Helios Towers (HTWS) listed on the London Stock Exchange last October and the telecoms company, whose operations are largely based in Africa, has seen its share price slide by almost 30 per cent so far. But this sell-off, which we can safely assume has partly been driven by coronavirus anxieties, is unjustified. Reported cases in Africa remain relatively low and besides that, mass self-isolation would heighten demand for better connectivity.
Adjusted cash profits were up by 16 per cent year-on-year to $205m (£158m) which management said reflected both tenancy growth and improvements in its operational efficiency. The group’s tenancy ratio (total number of tenancies divided by the total number of towers) nudged up to 2.09x from 2.01x in the year prior, with 20 projects in the pipeline. Activity has been bolstered by its recent entry into the South African market, where it has 500 sites in the works.
Chief executive Kash Pandya struck an ambitious tone in his statement, saying that the company aims to deliver on “the structural opportunities present across Africa”. The group’s active M&A pipeline covers many countries on the continent and analysts at Jefferies noted that Ethiopia is “especially active” in this respect. The company did not provide specific targets for 2020 – but said that by 2025, it is targeting expansion of its tower network to 12,000 across eight countries from the current five.
Broker Jefferies forecasts cash profits (Ebitda) of $235m, rising to $266m in 2021.
| HELIOS TOWERS (HTWS) | ||||
| ORD PRICE: | 88p | MARKET VALUE: | £ 880m | |
| TOUCH: | 88-94p | 12-MONTH HIGH: | 160p | LOW: 88p |
| DIVIDEND YIELD: | nil | PE RATIO: | NA | |
| NET ASSET VALUE: | 18p | NET DEBT: | £463m* | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2018* | 356 | -120 | -14.0 | na |
| 2019 | 388 | -74.8 | -15.0 | nil |
| % change | +9 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| £1 = $1.29. *Includes lease liabilities of £125.6m **Pre-IPO figures | ||||
