Brief Introduction

Starcomms plc was incorporated on the 19^th July, 1995. It is the 4^th largest Nigerian Telecom operator that provides fixed line, mobile and internet/data services over wireless CDMA network. In February 2007, Starcomms Plc launches its nationwide mobile services. Starcomms subscribers has grown to 1.92 million with 1.55 million active subscribers, having full operation in 11 major cities,and going with the plan of making 20 more coverage to sum up to 31 cities by the end of 2008.

The company is also the leading provider of 3G and 3.5G broadband services in Nigeria using CDMA 2000 Ev-Do and the first company in Africa to launch Ev-Do high speed (600-800 kbps) broadband services in June 2006. The company was listed on the Nigerian Stock Exchange on the 14^th July 2008.

Starcomms over the years has position itself to exploit the significant growth expected in the Nigerian Telecommunications market.

Management Team:

The paddle of progress has been sustained over the years by well deserved executives with high level of professionalism, skills and experiences to the achievement of goals and objectives of the company. The board list includes:

1. Chief Maan Lababidi, OON (Chairman)

2. Maher Qubain (CEO)

3. Omar Lababidi

4. Navaid Burney

5. Folabi Williams

6. Paul Edwards

7. John Owers

8. Micheal Rosse

9. Oluwaseyi Owodunni (CFO)

10. Dr. Sam Nwosu (Sales Director)

11. Manoj Vashisht (Marketing Director)

12. Krishnan Madabushi (CTO)

FINANCIAL ANALYSIS

Price Movement: Performance of the shares price of Starcomms Plc on the secondary market has been on the downward trend as analyzed from the period of its listing to the current Market price. For instance, available statistics show that the Company’s share price movement, which stood at N14.33 as at 14 July, 2008, dropped to close the third quarter 26 September, 2008 at N8.04. With the current bearish trend established in the market, the share price dropped sharply to N4.05 as at December 31, 2008.

Turnover: There have been consistent and progressive increases in the turnover over a five (5) year period ending 31 December. Turnover for the year ended 31 Dec., 2003 shows a figure of N3.14 billion, N5.17 billion in 2004, N6.34billion, N13.61 billion, and N20.51 billion, for 2005, 2006, and 2007 respectively. The result for the third quarter ended 30 September 2008 showed an increase of N12.40 billion to stand at N27.13 billion as compared with the N14.73 billion third quarter result for 2007. This shows that the market for the company is expanding, and  huge growth potential.

Technical Analysis/Conclusion

Listing price of 14.33 on 14/7/2008 rose to an all-time high of 14.90 the following day, and ever since has been on the decline till date closing at 3.01 on 9/1/2009. With a total of 6,878,478,096 shares in issue, this translates to a market capitalization of 20.7 billion naira as against a market capitalization of 98.5 billion at listing, a depreciation of 79% in market valuation of the company. The entire market capitalization on the other hand depreciated by about 43% over the same period.

Since the fortune of the market is not looking bright it may be concluded that the share price of Starcomms Plc would continue to fall at a faster rate than the market.

This conclusion is further corroborated by the fact that at the Price/Earnings ratio of the company is ? with an expected dividend of 76kobo per share in Year 2010, when the earnings of the company is expected to be in the positive region based on the company’s forecast. A cursory look at the company’s forecast however, indicates that the company’s performance is below expectation, and that the forecasts may not be met. The expected loss before tax for the year ended December 2008 is put at 454 million naira, but the third quarter (September 2008) results released to market put the company’s loss before tax at over 3 billion naira.

With the final results of the company being expected in a few weeks, and considering the current market meltdown and investor apathy, it is advisable to dispose holdings in Starcomms Plc now before the results come to the market, as the market reaction to these results is expected to further dampen the company’s share price.