Lulu Retail to list its shares for trading on Abu Dhabi exchange
Lulu Retail Holdings PLC (“Lulu Retail”, or “Lulu”, or the “Company”, and together with its subsidiaries, the “Group” ), the largest and fastest growing pan-GCC full-line retailer and a public company limited by shares incorporated in the Abu Dhabi Global Market (“ADGM”), announced its intention to proceed with an Initial Public Offering (the “IPO” or the “Offering”) and to list its shares for trading on the Abu Dhabi Securities Exchange (ADX)
KEY HIGHLIGHTS OF THE OFFERING
A total of 2,582,226,338 (two billion five hundred eighty-two million two hundred twenty-six thousand three hundred thirty-eight) ordinary shares, each with a nominal value of USD 0.014 (which is equivalent to AED 0.051), representing 25% of the total issued Shares in the Company (the “Offer Shares”), are to be sold by the Company’s sole shareholder, Lulu International Holdings Limited (the “Selling Shareholder.”)
The Offering will be made available to UAE Retail Investors, including Eligible Employees of the Group, as part of the UAE Retail Offering; to Professional Investors as part of the Qualified Investor Offering; and to Eligible Senior Executives of the Group as part of the Senior Executives Offering.
The subscription period will open on Monday, Oct. 28, and end on Tuesday, Nov. 5, for UAE retail investors, professional investors, and eligible senior executives.
The final Offer Price will be determined through a book-building process.
The company targets a dividend payout ratio of 75% of annual distributable profits after tax, paid semi-annually. The Company targets that a dividend for the six months ended 31 December 2024 will be paid in the first half of 2025.
Admission of the Shares to trading on the Abu Dhabi Securities Exchange (ADX) (the “Admission”) is expected to take place on or around Thursday, Nov. 14.
Commenting on the Offering, Yusuffali M.A., Founder, Chairman, and Non-Executive Director of Lulu Retail, said: “It’s with immense pride that we announce the planned IPO of Lulu Retail on ADX, bringing to market the largest pan-GCC full-line retailer by selling space, sales and several stores. We founded Lulu in 1974 with the ambition to introduce and embed organized retail in the UAE and a commitment to create a shopping experience that customers would love and remain loyal to.
“We have exceeded our expectations, and today, Lulu operates more than 240 stores across six GCC countries, delivering immense value every day for new and loyal customers. Integral to our growth is the vision and ambition of the UAE, KSA, and the other GCC nations, where strong national leadership enables positive demographic and consumption trends and drives impressive economic growth. We’re looking forward to welcoming new shareholders to Lulu and are sure they will share our passion for the company and excitement for the future.”
Commenting on the Offering, Saifee Rupawala, CEO of Lulu Retail, said: “Lulu is a brand synonymous with retail in the GCC and we’re incredibly proud to launch our IPO today. Over the past 50 years, we have grown from one store in Abu Dhabi to the largest pan-GCC retailer by market share and the fastest-growing player of scale in the Kingdom of Saudi Arabia. Every day, Lulu serves more than 600,000 shoppers, enabled by our unmatched international sourcing network across 85 countries, ensuring we are deeply rooted in all GCC markets and able to offer over 200,000 active SKUs, catering to all our customers’ diverse needs.
“Our scale is combined with a track record of delivering robust revenue growth, attractive profit margins, and a well-defined growth strategy built around enhancing and delivering greater value from our existing stores, expanding our store network, delivering operational efficiencies, and growing our high-value private label and loyalty programs. With GCC retail presenting a $100 billion market opportunity over the next five years and our business in the Kingdom of Saudi Arabia primed for further growth, we are confident that Lulu will continue to be where the world comes to shop.”
DIVIDEND POLICY AND CAPITAL STRUCTURE
The Company endeavors to maintain a total dividend payout ratio of 75% of annual distributable profits after tax, paid semi-annually following the approval and publication of the results for the respective periods, subject to applicable financial parameters, internal and external circumstances, and as per applicable legal provisions.
The Group targets that a dividend for the six months ended Dec. 31 2024 will be paid in the first half of 2025.
OVERVIEW OF LULU RETAIL
Lulu Retail is the largest pan-GCC full-line retailer by selling space, sales (retail sales value), and number of stores in 2023. The Group holds the top position in modern offline grocery retail in the GCC region, capturing 13.5 percent of the GCC modern offline grocery market in 2023.
The Group operates retail stores under the Lulu brand in the UAE, the KSA, Oman, Qatar, Kuwait, and Bahrain. According to Euromonitor International Ltd (the “Market Consultant” or “Euromonitor”), the Group was the second-largest grocery retailer in the UAE, the largest retailer in Oman, Qatar, Bahrain, and Kuwait[1], and the fastest-growing and largest pan-GCC retailer in the KSA, in each case based on the retail sales value for 2023.
The Group has a strong omni-channel presence in the form of three formats of brick-and-mortar stores catering to various shopping occasions. As of Aug. 31, 2024, the Group’s network of 240 stores comprised (i) 116 Hypermarkets, (ii) 102 Express Stores, and (iii) 22 Mini Markets, with 103 stores located in the UAE, 56 stores located in the KSA and 81 stores across the other markets.
The Group also operates e-commerce retailing via the Group’s website and mobile application, supported by a partnership with Amazon in the UAE, HungerStation in KSA, Snoonu in Qatar, and a partnership with Talabat across all markets.