Marka posts smaller losses as target date for profitability looms
Marka, the UAE’s first retail-focused listed company, narrowed its third-quarter loss and is yet to register a profit, despite assurances from management that it would do so this year.
Marka listed its shares in 2014 as a greenfield company with no track record, but with a promise to enable small investors to buy a slice of the UAE’s booming retail and dining industries.
Nick Peel, Marka’s chief executive, said he expects the company to be profitable some time next year as “we are in a challenging retail environment at the moment”.
“I can’t give a clearer time frame because of the changing market conditions. We are a young, agile and swift retailing group and we have recalibrated. We have pulled back from fashion and see real opportunity in health and beauty. We also see real growth in food and beverage, which is a heavily weighted vertical for us, unlike other groups that are struggling.”
Marka’s third-quarter results showed net loss attributable to equity owners stood at Dh11.8 million, down from the Dh14.7m loss reported during the same period a year ago.
Third-quarter revenue fell 15.6 per cent to Dh65.9m from Dh78.1m a year ago.
He said that there are too many burger and pizza offerings and expects to soon see some consolidation.
Mr Peel added that Marka still believed in the food and beverage sector in the UAE and GCC, and expects to see growth in its brands.
During the third quarter, Marka sold a 15 per cent stake in the children’s indoor play areas company Cheeky Monkeys Playland & Sweet Surprises to a firm controlled by one of its key managers for Dh21m.
Marka bought a 60 per cent stake in Cheeky Monkeys in April last year, saying it planned to take the concept which has a presence in Al Barsha, Mirdif, Jumeirah Beach Residence and J3 Mall, to markets outside the UAE.
“Cheeky Monkeys is almost a recession-proof business,” Mr Peel said. “We have built enormous value in the Cheeky Monkeys group and we were made a very good offer, and we are still planning on expansion and have three openings in the next few weeks. I am confident we will be in profit next year because we are not exposed to real estate like many people are, which allows us to be agile and make decisions quickly.”
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Updated: November 15, 2016 04:00 AM