Shares in Saudi Arabian retailer Alhokair are expected to benefit from international expansion and a jump in consumers' disposable income
Regional protests fail to derail Alhokair
Political turmoil in the region did not slow sales at the Saudi Arabian retailer Fawaz Abdulaziz Alhokair and Company, where annual profit doubled.
The company reported a 100 per cent jump in net profit for the full year ending March 31 to 55 million Saudi riyals, compared with the same period a year ago.
Sales stood at 613m riyals, up 24.4 per cent on the previous year, which was above some analysts' estimates, including 12.4 per cent above Al Mal Capital's forecasts.
Alhokair is one of the few Saudi retailers with direct exposure to countries that have suffered from political instability, with 50 of its more than 1,000 stores based in Egypt.
Irfan Ellam, an analyst at Al Mal Capital who covers the stock, maintained his "outperform" rating, with a target price of 50.8 riyals.
He said the growth was mainly driven by business initiatives including the opening of five children's stores in Saudi Arabia, thanks to a tie-up with the Zippy franchise, and expansion outside the kingdom.
The retailer is also looking to open up to 45 stores in Saudi Arabia in the next six months to support its new private label, FG4.
The label, a joint venture with George Davies, the Next founder, will target the under-14s.
This month, the company signed a memorandum of understanding with International Finance Corporation, a member of the World Bank Group, for 281m riyals to finance its expansion into international markets.
The company operates more than 1,000 branches in Saudi Arabia and has increasingly moved towards international retailing since it was established in 1989.
In a cautious note, Mr Ellam said the expansion initiatives were likely to put pressure on margins in the future.
Shares in the company have climbed 33 per cent since the beginning of last month.
They closed yesterday 0.4 per cent higher at 45 riyals.