Centum 1H16 Earnings Analysis

NSE Listed Firm,Centum Investment announced results for the 6 months ending September 2015, recording 55.0%, Earnings Per Share growth to KES 2.87 .The company’s Net Asset Value (NAV) recorded 2.5%  growth to KES 59.39.

The Key Highlights from Centum’s Results;

Interest income noted impressive growth, growing to KES 1.4 Billion in 1H16, following the consolidation of K-REP Bank: Centum Investment acquired 65% of K-REP Bank, a tier IV commercial bank in 2H15 at a consideration of KES 2.3Billion.

Centum’s FMCG segment which includes Almasi Beverages Ltd recorded a very handsome return of KES 3.8 Billion:Centum has 50.95% ownership in Almasi, as well as stakes in KWAL and Carlsberg.
Finance costs increased 3.8% to Ksh 1.3 Billion as a result of consolidation of Almasi Breweries and K-REP Bank, additional debt raising and rise in interest rates whereby Centum raised Ksh 6.1 Billion via debt market.
Ongoing projects remain on track: Amu Power project remains on track, with land and debt capital secured while equity capital raising is on course. Construction is expected to commence in December 2015. The first well of the Akiira geothermal power project has been drilled and tests are underway, while plans to drill the second well are on schedule.
Pipeline projects include ventures in the education, agriculture, healthcare and ICT spaces:Centum is set to launch flagship projects in agribusiness, education through a signed partnership with SABIS Schools and Investbridge and prospective partnerships in the healthcare space.

Wall street Recommendation

Centum is currently trading below book value (P/B multiple of 0.7x) and therefore its a Buy recommendation.

Happy Investing….