Centum Investments is back to profitability with a Sh2.5 billion after-tax profit for the year ended March 2024, driven by improved performance and profitability of investee companies.
This marks a turnaround from the Sh7.3 billion net loss reported in the financial year ended March 2023.
In the review period the group’s investment portfolio increased by Sh6.1 billion to Sh66.5 billion, in what the firm attributed to its business model focusing on identifying compelling investment opportunities.
Chief executive James Mworia said the performance signals a strong start to the group's 5.0 growth strategy that focuses on value optimisation in the next five years.
“The operating environment has been volatile, and while this could persist in the short term we believe that there exist pockets of opportunities that can be maximised through an active investment strategy to optimise and monetise the portfolio value,” said Mworia.
The portion of a company's net income that will not be distributed to shareholders as dividends but is instead reinvested back into the business (retained earnings) grew by Sh2.6 billion to reach Sh39 billion.
The company says this will put it in a strong financial position for future investment opportunities.
Centum Real Estate was one of the most profitable divisions this year, with Sh3.7 billion in sales, a Sh3.6 billion increase in property value, and a Sh2.5 billion net profit.
In line with Centum’s policy of paying out dividends equivalent to 30 percent of total annuity income in any financial year, the company has proposed to pay out Sh210 million (SH0.32 per share) dividend, out of the Sh692 million the business generated from its portfolio investments.
The declared dividend for the year is a drop from the Sh0.60 that investors pocketed in 2023.
In the review period the NSE listed firm executed a buyback of 9.7 million shares, accounting for 24 per cent of the traded volume as of July 26, 2024.
In the groups consolidated financials, Centum's investment income grew by 157.6 per cent to Sh607.4 million. However, for the company-specific financials, investment income fell by 46 per cent to Sh1.152 billion.
The groups operating expenses increased by 16.9 percent, reaching Sh556.9 million. The operating loss significantly reduced to Sh352.9 million from Sh1.4 billion in 2023.
“As we transition into the new strategy period named Centum 5.0, our focus is on optimisation of the value of the current portfolio of investments. We are working towards scaling up the various businesses and monetising them to realise a minimum of their carrying values,” said Mworia.
The Group CEO added that proceeds generated would be applied to enhance the pool of marketable securities to significantly boost annuity income generated.
“We believe that these actions will progressively enhance shareholder value both in terms of enhanced future dividend distributions and increased market value of the business.”
For the company-specific financials, operating expenses rose by 13.3 per cent to Sh579.7 million.
However, the operating profit increased by 34 percent, amounting to Sh277.6 million.
The net profit soared to Sh5.5 billion, marking a significant turnaround from a net loss of Sh 4.9 billion in 2023.
