Centum share dips after profit warning

Centum Investment Group Chief Executive Officer James Mworia

Investment firm Centum’s share price dropped by Sh2.50 Friday after the company issued a profit warning.

The stock sold at an average Sh38 from the Sh40.50 it traded in on Thursday.

Centum, which is majorly owned by businessman Chris Kirubi, said its real estate portfolio dipped this year, blaming it on industry-wide challenges.

“Although our investment properties recorded a gain in value in the year ended March 31, 2018, this gain was lower than that recorded in the year March 31, 2017 which is consistent with the performance of the Kenyan Real Estate market,” said a notice signed by Group Chief Executive James Mworia.

The firm, which grew exponentially after the privatisation of the Industrial and Commercial Development Corporation Ltd, has real estate holding in Two Rivers mall and luxury villas and apartments including Pearl Marina, Vipingo and Athena which make up half of its portfolio.

Centum said its profits will be 25 per cent lower than last year, when it reported Sh8.3 billion in net profits.

The firm’s troubles could be seen in its half-year performance where it booked lower income from its associate companies, and did not close a single asset disposal deal, one of its key earners.

Centum now says it had some deals on the table but they could only be booked next year in “prudent application to accounting rules”.

“The company has not recognised realised gains on disposal of investments for transactions that were signed in the financial year ended March 2018 but which had not been concluded by March 31 2018,” said the statement.

“Those gains will be booked in the current financial year ending March 2019.”

Gained dividends

Over the years, Centum has sold UAP to Old Mutual, gaining Sh5 billion in 2015, and last year it gained Sh1 billion of dividends from Investpool (Platcorp sale), Athena reserves and Almasi scrip.

It also received Sh1 billion in the exit from Kenya Wine Agencies Limited.

The firm then went ahead and bought K-Rep Bank and renamed it Sidian, where it holds a 74.8 per cent stake. The tier-two bank has, however, suffered under the rate cap regime.

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