Billionaire investor John Kibunga Kimani has increased his stake in Centum Investment Company Plc to 11.06 percent, expanding his ownership in the firm that remains undervalued in the market.
Regulatory filings show that Dr Kimani in August this year raised his holdings in the investment firm to 73.6 million shares, valued at Sh1.06 billion at Monday's closing price of Sh14.45 per share.
He increased his stake from 6.87 percent, 45.6 million shares, in March 2024 by buying 27.9 million shares valued at Sh403.5 million at the current market price.
This ranks him third after the estate of the late businessman Chris Kirubi (30.94 percent) and the State-owned Kenya Development Corporation (22.96 percent).
The enlarged stake in Centum raises the odds of Dr Kimani joining the board of directors, where only KDC and the Kirubi family have direct representation.
He joined the board of agricultural firm Kakuzi in November 2020 after accumulating shares in the firm for many years to reach a 32.2 percent stake at the time.
A long-term investor on the Nairobi Securities Exchange (NSE), Dr Kimani has been buying shares of Centum and other firms, including Safaricom and Kakuzi.
He is the second-largest shareholder in Kakuzi with a 33.35 percent stake, as at the end of December 2024, valued at Sh2.58 billion at the current trading price of Sh395.50 a share. His holding in Safaricom stood at 31.3 million shares valued at Sh899.2 million, as at the end of 2024, ranking him among the top individual investors in the telecommunications company.
He also holds 500,000 Kenya Airways shares valued at Sh2 million.
Dr Kimani's purchase of additional shares in the investment company comes at a time when Centum’s share buyback programme has been halted after its market price rallied past the offer price of Sh9.51.
Centum had sought to repurchase up to 10 percent of its issued shares or 66.5 million units after deeming the stock undervalued at the NSE for years, compared to its net assets.
The company places the value of its shares at Sh66.93 each based on a net asset value of Sh44.5 billion. This indicates the company’s share price is trading at a 78.5 percent discount.
Share buybacks have the effect of reducing the value of outstanding stock, potentially boosting the market valuation, besides increasing the stakes of continuing shareholders.
Centum had repurchased 10.8 million shares at a cost of Sh99.2 million, as at the end of March this year, having initiated the programme in October 2024.
Centum’s share price has risen 62 percent in the last 12 months, wiping out the premium that the company was offering investors in the share buyback programme.
The investment company has sought to attract sophisticated investors who understand its strategy and, as a result, give it commensurate value at the bourse. Centum seeks to identify good investments, scale up the portfolio companies, and sell them later to reap capital gains.
Some of its recent sales include a 63.4 percent stake in Sidian Bank at about Sh3.2 billion. The sale price represented a 59 percent premium on the value held in Centum’s books.
Centum made 10 exits between 2009 and 2022 at an average of 3.7 times its original investments. A substantial part of the proceeds from the sales has gone into repayment of debt, which the company had relied on to fund its investments.
Centum is currently growing Jafari Microfinance, having sold its stake in Platinum Credit in 2018 for gains exceeding Sh1 billion.
Businesses in which the company has an interest include Isuzu East Africa, Longhorn Publishers, and catering firm Nas Servair.
Centum also has several plum real estate projects in different stages of development, while some are on sale.
The company's latest bet is on the geothermal sector, having recently increased its stake in power-generating company Akiira to 85 percent.
A previous bet on coal energy production had backfired on the company after the project, Amu Coal Plant, was halted following resistance from the host community in Lamu.
Centum reported a 68.8 percent drop in net profit for the year ended March 2025, owing to lower fair value gains on its investment property and a higher deferred tax charge.
The listed investment firm reported a net profit of Sh812 million in the year ended March, a drop from Sh2.6 billion a year earlier.
Despite the profit drop that forced Centum to issue a profit warning in June, the investment firm retained its dividend payout at Sh0.32 per share.
It has sustained the payments of dividends in the last decade, even in years when it has posted losses. Centum has ring-fenced income made from investment in government securities and cash holdings for distribution to shareholders as it waits for other investments to ripen for sale.
