Airtel Africa PLC
Airtel Africa PLC (AAF) is a London-headquartered leading provider of telecommunications and mobile money services, with a presence in 14 countries in Africa, that offers an integrated suite of telecommunications solutions to its subscribers, including national and international mobile money services as well as mobile voice and data services. The mobile voice business line comprises fixed-line telephone services, international roaming and pre-and post-paid wireless voice services, and offers mobile money services under its Airtel Money brand to customers in all of the 14 countries of operation in Africa. The mobile data business line comprises value-added services for mobile subscribers, 4G data services, and other data communications services, and the mobile voice business line is the largest revenue component of the group. The operations of the group are differentiated in three operating segments, namely Nigeria, East Africa and Rest of Africa.
The company on 22 October 2019 announced that it had entered into a global partnership with Finablr to facilitate seamless inbound and outbound cross-border payments, allowing the company to gain access to global payments connectivity, technology platform and its omnichannel sourcing and distribution capabilities spanning across 170 countries. Airtel Africa mobile money operations will be integrated with the technology platform and global network of Fibnablr to introduce global payments services, enabling customers to make purchases and withdraw cash from outlets and agents across the continent and make cross-border remittances, pay bills.
Financial Highlights (H1 2020, in $m)
(Source: Company Filings)
Driven by a 10.4% increase in the customer base, to 104 million, and ARPU growth of 1.5%, revenue growth accelerated in the second quarter to 12.6% in constant currency as a result of improvement in performance of Rest of Africa and it increased by 8.4% during the first half to $1,640 million, with constant currency growth of 11.4%. Across services, revenue growth in constant currency terms was positive with mobile Voice up 3.2%, Data up 37.8%, and Mobile Money up 46.5%, while double-digit revenue growth in Nigeria and East Africa was partially offset by a decrease in Rest of Africa revenues. Though operating expenditures as percentage of revenue remained broadly flat, operating profit increased by 8.6% to $395 million as a result of strong revenue growth and in constant currency terms grew by 11.1%, while underlying EBITDA was $719 million, up 10.9% largely driven by 13.7% constant currency growth, partially offset by currency devaluation. As finance costs reduced by $70 million and net finance cost declined to $148 million, profit before tax rose by 158.4% (reported currency) to $316 million, while growth on a constant currency basis was 172.1%. Driven by an increase in operating profit and lower finance costs but partially offset by higher tax charges, profit after tax was $228 million, which represented an increase of 11.9%, while due to the increase in the number of shares issued, basic earnings per share was 6.3c, down 59.4% and earnings per share before exceptional items was 4.1c, down 32.7%. Leverage reduced to 2.3x as of September 2019 as compared to 5.1x as of September 2018 basis LTM EBITDA, as net debt reduced to $3,191 million in September 2019 compared to $6,439 million in September 2018, while free cash flow was $237 million, up by 28%. The Board approved an interim dividend of 3c per ordinary share and underlying EBITDA margin in reported currency was 43.9% during the period.
Share Price Commentary
On 25 October 2019, at the time of writing (before the market closed, at 1:42 GMT), AAF shares were trading at GBX 58.50, up by 4.46 per cent against the previous day closing price. Stock's 52 weeks High and Low is GBX 81.00/GBX 47.00. The outstanding market capitalisation was around £5.05 billion.
On 9 September 2019, it was announced that the company would be added to the FTSE 250 index as on 23 September 2019, and the company announced several partnerships with companies, including Mastercard, Ecobank and FINABLR, to improve its Airtel Money business and carry out a variety of mobile transactions. With a unique user penetration at 44%, the potential for growth across its footprint is huge, which is presently characterised by low but increasing levels of mobile connectivity in a fast-growing region that is vastly underpenetrated in terms of mobile and banking services. To deliver on its medium-term aspirations for revenue and profit growth, the company is confident of delivering sustained growth across the service it offers to a potentially vast consumer base as it continues to build momentum.
Nuformix PLC (NFX) is a Cambridge, the United Kingdom-headquartered pharmaceutical development company which has invested in pharmaceutical cocrystal Research and Development. With lead programmes in oncology supportive care and fibrosis, the company seeks to unlock the therapeutic potential of approved drugs by yielding multiple product opportunities with an accompanying portfolio of intellectual property and establishing world-class capability and know-how in cocrystal discovery and development. To maximise the efficiency of investment, the group operates a semi-virtual business model.
Financial Highlights (FY 2019, in £m)
Total revenue rose to £610,000 (2018: £15,000) as it received the first payment of £500,000 after its IP licensing agreement with Newsummit Biopharma, while cost of sales also rose considerably to £537,527, resulting in a gross profit of £72,473 against a loss of £188,868 reported in the prior year. Total administrative expenses rose to £1.89 million during the period from £1.8 million in the prior year, while operating loss declined to £1.81 million from £1.96 million loss in FY 2018. Loss before tax also decreased to £1.84 million from £1.96 million of loss in the previous year. Driven primarily by product development costs following the commencement of clinical studies and by share-based charges, loss on ordinary activities (after tax credit) was £1,661,227 (2018: loss of £1,838,263), and the loss per share was 0.36p (2018: 0.49p). Following continued investment into its intellectual property portfolio, the company has seen growth in the value of its patents, and net assets at year-end of £3,815,330 (2018: £4,493,142) which includes £4,261 cash at bank (2018: £338,167).
Share Price Commentary
On 25 October 2019, at the time of writing (before the market closed, at 1:44 GMT), NFX shares were trading at GBX 12.76, up by 52.72 per cent against the previous day closing price. Stock's 52 weeks High and Low is GBX 14.89/GBX 1.90. The company's stock beta was 1.54, reflecting more volatility as compared to the benchmark index. The outstanding market capitalisation was around £38.93 million.
The group enjoys an accelerated entry into clinical trials at a reduced cost as well as abbreviated regulatory pathways to obtain faster market approval as it works with drugs already shown to be safe and accesses existing pre-clinical and clinical data which also de-risks the business model. The company is focused on creating value within its existing intellectual property portfolio and is developing an innovative pipeline of products using its cocrystal technology platform. The company also announced the completion of its innovative pre-clinical trial in human IPF for NXP002 and the achievement of a second pre-clinical milestone triggering a second payment of £500,000. To maximise the opportunity to address unmet patient needs using cocrystal technology and driving commercial success, the company has made further progress with its product pipeline, and additional development opportunities and new partnerships are being explored in parallel.
Comparative share price chart of Airtel Africa PLC and Nuformix PLC
(Source: Thomson Reuters)
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