BTCL stock bullish into July

11th July 2017
CHAT Source:The Midweek Sun


By Sun Reporter - Reporter

R Botswana Telecommunications Corporation Limited last week closed the week trading 15 thebe higher for the week, a 11.8 percent climb following the release of the company’s financial results for the year ended March 2017. The company’s profits rose by P608.2 million, from a deficit of P370mn to P272.3 million for the year, after revenues grew by 8 percent to P1.6 billion.

All the company’s business units recorded an improvement in revenues, including fixed lines services, which improved by 4 percent. Cost of services and goods sold declined by 6 percent while total costs declined by 26 percent, and the Managing Director, Anthony Masunga alluded to the fact that there is room for further cost cutting, and that the company strives to do just that.

The news should comfort investors as the former parastatal continues to shape up. Analysts at Motswedi Securities, Garry Juma and Moemedi Mosele advised that investors should be wary of the 27.6 percent growth in receivables, probably due to aggressive sales or poor credit collection. “The effective tax rate is also bound to rise as the company saw some tax benefit following last year’s losses.

Momentum eased off during Friday’s session, however we expect the stock to continue to rally around the excitement well into July,” they said. Yesterday (Tuesday) BTCL rally came to a halt after the stock rose by 15 thebe over the previous week to trade at P1.42 per share, the highest price since listing. Meanwhile, the company reviewed its dividend policy, committing to a pay-out ratio of 50-65 percent, and in line with this the company declared a final gross dividend of 11.09thebe per share, which together with the interim (3.6thebe) represent 65 percent of earnings per share. Investors last week quickly rushed to the market in a bid to capture the fat dividend pay check as the stock continues to trade until 14 July. Given the future outlook, the Telecommunications landscape continues to evolve, with further liberalisation of the market.

BTC management has therefore remained very optimistic about its future prospects, as it continues to leverage on its unique product offering and wide network coverage to consolidate its position to become a market leader in communication services. The Company says it will continue to make significant investments in its network and people, in order to provide quality, reliable and affordable services to its customers, while creating value for its shareholders.

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