Investment firm Centum Group has recorded Sh7.4 billion after-tax profit for the year ended March 2020 - representing a 79 per cent jump earrings.
This sets the stage for a dividend payout to shareholders of Sh798 million.
The group’s total income rose 33.7 per cent to Sh15.8 billion - the first of a five-year ‘Centum 4.0’ strategy in which the company is focused on building a strong, debt-free balance sheet, enhancement of liquidity and cash generation by the portfolio companies.
James Mworia, the Centum Group chief executive, said the improved financial performance set a solid base for the remaining years in the strategy.
Sale of stake
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- 4 Sale of stake lifts Centum earnings
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Last October, Centum earned Sh12.6 billion from the sale of its stake in Almasi Beverages Ltd, Nairobi Bottlers Ltd and King Beverage Ltd, boosting its liquidity position.
Last week, the company announced the repayment of all its medium and long-term debt within 14 months of commencement of the new strategy.
It repaid Sh6.6 billion on its five-year corporate public bond. In September 2019, the company paid off $75 million (Sh7.8 billion) of a US dollar-denominated debt.
“This deleveraging will save Sh1.8 billion in annual finance costs, which will further enhance the company’s future performance and dividend payout,” Mworia said yesterday while releasing the results.
Centum’s four main business units that include private equity, real estate, marketable securities and development, all recorded robust performance in the year.
As part of its strategy to boost its liquidity position, the group held Sh9 billion in marketable securities and cash deposits as of March 31, 2020, which was about Sh6.7 billion higher than the previous year.
“The enhanced liquidity further provides us with a platform to take advantage of available opportunities in the private equity and in public markets under the current market conditions,” Mworia said.
The chief executive said the group was now pursuing a sales-led development model and is currently constructing 1,442 residential units across its three mixed-use developments.
He stated that of the 1,442 units under construction, 999 units with a revenue potential of Sh7.8 billion, had been sold as at March 31, 2020 - representing a pre-sale level of 70 per cent.
The Centum Group boss acknowledged the tough reality of the global Covid-19 pandemic but said it was an opportunity for investments at “reasonably priced valuations” as economies recover.