Manufacturing firm Africa Cellular Towers, which this morning listed on the JSE's Alternative Exchange (AltX), saw rapid trade this morning, with 14 trades taking place within two minutes.
The company, which manufactures steel communication towers and is involved in the management of telecommunications network projects, including GSM, fixed wireless and VSAT technology, aims to expand on the continent.
In a private placement before listing, it raised R50 million at R1 a share. The placement was 10 times oversubscribed. It also raised R55.7 million in a vendor placement.
Its first trade, just after the market opened at 9am, was at R1.27, with bids before the market opened ranging between R1.45 and R1.27. By 9.22am, the share - trading under the code ATR - was changing hands at R1.19, 6.30% down on the morning's opening, with close on a million-and-a-half shares traded.
The company's first cellular tower - in 1999 - was in Gabon, points out JSE CEO Russell Loubser. It has, he says, completed 900 projects in Africa and has erected over 3 000 towers on the continent.
Growth beckons
"We have great expectations for Africa Cellular Towers as a leading supplier of telecommunications solutions in Africa and other emerging markets," says CEO Chris Kruger.
"We definitely intend to acquire businesses which will form part of our supply chain to ensure we maintain these very attractive margins and reduce reliance on third-party suppliers."
Africa Cellular Towers intends increasing its local manufacturing capacity and stock holdings in emerging markets in order to expand its market share on the continent and in the Gulf.
The company says diversifying its customer base as a result of expansion will "shift reliance away from Celtel as its major customer and provide more opportunities to expand its business".
In a recently released abridged prospectus, it said its revenue to end-February was R129 million, while its gross profit was R47.9 million.
The company forecasts revenue of R157 million by the end of the next financial year, while gross profit is expected to move up to R53 million. By February 2008, it expects revenue of R191 million and gross profit of R68.8 million.
The manufacturing firm is AltX's 35th company to list. Established three years ago, AltX has a market capitalisation of R6.8 billion.
Africa Cellular Towers is present in 24 African countries out of the 53 on the continent and is also in discussion with other Gulf State countries. It is already operational in Kuwait, and is in discussion with Indian parties to manufacture and supply materials for the construction of cellular towers.
It aims to expand its product offering and offer more flexible solutions, such as low-cost rapid-deployment towers and cost-efficient products.
The company aims to earn annuity income from existing towers and also seeks to buy out other firms that fit into its supply chain, which will lead to higher margins.
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