• Strong Q4 2024 performance driven by growth in new contracts, retention of existing contracts and margin improvements
  • Total contracts for 2024 grew by 5.4% year-on-year to 388
  • Contract retention rate stood at a best-in-class 97% as of December 2024
  • ADNH Catering expanded its presence in Saudi Arabia by increasing its equity stake in Saudi Joint Venture from 30% to 50%
  • Company reaffirms special dividend of AED 60 million, to be distributed in April 2025 

Abu Dhabi, UAE: ADNH Catering plc (the “Company” or “ADNH Catering”), a leading food and support services provider in the UAE, has announced its financial results for the three- and twelve-month periods ended 31 December 2024. On a pro forma basis, ADNH Catering reported strong financial performance in Q4, driven by healthy growth in new contracts and the retention of key existing clients and margin improvements. Revenue for the fourth quarter grew 12% to AED 443 million. EBITDA was up 22.2% year-on-year to AED 66.5 million with an improved EBITDA margin of 15%. Net profit improved by 20% to AED 44 million, demonstrating the positive impact of ADNH Catering’s robust supply chain management, operational efficiencies and proactive contract management.

Commenting on the results, Clive Cowley, CEO of ADNH Catering, said:  

“Our strong performance in both the full-year and fourth quarter reflect the continued execution of the growth strategy we set out during our IPO. Our expansion in Saudi Arabia by increasing our stake in our Joint Venture will allow us to grow our operations across business segments and provinces in the Kingdom. Complimenting this regional expansion, we are proving our capacity to continuously secure new contracts while maintaining a retention rate of over 97%, underscoring our market-leading position and our ability to deliver on our commitments and capitalize on market opportunities. These achievements highlight the strength of our business model and the commitment of our entire team to creating long-term value for our stakeholders. We remain focused on driving sustainable growth by not only expanding our footprint but also growing within key sectors, ensuring that we continue to meet the evolving needs of our clients and reinforce our regional leadership." 

Strategy Execution and Growth Drivers 

ADNH Catering secured 14 new contracts in Q4 and 61 new contracts over the past twelve months, bringing the total number of contracts to 388 in 2024. As of 31 December 2024, the Company serves a total of 283 clients. The Company maintained an industry-leading average retention rate of over 97% during the year, underscoring its focus on securing new business while strengthening key client relationships through active tender participation.

In December 2024, ADNH Catering advanced its strategic expansion in Saudi Arabia by signing a Sale and Purchase Agreement to acquire an additional 20% equity stake in its Saudi Joint Venture (“Saudi JV”), increasing its ownership to 50%. Upon completion, expected in H1 2025, the business will be consolidated into ADNH Catering.The Company has a strategic plan to drive SAR 500 million in growth for its Saudi JV over the next 3-5 years in alignment with its vision to leverage opportunities in the Saudi market. Saudi Arabia’s economic development and growth of high-potential sectors, such as private healthcare and energy remain key pillars of the Company’s strategy. Building on a decade of partnership and a 17% increase in clients served from 2021 to 2023, ADNH Catering plans to continue to leverage its expertise and proven track record to expand its operations and capture market share across the Kingdom.

As part of its strategy to pursue horizontal integration and adjacent expansion, ADNH Catering continues to make significant progress with “Husk”, its coffee and grab-and-go brand. By the end of H1 2025, 25 outlets are expected to be operational across the UAE, with an additional 25 locations set to open in H2 2025. This expansion reflects ADNH Catering’s commitment to diversifying its offering and enhancing customer convenience. 

In  a post-period event in January 2025, ADNH Catering continued to pursue inorganic growth through targeted bolt-on acquisitions, announcing the all-cash acquisition of 100% of the share capital of Food Nation Catering Services, a chef-driven school catering business in the UAE that currently feeds more than 70,000 students across three Emirates. The transaction is in line with the Company’s strategy to broaden its service offering and expand into high-potential sectors such as education.

Financial Performance 

Revenue: On a pro forma basis, revenue for Q4 2024 increased by 12% year-on-year to AED 443 million compared to AED 396 million in Q4 2023 driven by the securing of profitable new contracts while maintaining strong client retention and expansion of existing contracts. The fourth quarter was the first in 2024 where, on a comparative basis, financial results were no longer affected by the impact of exiting certain unprofitable contracts, which had previously weighed on performance. The absence of this impact reflects the Company’s return to a normalized revenue base.

Pro forma revenue for the twelve months ended 31 December 2024 was AED 1.7 billion. On an adjusted like-for-like basis, excluding the one-off negative impact of the Company’s decision in 2023 to de-risk its portfolio by exiting the above-mentioned unprofitable contracts and the change in its revenue recognition model for part of its Support Services business, full-year pro forma revenue improved 12.9% against 2023 (whereas on an unadjusted basis it declined by 2.6%).  

Profitability: The Company’s stable base of contract profitability continued to see higher costs mitigated by effective supply chain management, operational efficiencies and growth in new contracts. For Q4 2024, pro forma EBITDA grew to AED 66.5 million year-on-year, or by 22.2%, with an industry-leading EBITDA margin of 15%, and EBIT of AED 49 million at an EBIT margin of 11.1%. Pro forma EBITDA for the twelve-month period was AED 233 million, improving by 10.6% when adjusted for the impacts stated above, and declining by 11.8% on an unadjusted basis.

Pro forma net profit for the Q4 period stood at AED 44 million at a margin of 10%. Strong profitability in Q4, as compared to prior quarters in 2024 as well as to the comparative period in 2023, demonstrates the success of management’s strategy to reallocate resources toward higher-margin opportunities, diversify the contract base, improve contract-level margins and implement better cost controls – all of which had a material role in offsetting one-off costs such as IPO expenses. Pro forma net profit for the twelve-month period was AED 153.6 million improving by 1% when adjusted for the impacts stated above, and declining by 25.6% on an unadjusted basis.

Special Dividend Reaffirmed: ADNH Catering’s Board of Directors has approved a recommended dividend of AED 60 million for 2024, equivalent to 2.7 fils per share to be distributed in April 2025, subject to approval by shareholders at the General Meeting to be held in April 2025.

Management Outlook 

Management and the Board have a positive outlook for growth in 2025, supported by an expanding addressable market that offers significant opportunity to win new business and increase market share and inorganic growth. The Company’s full-year performance exceeded expectations, with a particularly strong Q4 driven by growth in new contracts, retention of existing contracts, and margin improvements, with sustained momentum carrying into 2025.

The Company’s focus continues to be on maintaining client retention rates above 95% over the near- and medium-term, as it strengthens its position in key sectors. With a disciplined approach to scaling operations, ADNH Catering aims to drive revenue growth by 5-7% annually from 2025 over the near- and medium-term, while achieving an EBITDA margin of ~13-14% over the same period. The guidance is provided on a like-for-like organic basis, excluding future contributions from recently announced acquisitions such as Food Nation Catering and the Saudi Joint Venture.

For the full-year 2025 period, the Company intends to pay a dividend of AED 180 million, distributed semi-annually first in October 2025 and second in April 2026 subject to business performance, the Board of Directors’ recommendation and shareholder approvals.