Listed investment company, Centum, will continue with its non-cash dividend policy as it enters into a new five-year growth plan that will see its shareholders go for a decade without getting any payout.
The company, which Tuesday announced a 22 per cent increase in after-tax profit for the full-year ended March, intends to use retained earnings and debt to drive growth.
The company reported profit of Sh3.05 billion up from Sh2.5 billion a year earlier, attributed to growth in investment income.
“We will continue pursuing the zero dividend policy. We now have a greater scale to grow faster and take opportunities which will create a more value to our shareholders,” said the Centum chief executive James Mworia.
The company’s stock traded at Sh39.25 per share down from Sh40.25 per share in Monday’s trading at the Nairobi Securities Exchange. The share has gained 17.5 per cent in the past six months.
Centum’s total assets currently stand at Sh29.4 billion, up from Sh18.9 billion last year and Sh6 billion in 2009 when it started the zero dividend policy.
The portfolio growth was buoyed by a doubling of Centum’s real estate investments to Sh10.8 billion. The company has two major real estate projects underway— two rivers in Runda and Pearl Marina in Uganda.
Mr Mworia said the company will be concentrating on eight sectors of the economy in the next five years unlike in the last five when it looked at general diversification from listed shares.
The largest portion of Centum’s assets are currently held in private companies, being 48 per cent of its portfolio, real estate is at 37 per cent while quoted equities are 17 per cent.
Of the investment in equities, only eight per cent is in shares listed at the Nairobi Securities Exchange.
The diversification helped the company to record a 25 per cent growth in investment income to Sh4.9 billion.
In the next five years the company aims to focus on the education, health, energy, agriculture, real estate, financial services, fast moving consumer goods, and ICT sectors.
Currently, Centum has shareholding in UAP Insurance, K-Rep, Platinum Credit, NAS Servair, General Motors, AON, Helios and Coca Cola. Kenya Wine Agencies, which is 20 per cent owned by Centum, is being privatised by the government which is the majority owner.
Centum recorded profits of Sh393 million from its associate companies compared to Sh263 million in the previous year, indicating improved performance of the private companies.
It hopes to grow its assets by 35 per cent annually in the next five years leading to a portfolio of Sh120 billion by 2019. The company, chaired by billionaire businessman Chris Kirubi, has made a Sh4.5 billion bid for listed agricultural firm Rea Vipingo, underscoring its intention to delve into agriculture.
Centum also plans to increase the volume of assets belonging to third parties managed by its asset managers to over Sh600 billion in the same period.
Its asset management arm, licensed early last year by the Capital Markets Authority, has Sh1.2 billion under it. In December, Centum bought 73 per cent of pension fund manager, Genesis Kenya, which has Sh116 billion assets under management.