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6014

Governance: A

ALAMAR

Alamar Foods Co.

40.86 SAR / Share

As of: May 28, 2026

19.5x P/E Ratio Trailing 12 Months

3.6x P/B Ratio Price to Book Value

6.2% Dividend Yield Annual Dividend / Share

1.03B SAR Market Cap Total Valuation

0.85 Beta Systematic Risk Index

5.8% Net Margin Net Profit / Revenue

The Story

A high-return quick-service restaurant operator navigating a period of revenue consolidation while maintaining a significant value-creation gap over its cost of capital.

Source: Q2 2025 (2025-09-14)

Value Creation +16.5% Excess Return on Capital (Spread between ROIC/ROE and Cost of Capital)

Cash Flow Payback — Estimated years of operating cash flows required to cover Enterprise Value

Performance & Distributions

Dividend Yield Trailing annual dividends paid relative to share price

6.2%

Sustainable Growth Rate Rate at which company can grow internally using reinvested profits

-0.7%

Payout Ratio Percent of net profits distributed as dividends

121.9%

Net Margin Net profit margin generated from total operational revenue

5.8%

ROIC Return on Invested Capital

24.5%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

19.5x

P/B Ratio Market capitalization compared to corporate book value

3.6x

EV / EBITDA Operating multiple reflecting core operational leverage

6.5x

EV / SALES Asset pricing multiple relative to total topline revenue

1.3x

Growth Story

Alamar’s growth trajectory has recently transitioned from rapid expansion to a phase of strategic consolidation. Historical data shows a revenue decline from 1.07 billion SAR in fiscal 2022 to 891.6 million SAR in fiscal 2024. However, the six months ended June 30, 2025, indicate a potential stabilization, with revenue reaching 447.8 million SAR compared to 433.3 million SAR in the same period of 2024. This recovery is supported by growth in the Dunkin’ segment and a resilient performance in the core Saudi Arabian market, which accounts for approximately 67% of external revenue. Despite this, the company’s five-year average reinvestment rate is negative at -3.05%, resulting in a sustainable growth rate of -0.75%. This suggests that Alamar is currently prioritizing capital efficiency and shareholder distributions over aggressive new asset deployment, focusing on optimizing its existing 549-restaurant network.

Profitability Dynamics

The core strength of Alamar lies in its exceptional ability to generate returns on invested capital. With a five-year average ROIC of 24.53% against a WACC of 8.04%, the company maintains a substantial value-creation gap of 16.48%. While TTM operating margins have compressed to 7.47% compared to historical levels, the company demonstrated a significant turnaround in the first half of 2025, reporting a consolidated profit before zakat and tax of 16.6 million SAR, compared to a loss of 0.2 million SAR in the prior-year period. Cash flow generation remains a priority, as evidenced by the company's ability to fund consistent dividend payments—including 11.3 million SAR for the first quarter of 2025—directly from retained earnings, even as it manages a TTM capital expenditure of 23.6 million SAR.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.85

Cost of Equity Minimum required rate of return demanded by shareholders

8.0%

WACC Weighted average cost of total debt and equity funding

8.1%

Debt-to-Equity Ratio Proportion of corporate funding financed by debt creditors

17.3%

Risk Factors

Alamar’s risk profile is characterized by its multi-national operational exposure and moderate financial leverage. The company carries a total debt of 179.3 million SAR, primarily composed of lease liabilities totaling 173.7 million SAR, which are inherent to the restaurant business model. Operating across diverse regions like Egypt, Jordan, and Morocco introduces foreign currency translation risks, which resulted in a 2.8 million SAR impact on goodwill during the first half of 2025. Furthermore, the company faces business-specific risks related to its reliance on master franchise agreements and the competitive nature of the quick-service restaurant industry. However, a relevered beta of 0.86 suggests that the stock's systematic risk remains lower than the broader market, reflecting the relatively defensive nature of fast-food consumption.

Governance Disclosures

Rating: A

We track 4 key governance and oversight matters for this company in our database.

Significance: 3/10 Tunneling

Key Management Personnel Compensation

Total compensation for key management personnel for the six-month period ended June 30, 2025, amounted to SAR 5.87 million. This includes SAR 5.74 million in short-term benefits and SAR 124,858 in post-employment benefits.

Mitigating Factors: Compensation is disclosed as part of standard regulatory requirements for related party transactions.

Significance: 4/10 Info Asymmetry

Advances for Start-up Food Sector Ventures

The Group disclosed that advances made in 2023 for a venture in the food sector, currently in the start-up phase, were reclassified as Notes Receivables in 2024 following a formal agreement with the involved party.

Mitigating Factors: The reclassification was based on a signed agreement defining the nature of the receivable.

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In-Depth Analysis