Profile

TransCentury Limited is a Kenya-based company engaged in power transport infrastructure and engineering industries across Africa (Kenya, Tanzania, Uganda, Rwanda, South Sudan, South Africa, Mauritius, DR Congo, Zambia and other countries).

The Company operates in three segments: Power, Transport and Engineering.

The Power segment is engaged in manufacturing of aluminum and copper cables and manufacturing of transformers and switchgears.

The Transport segment is engaged in rail infrastructure and support services.

The Engineering segment includes civil, mechanical engineering, cranage and erection and logistics services.

This segment also includes installation of weigh bridges, generators, bearings and sub stations.

The Company’s major subsidiaries include:

• •Cable Holdings (Kenya) Limited (This is the holding company for TranCentury’s 68.37% in East Africa Cables Limited Group which is listed on the Nairobi Securities Exchange)
• •Avery Kenya Limited (AEA Limited)
• •Tanelec Limited
• •TransCentury Holdings Pty Limited (Holding company for Kewberg Cables & Braids Proprietary Limited based in South Africa)
• •Crystal Limited
• •TransCentury Mauritius Holdings Limited

Management

The CEO of Transcentury Dr Gachao Kiuna on Thursday 15th January resigned from the company for undisclosed reasons and was later followed by the resignation of Mr Joe Karago, a non-executive director.

The firm has appointed Mr Ng’ang’a Njiinu, currently the company’s head of corporate finance, as the acting chief executive.

The exit of the two comes at a time when its facing a debt repayment of Sh8.1 billion due on March 25, 2016.

Related Post;Safaricom 2016 Analysis,Top shareholders,Financials etc

Financials

Latest (Half Year Results 2015)

For the six months ended 30 June 2015, Trans Century Ltd revenues increased 5% to KES5.21B. The company attributes this growth due to ongoing executions of major construction projects in the Engineering Division which began in Q1 2015.

Net loss decreased 63% to KES (606.7)Mn. This reflects an improvement in operations though they are still in the loss making side.

Lower net loss reflects Other Operating Expenses decrease of 19% to KES4.96B (expense).

Basic Earnings per Share excluding Extraordinary Items increased from KES – 5.92 to KES – 2.21.

Five Year Financial Summary

The significant loss made in 2014 was due to the sale of their stake in Rift Valley Railways (RVR). The group through its wholly owned subsidiary, Safari Rail Company Limited, disposed its entire 34% shareholding in KU Railways Holdings Limited on 31^st March 2014 by exercising a PUT option as this investment failed to meet return targets.

Summary of the Top 10 Shareholders

1. •STANDARD CHARTERED NOMINEES AC KE 15615 – 11.5%
2. •ANNE PEARL KARIMI GACHUI – 7.58%
3. •MICHAEL GITAU WAWERU – 7.57%
4. •PETER TIRAS KANYAGO – 5.59%
5. •EPHRAIM KARIITHI NJOGU – 4.47%
6. •GITAU ZEPHANIA MBUGUA – 4.28%
7. •GATH PROPERTIES LIMITED – 3.90%
8. •STANDARD CHARTERED NOMINEE AC KE 12424 – 3.90
9. •ROBIN MUNYUA KIMOTHO – 3.87%
10. •STEPHEN NJOROGE WARUHIU – 3.52%

The only notable top institutional holder is Duet Asset Management. Norges Bank Investment Management had stakes but fully liquidated their holdings as illustrated below.

Share Price

Total Shares in Issue: 280,284,476

Free Float: 97%

Current Share Price (15^th January 2016): KES 9.00 compared to its listing price of KES 50 per share.

We maxed out TransCentury’s share price chart and we got some really depressing findings. Over the entire life of the company, the share price has been continuously falling down. If you invested in July 14, 2011 at a price of KES 57 and sold on January 15, 2016 at a price of KES 9.00 you would have been a whopping – 84.21% “out of the money.” The only clear way investors could have made money was selling the stock short (short selling is not on the NSE) or just forgoing the investment decision and holding on to your precious cash.

Conclusion

TransCentury has been struggling in terms of management effectiveness, its 5 year average on return on assets is a mere 0.2961. Interest coverage (Trailing Twelve Months) is 0.3388 this means that its ability to meet interest expenses are questionable.

TransCentury’s story as we see it is a matter of management in terms of expenses, if expenses are able to be contained and maintained at the lowest possible level it may turnaround to profitability.

In regard to their wide geographical reach it could try implementing the use of currency hedging instruments in order to avoid losses as a result of currency devaluations which ultimately become a burden on its finance costs.

Your Thoughts?

Sources: (Financial Times, Company Annual Reports/Filings)

Profile

TransCentury Limited is a Kenya-based company engaged in power transport infrastructure and engineering industries across Africa (Kenya, Tanzania, Uganda, Rwanda, South Sudan, South Africa, Mauritius, DR Congo, Zambia and other countries).

The Company operates in three segments: Power, Transport and Engineering.

The Power segment is engaged in manufacturing of aluminum and copper cables and manufacturing of transformers and switchgears.

The Transport segment is engaged in rail infrastructure and support services.

The Engineering segment includes civil, mechanical engineering, cranage and erection and logistics services.

This segment also includes installation of weigh bridges, generators, bearings and sub stations.

The Company’s major subsidiaries include:

• •Cable Holdings (Kenya) Limited (This is the holding company for TranCentury’s 68.37% in East Africa Cables Limited Group which is listed on the Nairobi Securities Exchange)
• •Avery Kenya Limited (AEA Limited)
• •Tanelec Limited
• •TransCentury Holdings Pty Limited (Holding company for Kewberg Cables & Braids Proprietary Limited based in South Africa)
• •Crystal Limited
• •TransCentury Mauritius Holdings Limited

Management

The CEO of Transcentury Dr Gachao Kiuna on Thursday 15th January resigned from the company for undisclosed reasons and was later followed by the resignation of Mr Joe Karago, a non-executive director.

The firm has appointed Mr Ng’ang’a Njiinu, currently the company’s head of corporate finance, as the acting chief executive.

The exit of the two comes at a time when its facing a debt repayment of Sh8.1 billion due on March 25, 2016.

Related Post;Safaricom 2016 Analysis,Top shareholders,Financials etc

Financials

Latest (Half Year Results 2015)

For the six months ended 30 June 2015, Trans Century Ltd revenues increased 5% to KES5.21B. The company attributes this growth due to ongoing executions of major construction projects in the Engineering Division which began in Q1 2015.

Net loss decreased 63% to KES (606.7)Mn. This reflects an improvement in operations though they are still in the loss making side.

Lower net loss reflects Other Operating Expenses decrease of 19% to KES4.96B (expense).

Basic Earnings per Share excluding Extraordinary Items increased from KES – 5.92 to KES – 2.21.

Five Year Financial Summary

The significant loss made in 2014 was due to the sale of their stake in Rift Valley Railways (RVR). The group through its wholly owned subsidiary, Safari Rail Company Limited, disposed its entire 34% shareholding in KU Railways Holdings Limited on 31^st March 2014 by exercising a PUT option as this investment failed to meet return targets.

Summary of the Top 10 Shareholders

1. •STANDARD CHARTERED NOMINEES AC KE 15615 – 11.5%
2. •ANNE PEARL KARIMI GACHUI – 7.58%
3. •MICHAEL GITAU WAWERU – 7.57%
4. •PETER TIRAS KANYAGO – 5.59%
5. •EPHRAIM KARIITHI NJOGU – 4.47%
6. •GITAU ZEPHANIA MBUGUA – 4.28%
7. •GATH PROPERTIES LIMITED – 3.90%
8. •STANDARD CHARTERED NOMINEE AC KE 12424 – 3.90
9. •ROBIN MUNYUA KIMOTHO – 3.87%
10. •STEPHEN NJOROGE WARUHIU – 3.52%

The only notable top institutional holder is Duet Asset Management. Norges Bank Investment Management had stakes but fully liquidated their holdings as illustrated below.

Share Price

Total Shares in Issue: 280,284,476

Free Float: 97%

Current Share Price (15^th January 2016): KES 9.00 compared to its listing price of KES 50 per share.

We maxed out TransCentury’s share price chart and we got some really depressing findings. Over the entire life of the company, the share price has been continuously falling down. If you invested in July 14, 2011 at a price of KES 57 and sold on January 15, 2016 at a price of KES 9.00 you would have been a whopping – 84.21% “out of the money.” The only clear way investors could have made money was selling the stock short (short selling is not on the NSE) or just forgoing the investment decision and holding on to your precious cash.

Conclusion

TransCentury has been struggling in terms of management effectiveness, its 5 year average on return on assets is a mere 0.2961. Interest coverage (Trailing Twelve Months) is 0.3388 this means that its ability to meet interest expenses are questionable.

TransCentury’s story as we see it is a matter of management in terms of expenses, if expenses are able to be contained and maintained at the lowest possible level it may turnaround to profitability.

In regard to their wide geographical reach it could try implementing the use of currency hedging instruments in order to avoid losses as a result of currency devaluations which ultimately become a burden on its finance costs.

Your Thoughts?

Sources: (Financial Times, Company Annual Reports/Filings)