AccessKenya analyst briefing- 19 March 2013.
AccessKenya Group Limited (AccessKenya) held an analyst briefing on 19 March 2013 following its FY12 results in which EPS grew 38.8%y/y to KES 0.69 and a DPS of KES 0.30 was declared. Management highlighted that
earnings could have been roughly 15% higher had the company not purchased emergency capacity in the 1H12 (due to an international fibre cut). The company had
also made additional one-off provisions during the year. AccessKenya expects to spend KES 300m in capital expenditure for 2013, with most of the funding expected
to expand its fibre network to reach more buildings and move some existing clients from WiMax. 2013 had started weaker as a result of a slowdown around the elections but expected business to pick up later. The company is
increasing its focus on IT and value added services for the coming years. It has
signed up with Safaricom to become its local loop provider and is pursuing Telkom Kenya for a similar wholesale service. We expect Safaricom’s revenue to last for less than five years by which time the company will have completed its own fibre network. Generally, management expects a much higher degradation of average revenue per user than 2012, which will be compensated by a focus on getting some new high value customers to improve the mix of clients.
EPS guidance was made at a growth of around 30-40% on 2012, with revenue rising roughly 8%. Management noted that there were few independent businesses like AccessKenya which were independent and that
they would consider appropriate offers if they came along. (Standard Investment Bank)
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett