Parkin: revenue growth slowed to 13.6%, but profit and dividends support the valuation

On August 25, Parkin released its Q2 2026 results. Revenue grew 13.6% year-on-year to AED 359.7 m, EBITDA – by 15.1% to AED 213.2 m, net profit – by 12.0% to AED 166.2 m. The EBITDA margin remained high at 59.3%, and leverage stands at 1.01x EBITDA. At the current price, the shares look rather attractive: a dividend yield of 3.65% and a +12% upside to the portal model's fair value.

Key takeaways

— Revenue grew 13.6% year-on-year, but this is noticeably slower than in previous quarters

— EBITDA margin of 59.3% – the business remains highly profitable despite slowing growth

— Net profit rose 12.0% year-on-year, with no visible one-off factors

— Leverage at 1.01x EBITDA – a comfortable level, with debt gradually declining

— Free cash flow remains positive, supporting dividends

— Dividend yield of 3.65% and a +12% upside on the portal model make the stock interesting

— EV/EBITDA of 21.6 is below the three-year average of 25.6, providing room for re-rating

Attractiveness

Key figures, AED bn

Revenue grew 13.6% year-on-year, but this is noticeably slower than in previous quarters

In Q2 2026, Parkin's revenue amounted to AED 359.7 m, up 13.6% year-on-year. This is the lowest growth rate in several quarters: in Q1 2026 revenue grew 41.0%, in Q4 2025 – 47.7%, and in Q2 2025 – 54.8%.

The slowdown is due to a high base effect: a year ago revenue jumped 54.8%, so the current growth looks more modest. Nevertheless, the absolute revenue level remains high – AED 359.7 m, only slightly below the record AED 385.6 m in Q4 2025.

The company does not disclose segment details, so it is impossible to say which business slowed. However, the overall dynamics indicate that the peak recovery growth is likely over, and future rates will be more moderate.

EBITDA margin of 59.3% – the business remains highly profitable despite slowing growth

EBITDA in Q2 2026 amounted to AED 213.2 m, up 15.1% year-on-year. The EBITDA margin reached 59.3%, above the year-ago figure of 58.5%.

Margin growth amid slowing revenue indicates that the company controls costs. Operating profit rose 11.0% to AED 193.5 m, slightly lagging EBITDA growth but still above revenue growth.

The high margin is Parkin's key competitive advantage. Even with more modest revenue growth, the business generates significant operating cash flow: in Q2 2026 it was AED 202.5 m.

Net profit rose 12.0% year-on-year, with no visible one-off factors

Net profit in Q2 2026 was AED 166.2 m, up 12.0% year-on-year. Profit growth slightly lags EBITDA growth due to a higher base in other income or taxes, but the company does not disclose details.

The net margin declined to 46.2% from 46.9% a year earlier. This is a slight decrease that may be due to changes in income or expense structure, but without additional information the cause cannot be identified.

Importantly, profit contains no large one-off items: growth is organic and consistent with operating dynamics. Over the last 12 months, net profit amounted to AED 691.9 m, confirming sustainable profit generation.

Leverage at 1.01x EBITDA – a comfortable level, with debt gradually declining

Net debt at the end of Q2 2026 was AED 680.3 m, corresponding to a net debt/EBITDA LTM ratio of 1.01. This is a moderate burden that does not pose risks to financial stability.

Over the last 12 months, net debt decreased by AED 0.3 bn, and compared to the previous reporting date it remained virtually unchanged. Debt reduction occurs alongside EBITDA growth, improving credit metrics.

Interest expenses are not disclosed, but with such leverage they should not put significant pressure on profit. The company remains able to service debt and fund dividends from operating cash flow.

Free cash flow remains positive, supporting dividends

Operating cash flow in Q2 2026 was AED 202.5 m, lower than the year-ago figure (AED 247.6 m) on a quarterly basis, but still significant. Capital expenditures were small – AED 8.2 m.

Free cash flow (operating cash flow minus capex) amounted to about AED 194.3 m, which comfortably covers dividend payments. Over the last 12 months, operating cash flow reached AED 733.6 m, while capital expenditures remained low.

Low capex is a feature of Parkin's business, which does not require large investments in fixed assets. This allows directing a significant portion of profit to dividends and debt reduction.

Dividend yield of 3.65% and a +12% upside on the portal model make the stock interesting

Parkin is a dividend story. Over the last 12 months, the dividend yield is 3.65%. The company does not disclose the exact dividend for Q2, but stable cash flow allows expectations of further payments.

Our estimate of the dividend for the current year assumes a payout ratio close to last year's and profit growing at a moderate pace. At the current share price, the yield may remain in the range of 3.5–4.0%, which is above the UAE key rate (presumably around 3–4%), but exact rate data is not in the facts.

Dividend payments are supported by free cash flow and low leverage. The risk of a dividend cut could arise if profit growth slows significantly or capex increases, but there are no such signals yet.

EV/EBITDA of 21.6 is below the three-year average of 25.6, providing room for re-rating

Parkin's current EV/EBITDA is 21.6, below the three-year average of 25.6. This indicates that the stock trades at a discount to its historical valuation, which may be due to slowing revenue growth.

P/E LTM is 26.0. At the same time, ROE is 152.2%, reflecting high efficiency in capital use. However, such a high ROE may be a consequence of small equity rather than only high profit.

According to the portal's model, the fair value of the share implies a +12% upside to the current price. This is our own calculation based on EBITDA growth and a target multiple. If the company can maintain its margin and return revenue growth above 20%, the valuation could be revised upwards.

Valuation on the latest reported figures

Bottom line

Bottom line: Parkin reported Q2 2026 with revenue growth of 13.6% and net profit growth of 12.0%. The slowdown in growth is the main negative, but the high margin (59.3% EBITDA) and comfortable leverage (1.01x EBITDA) offset it. A dividend yield of 3.65% and a +12% upside on the portal model make the stock attractive for income-oriented investors. The key question for a holder is whether the company can return to higher revenue growth without sacrificing margin.