| Airtel Africa Plc (GB00BKDRYJ47) | |||
1,82 GBXStand (close): 03.07.25 |
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| Datum / Uhrzeit | Titel | Bewertung |
| 21.04.25 21:06:19 | Airtel Africa PLC (AAFRF) Q3 2025 Earnings Call Highlights: Robust Growth Amid Currency Challenges |  |
| Revenue: $1.27 billion in Q3, 21.3% growth in constant currency. Reported Currency Revenue Growth: 2.5% in Q3. Nigeria Revenue Growth: 35% in constant currency over nine months. East Africa Revenue Growth: 23% in constant currency. Francophone Revenue Growth: 10.2% in constant currency. Mobile Services Revenue Growth: 18.8% in constant currency over nine months. Voice Revenue Growth: Almost 10% over the period. Data Revenue Growth: Over 31% in Q3. Mobile Money Revenue Growth: Over 31% in constant currency in Q3. Transaction Value: Increased over 30% to $146 billion. EBITDA: $1.68 billion for nine months, 15.3% growth in constant currency. EBITDA Margin: 46.9% in Q3, a 160-basis-point recovery from Q1. Basic EPS: $0.036 for the quarter ended December 31. EPS Before Exceptionals: $0.013 for the quarter ended December 31. Local Currency Debt: 92% of OpCo debt in local currency as of December. Leverage: 2.4 times, increased due to tower lease agreements. Lease Adjusted Leverage: 1.1 times. Share Buyback Program: Up to $100 million launched in December. Warning! GuruFocus has detected 9 Warning Signs with AAFRF. Release Date: January 30, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Airtel Africa PLC (AAFRF) reported a strong constant currency revenue growth of 21.3% in the latest quarter, showing an acceleration from previous quarters. The company saw a significant increase in mobile money customer base by 18% to over 44 million, reflecting its focus on financial inclusion. In Nigeria, Airtel Africa PLC (AAFRF) achieved a remarkable constant currency growth of almost 35%, indicating strong market performance. The mobile services segment experienced a sustainable growth with a constant currency revenue increase of 18.8% over the first nine months. Airtel Africa PLC (AAFRF) has successfully reduced its foreign currency debt, with approximately 92% of OpCo debt now in local currency, mitigating currency volatility risks. Negative Points Reported currency revenue growth was only 2.5% in the third quarter due to foreign exchange headwinds. The company faces challenges with currency volatility impacting financial results, despite some recent currency appreciations. Leverage for the group increased to 2.4 times, primarily due to the extension of tower lease agreements. There is uncertainty regarding the impact of the approved price increases in Nigeria, with potential competitive and demand elasticity concerns. In Francophone Africa, there was a slight dip in margins due to higher marketing spends, despite revenue growth acceleration. Story Continues Q & A Highlights Q: Can you provide more details on the price increase situation in Nigeria and its expected impact on margins? A: Sunil Taldar, CEO, explained that the Nigerian authorities have approved a price increase, which is a positive development for the industry. However, the competitive response and demand elasticity are uncertain, making it difficult to predict the exact impact on margins. The additional revenue from the price increase is expected to support EBITDA margin progression. Q: What proportion of your revenue in Nigeria is affected by the price increase, and how does this compare to your competitors? A: Sunil Taldar, CEO, stated that approximately 75% of Airtel Africa's revenue in Nigeria is subject to the price increase. The company has been focused on keeping prices low to encourage usage and take-up, and it remains to be seen how competitors will react to the price adjustments. Q: Could you provide an update on the mobile money IPO and where you plan to list it? A: Sunil Taldar, CEO, confirmed that the mobile money IPO is on track for July 2025. The company is preparing for the IPO and will provide more details on the listing geography and other specifics closer to the time. Q: How is Airtel Africa managing its upstreaming of cash given the challenges in Nigeria? A: Jaideep Paul, CFO, explained that due to accumulated losses in Nigeria, upstreaming from this region will be challenging for the next 12 to 18 months. However, upstreaming from East Africa and Francophone Africa will continue, and the company does not plan to increase debt at the HoldCo level. Q: What are the key areas of focus for capital expenditure in the coming quarters? A: Sunil Taldar, CEO, mentioned that the company maintains its CapEx guidance of $725 million to $750 million for the year, with investments focused on sustaining growth and improving customer experience. The CapEx is expected to be at the lower end of the guidance range. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. View Comments |
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| 28.03.25 09:20:33 | Optimism for Airtel Africa (LON:AAF) has grown this past week, despite five-year decline in earnings | |
| For many, the main point of investing in the stock market is to achieve spectacular returns. While the best companies are hard to find, but they can generate massive returns over long periods. Just think about the savvy investors who held Airtel Africa Plc (LON:AAF) shares for the last five years, while they gained 324%. And this is just one example of the epic gains achieved by some long term investors. Also pleasing for shareholders was the 46% gain in the last three months. Since the stock has added UK£179m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns. There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS). During five years of share price growth, Airtel Africa actually saw its EPS drop 30% per year. This means it's unlikely the market is judging the company based on earnings growth. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics. In contrast revenue growth of 8.2% per year is probably viewed as evidence that Airtel Africa is growing, a real positive. In that case, the company may be sacrificing current earnings per share to drive growth. You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).LSE:AAF Earnings and Revenue Growth March 28th 2025 Take a more thorough look at Airtel Africa's financial health with this freereport on its balance sheet. What About Dividends? It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Airtel Africa the TSR over the last 5 years was 419%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence! A Different Perspective It's good to see that Airtel Africa has rewarded shareholders with a total shareholder return of 63% in the last twelve months. And that does include the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 39% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should learn about the 4 warning signs we've spotted with Airtel Africa (including 1 which is potentially serious) . Story Continues For those who like to find winning investments this freelist of undervalued companies with recent insider purchasing, could be just the ticket. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British exchanges. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
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| 01.03.25 08:16:23 | Airtel Africa Plc's (LON:AAF) Stock Is Rallying But Financials Look Ambiguous: Will The Momentum Continue? |  |
| Airtel Africa's (LON:AAF) stock is up by a considerable 35% over the past three months. However, we decided to pay attention to the company's fundamentals which don't appear to give a clear sign about the company's financial health. Particularly, we will be paying attention to Airtel Africa's ROE today. Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors’ money. In simpler terms, it measures the profitability of a company in relation to shareholder's equity. See our latest analysis for Airtel Africa How To Calculate Return On Equity? The formula for ROE is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Airtel Africa is: 6.0% = US$157m ÷ US$2.6b (Based on the trailing twelve months to December 2024). The 'return' refers to a company's earnings over the last year. That means that for every £1 worth of shareholders' equity, the company generated £0.06 in profit. What Has ROE Got To Do With Earnings Growth? Thus far, we have learned that ROE measures how efficiently a company is generating its profits. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don’t share these attributes. Airtel Africa's Earnings Growth And 6.0% ROE At first glance, Airtel Africa's ROE doesn't look very promising. However, given that the company's ROE is similar to the average industry ROE of 5.6%, we may spare it some thought. Having said that, Airtel Africa's five year net income decline rate was 18%. Bear in mind, the company does have a slightly low ROE. So that's what might be causing earnings growth to shrink. Next, when we compared with the industry, which has shrunk its earnings at a rate of 3.2% in the same 5-year period, we still found Airtel Africa's performance to be quite bleak, because the company has been shrinking its earnings faster than the industry.LSE:AAF Past Earnings Growth March 1st 2025 The basis for attaching value to a company is, to a great extent, tied to its earnings growth. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Is Airtel Africa fairly valued compared to other companies? These 3 valuation measures might help you decide. Story Continues Is Airtel Africa Using Its Retained Earnings Effectively? Looking at its three-year median payout ratio of 31% (or a retention ratio of 69%) which is pretty normal, Airtel Africa's declining earnings is rather baffling as one would expect to see a fair bit of growth when a company is retaining a good portion of its profits. So there could be some other explanations in that regard. For instance, the company's business may be deteriorating. Moreover, Airtel Africa has been paying dividends for five years, which is a considerable amount of time, suggesting that management must have perceived that the shareholders prefer consistent dividends even though earnings have been shrinking. Upon studying the latest analysts' consensus data, we found that the company's future payout ratio is expected to rise to 39% over the next three years. Still, forecasts suggest that Airtel Africa's future ROE will rise to 28% even though the the company's payout ratio is expected to rise. We presume that there could some other characteristics of the business that could be driving the anticipated growth in the company's ROE. Summary Overall, we have mixed feelings about Airtel Africa. While the company does have a high rate of profit retention, its low rate of return is probably hampering its earnings growth. With that said, we studied the latest analyst forecasts and found that while the company has shrunk its earnings in the past, analysts expect its earnings to grow in the future. To know more about the company's future earnings growth forecasts take a look at this freereport on analyst forecasts for the company to find out more. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
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| 02.02.25 07:11:10 | Airtel Africa Plc (LON:AAF) Just Released Its Third-Quarter Results And Analysts Are Updating Their Estimates | |
| Shareholders of Airtel Africa Plc (LON:AAF) will be pleased this week, given that the stock price is up 15% to UK£1.44 following its latest quarterly results. Results overall were respectable, with statutory earnings of US$0.036 per share roughly in line with what the analysts had forecast. Revenues of US$1.3b came in 4.2% ahead of analyst predictions. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year. See our latest analysis for Airtel Africa LSE:AAF Earnings and Revenue Growth February 2nd 2025 Taking into account the latest results, the consensus forecast from Airtel Africa's eleven analysts is for revenues of US$5.84b in 2026. This reflects a huge 22% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 963% to US$0.17. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$5.82b and earnings per share (EPS) of US$0.16 in 2026. Although the revenue estimates have not really changed, we can see there's been a decent improvement in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result. There's been no major changes to the consensus price target of UK£1.41, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Airtel Africa analyst has a price target of UK£2.00 per share, while the most pessimistic values it at UK£1.15. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation. These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Airtel Africa's past performance and to peers in the same industry. The analysts are definitely expecting Airtel Africa's growth to accelerate, with the forecast 18% annualised growth to the end of 2026 ranking favourably alongside historical growth of 8.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Airtel Africa is expected to grow much faster than its industry. Story Continues The Bottom Line The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Airtel Africa's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at UK£1.41, with the latest estimates not enough to have an impact on their price targets. With that in mind, we wouldn't be too quick to come to a conclusion on Airtel Africa. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Airtel Africa going out to 2027, and you can see them free on our platform here.. Plus, you should also learn about the 4 warning signs we've spotted with Airtel Africa (including 1 which is a bit unpleasant) . Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
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| 10.01.25 08:11:30 | We Think Airtel Africa (LON:AAF) Might Have The DNA Of A Multi-Bagger | |
| If you're looking for a multi-bagger, there's a few things to keep an eye out for. Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. Speaking of which, we noticed some great changes in Airtel Africa's (LON:AAF) returns on capital, so let's have a look. What Is Return On Capital Employed (ROCE)? For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. To calculate this metric for Airtel Africa, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.22 = US$1.5b ÷ (US$11b - US$4.0b) (Based on the trailing twelve months to September 2024). Thus, Airtel Africa has an ROCE of 22%. In absolute terms that's a great return and it's even better than the Wireless Telecom industry average of 8.7%. See our latest analysis for Airtel Africa LSE:AAF Return on Capital Employed January 10th 2025 Above you can see how the current ROCE for Airtel Africa compares to its prior returns on capital, but there's only so much you can tell from the past. If you're interested, you can view the analysts predictions in our freeanalyst report for Airtel Africa . What Can We Tell From Airtel Africa's ROCE Trend? Airtel Africa has not disappointed with their ROCE growth. The figures show that over the last five years, ROCE has grown 96% whilst employing roughly the same amount of capital. So our take on this is that the business has increased efficiencies to generate these higher returns, all the while not needing to make any additional investments. It's worth looking deeper into this though because while it's great that the business is more efficient, it might also mean that going forward the areas to invest internally for the organic growth are lacking. On a side note, we noticed that the improvement in ROCE appears to be partly fueled by an increase in current liabilities. Essentially the business now has suppliers or short-term creditors funding about 37% of its operations, which isn't ideal. Keep an eye out for future increases because when the ratio of current liabilities to total assets gets particularly high, this can introduce some new risks for the business. In Conclusion... In summary, we're delighted to see that Airtel Africa has been able to increase efficiencies and earn higher rates of return on the same amount of capital. Since the stock has returned a staggering 106% to shareholders over the last five years, it looks like investors are recognizing these changes. With that being said, we still think the promising fundamentals mean the company deserves some further due diligence. Story Continues On a separate note, we've found 2 warning signs for Airtel Africa you'll probably want to know about. If you'd like to see other companies earning high returns, check out our freelist of companies earning high returns with solid balance sheets here. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
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| 09.09.24 11:08:14 | Pulling back 3.7% this week, Airtel Africa's LON:AAF) five-year decline in earnings may be coming into investors focus | |
| When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But when you pick a company that is really flourishing, you can make more than 100%. Long term Airtel Africa Plc (LON:AAF) shareholders would be well aware of this, since the stock is up 103% in five years. It's down 3.7% in the last seven days. Although Airtel Africa has shed UK£164m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns. See our latest analysis for Airtel Africa To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement. During five years of share price growth, Airtel Africa actually saw its EPS drop 54% per year. This means it's unlikely the market is judging the company based on earnings growth. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics. There's no sign of growing dividends, which might have explained the resilient share price. It could be that the revenue growth of 11% per year is viewed as evidence that Airtel Africa is growing. In that case, the company may be sacrificing current earnings per share to drive growth. The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers). earnings-and-revenue-growth Airtel Africa is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. If you are thinking of buying or selling Airtel Africa stock, you should check out this freereport showing analyst consensus estimates for future profits. What About Dividends? When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Airtel Africa, it has a TSR of 153% for the last 5 years. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence! Story continues A Different Perspective Airtel Africa shareholders are up 2.4% for the year (even including dividends). But that was short of the market average. It's probably a good sign that the company has an even better long term track record, having provided shareholders with an annual TSR of 20% over five years. Maybe the share price is just taking a breather while the business executes on its growth strategy. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - Airtel Africa has 4 warning signs we think you should be aware of. We will like Airtel Africa better if we see some big insider buys. While we wait, check out this freelist of undervalued stocks (mostly small caps) with considerable, recent, insider buying. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British exchanges. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View comments |
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| 22.08.24 06:03:17 | 3 UK Stocks Estimated To Trade At Up To 42.2% Below Intrinsic Value | |
| The United Kingdom's FTSE 100 index has recently experienced a downturn, influenced by weak trade data from China and falling commodity prices. In this challenging market environment, identifying undervalued stocks can be crucial for investors seeking opportunities; here are three UK stocks estimated to trade up to 42.2% below their intrinsic value. Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom Name Current Price Fair Value (Est) Discount (Est) TBC Bank Group (LSE:TBCG) £30.60 £58.41 47.6% Gaming Realms (AIM:GMR) £0.40 £0.76 47.6% Liontrust Asset Management (LSE:LIO) £6.47 £12.31 47.4% Topps Tiles (LSE:TPT) £0.475 £0.91 47.5% Marks Electrical Group (AIM:MRK) £0.65 £1.27 49% C&C Group (LSE:CCR) £1.546 £3.00 48.5% AstraZeneca (LSE:AZN) £130.00 £250.41 48.1% Mercia Asset Management (AIM:MERC) £0.35 £0.68 48.3% Foxtons Group (LSE:FOXT) £0.652 £1.22 46.4% Franchise Brands (AIM:FRAN) £1.82 £3.61 49.6% Click here to see the full list of 57 stocks from our Undervalued UK Stocks Based On Cash Flows screener. Let's take a closer look at a couple of our picks from the screened companies. Airtel Africa Overview: Airtel Africa Plc, with a market cap of £4.23 billion, offers telecommunications and mobile money services across Nigeria, East Africa, and Francophone Africa. Operations: The company's revenue segments include $858 million from Mobile Money and $4.10 billion from Mobile Services, with a segment adjustment of -$196 million. Estimated Discount To Fair Value: 20.4% Airtel Africa is trading at £1.14, significantly below its estimated fair value of £1.43, indicating it may be undervalued based on cash flows. Despite high debt levels and a dividend not well covered by earnings, the company shows strong profit growth forecasts of 39.42% per year, outpacing the UK market average. Recent buybacks and improved net income to $7 million from a $170 million loss last year further enhance its financial position. Our growth report here indicates Airtel Africa may be poised for an improving outlook. Click to explore a detailed breakdown of our findings in Airtel Africa's balance sheet health report. LSE:AAF Discounted Cash Flow as at Aug 2024 Rank Group Overview: The Rank Group Plc, with a market cap of £365.38 million, provides gaming services in Great Britain, Spain, and India through its subsidiaries. Operations: The company's revenue segments include Mecca (£138.90 million), Digital (£226 million), Enracha Venues (£38.50 million), and Grosvenor Casinos (£331.30 million). Estimated Discount To Fair Value: 42.2% Rank Group's recent earnings report shows a significant turnaround, with net income of £12.5 million compared to a net loss of £96.2 million last year. Trading at 42.2% below its estimated fair value of £1.35, the stock appears undervalued based on discounted cash flows (DCF). Revenue growth is forecasted at 5.9% per year, outpacing the UK market average, while earnings are expected to grow significantly at 35.7% annually over the next three years despite low return on equity forecasts and high one-off items impacting results. Story continues Insights from our recent growth report point to a promising forecast for Rank Group's business outlook. Delve into the full analysis health report here for a deeper understanding of Rank Group. LSE:RNK Discounted Cash Flow as at Aug 2024 Deliveroo Overview: Deliveroo plc operates an online food delivery platform across multiple countries including the UK, Ireland, France, and others, with a market cap of £2.46 billion. Operations: The company generates revenue of £2.03 billion from its on-demand food delivery platform operations. Estimated Discount To Fair Value: 40.5% Deliveroo is trading at £1.58, significantly below its estimated fair value of £2.65, indicating it may be undervalued based on discounted cash flows. The company reported a net income of £1.3 million for H1 2024, a turnaround from the previous year's loss of £82.9 million. Earnings are forecast to grow 67.6% annually over the next three years, with revenue expected to increase by 7.7% per year, outpacing the UK market's growth rate of 3.7%. Our comprehensive growth report raises the possibility that Deliveroo is poised for substantial financial growth. Get an in-depth perspective on Deliveroo's balance sheet by reading our health report here. LSE:ROO Discounted Cash Flow as at Aug 2024 Seize The Opportunity Click through to start exploring the rest of the 54 Undervalued UK Stocks Based On Cash Flows now. Are any of these part of your asset mix? Tap into the analytical power of Simply Wall St's portfolio to get a 360-degree view on how they're shaping up. Enhance your investing ability with the Simply Wall St app and enjoy free access to essential market intelligence spanning every continent. Ready For A Different Approach? Explore high-performing small cap companies that haven't yet garnered significant analyst attention. Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence. Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include LSE:AAF LSE:RNK and LSE:ROO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com View comments |
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| 22.08.24 05:37:51 | Does The Market Have A Low Tolerance For Airtel Africa Plc's (LON:AAF) Mixed Fundamentals? | |
| It is hard to get excited after looking at Airtel Africa's (LON:AAF) recent performance, when its stock has declined 4.8% over the past three months. We, however decided to study the company's financials to determine if they have got anything to do with the price decline. Fundamentals usually dictate market outcomes so it makes sense to study the company's financials. In this article, we decided to focus on Airtel Africa's ROE. Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors’ money. Simply put, it is used to assess the profitability of a company in relation to its equity capital. View our latest analysis for Airtel Africa How Do You Calculate Return On Equity? ROE can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Airtel Africa is: 4.0% = US$93m ÷ US$2.3b (Based on the trailing twelve months to June 2024). The 'return' refers to a company's earnings over the last year. One way to conceptualize this is that for each £1 of shareholders' capital it has, the company made £0.04 in profit. What Is The Relationship Between ROE And Earnings Growth? We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features. Airtel Africa's Earnings Growth And 4.0% ROE At first glance, Airtel Africa's ROE doesn't look very promising. A quick further study shows that the company's ROE doesn't compare favorably to the industry average of 5.1% either. For this reason, Airtel Africa's five year net income decline of 7.0% is not surprising given its lower ROE. However, there could also be other factors causing the earnings to decline. Such as - low earnings retention or poor allocation of capital. However, when we compared Airtel Africa's growth with the industry we found that while the company's earnings have been shrinking, the industry has seen an earnings growth of 2.2% in the same period. This is quite worrisome. past-earnings-growth Earnings growth is a huge factor in stock valuation. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Is AAF fairly valued? This infographic on the company's intrinsic value has everything you need to know. Story continues Is Airtel Africa Making Efficient Use Of Its Profits? In spite of a normal three-year median payout ratio of 31% (that is, a retention ratio of 69%), the fact that Airtel Africa's earnings have shrunk is quite puzzling. So there could be some other explanations in that regard. For instance, the company's business may be deteriorating. Moreover, Airtel Africa has been paying dividends for five years, which is a considerable amount of time, suggesting that management must have perceived that the shareholders prefer consistent dividends even though earnings have been shrinking. Based on the latest analysts' estimates, we found that the company's future payout ratio over the next three years is expected to hold steady at 34%. However, Airtel Africa's ROE is predicted to rise to 48% despite there being no anticipated change in its payout ratio. Summary On the whole, we feel that the performance shown by Airtel Africa can be open to many interpretations. While the company does have a high rate of profit retention, its low rate of return is probably hampering its earnings growth. That being so, the latest industry analyst forecasts show that the analysts are expecting to see a huge improvement in the company's earnings growth rate. To know more about the company's future earnings growth forecasts take a look at this freereport on analyst forecasts for the company to find out more. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View comments |
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| 05.07.24 05:03:11 | Avoid Airtel Africa And Explore One Superior Dividend Stock | |
| When exploring dividend stocks in the United Kingdom, it's important to consider the sustainability of a company's dividend payments. A high payout ratio might initially appear attractive, but it can also signal potential financial strain and a risk to future dividends. This article will discuss two companies: one that may pose such risks due to its high payout ratio, Airtel Africa, and another that offers a more stable dividend prospect. Top 10 Dividend Stocks In The United Kingdom Name Dividend Yield Dividend Rating James Latham (AIM:LTHM) 6.30% ★★★★★★ Epwin Group (AIM:EPWN) 5.75% ★★★★★☆ Big Yellow Group (LSE:BYG) 3.92% ★★★★★☆ Impax Asset Management Group (AIM:IPX) 7.00% ★★★★★☆ Keller Group (LSE:KLR) 3.48% ★★★★★☆ Plus500 (LSE:PLUS) 5.70% ★★★★★☆ Grafton Group (LSE:GFTU) 3.83% ★★★★★☆ Rio Tinto Group (LSE:RIO) 6.17% ★★★★★☆ Hargreaves Services (AIM:HSP) 6.82% ★★★★★☆ NWF Group (AIM:NWF) 4.52% ★★★★★☆ Click here to see the full list of 56 stocks from our Top Dividend Stocks screener. We're going to check out one of the best picks from our screener tool and one that could be a dividend trap. Top Pick Drax Group Simply Wall St Dividend Rating: ★★★★☆☆ Overview: Drax Group plc operates in renewable power generation in the United Kingdom, with a market capitalization of approximately £2.07 billion. Operations: The company's revenue segments include £4.96 billion from customers, £6.79 billion from generation, and £822.40 million from pellet production. Dividend Yield: 4.3% Drax Group's dividend sustainability is evident with a low earnings payout ratio of 16.2% and a cash payout ratio of 22.7%, ensuring dividends are well covered by both profits and cash flows, despite its unstable dividend track record over the past decade. Recent board changes, including the appointment of Rob Shuter with extensive financial expertise, may influence strategic directions positively. However, earnings are expected to decline significantly in the next three years, which could challenge future dividend growth and stability. Take a closer look at Drax Group's credentials here in our dividend report. Upon reviewing our latest valuation report, Drax Group's share price might be too pessimistic. LSE:DRX Dividend History as at Jul 2024 One To Reconsider Airtel Africa Simply Wall St Dividend Rating: ★★☆☆☆☆ Overview: Airtel Africa Plc operates in providing telecommunications and mobile money services across Nigeria, East Africa, and Francophone Africa, with a market capitalization of approximately £4.42 billion. Operations: The company generates revenue primarily through mobile services and mobile money, with segments totaling $4.34 billion and $0.84 billion respectively. Story continues Dividend Yield: 3.9% Airtel Africa's dividend profile is concerning due to its high payout ratio, indicating dividends are not well supported by earnings or cash flow. The company has shown volatile dividend payments and a recent shift from profitability to a net loss of US$165 million for the full year ended March 31, 2024. Despite a modest yield of 3.94%, which is below the UK market's top quartile, and ongoing financial challenges underscored by significant revenue declines and losses, it raises doubts about future dividend reliability and growth. Navigate through the intricacies of Airtel Africa with our comprehensive dividend report here. LSE:AAF Dividend History as at Jul 2024 Summing It All Up Click this link to deep-dive into the 56 companies within our Top Dividend Stocks screener. Hold shares in some of these firms? Setup your portfolio in Simply Wall St to seamlessly track your investments and receive personalized updates on your portfolio's performance. Join a community of smart investors by using Simply Wall St. It's free and delivers expert-level analysis on worldwide markets. Ready To Venture Into Other Investment Styles? Explore high-performing small cap companies that haven't yet garnered significant analyst attention. Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management. Find companies with promising cash flow potential yet trading below their fair value. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include LSE:DRX and LSE:AAF. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com View comments |
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| 16.06.24 07:44:59 | Don't Buy Airtel Africa Plc (LON:AAF) For Its Next Dividend Without Doing These Checks | |
| Airtel Africa Plc (LON:AAF) is about to trade ex-dividend in the next 3 days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Thus, you can purchase Airtel Africa's shares before the 20th of June in order to receive the dividend, which the company will pay on the 26th of July. The company's next dividend payment will be US$0.0357 per share, on the back of last year when the company paid a total of US$0.059 to shareholders. Last year's total dividend payments show that Airtel Africa has a trailing yield of 4.0% on the current share price of UK£1.186. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. We need to see whether the dividend is covered by earnings and if it's growing. See our latest analysis for Airtel Africa Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Airtel Africa reported a loss last year, so it's not great to see that it has continued paying a dividend. Considering the lack of profitability, we also need to check if the company generated enough cash flow to cover the dividend payment. If cash earnings don't cover the dividend, the company would have to pay dividends out of cash in the bank, or by borrowing money, neither of which is long-term sustainable. Luckily it paid out just 17% of its free cash flow last year. Click here to see the company's payout ratio, plus analyst estimates of its future dividends. historic-dividend Have Earnings And Dividends Been Growing? Companies with falling earnings are riskier for dividend shareholders. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Airtel Africa was unprofitable last year and, unfortunately, the general trend suggests its earnings have been in decline over the last five years, making us wonder if the dividend is sustainable at all. Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. It looks like the Airtel Africa dividends are largely the same as they were five years ago. When earnings are declining yet the dividends are flat, typically the company is either paying out a higher portion of its earnings, or paying out of cash or debt on the balance sheet, neither of which is ideal. Story continues Get our latest analysis on Airtel Africa's balance sheet health here. To Sum It Up From a dividend perspective, should investors buy or avoid Airtel Africa? It's hard to get used to Airtel Africa paying a dividend despite reporting a loss over the past year. At least the dividend was covered by free cash flow, however. It's not the most attractive proposition from a dividend perspective, and we'd probably give this one a miss for now. So if you're still interested in Airtel Africa despite it's poor dividend qualities, you should be well informed on some of the risks facing this stock. Every company has risks, and we've spotted 2 warning signs for Airtel Africa you should know about. If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com View comments |
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