Centum Investment has recorded a profit of KSh556 million for the financial year ended 31 March 2024 compared to a loss of 61 million in the prior year.
- The Board of Directors has proposed a first and final dividend of KSh0.32 per share to be considered by shareholders for approval at the next Annual General Meeting.
- The company links the performance to a dual focus during the year on reallocation of a portion of the marketable securities portfolio to higher yielding opportunities and to repayment of debt.
- Investment income stood at KSh1.15 billion compared to KSh2.13 billion in the prior year.
The drop was on account of asset reallocation whereby interest earning securities in the company’s marketable securities were liquidated to fund Centum’s equity investment in Two Rivers Land Company SEZ Limited as well as to make debt repayments.
Operating and administrative expenses grew by 13 per cent, on account of additional investment resources and reflecting the impact of rising inflation and implementation of Finance Act 2023 provisions in the period.
Finance costs reduced by 36 per cent, reflecting the debt repayments that the company continued to make during the financial year. Borrowings reduced from KSh2.25 billion as at 31 March 2023 to KSh1.95 billion in the period under review.
“The growth in total return was attributed to improved performance and valuations of the portfolio companies. This was reflective of the various value creation initiatives executed over the Centum 4.0 strategy period coming to fruition,” said James Mworia, Managing Director Centum.
Total assets grew by 15 per cent with the growth in portfolio value. Total liabilities increased by 22% on account of deferred tax liability recognized in the period and deferred revenues.
Company Cash Flows
The company generated KSh3.1 billion from operations which comprised dividend and interest income as well as shareholder loan repayments to Centum by portfolio companies.
The net follow-on investments made in the period was KSh2.3 billion while KSh1.1 billion was applied towards principal debt repayment, interest payments as well as dividend payment.
The company’s debt was reduced by 13 per cent to close at KSh1.9 billion. Net debt to equity reduced to 1.3 per cent from 4 per cent as at 31st March 2024.
Post March 2024 year end, Centum has made further debt repayment to the tune of KSh1.18 billion to cut down finance costs given the current high interest rate environment.
Consolidated Performance
The consolidated performance after tax stood at a profit of KSh2.6 billion compared to a loss of KSh7.3 billion in the prior year. This was attributable to the improved profitability recorded from most of the investment segments in the year.
The performance of Two Rivers reflected the interest costs incurred in the two months of the year prior to sale of assets in May 2023 and foreign exchange losses which accounted for 52% of the finance costs.
“As we transition into the new strategy period named Centum 5.0, our focus is on optimization of the value of the current portfolio of investments. We are working towards scaling up the various businesses and monetizing them to realize a minimum of their carrying values,” Mworia said.
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