$114 million net profits for GFH: Smart investments; Profitable exits
For the financial year ended 31 December 2018, GFH Financial Group (GFH) reported consolidated net profit of $115 million (mn) as compared with $103.19 million from the previous year, an increase of 11.4%, and a net profit attributable to shareholders of $114.08mn compared with $104.18mn for the previous year, an increase of 9.5% mainly due to contribution from across all business lines and strategic transactions during the year.
Commenting on the results, Jassim Alseddiqi, Chairman of GFH, said, “This marks the fourth consecutive year of solid gains. Among the strongest measures of market confidence in GFH today and over the past year was the raising of more than $1 billion through our investment products and treasury and capital markets during 2018, which fuels further growth and investment for GFH in 2019.”
“We are also delighted to announce the Board’s recommendation for another robust distribution of a dividend of 8.71% and $85mn ($30mn cash and $55mn bonus shares) for 2018 to shareholders, subject to approval by the General Assembly and our regulators. We have entered 2019 in a stronger position than ever to build value and execute on our strategy.”
For the full year 2018, the Group’s total consolidated revenue was $246.21mn compared with $204.36mn in 2017, reflecting a healthy year-on-year increase of 20.5%.
GFH also continued to deliver on its strategy of achieving profitable exists, which for the year amounted to $120mn.
Last October, GFH was conditionally approved to sell its $1bn real estate portfolio to the Bahraini central bank, in the form of both initial cash payments covering over 25% of the deal and through a joint development agreement over 5 years for the remaining balance, a company statement at the time said.
Reflecting market confidence in the Group was an affirmation of its ratings by Fitch, the international rating agency, at “B” with a Stable Outlook.
Hisham Alrayes, CEO of GFH, added, “2018 was characterised by a strategic focus on further diversifying and building our portfolio of strong income yielding. We made our first technology investment in the Entertainer, a market leading leisure platform that operates in the region and globally and which has been doubling its turnover year on year. Significantly, we have also made strong progress in achieving strategic and profitable exits ahead of targets, despite challenging market conditions.”
Left: Hisham Alrayes, CEO of GFH and right: Jassim Alseddiqi, Chairman of GFH
In May 2018, GFH acquired 85% of UAE retail app, ‘The Entertainer’, in a deal that sees the company invest up to $150mn.
In January this year, UK’s Hemel Hempstead business park was acquired by GFH.
Located just north of London, the park comprises four grade A office buildings with approximately 200,000 sqft of space with the property being 96% occupied by tenants from a range of industries.
As part of GFH exit strategies, Reuters today reported that GFH signed a strategic $100mn real estate deal with a Special Purpose Vehicle (SPV) owned by Terra real estate investments with instrumental support from Abu Dhabi Financial Group, as published by Zawya.
“Deal will see Terra acquiring 72% of Harbour Row Residence in Bahrain for $40mn and part of GFH’s real estate project in Morocco for $60mn,” said Reuters.
“(The) transaction is expected to have a positive impact on GFH’s 2019 financial results and comes as part of planned exits from GFH’s real estate portfolio, to be undertaken over the next five years.”
Alrayes concluded, “We plan to start the process to launch operations in Saudi Arabia and the UK and to establish dedicated healthcare and education platforms.”