Saudi electronics retailer Extra eyes IPO
Riyadh, March 16, 2011
Saudi consumer electronics retailer United Electronics Co (Extra) plans a stock market listing in the second half of 2011 as it expands at home and abroad, the company's chief executive told Reuters.
"We have a clear and specific vision to be the leading retailer of consumer electronics in the region by 2020," Mohammed Galal told Reuters in a phone interview.
Galal said the company sought to float 30 percent of its capital and was aiming to list in the second half of 2011. The listing would help fund branch expansion plans in Saudi and elsewhere in the Middle East, he said.
Extra is capitalised at 240 million Saudi riyals ($64 million), Galal said.
Several Saudi firms have announced plans to go public in 2011 including state-owned Saudi Airlines after 2010 saw only nine listings. Concerns about domestic stability, however, have cast a shadow over key Gulf bourses, all of which are down sharply on the year.
Galal said the electronics and home appliances seller is set to open six new branches, raising the total to 24 by end-2011 from 18 now and plans to distribute over the internet, capitalizing on the improving e-commerce infrastructure in the kingdom.
"Within 24 months, we will be operating in some neighbouring countries," he said declining to give further details.
He said there is big potential for the consumer electronics market, pointing to studies forecasting annual growth of 7.6 percent through 2015.
Extra snatched 9-10 percent of the retail electronics market in 2010, with sales worth 1.8 billion riyals, and posted some 100 million riyals profit, Galal said.
"Once you crack the code, you make it difficult for others to follow," he said. Galal declined to forecast 2011 earnings. "You can guess. We will have 24 branches by year-end and the market itself will see strong growth," he said.
When listed, Extra would be the 10th firm under Saudi retail sector, which currently has nine listed firms, most prominent of which are office supplies and electronics retailer Jarir Marketing Co, food retailer Al Othaim Markets Co. and Fawaz Abdulaziz Al Hokair Co which represents international brands such as Zara chain and Marks and Spencer.
The latest IPO in the largest Arab bourse was for Al-Khodari and Sons Co, which saw the contracting firm valued at 2.04 billion riyals ($544 million). - Reuters