Par Value: 0.50/-
Closing Price: 8.90
Total Shares Issued: 665441775.00
Market Capitalization: 5,922,431,798
Centum Investment Co reports HY 22 Earnings through 30th September 2022 versus through 30th September 2021
HY 22 Investment & Other Income 713.424m versus 986.994m
HY 22 Operating & administrative Costs [254.715m] versus [328.170m]
HY 22 Finance Costs [214.671m] versus [233.384m]
HY 22 Operating Profit 244.038m versus 425.440m
HY 22 Impairment Provision on assets 0 versus [412.986m]
HY 22 Profit before Income Tax 244.038m versus 12.454m
HY 22 Profit after Tax 244.038m versus 12.454m
HY 22 Other comprehensive Income [1.402413b] versus [295.759m]
HY 22 Total Return for the Period [1.158375b] versus [283.305m]
HY 22 [Loss]Profit from Trading businesses [22.593m] versus 183.724m
HY 22 Loss from Real Estate Operations [267.992m] versus [141.807m]
HY 22 Loss from Two Rivers Investment Operations [984.472m] versus [342.371m]
HY 22 Profit from Financial Services 385.244m versus 210.460m
HY 22 Loss from Investment Operations [344.746m] versus [606.612m]
HY 22 Loss before Tax [1.234559b] versus [0.696606b]
HY 22 Loss after Tax [1.290734b] versus [0.662107b]
HY 22 Other comprehensive [Loss]/income [260.550m] versus 418.486m
HY 22 Total comprehensive Loss [1.551284b] versus [243.621m]
HY 22 EPS [1.18] versus [0.89]
Company proposing a share Buy Back of up to 10% of its shares
Centum reports H1 2021 Earnings 6 months through 30th September 2021 versus 6 months through through 30th September 2020
HY Trading Profit 255.330m versus [316.793m]
HY Income from Financial Services 2.570133b versus 1.871656b
HY Funding & Other Cost [2.359673b] versus [1.833909b]
HY Profit from Financial Services 210.460m versus 37.747m
HY Loss from Real Estate Investments [141.807m] [279.775m]
HY Loss from Two Rivers Development [342.371m] versus [1.010856b]
HY Investment & Other Income 771.172m versus 329.095m
HY Operating & Administrative costs [401.019m] versus [354.561m]
HY Finance Costs [326.964m] versus [453.776m]
HY Profit [Loss] from Investment operations 43.189m versus [479.242m]
HY Operating profit [Loss] before impairment provisions 24.801m versus [2.048919b]
HY Impairment Provision on assets [721.407m]
HY [loss] before Tax [696.606m] versus [2.048919b]
HY [loss] after Tax [662.107mm] [1.981725b]
HY Other comprehensive income net of Tax 418.486m versus 267.700m
HY EPS [0.89] versus [2.09]
Closing Cash and cash equivalents 3.452b versus 8.323b
The Companys operating profit for the six month period ended 30 September 2021 increased to KES 425 million from KES 95 million reported in the corresponding prior year period, driven mainly by the 38% increase in investment income.
This increase in operating profitability is attributable to higher investment income as the company continued rebalancing its portfolio in line with its capital preservation and liquidity enhancement objectives.
The profit after tax declined to KES 12 million from KES 95 million driven by a non cash impairment provision of KES 413 million following a conservative assessment of the realizable value of some of the assets on the Companys balance sheet.
The benefits of the strategic decision to pay down debt, has resulted in the reduction in finance costs by 24%.
During the six month period ended 30 September 2021, the company booked revaluation losses of KES 296 million, lower than prior period of KES 1.4 billion, in line with our conservative asset valuation policy.
Debt Reduction: During the year, the company did not take up any long term debt, in line with its strategic objective of fully deleveraging the balance sheet at Centum level.
Long term debt may be used to finance projects and investments at investee company level, depending on the debt capacity of the specific projects and investments undertaken by the different investee companies.
The positive impact of deleveraging on the balance sheet is a 24% reduction in the companys finance costs in the six month period ended 30 September 2021, compared to the corresponding period in the prior year.
Net Asset Value Per Share
The Net Asset Value per share declined slightly from KES 62.85 to KES 62.09.
Trading businesses recorded improved performance in the six month period compared to last year with a profit of KES 255 million compared to a prior year loss of KES 317 million.
This improved performance is attributable to Longhorn Publishers which recorded bottom line growth by regional expansion and a recovery in the education sector following the re opening of schools.
Financial Services recorded a five fold growth in profitability in the six month period compared to last year with a profit of KES 210 million from a prior year profit of KES 38 million. The improvement is attributable to the strong performance by Sidian Bank
Real Estate: Centum RE, the Real Estate business, halved its six month period loss to KES 142 million from a loss of KES 280 million recorded in the sixmonth period ended 30 September 2020.
Two Rivers Development Limited: Though the bulk of the loss in the consolidated statement of comprehensive income is attributable to the performance of Two Rivers Development Limited (TRDL), the business recorded significant improvement, posting a loss of KES 342 million in the six month period ended 30 September 2021 compared to the KES 1 billion posted in the corresponding prior year period.
Though Centum Investment holds a 58% equity stake in TRDL, we have recognized TRDLs performance in our consolidated financial statements as if we own a 100
Centum Group reports FY Earnings through March 2021
FY Trading Business [Loss] Profit [529m] versus 25m
FY Financial Services 330m versus 171m
FY Real Estate 875m versus 3.560b
FY Loss from Two Rivers Development group [1.859b] versus [5.958b]
FY Investment and other income 684m versus 13.347b
FY Operating and administrative Costs [715m] versus [1.132b]
FY Finance Costs [629m] versus [1.815b]
FY [loss] Profit from investment Operations [660m] versus 10.400b
FY Total Operating Profit [1.843b] versus 8.198b
FY Impairment provision on Assets [459m] versus [2.752b]
FY [loss] profit before Tax [2.332b] versus 5.446b
FY Tax 964m versus [818m]
FY [loss] Profit for the Year [1.368b] versus 4.628b
FY EPS [0.93] versus 10.25
FY Total comprehensive Income [1.454b] versus 5.430b
NAV Company 62.85 versus 71.29
FY Closing Cash 4.842b versus 7.126b
Centum Board of Directors has recommended the payment of a first and final dividend of KES 0.33 per share @CentumPLC
.@CentumPLC FY Results presentation
.@CentumPLC operating portfolio companies @CentumPLC
They have pared debt at the Company Level.
Clearly Two Rivers was a drag and they are restructuring that balance sheet.
I suspect they will have to put more cash to work into their Portfolio companies
Its a significant Real estate Play in point of fact
Results for 6 months ended 30th September 2020
HY Sales 294.869m versus 4.775213b
HY Trading [Loss] Profit [403.945m] versus 254.424m
HY Income from Financial Services 1.871656b versus 1.904039b
HY Funding and other Costs [1.833909b] versus [1.895577b]
HY Operating Profit from Financial Services 37.747m versus 8.462m
HY Investment and other income 433.464m versus 12.402305b
HY Operating and Admin Costs [502.888m] versus [574.665m]
HY Finance Costs [1.331233b] versus [2.037422b]
HY [Loss] Profit [2.048919b] versus 10.003123b
HY [Loss] Proft before Tax [2.048919b] versus 7.716233b
HY [Loss] Profit after Tax [1.981725b] versus 6.790544b
HY EPS [2.09] VERSUS 10.70
Portfolio Investments 20.425b versus 18.202b
Cash and Cash Equivalents 8.850b versus 8.182b
Inventory Residential Units 4.257b versus 3.016b
Other Assets 74.944b versus 72.461b
The 6 month period to 30 September 2020 was an extremely challenging one against a backdrop of Covid 19 and the economic uncertainty and disruption to business that it occasioned.
Fortunately, the core focus of our Centum 4.0 strategy that began in 2019/2020 was to build business resilience by strengthening the balance sheet through a process of:
a) reducing debt;
b) enhancing liquidity;
c) switching to more cash flow generative assets that are less susceptible to market movements; and
d) Value preservation.
Debt Reduction: During the six months period, we reduced net debt by Kshs 4.1 Bn by retiring our 5 year bond fully.
In the prior period ended 30 September 2019, the company had made an early repayment of its USD denominated facility of USD 75 million.
These actions of deleveraging the balance sheet have resulted in a significant reduction in finance costs from KES 1.2 billion to KES 335 million.
Liquidity Enhancement: In June 2020, Centum Real Estate Limited, our wholly owned Real Estate subsidiary, repaid shareholder loans worth KES 3.75 billion to Centum.
This repayment is the first significant cash contribution from our Real Estate subsidiary. Since this was a repayment of a shareholder loan, the transaction was not recognized in the income statement.
We are upbeat about the strong pipeline of land sales within Centum RE and we expect further contribution in the second half of the year.
Switching to more cash flow generative assets: To preserve value, we closed the period with cash and marketable securities portfolio of KES 8.3 billion, the bulk of which is invested in cash flow generating fixed income securities.
The switch to fixed income securities significantly enhanced our interest income, further cushioning statement from the decline in dividend income as portfolio companies cut dividend to preserve cash.
In the current period, no gain on disposal or impairment provision on assets has been recorded.
Centum Investment Company Plc has reorganized its Real Estate business unit into two distinct businesses units: Centum Real Estate Limited, which is a wholly owned subsidiary and the holding company for all wholly owned real estate business; and Two Rivers Development Limited, of which the company holds a 58% stake.
Centum Real Estate Limited is pursuing a sales led development model and is currently constructing 1,482 residential units across three sites, namely Two Rivers Development in Nairobi, Vipingo Development in Kilifi and Pearl Marina Development in Uganda.
Of the 1,482 units under construction, 1,086 units, with a revenue potential of KES 9.2 billion had been sold as at 30 September 2020, representing a pre-sale level of 73%.
The business has collected over KES 2.6 billion in cash deposits for these presold units and has a collectible KES 6.6 billion.
IFRS 15: Revenue from Contracts with Customers requires that the seller recognizes revenue once the performance obligations under the contract are satisfied.
Collections from presold units are treated as a deferred revenue on the balance sheet and will reflect on the income statement when the units are completed and transferred to buyers.
The Private Equity business recorded a KES 1.2 billion consolidated after tax loss for the period ended 30 September 2020 compared to an after tax profit of KES 8.4 billion recorded for a similar period in 2019.
During the six month period ended 30 September 2019, the Group completed the disposal of its stakes in three beverages companies, realising a net gain of KES 12 billion.
The Group has not received any dividends from portfolio companies where the Group holds minority stakes in the six month period ending 30 September 2020 as these portfolio companies have elected to build resilience in their balance sheets by preserving cash.
The Group held KES 6.5 billion in marketable securities and KES 1.7 billion in cash at 30 September 2020
The Company after tax profit improved from a loss of KES 1.6 billion to a profit of KES 95 million. The Company also booked revaluation losses of KES 1.4 Billion which contributed to a total loss of KES 1.3 billion.
In the period ended 30 September 2020, the company did not dispose any of its assets. In the corresponding period in the prior year, the company recorded a gain on disposal of KES 2.2 billion.
There is evidently a sticker shock with the reported Loss of 1.981725b.
It is a conservatively reported HY set of numbers and the bias has been to take the Hit up front as it were.
However, they have a lot of Real Estate Sales which are yet to be booked.
Looks interesting on any further reverses.
Centum reports FY Earnings through 31st March 2020
FY Investment Income 14.996b versus 9.549b
FY Trading Profit 0.395b versus 1.117b
FY Profit Before Tax [before one off provisions] 8.198b versus 4.439b
FY Profit after Tax [before one off provisions] 7.380b versus 4.120b
Provision for impairment of Assets [2.572b]
FY Net Profit 4.628b versus 4.120b
FY EPS 7.41 versus 6.68
FY Total Assets 101.861b [18.202b Investment Portfolio 8.182b Cash and Cash Equivalents 75.477b Other Assets]
NAV 71.29 versus 79.05
FY Dividend 1.20 per share
During the Year Group disposed stakes in Almasi Beverages limited, Nairobi Bottlers limited and King Beverage limited 2.7b booked gain
Real Estate 999 of 1442 residential units have been sold
one off impairment provision against debt instrument in Amu Power Company 3.6b impairment
Total debt repayment: KES 14.4 billion
KES 7.8 billion bank term loan repaid by 31 March 2020.
Maturing KES 6.6 billion bond retired post balance sheet date on 8 June 2020
KES 1.8 billion in annual finance cost savings to be realised looking forward.
Real Estate 65% of Total Assets
In the short term, the company said its private equity business is likely to witness a substantial fall in earnings for the full year that ends March 2021, due to the coronavirus related crisis.
In the long term, however, the current market conditions present opportunities to make investments at reasonably priced valuations and rise the growth in earnings ... as economies recover from the crisis caused by the COVID 19 pandemic, it said.
Centum said in its real estate business, sales in new houses had dropped 40% due to the COVID 19 pandemic, but those expected to be completed by end March 2021 had sold out.
Two Rivers Mall and the two office towers are 81.0% and 20.0% let respectively while converted bulk land sales as at March 2020 stood at KES 2.8 BN.
Centum Company Plc (the listed entity) saw a 192.6% y o y decline in total comprehensive income to a loss of KES 4.4 BN mainly on the back of a one off provision of KES 3.6 BN for their investment in Amu Power.
Management highlights that with Centum’s share price of KES 25.95 as at June 11th 2020, its cash and marketable securities value of KES 13.50 per share, implies a market valuation of KES 12.45 for the rest of its portfolio.
This is against a total portfolio NAV per share of KES 57.80 (excluding marketable securities) comprising KES 42.03 from the real estate portfolio, KES 13.36 from the PE portfolio and KES 2.41 from the development portfolio.
well managed. Whilst it might look more like a Real estate Play now, James Mworia understands risk and the risk in the RE Portfolio is well managed.
Its cheap on a PE Basis
Centum Investment Company PLC HY 2019/ 20 results through 30th September 2019 vs. 30th September 2018
HY Sales 4.775213b vs. 4.818287b -0.894%
HY Direct and other operating costs [4.520789b] vs. [4.428471b] +2.085%
HY Trading profit 254.424m vs. 389.816m -34.732%
HY Income from financial services 1.904039b vs. 1.608407b +18.380%
HY Funding and other costs [1.895577b] vs. [1.700240b] +11.489%
HY Operating profit/[loss] from financial services 8.462m vs. [91.833m] +109.215%
HY Investment and other income 12.402305b vs. 4.054847b +205.864%
HY Operating and administrative costs [574.665m] vs. [683.689m] -15.946%
HY Finance costs [2.037422b] vs. [1.230388b] +65.592%
HY Share of associates [loss]/profit [61.697m] vs. 97.254m -163.439%
HY Operating Profit10.003123b vs. 2.555750b +291.397%
HY Impairment provision on assets [2.286890b] vs.
HY Profit before tax 7.716233b vs. 2.555750b +201.917%
HY Profit after tax 6.790544b vs. 2.079909b +226.483%
Basic EPS 10.70 vs. 3.40 +214.706%
Closing cash and cash equivalents 18.516b vs. 7.395b +150.385%
The Groups consolidated net profit increased from KES 2.1 billion to KES 6.8 billion for the six month period ended 30 September 2019, compared to a similar period in the prior year on the back of a strong investment income performance.
The underlying performance of the Groups three business units is set out below.
The Private Equity business recorded a KES 8.4 billion consolidated operating profit for the period ended 30 September 2019 compared to KES 1.3 billion recorded for a similar period in 2018.
During the period the Group completed the disposal of its stakes in Almasi Beverages Limited Nairobi Bottlers Limited and King Beverage Limited realising a net gain of KES 12 billion.
The disposal of Almasi Beverages Limited and Nairobi Bottlers Limited achieved a combined average IRR of 31% over the last ten years demonstrating our track record in growing shareholder wealth through an optimal investment strategy, portfolio management and successful exits.
The performance of both companies has been included in our consolidated results for the six month period ended 30 September 2019 as the disposal was effective in September 2019.
Between 2014 and 2019 the average annual dividends from the two businesses was KES 299 million. The proceeds from the exit have been applied towards paying off our US Dollar bank debt and local currency revolving credit facilities with the balance being invested into a cash-generating marketable securities portfolio.
The combined interest income from this investment and the savings in finance costs is KES 1.9 billion per year which compares favourably to the annual dividends of KES 299 million that would be receivable from both companies.
Consolidated dividend income received from portfolio companies where the Group holds minority stakes increased by 118% to KES 257 million for the six month period.
Sidian Bank Limited which falls within this business unit, has seen significant improvement in its performance compared to the prior year with the bank returning to profitability for the first time since the introduction of interest rate capping regulations.
This performance has been primarily driven by the banks focus on growing its non funded income through growth in trade finance business over the last three years. The success in this focus is demonstrated by the growth in non funded income by 143% between 2016 and 2019. In the current period non funded income increased by 41% compared to a similar period in 2018 and was higher than net interest income during the period. The bank has also recorded a 4% and 6% growth in both total assets and customer deposits respectively over the last six months. Recently the bank closed on a KES 2 billion facility with The Dutch Entrepreneurial Development Bank (FMO). The facility, together with the prior years new equity injection of KES 1.2 billion through a rights issues and KES 1.2 billion Tier II Capital investment by Investment Fund for Developing Countries (IFU) will provide Sidian Bank with a strong platform for growth.
Within the Real Estate Business Unit the Group is pursuing a sales-led development model and is currently constructing 1316 residential units across its three mixed use developments namely Two Rivers Development in Nairobi Vipingo Development in Kilifi and Pearl Marina Development in Uganda.
Of the 1316 units under construction 827 units, with a revenue potential of KES 6.1 billion have been sold over the last twelve months, representing a pre sale level of 63%.
The business has collected over 22% in cash deposits for these presold units.
All the units under construction have been financed through internally generated cash flows and the projects are currently debt free. The underlying subsidiaries have an asset to debt ratio of 5.8x and are therefore under-leveraged. Both Vipingo and Pearl Marina developments are currently fully equity funded.
This Business Unit has developed a rich pipeline of residential projects which are either under or nearing market validation, consistent with the sales led development model. Across the three mixed-use developments, we are actively pursuing a land sales pipeline of over KES 13.2 billion.
The Real Estate business is now significantly cash generative and has shown a strong performance.
The Group held KES 2.8 billion in marketable securities at 30 September 2019 as a separate portfolio from that created using the proceeds from the sale of Almasi Beverages Limited and Nairobi Bottlers Limited.
This portfolio is structured to minimize risk of capital loss while generating cash and additional liquidity for the Group from income and capital gains. Over the last six months this portfolio recorded a realised cash investment income of KES 130 million.
The companys operating profit increased from KES 992 million to KES 1.5 billion for the six month period ended 30 September 2019, representing a 49% growth relative to a similar period last year. This was primarily attributable to the realised gains on disposal of Almasi Beverages Limited and Nairobi Bottlers Limited. Dividend income from the Private Equity portfolio also increased by 45% to KES 387 million.
The company has recorded a one off impairment provision of KES 2.3 billion of which KES 2.1 billion is against the debt instrument investment in Amu Power Company Limited. As at 30 September 2019 the Company had completed negotiations for an Operations and Maintenance (O&M) and the Engineering Procurement and Construction (EPC) contracts secured a Power Purchase Agreement with Kenya Power Limited negotiated a debt term sheet and obtained a Government of Kenya Letter of Support. The Company had however not yet secured a Partial Risk Guarantee which is a requirement for financial close of funding with lenders. In addition while the company had obtained the relevant environmental approvals, the same is currently under litigation before the High Court of Kenya following an appeal from the National Environment Tribunal. In view of the uncertainties surrounding the timing of closure of these matters and the classification of the investment as a debt instrument a full provision has been recorded in accordance with IFRS 9 Financial Instruments. Contractually however the investment in the debt instrument continues to be outstanding.
The decrease in Net Asset Value from KES 52.6 billion as at 31 March 2019 to KES 50.3 billion as at 30 September 2019 is attributable to those provisions.
We are on course to fully deleverage the Companys balance sheet having paid off all bank term loans and looking to pay off the corporate bond that is maturing in June 2020. The Company has a strong balance sheet with an available liquidity of KES 13.6 billion and a portfolio of quality assets with low gearing.
The Company is therefore well positioned to take advantage of available opportunities, particularly under the current market conditions.
The Real Estate business will continue to pursue a sales led development process. The cash returns from sold residential units projected to be completed within the next three months and from sale of land will be partially applied towards redemption of the Corporate Bond.
The Private Equity business is evaluating new opportunities that meet our investment criteria and is currently pursuing first close of Centum Capital Fund II. Our focus on marketable securities is on a cash generative portfolio whose returns together with the savings in finance costs post full deleveraging will positively impact cash profitability by KES 2.5 billion.
@CentumPLC Investor Briefing HY 2019/2020
consolidated income statement is as below CentumHY2020 @CentumPLC
We have made a full provision on the shareholder loan we had provided to Amu Power Limited given the uncertainties surrounding the timing of closure @MworiaJ
The provision for Amu Power of KShs. 2.1b is not a write off but a provision given the uncertainties Samuel Kariuki CFO CentumHY2020
Strong Results. juiced by the disposal its stakes in Almasi Beverages Limited Nairobi Bottlers Limited and King Beverage Limited realising a net gain of KES 12 billion. with whilst a One Off speaks to their facility in getting in and out of positions.
Centum is now overwhelmingly a real estate Play.
Centum Investment Company PLC FY 2018/ 19 results through 31st March 2019 vs. 31st March 2018
FY Sales 10.864087b vs. 10.171132b +6.813%
FY Direct and other operating costs [9.746717b] vs. [9.102223b] +7.081%
FY Trading profit 1.117370b vs. 1.068909b +4.534%
FY Income from financial services 3.502548b vs. 2.844698b +23.125%
FY Funding and other costs [3.963785b] vs. [3.385289b] +17.089%
FY Operating loss from financial services [461.237b] vs. [540.591m] -14.679%
FY Investment and other income 9.852606b vs. 5.712840b +72.464%
FY Operating and administrative costs [2.128453b] vs. [2.028205b] +4.943%
FY Finance costs [2.517605b] vs. [1.761201b] +42.948%
FY Share of profits from associates and joint ventures [1.423835b] vs. 694.898m -304.898%
FY Profit before tax 4.438846b vs. 3.146650b +41.066%
FY Profit from continuing operations 4.120246b vs. 2.656298b +55.196%
FY Profit from discontinued operation, net of tax vs. 135.600m %
FY Profit for the year 4.120246b vs. 2.791898b +47.579%
Basic EPS 6.68 vs. 3.96 +68.687%
NAV per share 79.05 vs. 73.16 +8.051%
Closing cash and cash equivalents 5.284b vs. 4.074b +29.701%
Dividend 1.20 vs. 1.20
Total Assets 101.764b vs. 96.288b +5.687%
Total Equity 51.576b vs. 50.897b +1.334%
The Board of Directors has recommended the payment of a dividend equivalent to KES 1.20 per share for the financial year ended 31 March 2019 12018: KES 1.20 per share).
The year ended 31 March 2019 marked the end of our five year strategy period dubbed Centum 3.0. Over that five year period, the Companys assets grew by 249% from KES 28.8 billion to close at KES 71.6 billion as at 31 March 2019. N. Asset Value (NAVI per share on the hand grew by 229% from KES 34.5 to KES 79 as at 31 March 2019. The NAV per share has grown at a compounded annual growth rate of 18% since the commencement of our current strategy period in 2014, underscoring the Groups commitment to sustained value creation for its shareholders. This growth was primarily funded by internally generated funds and borrowings as the Company elected not to raise new equity. Through either full or partial exits in our investment portfolio over the strategy period, we raised KES 36.3 billion in exit proceeds, which resulted in realised capital gains of KES 24.3 billion. These internally generated funds were complemented by two corporate bond raises amounting to KES 10.2 billion and a bank term loan of KES 7.5 billion. Of the two bond raises, the first bond of KES 4.2 billion which matured in September 2017 was successfully redeemed through internally generated funds. Investors in the equity linked component (ELNI of that bond received an additional KES 191 million, representing a total equity upside of 15 percent of the par value in line with the terms of the issue, which translated to an annual internal rate of return of 14.9 percent for ELN investors. The Companys gearing over the strategy period was on account of new projects, under our development strategy focus. The respective real estate projects are now cash generative and able to raise non recourse debt on their own. Accordingly, as communicated in our previous investor briefing, we plan to deleverage the Company through payment of all maturing liabilities between 2019 and June 2020.
The Group recorded a consolidated profit growth of 48% from KES 2.7 billion in 2018 to KES 4.1 billion for the financial year ended 31 March 2019. The primary performance drivers under our respective three business units are set out below. I. PRIVATE EQUITY During the year, the Group completed the disposal of GenAfrica Asset Managers Limited, realising a gain of KES 1.2 billion. Through this transaction, the Group achieved a holding period IRR of 29% for the investment, demonstrating our track record in growing shareholder wealth through an optimal investment strategy, portfolio management and successful exits. The Group s beverage business reported a flat performance in revenues, with a nominal decrease of 3%. This performance was largely on account of weather related distribution channel disruptions in 2018 and depressed consumer demand in the fir, half of the year. This trend has however reversed in the quarter ended 31 March 2019, with revenues growing by 22% compared to a similar period last year. The Groups banking subsidiary, Sidian Bank Limited, has seen significant improvement in its performance compared to the prior year. The banks focus on growing its non funded income through growth in trade finance business has seen non funded income increase by 44% compared to 2018. Notably, non funded income was higher than net interest income during the period while trade finance balances have grown by 77% over the last 12 months, demonstrating the successful implementation of the banks new strategic focus. The bank has also recorded a 10% growth in total assets and 14% in customer deposits over the twelve-month period ended 31 March 2019. To support this growth, we recapitalised the bank in 2018 through a full subscription to its KES 1.2 billion rights issue. The bank also closed on a KES 1.2 billion Tier II Capital Facility from Denmarks Investment Fund for Developing Countries (IFU). The banks strong capital base, balance sheet and trade finance book have provided it with a strong growth platform that saw it return to profitability in the quarter ended 31 March 2019.
Within the trading subsidiaries segment, Longhorn Publishers Limited recorded a 141% growth in profitability over the twelve month period to 31 March 2019, driven by a strong top line performance, on account of both geographical and product diversification.
REAL ESTATE Our focus in the real estate portfolio is monetisation of our land banks through in fill projects development or sale of development rights. During the year, we closed a number of development rights sales in our land banks at valuation multiples that are several times our book carrying value. In addition, residential projects across our three land banks have recorded strong pre sale performance over the year. We are currently developing 3,000 residential units, of which the first phase of 1,200 units is under construction. Over a ten-month period, we have attained a 51% (606 units) pre sale level on the units under construction, with a sales value of KES 5.2 billion . We also broke ground at our Vipingo Industrial Park, where some of the referenced development rights were sold. The underlying activity and sales in the real estate portfolio saw a growth of KES 3.3 billion in fair value gains across the portfolio.
MARKETABLE SECURITIES The Group held a marketable securities portfolio of KES 3.1 billion as at 31 March 2019 (2018 KES 3.4 billion). During the period, the portfolio recorded a realised cash investment income of KES 400 million. Consistent with the overall performance of markets, particularly the NSE, the portfolio valuation decreased by KES 533 million during the year.
We have commenced implementation of our new 5 year strategy dubbed Centum 4.0 that covers the period April 2019 to March 2024. Under the new strategic plan, our business has been simplified into 3 business units, namely Private Equity, Real Estate and Marketable Securities. Across the three business units, we are targeting to grow our total returns at an annual rate of 20%, with specific targets for cash returns. We believe that the momentum and scale achieved over Centum 3.0 provides us with a strong growth platform for both the Private Equity and Real Estate businesses. Specifically, for Private Equity, Centum will be investing between KES 10 billion and 15 billion over the next 5 years in a fund to be managed by its wholly owned subsidiary, Centum Capital Partners Limited. Within Real Estate, our focus over the next five years will be continued activation of our development sites and land bank monetisation through infill projects and sale of development rights. Our current development pipeline comprises of 3,000 residential units across our existing development sites. A further 2,000 are at the concept stage. In addition to our existing sites, we are actively pursuing opportunities in affordable mid-market housing where we look to develop over 5,000 units over the
next five years. We have received committed funding for this development pipeline. On land development rights sales, some transactions were closed during the year while we have a rich pipeline of sales under negotiation. On 10 June 2019, we entered into agreements to sell our total combined shareholding in Almasi Beverages Limited and Nairobi Bottlers Limited to Coca Cola Beverages Africa Limited at a combined valuation of KES 19.5 billion. This is an event subsequent to the balance sheet date and the realised gains are therefore not reflected in the results for the year ended 31 March 2019. The two investments are carried at KES 16.8 billion on the balance sheet as at 31 March 2019. We expect to complete the transaction in the financial year ending 31 March 2020. The proceeds from these transactions will be applied towards repaying our current US Dollar denominated bank term loans of KES 7.5 billion, which will result in finance cost savings of KES 700 million. The balance of the proceeds will be invested in our Private Equity and Marketable Securities portfolios.
Centum plc enters into agreement to sell their shareholding in Almasi beverages and Nairobi bottlers at KES 19.5 Billion. #CentumFY2019 @MSkiplangat
The markets are presenting us with once in a decade opportunity says @MworiaJ of @CentumPLC at #CentumFY2019 @TwoRivers_KE @CapitalFMKenya @NSE_PLC @MetropolTVKE @SidianBank
asset and NAV growth over the last five years #CentumFY2019 @CentumPLC
We completed the exit of GenAfrica at 30% IRR. #CentumFY2019 @MworiaJ @CentumPLC
Summary of our portfolio class as at end of March 2019 #CentumFY2019
Significant progress. Attended the Investor Briefing and a determination to narrow the NAV versus share price Gap.
6 months through 30th September 2018 versus through 30th September 2017
Sales 4.818287b versus 4.772045b
Direct and Operating Costs [4.428471b] versus [4.233126b]
Trading Profit 389.816m versus 548.919m
Operating Loss from Financial Services [91.833m] versus [111.481m]
Investment and Other Income 4.093440b versus 2.203492b
Operating and Admin Costs [683.689m] versus [524.585m]
Finance Costs [1.230388b] versus [557.253m]
HY PBT 2.392198b versus 1.765589b
HY PAT 2.079909b versus 1.631461b
HY EPS 3.40 versus 2.07
HY Comprehensive Income 1.524082b versus 1.928075b
Centum completed disposal of the companys stake in GenAfrica Asset Managers Limited which saw it book Sh1.2 billion.
The companys Private Equity business reported a 300 percent profit growth to Sh1.5 billion from Sh513 million recorded last year.
In a statement released Sunday, the company said that all of Centums four business units recorded a robust performance in the period.
In the Real Estate Business Unit, revenue potential for pre sales achieved was Sh1.8 billion as at September 30, 2018, with a corresponding profit potential of Sh460 million, the statement read.
The firm is engaged in the Two Rivers Development in Nairobi, Vipingo Development in Kilifi and Pearl Marina Development in Uganda.
The Marketable Securities unit held a portfolio of Sh3.5 billion, which recorded a realised cash investment income of Sh130 million over the past six months. The companys portfolio comprises Sabis International School Runda, two energy projects and an agribusiness.
Total assets increased from Sh66 billion as at March 32, 2018 to Sh67 billion as at September 30, 2018.
The company closed the half year period with a cash balance of Sh1 billion.
The companys debt service capacity remains strong with Debt Service Coverage Ratio (DSCR) consistently above the minimum level set under its various debt covenants, said Centum Group CEO James Mworia in a statement.
This half year profit marks a recovery for the company compared to the losses it suffered in the same period last year when its subsidiary Sidian Bank was hit by interest rate caps.
They are highly accomplished at upsizing and downsizing risk effectively.
1.2b was a one off
Centum Investment Company Limited FY 2017/18 results through 31st March 2018 vs. 31st March 2017
FY Sales 10.171132b vs. 9.401660b +8.184%
FY Direct and other operating costs [9.102223b] vs. [8.204607b] +10.940%
FY Trading profit 1.068909b vs. 1.197053b -10.705%
FY Income from financial services 2.844698b vs. 6.627312b -21.576%
FY Funding and other costs [3.385289b] vs. [3.644573b] -7.114%
FY Operating loss from financial services [540.591m] vs. [17.261m] -3,031.864%
FY Investment and other income 5.712840b vs. 8.379167b -31.821%
FY Operating and administrative costs [2.028205b] vs. [1.121876b] -80.787%
FY Finance costs [1.761201b] vs. [1.048371b] -67.994%
FY Share of associates profits 694.898m vs. 1.346935b -48.409%
FY Profit before tax 3.146650b vs. 8.735647b -63.979%
FY Profit from continuing operations 2.656298b vs. 8.169263b -67.484%
FY Profit from discontinued operation, net of tax 135.600m vs. 141.029m -3.850%
FY Profit for the year 2.791898b vs. 8.310292b -66.404%
Basic EPS 3.96 vs. 10.93 -63.769%
NAV per share 73.16 vs. 67.34 +8.643%
Closing cash and cash equivalents 4.074b vs. 4.657b -12.519%
Dividend 1.20 vs. 1.20
Total Assets 96.288b vs. 88.386b +8.940%
Total Equity 50.897b vs. 49.474b +2.876%
FY Dividend 1.20 unchanged
+9% growth in the book value of shareholder Funds
FY Total Assets 66b +7%
NAV 73.1 versus 67.3 [21% CAGR since 2014]
Group's Fair value Gain on its investment properties decreased by 2.3b year on year.
11.381b of borrowings as at 31-Mar-2018
Consolidated Group Revenue is 13.7 Billion #CentumFY2018 @Centum_Inv
Decline in profitability is attributed to lower realized gains as recognition of GenAfrica disposal gains was deferred to FY 2019 #CentumFY2018
Decline in profitability is attributed to lower realized gains as recognition of GenAfrica disposal gains was deferred to FY 2019. Had the gains been booked, the company would have recorded 42% profit increase. #CentumFY2018
CEO @MworiaJ taking us through Centums Business Review We are currently active in 6 key sectors. #CentumFY2018
Total assets have increased by 2.3x for the period FY14 FY18 #CentumFY2018 @Centum_Inv
They have proven extremely adept at up and down risking their Projects [2 Rivers is an optimal Example where they are in at 0].
They are going to have upload more capital into the financial Services sector. They obviously would have looked a lot sharper had they been able to book their GenAfrica disposal gains in FY 18
There is a monster NAV discount which buyers can lean into.
Centum Investment Company PLC HY 2018 Results through 30th September 2018 vs. 30th September 2017
HY Sales 4.772045b vs. 4.121865b +15.774%
HY Direct and other operating costs [4.223126b] vs. [3.619903b] +16.664%
HY Trading profit 548.919m vs. 501.962m +9.355%
HY Income from financial services 1.585604b vs. 2.422458b -34.546%
HY Funding and other costs [1.697086b] vs. [1.851163b] -8.323%
HY Operating [Loss]/ profit from financial services [111.482b] vs. 571.295m -119.514%
HY Investment and other income 2.231220b vs. 1.932971b +15.430%
HY Operating and administrative costs [524.583m] vs. [250.177m] +109.685%
HY Finance costs [557.253m] vs. [354.536m] +57.178%
HY Share of profits from associates and joint ventures 568.236m vs. 345.651m +64.396%
HY Profit/ [Loss] before tax 2.166518b vs. 2.760161b -21.508%
HY Profit/ [Loss] after tax 1.631416b vs. 2.057886b -20.724%
EPS 2.07 vs. 2.57 -19.455%
Total Assets 91.909b
Total Equity 50.604b
HY Closing cash and cash equivalents 4.921b vs. 5.639b -12.733%
On a Trailing PE of less than 4, this is a cheap share.
FY Trading sales 9.401660b vs. 8.140574b +15.491%
FY Trading business direct and other operating costs [8.204607b] vs. [7.461659b] +9.957%
FY Trading profit 1.197053b vs. 678.915m +76.319%
FY Income from financial services 4.074964b vs. 4.072050b +0.072%
FY Financial services funding and other costs [3.884669b] vs. [3.487560b] +11.386%
FY Operating profit from financial services 190.295m vs. 584.490m -67.443%
FY Investment and other income 7.345806b vs. 6.533056b +12.441%
FY Realised gains on disposal of investments 1.033362b vs. 5.419394b -80.932%
FY Operating and administrative costs [1.121877b] vs. [1.435310b] -21.837%
FY Finance costs [1.048371b] vs. [1.981966b] -47.104%
FY Share of associates profits 1.346935b vs. 1.074114b +25.400%
FY Profit before tax 8.943203b vs. 10.872693b -17.746%
FY Profit after tax 8.310291b vs. 9.947630b -16.460%
Basic EPS 10.93 vs. 11.75 -6.979%
Total Assets 88.385b vs. 78.054b +13.236%
Total Equity 49.473b vs. 43.258b +14.367%
NAV per share 67.34 vs. 59.08 +13.981%
Closing cash and cash equivalents 5.639b vs. 10.197b -44.699%
Dividend 1.20 vs. 1.00 +20.000%
Dividend 1.20 per share
FY Group Portfolio investments 65.464b versus 57.021b
FY Group Total Assets 88.385b versus 78.054b
FY Company NAV 67.34 versus 59.08
Company recorded a 14% growth in the book value of shareholder funds versus a 22% decline in the NSE
Consolidated profit after tax declined by 16% on account of lower gains on disposal compared to the previous period.
Adjusted for the gains on disposal, the group profit after tax increased by 66% year on year
Beverage business +37% in trading profit
Operating Profit of the financial services business dropped by 67% primarily as a result of Sidian Bank's performance. 168m loss over 12 month period ended March 2017
Centum completed an exit of 26.43% stake in Kenya Wine agencies limited KWAL realising a gain of 1.1b
Our focus in the real estate sector is master development.
Strong Earnings cheap share very nimble and risk adjusted up risking and de risking strategy.
Group six month Period ended 30th September 2016
H1 Investment and Other Income 8.490289b versus 8.384441b +1.26%
H1 Operating and admin costs [5.130138b] versus [5.068977b] +1.20%
H1 Finance Costs [945.641m] versus [1.260767b] -24.99%
Share of associate profits 345.651m versus 192.264m
H1 Profit before Tax 2.760161b versus 2.246961b +22.83%
H1 Profit after Tax 2.057886b versus 1.907591b +7.87%
H1 EPS 2.57 versus 2.56
Investment Portfolio 62.802b versus 57.021b
Cash and Cash equivalents 5.384b versus 10.197b
Other Assets 17.697b versus 10.836b +63.31%
H1 Borrowings 19.327b versus 16.356b
Company NAV 61.12 versus 59.08
a challenging macro environment
Co. recorded a 5% growth in the book value of shareholder funds which closed at 40.7b
NAV has increased from 13.8 in 2010 to 61.12 as at 30th September 2016
The Key profitability drivers during the period were
1. Consolidation of longhorn Publishers financial results for the first time
2. improved profitability in the Groups Portfolio Companies
3. Lower finance costs as a result of reduced forex losses on US Dollar denominated borrowings and capitalisation of interest during construction for the Groups real estate projects
In the prior year the Group completed an exit in Aon Insurance Brokers limited and disposed of a portfolio of listed securities resulting in a realised gain of 1.7b. No exit of similar magnitude this reporting period
Bottling subsidiary invested 1.7b in capital expenditure on a new PET Line
During the Period the Company closed an 18 month bridge facility of $30m. with FirstRand Bank Limited
Centum Investment ‏@Centum_Inv Portfolio #CentumHY2017
They did not repeat the one off AON extraordinary gain of 1.7b and therefore this H1 Performance is strong when you account for that fact.
FY Investment and other income 24.165074b vs. 11.826150b +104.336%
FY Operating and administrative costs [11.290209b] vs. [2.458356b] +359.259%
FY PBT 10.872693b vs. 8.817159b +23.313%
FY PAT 9.947630b vs. 7.942432b +25.247%
FY Other comprehensive income, net of tax [2.346996b] vs. 0.821719b -385.620%
EPS 11.75 vs. 10.45 +12.440%
Total Equity 43.258b vs. 38.555b +12.198%
Closing cash cash equivalents 10.197b vs. 9.006b +12.198%
Dividend 1.00 vs.
Zero dividend Policy since 2009. Final Dividend 1.00 a share
Book Value of shareholder funds [NAV] grew +23% to 39.3b
NAV 59.08 a share 31st March 2016
Total group consolidated assets grew by 25% to 51.5b primarily reflecting the increase in value of the investment portfolio. The Company determines the Fair Value of its non subsidiary investments in accordance with international Private Equity and Venture Capital Valuation [IPEV] guidelines, while subsidiaries are held at their Net Asset Values
Listed Equities as a proportion of the marketable securities portfolio 23% as at March 2016 [versus 70% March 2015]
Net Debt 6.559b versus 3.896b
Gearing 16.7% versus 12.2%
Table 3 Third Party Equity Funding
Two Rivers Old Mutual 6.4b
Two Rivers ICDC 0.5b
Two Rivers AVIC 6.5b
Table 4 Value Realisation through Exits
2015 UAP 5.2b
2016 AON 1.0B
@Centum_Inv We have gains of KES 5.4 billion realized on the Exit of AON and disposal of quoted and unquoted investments #CentumFY2016
@Centum_Inv This shows a strong performance on total returns despite the effect of the UAP exit in 2015#CentumFY2016
@Centum_Invs objectives under the Centum 3.0. H/T ‏@CapitalFMKenya
Strong Earnings. Some well timed unloads. Incredible outperformance when compared to the benchmark equity Indices.
The Dividend of a Shilling will be well received.
Investment and other income 8.384b vs. 1.897b +341.96%
Operating and administrative costs [5.068b] vs. [0.677b] +648.60%
Finance costs [1.261b] vs. [0.262b] +281.30%
Profit before tax 2.247b vs. 1.285b +74.86%
Profit after tax 1.907b vs. 1.230b +55.04%
Other comprehensive income [1.115b] vs. 2.061b -154.10%
Total comprehensive income 0.792b vs. 3.291b -75.93%
EPS 2.56 vs. 1.79 +43.01
Total Assets 77.613b vs. 72.340b +7.29%
Closing cash and cash equivalents 6.564b vs. [1.031b] +736.67%
Company Profit before Tax increased +132% attributable to a +100% increase in Total Investment income, from 1.2b to 2.4b.
We significantly reduced our exposure to listed equities with our marketable securities portfolio from 70% to 25%
Increased our allocation of cash and fixed income from 20% to 68% of the Portfolio.
@KevinNganga If you strip out AonMinet self off gain, Centum has dropped in operating income..
Full Year Earnings through 31st March 2015 versus through 31st March 2014
Group Full Year Investment and Other Income 11.826b versus 4.883b +142.418%
Group FY Operating and Admin Costs [2.458b] versus [0.796b] +208.79%
Full Year Finance Costs [998m] versus [469m] +112.79%
Full Year Share of Associate profits 448m versus 393m
Full Year Profit before Tax 8.817b versus 4.011b +119.82%
Full Year Profit after Tax 7.942b versus 3.055b +159.96%
Full Year Earnings Per Share 10.44 versus 4.54 +129.95%
Group Portfolio Value 68.91b versus 27.39b
Total Assets 72.34b versus 29.597b
Full Year Borrowings 9.983b versus 5.492b
Closing Cash and cash equivalents 9.006b versus [0.447b]
Over the last 6 years, cumulative increase in the book value of shareholder funds has been 441%
Power Amu Power
Centum 65% stake in KREP Bank
Two Rivers Development
Pearl Marina Devlopment
vipingo Land 10,500 acres
King Beverage limited [ref Carlsberg]
Startling good Full Year Earnings
Centum reports H1 2014 Earnings versus H1 2013
H1 Dividend Income 489m versus 364m +34%
H1 Interest Income 83m versus 94m [12%]
H1 Fund Management 337M versus 0
H1 Realised Gains 1.017b versus 307m +231%
H1 Unrealised Gains on Bonds [37m] versus 369m
H1 Income 1.897b versus 1.198b +57%
H1 Portfolio Costs [677m] versus [219m] +209%
H1 Finance Costs [262m] versus [298m]
Share of Associate Profit 327m versus 352m
H1 Profit before Tax 1.285b versus 1.033b +24.00%
H1 Profit after Tax 1.230b versus 0.892b +38%
H1 Other Comprehensive Income 2.062b versus 0.576b +258%
42% growth in total assets as at 30 September 2014
@Centum_Inv Graph showing pseudo exponential growth of Market Cap. Where else to take your money?
@Centum_Inv @2riversdevt_ke 2rivers the largest retail mall in Sub Saharan Africa (ex S. Africa) let over 50%
@Centum_Inv The first six months gross return at KES 4.912 B ex real estate (which accounts for a third of portfolio) #centumhalfyear
Investor briefing Half year ended 30 September 2014
Financial Results for the Year ended 31st March 2014
Full Year Investment Income 4.883b versus 3.906b +25.012%
Operating and Admin costs [0.796b] versus [0.520b] +53.076%
FY Finance Costs [0.469b] versus [0.401b]
FY Share of Associate Profits 0.393b versus 0.263b
FY Profit before Tax 4.011b versus 3.248b +23.491%
FY Profit after Tax 3.055b versus 2.509b +21.761%
Other Comprehensive Income 3.576b versus 1.092b
FY Earnings Per Share 4.54 versus 3.77 +20.42%
In the FY 2014 company recorded a 6.8b increase in net worth.
Our Exposure to Private Equity and Real Estate and Infrastructure has increased from 59% to 83% during the strategy period.
5.3b shillings and 19% of Portfolio deployed outside Kenya
Two Rivers project is now substantially funded.
They have largely exited the listed markets.
The Portfolio is gaining Traction.
Its inexpensive on a PE Basis.
H1 2013 Earnings through September 2013
H1 PBT 1.033b versus 836m +23.564%
H1 PAT 892M versus 806m +10.669%
H1 EPS 1.34 versus 1.21 +10.743%
NAV increased +7.00% over this Period
Share Price trading at a 4% Premium to NAV
Referencing 2 Real Estate Projects Two Rivers Retail Mall and Pearl Marina project
Conclusions Looks Fully priced near term at a Premium of 4% to NAV.
FY through March 2013 versus FY through March 2012
FY Investment Income 3.906b versus 1.272b +207.07%
Operating and Administrative Expenses [520m] versus [269m] +93.308%
Finance Costs [401m] versus [229m]
Share of Associate Profits 263m versus 594m
FY PBT 3.248b versus 1.368b +137.42%
FY PAT 2.509b versus 1.189b +110.01%
FY EPS 3.77 versus 1.79 +110.61%
Net Asset Value per share 24.23
Speaking to a Narrowing of the NAV Discount to 9.5% last.
Private Equity 54% of Total Assets
Real Estate accounts for 26% of Total Assets
FY PBT +137.42% and FY EPS +110.61% evidently confirm a Strong FY Earnings Release which was signalled in the H1 Earnings Release.
Centum has downsized its Listed Portfolio to 19% of its Total Portfolio.
Private Equity is 54% and Real Estate now 26%.
Centum has exhibited higher beta but in a Rising EAC Space I expect it to outperform to the Upside.
6 Months Through Sep 2012
Income 749.296m versus 728.352m +2.8755%
Expenses 228.585m versus 199.431m
Finance Costs 102.799m versus 42.485m +141.96%
Share of Profits Associate Companies 316.135m versus 299.001m
H1 Profit Before Tax 805.631m versus 793.177m +1.5701%
Earnings per Share 1.21 versus 1.19 +1.68%
Full Year through March 2012 versus FY through March 2011 Swot Analysis
Investment Income 1.272b versus 2.261b -43.741%
Operations and Admin 269m versus 299m -10.033%
Finance Costs 229m versus 155m +47.7419%
Share of Associate Profits 594m versus 487m +21.971%
Profit Before Tax 1.368b versus 2.294b -40.366%
Profit After Tax 1.189b versus 2.292b -48.123%
Other Comprehensive Income [708m] versus [589m]
Total Comprehensive Income 481m versus 1.703b
Earnings Per Share 1.79 versus 3.44 -47.965%
Net Asset Value 20.57 per share +9.00%
Talking about listing of LongHorn
Talking about UAP Capital Raise
They have restructured the Portfolio substantially over the last 24 Months and deemphasised Exposure to the Listed Market. They will need to source Blocks of Capital in order to unlock their Plan.
Swot Analysis Group 6 months to Sep 2011
PBT 827m versus 837m
PAT 793m versus 846m -6.26%
EPS 1.19 versus 1.40 -15.00%
James Mworia said the company cut its exposure to the Kenyan stock market to 9 percent of its total portfolio from 26 percent during the period, adding that high yields in the fixed-income market had cushioned the earnings.
Centum trades on a Trailing PE of 4.195 but clearly the Implied Forward [extrapolating from H1] is a little bit higher. Centum is a non Dividend paying Scrip but is expected to generate Capital Gains.
Group Results to March 2011 versus FY to March 2010
PBT 2.261b versus 1.038b
PAT 2.292b versus 1.094b
EPS 3.79 versus 1.81
Total Assets increased by 54% to 15b
Real Estate and Infrastructure Business Value Appreciation of 41%
Company NAV 20.75 versus 15.14
Bonus Share 1 for every 10 Held
100 Acre Site Runda 300 Acre Site Entebbe
Extremely strong Results and a Cheap share.