Centum Profit after tax increases by 55%
AA – Centum Investment Company Limited has released its half year financial performance for the 6 month period ended 30 September 2015.
The performance in the first 6 months of the financial year was against a turbulent investment environment characterized by a depressed stock market, rising interest rates and a general decline in economic growth. This notwithstanding, the company recorded good performance with the book value of shareholder funds (Net Asset Value) growing by 9% to close at KES 34.7 Billion. This was against a backdrop of a 20% decline in the NSE 20 index in the same period.
Speaking at the investor briefing held on 11th of November 2015 at the Sarova Stanley hotel, Mworia noted that the company’s focus is to preserve and grow the value of shareholders’ wealth through different market cycles, as measured by Net Asset Value per share. The Net Asset Value per share increased from KES 8.86 in 2009 to KES 52.10 in September 2015, an increase of 488% which represents a compounded growth rate of 31% per annum. He also noted that the market value of shareholders wealth grew by KES 28.8 Billion since 2009. In other words, every shilling invested in Centum in 2009 was worth KES. 5.18 as at 30 September 2015.
Company Profit before Tax grew by 132% from KES 587 Million in HY 2015 to KES 1.4 Billion, attributable to a 100% increase in total investment income, from KES 1.2 Billion to KES 2.4 Billion. Total Company Assets increased by KES 5.0 Billion from KES 41.3 Billion to KES 46.1 Billion driven by increased investment in subsidiaries as well as growth in the value of the portfolio. Total liabilities in the company balance sheet increased by KES 3.0 Billion on account of the successful KES 6 Billion bond issue.
Consolidated Profit before Tax grew by 75% to KES 2.2 Billion from KES 1.3 Billion in the prior period. Total Group assets increased from KES 72.3 Billion to KES 78.7 mainly driven by a 23% increase in Investment property.
‘Centum had adopted a proactive response to safeguard shareholder wealth and thus preserve capital in the current operating environment’, stated Mr. Mworia. Centum’s proactive response to this changing investment environment required a shift from listed equities to high yielding cash assets. This enabled the Company to take advantage of the high interest rate environment and minimize the impact of the depressed stock markets across sub-Saharan Africa.
April 2015 marked the beginning of the second year of Centum’s 2014-2019 strategy dubbed Centum 3.0. The focus in this period is on development of investment grade opportunities of scale across 8 key sectors of investment namely: Financial services, Real estate, Fast Moving Consumer Goods, Power, Agribusiness, Healthcare, Education, and ICT. In this half year, the highly reputable firm has made significant strides toward the achievement of this vision. The group is currently active in four key sectors namely Real Estate, FMCG, Financial Services and Power. Focus for the next half is on Agri-Business and Education.
In June 2015, Centum successfully raised KES. 6 Billion through issuance of fixed rate and equity linked notes at a pricing of 13% and 12.75% respectively. Availability of funding at fixed and competitive rates means that the company is not exposed to the current volatility in the market.
In June 2015, the Group’s associate company General Motors East Africa expanded its market share to a new high of 31% in the first nine months of the year as a result of increased sales and market share losses by some of its top competitors including Toyota Kenya. The firm which operates in the automobile industry, is continuously benefiting from valuable projects like the Standard Gauge Railway and purchases of commercial vehicles by small businesses.
In July 2015, Centum, together with a consortium comprising Dubai-based PE firm Investbridge and global education network Sabis, entered into a partnership agreement to launch 20 schools across Africa. The project is intent on applying Sabis’s innovative proprietary curriculum, cutting edge IT tools and a non-selective admissions policy to raise education standards in Africa over the next three to five years. The first school shall be built in Nairobi, Kenya.
Last month Centum invested an additional KES 1.2 Billion in its subsidiary K-Rep Bank Limited to contribute towards recapitalizing the bank and improving its operations. Centum CEO Mr. James Mworia expressed the bank’s ambition over the next five years to achieve the status of a Tier II bank through its repositioning strategy that will create a robust banking experience and provide innovative financial services to its clients.
In October this year, it was reported that Centum is in the process of developing a masterplan for its newly acquired approximately 11,794 acres in Rea Vipingo Plantations Limited (RVP). The project, which joins the firm’s portfolio projects in the Real Estate sector, is in line with its vision to develop sought-after urban nodes with high quality infrastructure. This is reflected in the ongoing construction of the 100 acre Two Rivers Development whose mall has already let out 86% of total lettable area with plans on the construction of the luxury apartments underway. In Uganda, the company’s 385 acre Pearl Marina Development on the shores of Lake Victoria is wrapping up construction of its show houses in Phase 1A of a 4 phase plan.
The company’s continues to receive accolades both locally and internationally, a testament of delivery to promise. Centum was crowned as the Capital Finance International’s Best Private Equity Team East Africa 2015, the Acquisition International 2015 Mergers & Acquisition Awards’ Most Trusted Financial Management Firm of the Year- Kenya. In addition, CEO Mr. James Mworia also took home The Finance Monthly’s CEO award for 2015 and the All African Business Leaders Awards (AABLA)’s East Africa Business Person of the Year Award for the year 2015. These institutions aggregately celebrate sound investment strategy and implementation, skill and outstanding results from teams as well as business leaders’ effort to guide strategy implementation in their firms.
Click below to read Aspire Africa’s Feature on Centum Investment.
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