LSE:AAF

Stock Analysis Report

Executive Summary

Airtel Africa Plc provides mobile telecommunication services to customers in Nigeria, East Africa, and rest of Africa.


Snowflake Analysis

Very undervalued average dividend payer.


Similar Companies

Share Price & News

How has Airtel Africa's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AAF's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-18.6%

AAF

3.4%

GB Wireless Telecom

10.0%

GB Market


1 Year Return

n/a

AAF

-16.6%

GB Wireless Telecom

-23.0%

GB Market

Return vs Industry: Insufficient data to determine how AAF performed against the UK Wireless Telecom industry.

Return vs Market: Insufficient data to determine how AAF performed against the UK Market.


Shareholder returns

AAFIndustryMarket
7 Day-18.6%3.4%10.0%
30 Day-40.8%-12.7%-17.6%
90 Day-51.9%-19.5%-27.3%
1 Yearn/a-12.5%-16.6%-18.9%-23.0%
3 Yearn/a-22.1%-34.6%-12.9%-24.2%
5 Yearn/a-20.7%-40.9%1.6%-21.8%

Price Volatility Vs. Market

How volatile is Airtel Africa's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Airtel Africa undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AAF (£0.38) is trading below our estimate of fair value (£1.57)

Significantly Below Fair Value: AAF is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: AAF is good value based on its PE Ratio (4.4x) compared to the Wireless Telecom industry average (27.9x).

PE vs Market: AAF is good value based on its PE Ratio (4.4x) compared to the UK market (12.4x).


Price to Earnings Growth Ratio

PEG Ratio: AAF is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: AAF is good value based on its PB Ratio (0.7x) compared to the XE Wireless Telecom industry average (2.1x).


Next Steps

Future Growth

How is Airtel Africa forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

10.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AAF's forecast earnings growth (10.5% per year) is above the savings rate (0.5%).

Earnings vs Market: AAF's earnings (10.5% per year) are forecast to grow slower than the UK market (15.5% per year).

High Growth Earnings: AAF's earnings are forecast to grow, but not significantly.

Revenue vs Market: AAF's revenue (6.1% per year) is forecast to grow faster than the UK market (2.3% per year).

High Growth Revenue: AAF's revenue (6.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AAF's Return on Equity is forecast to be low in 3 years time (13%).


Next Steps

Past Performance

How has Airtel Africa performed over the past 5 years?

37.9%

Last years earnings growth


Earnings and Revenue History

Quality Earnings: AAF has high quality earnings.

Growing Profit Margin: AAF's current net profit margins (11.5%) are higher than last year (9%).


Past Earnings Growth Analysis

Earnings Trend: Insufficient data to determine if AAF's year-on-year earnings growth rate was positive over the past 5 years.

Accelerating Growth: Insufficient data to compare AAF's past year earnings growth to its 5-year average.

Earnings vs Industry: AAF earnings growth over the past year (37.9%) exceeded the Wireless Telecom industry 4.8%.


Return on Equity

High ROE: AAF's Return on Equity (12.5%) is considered low.


Next Steps

Financial Health

How is Airtel Africa's financial position?


Financial Position Analysis

Short Term Liabilities: AAF's short term assets ($2.0B) do not cover its short term liabilities ($2.7B).

Long Term Liabilities: AAF's short term assets ($2.0B) do not cover its long term liabilities ($3.6B).


Debt to Equity History and Analysis

Debt Level: AAF's debt to equity ratio (97.7%) is considered high.

Reducing Debt: Insufficient data to determine if AAF's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: AAF's debt is well covered by operating cash flow (39.8%).

Interest Coverage: AAF's interest payments on its debt are well covered by EBIT (3.5x coverage).


Balance Sheet

Inventory Level: AAF has a high level of physical assets or inventory.

Debt Coverage by Assets: AAF's debt is not covered by short term assets (assets are 0.6x debt).


Next Steps

Dividend

What is Airtel Africa's current dividend yield, its reliability and sustainability?

12.59%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: AAF's dividend (12.59%) is higher than the bottom 25% of dividend payers in the UK market (2.69%).

High Dividend: AAF's dividend (12.59%) is in the top 25% of dividend payers in the UK market (7.48%)


Stability and Growth of Payments

Stable Dividend: Too early to tell whether AAF's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if AAF's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (27.7%), AAF's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AAF's dividends in 3 years are forecast to be covered by earnings (88% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.1yrs

Average board tenure


CEO

Raghu Mandava (52yo)

3.17s

Tenure

Mr. Raghunath Venkateswarlu Mandava, also known as Raghu, M. Tech, PGDBM, has served as an Executive Director at Airtel Networks Zambia Plc since November 1, 2017. He has been Chief Executive Officer and M ...


Board Members

NamePositionTenureCompensationOwnership
Raghunath Mandava
MD, CEO & Director3.17yrsno datano data
Sunil Mittal
Director1.42yrsno datano data
Akhil Gupta
Director1.42yrsno datano data
Liisa Poutiainen
Independent Non-Executive Director0.83yrno data0.00029% $4.2k
Yih Tao
Director1.42yrsno datano data
Sharvin Mittal
Director1.42yrsno data0.61% $8.8m
Andrew Green
Director0.83yrno datano data
John Danilovich
Director0.83yrno datano data
Douglas Baillic
Director0.83yrno datano data
Awuneba Ajumogobin
Director0.83yrno datano data

1.1yrs

Average Tenure

57yo

Average Age

Experienced Board: AAF's board of directors are not considered experienced ( 1.1 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: AAF only recently listed within the past 12 months, with total shares outstanding growing by 97% in the past year..


Top Shareholders

Company Information

Airtel Africa Plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Airtel Africa Plc
  • Ticker: AAF
  • Exchange: LSE
  • Founded: 2018
  • Industry: Wireless Telecommunication Services
  • Sector: Telecom
  • Market Cap: UK£1.444b
  • Shares outstanding: 3.76b
  • Website: https://airtel.africa

Number of Employees


Location

  • Airtel Africa Plc
  • 53/54 Grosvenor Street
  • 2nd Floor
  • London
  • Greater London
  • W1K 3HU
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AAFLSE (London Stock Exchange)YesOrdinary SharesGBGBPJun 2019
9AADB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 2019
AAFLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJun 2019
AIRTELAFRINGSE (Nigerian Stock Exchange)YesOrdinary SharesNGNGNJun 2019

Biography

Airtel Africa Plc provides mobile telecommunication services to customers in Nigeria, East Africa, and rest of Africa. It offers services to approximately 99 million small, medium, and high-usage customers; mobile data services to 30 million customers; and mobile banking services. The company was incorporated in 2018 and is based in London, the United Kingdom. Airtel Africa Plc is a subsidiary of Airtel Africa Mauritius Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/31 01:21
End of Day Share Price2020/03/30 00:00
Earnings2019/12/31
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.