Brands and Restaurants

The group is distinguished by being a franchisee of the following brands in the Middle East and Kazakhstan: KFC, Pizza Hut, Hardee's, Krispy Kreme, TGI Friday's, Costa Coffee, Peet's Coffee and Baskin-Robbins.

The group deems KFC, Pizza Hut, Hardee's and Krispy Kreme as its main brands, as they constituted 92.4% and 92.9% of the group's revenues in 2021 and H1 2022, respectively. Americana also owns two private brands, namely Wimpy and Chicken Tikka.

Further, the group continued to expand its restaurant network until June 30, 2022 despite the impacts of COVID-19 pandemic, operating 2,050 restaurants.

Strategies

The group aims to enhance revenue growth and record strong profitability in the medium term through four main strategic levers:

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