Centum Investment profit up 23pc, eyes opening of new mall

Nairobi, Kenya: Centum Investments Group posted a 23 per cent growth in pre-tax profit for the year ended March 31.

The Nairobi Securities Exchange (NSE) listed firm’s earnings soared to Sh4.01 billion from the previous year’s Sh3.24 billion.

The management attributed the improvement to performance of associate companies and better valuation of its investment basket.

However, the firm, which has invested mainly in private equity (49 per cent), Real estate and infrastructure (34 per cent) and quoted private equity (17 per cent) will not pay dividends to shareholders.

Chief Executive Officer James Mworia said the firm seeks to maintain its zero-dividend policy in an attempt to fund its ambitious growth and expansion plan from internally generated funds.

“We are a channel providing investors with access to a portfolio of otherwise inaccessible, quality, diversified investments,” Mworia told participants at an investor briefing in Nairobi yesterday.

 According to the firm’s audited financial statements, interest income dropped two per cent to Sh218 million from Sh223 million while realised gains fell 39 per cent to Sh993 million from Sh1.64 billion in a similar period in the previous year.

Unrealised gains, however, grew 77 per cent to Sh2.93 billion from the previous year’s Sh1.65 billion while share of associate profit went up 49 per cent to Sh393 million from Sh263 million. Total comprehensive income surged 84 per cent to Sh6.63 billion from Sh3.6 billion. Finance costs increased 17 per cent to Sh469 million from Sh401 million.

Investment income increased 25 per cent to Sh4.9 billion from Sh3.9 billion mainly due to fair value increase in the firm’s investment in property, improved dividends from portfolio companies and income from its fund management businesses.

Amongst the firm’s key subsidiaries include Athena Properties, a real estate project management service company and Centum Asset Managers. In addition, the firm is also in the tail end of introducing an Africa-focused Collective Investment Scheme. Centum’s flagship real estate project dubbed ‘Two Rivers Mall’ is currently under construction with the possibility of opening doors to the public in October 2015.

The Mall’s anchor tenant is set to be Carrefour, the fourth largest retail group in the world.

Fund manager

 In December 2013, Centum completed the acquisition of 73.35 per cent of Genesis Kenya Investment Management, the second largest fund manager in Kenya with over Sh110 billion of pension funds under its management.

 The acquisition enabled the group to grow its total assets under management to Sh147 billion by the end of the financial year.

Centum which is also cross-listed on the Uganda Securities Exchange (USE) has developed a pipeline of private equity opportunities across the region with hopes of significant investment prospects.

About 75 per cent of the private equity portfolio is allocated to beverages and financial services.

In Private Equity (PE) Centum focuses on acquisition of controlling and significant minority equity positions in unlisted companies that largely serve the needs of the domestic and other African markets.

Amongst the firm’s private equity investments include Coca Cola, Kenya Wine Agencies Ltd (KWAL), UAP, AON, Platinum Credit Ltd, K-Rep Bank, General Motors (GM), Longhorn Publishers and Nas Servair.

Quoted Equity business leverages on Private Equity expertise to invest in listed securities in Security Exchanges across Africa.

Equities and bonds constitute 74 per cent and 26 per cent of Centum’s quoted private equity investment portfolio respectively.

About 63 per cent of the quoted private equity investment is outside Kenya. Centum is also in the race towards the acquisition of the agricultural firm REA Vipingo Plantations Ltd (RVPL) whose planned takeover has attracted legal battles among some bidders and the regulator Capital Markets Authority.