Centum Investment records Sh3bn profit

Centum Investment has recorded a 22 per cent increase in after tax profit though shareholders will receive no dividend for the sixth straight year.

The firm posted an after tax profit of Sh3 billion for the year ended 31 March 2014 up from Sh2.5 billion reported in the previous year.

The investment company, which is pumping its money in real estate projects in Kenya and Uganda, said it will continue implementing a board decision made during the 2009/2010 financial year to grow its business using internally generated funds.

“In keeping with the company’s five year strategy for the period 2009 to 2014, the board will not pay any dividends,” said company chief executive James Mworia at an investor briefing on Tuesday.

He said during the strategy period, the firm has demonstrated its ability to reinvest retained dividends in growing shareholder wealth.

Its owners have been realising returns through increase in market capitalisation.

“Over the period, Centum shares delivered an aggregate return of 334 per cent to its shareholders,” said Mr Mworia.

The rise in profitability was driven by a 25 per cent increase in investment income to Sh4.9 billion from 2013’s Sh3.9 billion due to fair value appreciation in its investment property and better dividends from portfolio companies.

GAIN IN NET WORTH

Mr Mworia said the company’s net asset value per share has increased by 42 per cent from last year’s Sh24.25 apiece to Sh34.47 per share translating to an overall gain in the net worth of the company by Sh6.8 billion in 2014.

Centum’s flagship real estate project Two Rivers, said Mr Mworia, had received Sh6 billion for a 40 per cent equity stake in the project and is now fully funded.

The investment gives Two Rivers a Sh9 billion pre-money valuation adding to a Sh5.2 billion 10-year long debt facility from Co-operative Bank to finance a shopping mall in the estate.

The firm is also bidding to make a takeover of Rea Vipingo a sisal company with huge tract of land.