Centum ends eight-year dividend drought as net profit hits Sh9.9bn


From left: Deacons Kenya chief executive Muchiri Wahome, Centum CEO James Mworia and finance director Samuel Kariuki on the sidelines of Centum’s investor briefing on June 8, 2016. PHOTO | DIANA NGILA

Centum Investments has ended a near decade-long dividend drought for its shareholders with the planned payout of Sh1 per share after announcing a double-digit growth in after-tax profit to Sh9.9 billion.

This represents a Sh665 million total payout for the Nairobi Securities Exchange (NSE) listed investment firm. 

Centum Group chief executive officer James Mworia on day said that the end of the zero-dividend policy is informed by the strong growth momentum of the company’s various subsidiaries which has also boosted its cash balance.

“The company had a strong performance during the year and closed in a good liquidity position. We have chosen to recommend the dividend payout as delivering value to our shareholders is our primary focus and the company has sufficient liquidity to fund its deal pipeline,” said Centum Group chief executive officer James Mworia.

Centum has had a no-dividends policy since 2009. The dividend drought was meant to avail the company cash to make acquisitions.

The investments over the years have seen its asset classes multiply, while its stock value has multiplied nearly seven times.

It last paid its shareholders a 45 cents dividend in March 2008.

Mr Mworia said the Board is confident that it has sufficient funding for its planned projects as well as for distribution to shareholders.

“The company has over the years consistently delivered the return that now allows it to have a consistent dividend policy,” Mr Mworia said.

He added that the firm anticipates a sustained dividend payment going forward. Centum’s net profit increased 25 per cent to Sh9.9 billion from Sh7.9 billion earned in 2014.

READ: Centum net profit jumps 25pc to Sh10bn

Mr Mworia attributed the performance to the investment firm’s gains on disposals of investments, increase in value of property held, higher dividends from portfolio companies and higher income from subsidiaries.

“The increase in the group’s profitability speaks to the profitability of the underlying assets which represent our investments,” Mr Mworia told investors at the release of the company’s results at its upcoming Two Rivers project in Nairobi tipped to be one of the largest shopping malls on the continent.

Centum has a diversified portfolio of assets in seven sectors including financial services, real-estate and property development, fast moving consumer goods, ICT, power generation, healthcare, education and agribusiness.

The company recorded a 106 per cent growth in consolidated revenues for the full year ended March 2016 of Sh24.2 billion compared to Sh11.8 billion recorded the previous period.

Mr Mworia said the company’s planned shift from a portfolio investor to being an institutional developer of assets under its “Centum 3.0” strategy now in its third year of implementation had shown significant signs of paying off.

“The company’s focus is to preserve and grow the value of shareholder wealth through different market cycles as measured by Net Asset Value per share.  The Net Asset Value per share has risen by over 560 per cent over the past 8 years, from Sh8.86 to Sh59.08, this growth represents a 31 per cent Compounded Annual Growth rate,” said Mr Mworia.

Mr Mworia said the firm’s various capital-intensive real estate projects in Kenya and Uganda and also in the power sector are on course. Centum’s total assets as at March this year stand at Sh51.5 billion.