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Drake & Scull Sees Profit Growth; Seeks Acquisitions

“We expect our turnover this year to exceed the 2008 level. That would be anywhere from 20 to 25 per cent above last year’s numbers,” Drake & Scull CEO Khaldoun Rashid Tabari told 
Khaleej Times.

Drake & Scull which is set to list its shares on the Dubai Financial Market on March 16, posted a net profit of Dh150 million and a revenue of Dh1.45 billion last year.

“We expect growth to come from net interest income from the proceeds of last year’s IPO and from our planned acquisitions this year,” said Tabari.

The growth will be supported by new projects in the Middle East and North Africa region, he said.

Drake & Scull, which specialises in mechanical, engineering and plumbing operations, raised Dh1.2 billion in the IPO last July, the proceeds of which will be used to fund its growing business in the Middle East and North Africa (MENA) region.

Tabari said that the company is in “active negotiations” for several potential acquisitions in Qatar, Saudi 
Arabia and Kuwait.

“Our plans have not changed much despite the economic slowdown, but we are more cautious in our approach because of the current market situation. We are still looking to acquire good companies that have established a proper base in the areas where we want to grow.”

The company hopes to finalise these acquisitions before the end of the third quarter after the submission of recommendations by an independent third party evaluator and after getting shareholders’ approval.

While expanding its business outside of the UAE, Drake & Scull will also seek new opportunities in the country, 
said Tabari.

“We cannot ignore that there is a crisis, but we are still very bullish about Dubai. The best infrastructure is here and it will remain as our platform to enter different markets in the region.

Drake & Scull will be the first company listing at the Dubai Financial Market this year, coming at a time when there is high risk aversion by investors.

Tabari is optimistic that the listing of the company will be well-received despite the volatile market.

“We believe that this is the right opportunity; it was our belief when we had our IPO last year and we are still very comfortable with our situation.”

In July last year, Drake & Scull offered 55 per cent of its shares to the public. The shares were priced at Dh1 each with more than 45,600 subscribers applying for shares.

Tabari said there is still room for growth despite economies weakening in the region.

“We have done our due diligence and we know that this is just the right time to scout for areas where our company can expand its businesses.”

rocel@khaleejtimes.com