Dubai firm is planning to raise $327m
Dubai-based contractor Drake & Scull aims to raise 1.2 billion dirhams ($326.7 million) in an initial public offering and is in advanced talks with takeover targets as it expands in the Middle East and North Africa.
The long-awaited IPO comes amid a rush of listings in the GCC region, where oil-fuelled growth in real estate and infrastructure has confounded weakness elsewhere.
Demand remains strong in the region and revenue should continue to increase at 25-30 per cent per year, Qais Saleh, the group’s strategic planning director, said.
“We have separate discussions, some advanced, some less so, with companies in the region and we will announce in due course,” Saleh said.
Drake & Scull, which has been riding a construction boom in the GCC region, aims to use the IPO proceeds to buy supply firms who can deliver high-value engineering material. It also hopes to buy contractors in the Middle East and North Africa.
Prices for construction supplies like engineering goods, cement and steel have surged over the past 12 months as energy costs rise and demand for building materials in the booming GCC region leaps.
Looking forward, revenue should continue to grow at the same pace it has in recent years as demand remains strong and profitability should remain steady despite inflation, Saleh said.
“Historically, we’ve managed to grow (revenue) in excess of 25-30pc,” he said.
“We expect to continue within that band.” Operating profit margins have been between 10pc and 11pc and the company aims to maintain that level, he said.
Gulf Daily News
