LSE:AAF

Stock Analysis Report

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Market Cap

UK£3.1b

Last Updated

2021/07/29 22:07 UTC

Data Sources

Company Financials +

Executive Summary

Airtel Africa Plc provides telecommunication and mobile money services to customers in Nigeria, East and Central Africa, and Francophone Africa. More Details


Snowflake Analysis

Very undervalued second-rate 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 is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: AAF's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

1.8%

AAF

0.2%

GB Wireless Telecom

1.6%

GB Market


1 Year Return

56.4%

AAF

5.6%

GB Wireless Telecom

21.7%

GB Market

Return vs Industry: AAF exceeded the UK Wireless Telecom industry which returned 1.8% over the past year.

Return vs Market: AAF exceeded the UK Market which returned 18.5% over the past year.


Shareholder returns

AAFIndustryMarket
7 Day1.8%0.2%1.6%
30 Day9.1%-1.3%0.4%
90 Day10.1%-8.5%2.0%
1 Year62.1%56.4%12.1%5.6%27.2%21.7%
3 Yearn/a-16.1%-27.9%14.3%1.3%
5 Yearn/a-18.0%-38.7%40.9%13.8%

Long-Term 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 (£0.84) is trading below our estimate of fair value (£2.58)

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 (13x) compared to the European Wireless Telecom industry average (17.7x).

PE vs Market: AAF is good value based on its PE Ratio (13x) compared to the UK market (23.9x).


Price to Earnings Growth Ratio

PEG Ratio: AAF is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: AAF is good value based on its PB Ratio (1.3x) compared to the XE Wireless Telecom industry average (1.7x).


Future Growth

How is Airtel Africa forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

14.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AAF's forecast earnings growth (14.7% per year) is above the savings rate (0.9%).

Earnings vs Market: AAF's earnings (14.7% per year) are forecast to grow slower than the UK market (16.8% per year).

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

Revenue vs Market: AAF's revenue (7% per year) is forecast to grow faster than the UK market (5.4% per year).

High Growth Revenue: AAF's revenue (7% 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 (12.5%).


Past Performance

How has Airtel Africa performed over the past 5 years?

59.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AAF has high quality earnings.

Growing Profit Margin: AAF's current net profit margins (8.7%) are lower than last year (10.8%).


Past Earnings Growth Analysis

Earnings Trend: AAF's earnings have grown significantly by 59.8% per year over the past 5 years.

Accelerating Growth: AAF's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: AAF had negative earnings growth (-8.4%) over the past year, making it difficult to compare to the Wireless Telecom industry average (14.5%).


Return on Equity

High ROE: AAF's Return on Equity (12.4%) is considered low.


Financial Health

How is Airtel Africa's financial position?


Financial Position Analysis

Short Term Liabilities: AAF's short term assets ($1.9B) do not cover its short term liabilities ($3.5B).

Long Term Liabilities: AAF's short term assets ($1.9B) do not cover its long term liabilities ($3.1B).


Debt to Equity History and Analysis

Debt Level: AAF's debt to equity ratio (99.6%) 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 (49.9%).

Interest Coverage: AAF's interest payments on its debt are well covered by EBIT (3.8x coverage).


Balance Sheet


Dividend

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

3.42%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: AAF's dividend (3.42%) is higher than the bottom 25% of dividend payers in the UK market (1.3%).

High Dividend: AAF's dividend (3.42%) is low compared to the top 25% of dividend payers in the UK market (3.92%).


Stability and Growth of Payments

Stable Dividend: AAF has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: AAF has only been paying a dividend for 2 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (44.3%), 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 well covered by earnings (49.1% payout ratio).


Next Steps

Management

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

5.5yrs

Average management tenure


CEO

Raghu Mandava (54 yo)

4.5yrs

Tenure

Mr. Raghunath Venkateswarlu Mandava, also known as Raghu, M. Tech, PGDBM, serves as Chief Executive Officer and Managing Director at airtel TANZANIA LIMITED and has been its Director since July 2018. He re...


Leadership Team

Experienced Management: AAF's management team is seasoned and experienced (5.5 years average tenure).


Board Members

Experienced Board: AAF's board of directors are not considered experienced ( 2.3 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.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted 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£3.097b
  • Shares outstanding: 3.75b
  • Website: https://airtel.africa

Number of Employees


Location

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

Listings


Biography

Airtel Africa Plc provides telecommunication and mobile money services to customers in Nigeria, East and Central Africa, and Francophone Africa. It offers prepaid and postpaid wireless voice, international...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/07/29 22:07
End of Day Share Price2021/07/29 00:00
Earnings2021/03/31
Annual Earnings2021/03/31


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.