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2025 has been a good year overall for the FTSE 100 index of leading British shares. It has repeatedly set new all-time highs.
Growth of around 19% so far this year for the FTSE 100 also looks impressive and I think it is. However, it pales by comparison to the individual performance of some of its members.
For example, Airtel Africa (LSE: AAF) has gone up by 184% since the start of the year.
Why has the share almost tripled in a little under 12 months – and could its strong positive momentum perhaps carry over into the new year?
A business riding growing trends
Part of why this FTSE 100 share has shone this year is its focus on markets that have large growth opportunity and the firm’s proven ability to tap into that.
Specifically, Airtel Africa has a large business in several key African markets where demographics are on its side due to population growth and increasing mobile phone usage. Selling voice and data has been a good business. Building on that, getting into digital currency is both a logical step and a potentially lucrative one.
This year I think the wider stock market woke up to just how powerful this story could be. In the first half, revenues jumped 26% year-on-year. Profit before tax jumped no less than 375%.
The biggest revenue growth rate came from data, at 37%. For the first time it surpassed voice as a revenue generator. But mobile money also grew strongly, with revenues up 30% year-on-year.
By building a strong presence in multiple large African markets, Airtel Africa has laid the groundwork to ride demographic trends that play to its advantage as well as ramping up its mobile money offering.
Could 2026 be a good one for Airtel Africa?
Following the strong run this year, the FTSE 100 share now sells for 34 times earnings. That may seem expensive. But bear in mind the strong earnings growth the business reported in the first half of this year. If Airtel Africa can keep improving its performance strongly, the prospective price-to-earnings ratio may be markedly lower than 34.
However, there are also risks here. Airtel Africa’s net debt has been growing, standing at $5.5bn at the end of the first half. That is higher than I would like and I expect that, over time, it could get higher still. Building and maintaining mobile telephony infrastructure is a costly business.
Operating in Africa can also bring substantial operational risks. We have already seen how swings in the Nigerian currency can make business very challenging for Airtel Africa over the past several years. The company managed to take that in its stride, but as I see it the risk remains noteworthy.
Such risks could hurt the share price. However, if earnings continue to grow at a very strong rate I can imagine the Airtel Africa share price moving up over time. From a long-term perspective, I see it as a share for investors to consider.
