“A strategic powerhouse across the entire food supply chain” is how Abu Dhabi listed Mair Group describe themselves. With investments in food production, retail real estate and retailers themselves – operating more than 100 stores under the ADCOOP and SPAR brands – the business certainly does deliver on that vertical integration model. However, since its arrival on the stock market less than a month ago, the share price has been on something of a rollercoaster ride. Is there anything behind the volatility?
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Market debut – without an IPO
Having come to market using a direct listing process, Mair bypassed the traditional need for an IPO but some investors appeared keen to try and hunt out a bargain. An initial reference price of 1.16Dhs per share was set, but the stock quickly surged, closing out the first day of trade on 9th December 2024 at 2.95Dhs and valuing the business at 6.5Dhs billion. The enthusiasm however proved to be short lived with the following two weeks seeing a meaningful sell off and the stock trading at lows of 1.62Dhs by 20th December.
There has however been something of a recovery across the year-end, with Mair Group shares closing on 3rd January at 2.1Dhs, which still reflects a significant premium to theat initial reference price, although volumes have been notably depressed over the last two weeks.
The competitive landscape
Critically however this swing marks a stark contrast to the general lack of price action posted by Dubai-listed Spinneys, another grocer which made its market debut in an eye-catching 64-times oversubscribed IPO in the summer of 2024. Having opened at 1.53Dhs, the shares traded up to 1.70Dhs on the first day, tested lows of 1.36Dhs over the summer and now sit at 1.63Dhs.
It’s important to bear in mind that Spinneys and Mair each came to market using fundamentally different mechanisms and also have distinct business models, but there are some clear parallels. With that in mind, here’s a quick look at some key financial metrics of the two businesses:
| (AED) | Mair Group | Spinneys |
| 2024 Projected Revenues | 2.1 billion | 3 billion |
| Total Assets | 6 billion | 2 billion |
| Dividends paid | 135 million (FY ’23) | 103 million (Interim ’24) |
| Market cap Dec 2024 | 4.7 billion | 6 billion |
The fundamental market dynamics faced by both businesses will be broadly the same, with a 30% increase in the HNWI and UHNWI population of the UAE expected over the next five years, along with an 11% increase in the overall population. But will Spinneys potential for higher margin own-label grocery sales prove to be the winning element here and fuel a steady stream of higher dividend payments, or does the stronger asset base at Mair by virtue of its Makani real estate division stand out?
Food retail – a classic defensive play
Perhaps most crucially, the food industry is seen as a classic defensive play when it comes to investing. As the world looks at yet more uncertainty in 2025 with geopolitical volatility never far from the top of the agenda, the combination of the steady economic growth that’s being seen in the UAE and across the wider GCC area surely bodes well for this sector. And so long as there’s no major reset in terms of property valuations in the region, Mair Group could well be poised to display good value from here.
Tony Cross is a seasoned market commentator with over 15 years of experience, delivering engaging and insightful content for both journalists and investors. Specializing in macroeconomics, UK blue-chip equities, and intermarket analysis, his commentary is highly valued for its clarity and its knack for eliminating unnecessary jargon.
You can contact Tony on tony@goodmoneyguide.com
