Skyway Aviation Handling Company Plc (SAHCO)
Ticker Symbol: (Skyavn)
I will talk extensively on the summary, business, numbers and lastly the management.
At the point of publication the share price of SAHCO is N5.80k
Ground handling business is a business that handles essentially passenger and cargo services for aircraft, these include passenger check-in, aircraft cleaning and cargo movement. They are also part of security set-up for airports.
There are currently about four major handling companies in Nigeria. The Nigerian Aviation Handling Company Plc (NAHCO), Skyway Aviation Handling Company Plc (SAHCO), Precision Aviation Handling Company Limited (PAHCOL), and Swissport Handling Company.
As at December 2020 SAHCO handles over 60% of Nigeria cargo.
Also, they have won several awards which includes;
Most Efficient Ground Handling Company (2018) - Association of Foreign Airlines and Representatives in Nigeria (AFARN) Awards
Best Aviation Handling Company (2017) - Grassroots Newspapers Publishers Network Award
Aviation Handling Company of the year (2016) - Nigerian Transport Awards
Recently, they also won Aviation Ground Handling Company of the year award 2021, this was as a result of their Commitment towards delivering quality service even in hard times as their MD Basil Agboarumi stated during the presentation of the award.
Following the acquisition of SAHCO by SIFAX GROUP, the company went public in 2018 with an offer for sale of 406,074,000 ordinary shares representing 30% of its shares outstanding of 50kobo each at N4.65k per share.
SAHCO major revenue stream include:
• Cargo handling import
• Cargo handling export
• Foreign handling
• Domestic handling
• Equipment rental, etc.
Other streams include:
• Airport security services
• Christian pilgrimage handling
• Haulage/Crew bus services, etc.
SAHCO has about 27 management personnel made up of 11 Directors and 16 Senior managers whose Salary and short term benefit as at 2020 averaged to N3,389,481 per capital, a 15% decrease from 2019 personnel salary per capita. This decrease suggest that management was willing to work for less pay following the 2020 COVID-19 pandemic.
Administrative expenses and direct cost was reduced by 6.7% and 8.7% respectively between 2019 and 2020.
Employees benefits per capita stood at N490,275 . (1630 employees)
As at publishing this article SAHCO tangible assets stood at N14B while it’s P/B ratio is 0.4x.
Book Value per share (BVPS) is 14.45
EQUITY
5yrs 3yrs 1yr
29% 11% 1%
EPS
4yrs 2yrs 1yr
84% 50% 11%
REVENUE
5Yrs 3Yrs 1Yr
12% 86% 24%
Free Cash Flow
5Yrs 3yrs 1yr
42% -2% -3%
ROIC
5yrs 1yr
49% 47%
Decrease in free cash flow was as a result of Capex in the years under review.
Current EPS 43k
My estimated growth rate 10%
Current share price = N5.80
Fair price = N16 per share.
Management
The board chairman of SAHCO is Dr. Afolabi Taiwo while the Managing Director is Agboarumi Basil. Their annual message to shareholders, contain information the investors need to know about the company’s health, past and future. They are consistent and clear with their plan for SAHCO both in the annual shareholder message and every news interview I have come across. The duo are owner orientated and will certainly do what is best under any circumstances for business.
In an interview with punch Mr. Basil portrayed himself as Someone whose life have been laid by walking in righteousness and forsaking evil.
Below is a link on Dr. Afolabi interview with Guardian on his 12yrs as an investor in the aviation sector and a random post of an encounter with him by a LinkedIn user Ugochukwu Lawrence Ekeh describing Dr. Afolabi as a man who has passion for humanity and earnest desire in taking people off the street by offering them a better life. https://guardian.ng/business-services/ground-handling-business-has-a-long-gestation-roi-many-investors-cannot-endure/
https://www.linkedin.com/posts/ugochukwulawrenceekeh_business-sifaxgroup-achievement-activity-6905996052064010240-rp26?utm_source=linkedin_share&utm_medium=android_app
Note
The directors interest in the business so far have been unwavering, this suggests that the directors are very optimistic about the company’s future.
The company’s current liabilities is well covered by their current assets.
No dividends or share buy backs have been made by the company, this suggests that the directors are confident that the company’s earnings can be redeployed effectively for business purposes, this will mean a lot for future growth.
Some construction contract was awarded to Mrs Afolabi Folashadi (chairman’s wife) through her construction Macjosnack construction Nigeria limited, she was paid N39.4M for construction services during year end 31st December 2020.