Kirubi to bag Sh200m Centum dividend cheque on lion’s stake

Billionaire businessman Chris Kirubi is set to receive a Sh200 million cheque from Centum, the investment company in which he is the single-biggest shareholder.

Centum Investments on Wednesday announced that it would make a total dividend payout of Sh665 million to its shareholders, indicating that Mr Kirubi will receive about Sh196 million based on his 29.9 per cent stake in the company.

Mr Kirubi’s investment portfolio at the Nairobi Securities Exchange (NSE) alone is estimated at about Sh10 billion.

The company announced Sh1 per share dividend payout marking an end to the zero-dividend policy that had been in force since 2009, during which it preferred to conserve cash for re-investments. It last paid its shareholders a 45 cents dividend in March 2008.   

Its after-tax profit increased by 25 per cent to Sh9.9 billion in the year to March 2015.

Mr Kirubi, a flamboyant entrepreneur, hit his target of raising his shareholding in Centum to 29.9 per cent last year after acquiring an additional 4.9 per cent stake in two years.

His share stood at 24.99 per cent in September 2013 when he applied to the Capital Markets Authority (CMA) for an exemption from complying with the requirements to make a takeover.

As at August last year, regulatory filings showed that the businessman held a 28.19 per cent stake directly and the balance through investment vehicles including International House Limited.

The share purchase cemented his position as the single largest shareholder of the firm. On Wednesday, Mr Kirubi, said he had been patient just as other shareholders during the eight-year freeze in dividends payout.

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

Centum CEO James Mworia said the change in the policy came as a follow up to a promise the board had made in 2014 to review the no-dividend policy since the company can now finance its growth.

“In 2009 when we adopted this policy we had a balance sheet of Sh6 billion of which cash was only Sh10 million and an overdraft of Sh175 million. That is what we started working off with to what we are today. And so we have now reviewed the issue around dividend and eight years later, we now believe we are in a position to pay a good dividend to our shareholders,” Mr Mworia said during the release of the firm’s results.

The chief executive ranked Sh665 million payout as among the top 15 issued by NSE- listed firms.

Mr Kirubi has in recent years liquidated his interests in other publicly traded companies including KCB and Safaricom, concentrating his stock investments in Centum.

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 investments over the years have seen its asset classes multiply, while its stock value has risen nearly seven times. The state-owned Industrial & Commercial Development Corporation (ICDC) holds the second-largest stake in Centum at 22.97 per cent.

Last year Centum’s CEO emerged with a 0.61 per cent stake in the company after buying four million shares worth Sh212 million.

The performance was largely due a rise in investment income and gains realised from exits in its portfolio like AON and disposal of UAP to Old Mutual. The firm had gross proceeds of Sh6.2bn from exits thereby boosting its liquidity position.

The company is moving towards an investment holding company model where focus will mainly be on developing assets rather than portfolio investing.

Within the year, Centum projects attracted Sh13.9 billion in foreign direct investments (FDI) in 2015, an estimated nine per cent of Kenya’s FDI.