Shuaa Capital board proposes first dividend post-merger on back of strong 2020
2020 results demonstrate both the resilience of Shuaa’s business model and the strong strategic progress it made against a backdrop of Covid-19 challenges.
Shuaa Capital has received board approval for its audited financial statements for the fiscal year ended 31 December, 2020 and its board has recommended the payment of the first dividend to shareholders since the merger in 2019, of 3 fils per share totalling Dh76 million.
Fadhel Al Ali, chairman of Shuaa Capital, said: “Shuaa has risen admirably to the challenges of 2020 and delivered a strong performance. We have remained focused on realising our growth strategy and the results are clearly evident in our FY 2020 performance, including our ability to pay our first dividend post-merger. What’s more, we are proud that Shuaa’s operations continue to support the success of regional businesses and economies while creating significant value for our investors.”
2020 results demonstrate both the resilience of Shuaa’s business model and the strong strategic progress it made against a backdrop of Covid-19 challenges and the group’s transformational program. As a result, Shuaa and its subsidiaries achieved an 2020 net profit attributable to shareholders of Dh125 million, up 168 per cent year on year, with continued strong EBITDA generation; this increased to Dh349 million, up 89 per cent year on year. Despite significant valuation adjustments across the Group’s listed and unlisted assets and portfolios, the results benefited from three consecutive quarters of profit.
Jassim Alseddiqi, group chief executive officer of Shuaa Capital, said: “When we set out our growth strategy this time last year, the global pandemic had yet to unfold. Nevertheless, it is testament to the resilience of our business – and our people – that we have continued to execute against our strategy in the face of exceptional circumstances. We have already created considerable value in doing so and are therefore pleased to recommend a dividend to shareholders for the first time since our merger. Moreover, I am confident that Shuaa has the right platform in place to capitalise on every growth opportunity available.”
Driven by the group’s headway in its strategic agenda of increasing recurring revenue through permanent capital vehicles, assets under management increased to a record $14.1 billion at the year end. This, coupled with substantial progress in operational efficiency, profitability measures and synergy realisation, led to the group delivering a return of equity (ROE) of 8.5 per cent for 2020, in line with the medium-term target previously communicated of an ROE between 7-12 per cent.
Shuaa’s investment banking segment remains highly active, assisting with $685 million of debt capital market issuances in the year; this is despite Covid-19 challenges which resulted in delays to transactions closing. Furthermore, the segment continued to provide additional support to corporates, in light of these Covid-19 challenges, by introducing specialised corporate restructuring solutions, as well as providing free advisory services and financial packages to small and medium enterprises (SMEs).
Strong momentum and outlook into 2021
Building on the momentum and progress made in 2020, in line with the Group’s strategy to diversify its product offering, the group led a funding round in Anghami, the leading music streaming platform in the Middle East and North Africa, in early January 2021. The investment is aligned with Shuaa’s investment criteria and interest in pursuing investments in the technology space but also in supports its aim of creating significant value for its investors. Following its recent announcement, Anghami will become the first Arab technology company to list on Nasdaq in New York via a merger with a Special Purpose Acquisition Company (SPAC). This signifies both an opportunity for Shuaa to create significant value but also marks a milestone transaction for Shuaa’s Investment Banking team which is leading the fundraising.
Within the asset management segment and building on the success to date in the ICC Fund Platform, there are three further funds in the pipeline, which will not only diversify the platform’s offering but also build on the group’s recurring income and permanent capital base. In light of this momentum, together with the progress achieved in 2020, management remains confident about Shuaa’s ability to build on its market-leading position and deliver significant value creation for its investors and its shareholders.
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