Centum net profit jumps 160pc to Sh7.9b

Listed investment firm Centum Investment has nearly doubled its profit after tax for the period ending March 31, citing a sharp rise in its investment income.

The company, which invests in listed and private firms said its net profit grew to Sh7.9 billion compared to Sh3 billion reported in the year ending March 2014.

Speaking at the company’s annual investor briefing held in Nairobi yesterday, Centum CEO James Mworia said the company’s jump by 160 per cent in profit after tax was largely due to an increase in investment income. The company’s overall income grew by 140 per cent from Sh4.8 billion reported in 2014 to Sh11.8 billion in 2015, attributed to the disposal of stakes in Longhorn Publishers and UAP Holdings.

“We made a decision in 2009 not to pay dividends because it made more sense to re-invest our earnings in our business and today this decision continues to bear fruit because a shilling invested in Centum six years ago is Sh7 today,” said Mr Mworia. Centum has in the recent past diversified its portfolio into other key sectors like real estate, beverages and is set to make foray into the healthcare and education sectors.

Last year, the company invested in King Beverage Ltd, which had obtained the exclusive distributorship licence for Danish beer Carlsberg. Centum soon followed this deal with acquiring a 50.95 per cent controlling stake in carbonated soft drinks maker Almasi, pushing the company’s stake in the fast moving consumer goods segment to Sh9.1 billion, 22 per cent of the company’s portfolio.

Two rivers and Pearl Marina, the company’s flagship real estate development projects, account for another Sh9.1 billion taking up 22 per cent of the company’s sh41 billion war chest. Two Rivers consists of 100 acres of mixed-use development composed of the largest shopping mall in East and Central Africa consisting of 220 shops, a 3 star hotel, City Lodge Hotel, and 100 luxury apartments.

Already 60 per cent of the development has been let with more than half of the shops that have confirmed tenancy in the mall being snapped up by international retailers even as Mr Mworia said the development is more than just a mall.

Legal costs

“The development of Two Rivers is on schedule and we expect to open it in October this year and we are looking to see this become a commercial and residential node in the city like Upper Hill or Westlands,” stated Mr Mworia.

Centum last year made headlines by clinching the lucrative Sh180 billion tender to develop the Lamu Coal Power Plant under the new public private partnership framework.

The award of the tender was, however, disputed when Chinese firm, Hebei Construction Investment Group (HCIG) and Liketh Investments, a Kenya-based investment company, moved to court to block the power generation project.

“The legal dispute to the Amu Power project has since been settled out of court and we can now move forward with the development,” explained Mr Mworia.

“The main issues were around the legal costs whereby the people who went to court were supposed to pay for our legal costs as well as theirs but both sides have since come to an agreement for each foot their own costs.”