17th May 2023. 8.57am

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Regency View:


Currency movements hit Airtel Africa profits

Airtel Africa (AAF) released a strong set of full year results last week, but profits have been impacted by currency headwinds.

The African telecom company said its total customer base grew by 9% to 140m, as the penetration of mobile data and mobile money services continued to rise, driving a 16.9% increase in data customers to 54.6m and a 20.4% increase in mobile money customers to 31.5m.

Constant currency revenue growth was 17.6%, but this dropped to 11.5% when adjusting for currency depreciation. Underlying earnings (EBITDA) were similarly impacted, growing 17.3% on a constant currency basis, but only 11.4% on a reported basis, reaching $2.58bn.

Airtel CEO, Olusegun Ogunsanya plans to outrun the currency headwinds with growth:

“While currency devaluation is not in our control, we have plans to continue to mitigate its impact by growing our revenues at a faster pace than devaluation, with double-digit revenue growth in reported currency delivered this year and as we continue to reduce our foreign currency exposure across our balance sheet”.

After an initially weak reaction from the market, the shares have bounced back quickly. This indicates strong underlying demand for the shares and adds to the significance of the 104p support level that we identified in our original recommendation report.

AAF Daily Candle Chart

AAF Daily Candle Chart

Flutter Q1 revenues jump 29%

Flutter Entertainment (FLTR) grew its headline revenue by 29% on a pro-forma basis in the first quarter, driven by a 92% jump in its fast-growing US unit.

The Paddy Power, Betfair and Sky Bet owner also expanded its revenue in the UK and Ireland with average monthly players rising 11% year-on-year. And international revenue growth topped 60%, where Flutter said the recently acquired Italian gaming operator Sisal performed exceptionally well.

Flutter maintained its leading 50% share of the US sports betting market and increased its slice of the iGaming market to 23% from 21% three months earlier.

Peter Jackson, Flutter’s CEO highlighted the group’s US growth:

“In the US, the combination of the FanDuel Advantage and the Flutter Edge drove further market share gains. We added over 1.5m customers in the quarter and we remain the clear market leader. Our US sports betting handle of $10.9bn represented almost 60% of the Group’s total sportsbook stakes”.

The market responded positively to the numbers and Flutter’s share price has maintained the powerful uptrend which has made it one of the FTSE’s standout performers this year.

FLTR Daily Candle Chart

FLTR Daily Candle Chart

Glencore plans Europe’s biggest electric car battery recycling plant

Glencore (GLEN) has plans to build Europe’s largest battery recycling plant…

The commodity trader and mining group aims to extend its recycling business to take advantage of big demand for electric vehicles (EVs).

Glencore said it is launching a joint study with Canada’s Li-Cycle with a view to building a recycling facility in Italy by 2027.

The plant will be capable of processing up to 50,000 to 70,000 tonnes of ‘black mass’ (shredded batteries that would undergo hydrometallurgical processes to extract their raw materials).

Glencore has a 10% stake in Li-Cycle and aims to re-purpose its zinc and lead smelter in Sardinia to produce lithium, nickel and cobalt, key metals used to make batteries for EVs.

Glencore’s CEO, Gary Nagle has said that recycling already contributes $200m to $250m of the company’s earnings – making it one of the world’s largest metal recyclers.

Tim Johnston, co-founder and chair of Li-Cycle, said: “This is a landmark project for Europe’s battery recycling industry.” He added: “These assets are needed soon.”

GLEN Daily Candle Chart

GLEN Daily Candle Chart

Vodafone’s new CEO outlines plans to restore growth

Vodafone (VOD) released full year preliminary results this week and it was new CEO, Margherita Della Valle’s first opportunity to outline her plans to reshape the telecom giant.   

“My priorities are customers, simplicity and growth. We will simplify our organisation, cutting out complexity to regain our competitiveness” said Della Vallein her opening statement.

“We will reallocate resources to deliver the quality service our customers expect and drive further growth from the unique position of Vodafone Business” she added.

Della Valle plans to axe 11,000 jobs over the next three years, with cuts coming from both Vodafone’s UK headquarters and in local markets.

The job cuts equate to about 12 per cent of the 90,000 people Vodafone employs globally. The group will use about £250m in cost savings to improve customer service and bolster the Vodafone brand.

The market was unconvinced by Della Valle’s ‘new vision’. She has been with the company since 1994 and served under former CEO, Nick Read as chief financial officer.

Long-term, we like Vodafone for income and the stock trades on a market-beating forward dividend yield of 8.39%.

And, whilst the dividend is non-guaranteed and likely to drop due to recent poor performance, Vodafone’s size and diversity of revenue streams continue to make it an attractive long-term income play.

VOD Daily Candle Chart

VOD Daily Candle Chart


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