Centum Investment Company narrowed its net loss by two per cent to Sh1.33 billion in the year ended March 2022 as weaker performance in its Two Rivers real estate asset offset improved profitability in other divisions.
The Nairobi Securities Exchange-listed firm had posted a net loss of Sh1.36 billion the year before. Centum has raised its dividend payout in a move that will boost returns for shareholders who are sitting on major paper losses after the company’s stock declined over the past three years to trade at Sh9.9 on Monday.
“The board of directors has proposed to pay out Sh391 million in dividend with respect to the financial year ended March 31, 2022 (Sh220 million in the prior year),” the company said in a statement.
“This represents a dividend per share of Sh0.587 up from Sh0.33 in the last financial year. This proposal will be considered for approval by shareholders at the upcoming annual general meeting.”
Centum said the dividend payout is based on its policy of distributing 30 per cent of the returns from its cash holdings.
The company made a strategy change to invest a significant part of its capital in fixed income securities to lower its risk and generate a guaranteed minimum amount of cash, part of which can be distributed as dividends.
Centum’s loss from Two Rivers Development Limited widened to Sh1.98 billion from Sh1.85 billion due to reduced sales and investment income. The company is in the process of restructuring the debt of the business.
Centum’s other real estate operations reported a profit of Sh127 million, representing a decline from Sh875.3 million largely due to lower gains on the revaluation of the properties.
Centum RE, the subsidiary through which the NSE-listed firm holds part of its real estate assets, is currently selling both land and the properties it is developing.
The company’s investment operations narrowed losses to Sh547.9 million from Sh1.14 billion, helped by higher investment income.
Financial services made the biggest profit of Sh691.6 million, more than double the Sh329.8 million recorded a year earlier on higher interest and other income.
Centum is selling Sidian Bank, its main asset in the financial services segment, to Nigeria’s Access Bank Plc for Sh4.3 billion before final adjustments. The impact of the proposed transaction, which is subject to regulatory approvals in Kenya and Nigeria, is expected to reflect in future results announcements.
The investment firm’s trading business posted a profit of Sh73.2 million, reversing a loss of Sh529 million as sales surged with the reopening of the economy following the earlier disruption caused by the Covid-19 pandemic.
Sales of the businesses including Longhorn Publishers more than doubled to Sh2.3 billion from Sh995.7 million.
Centum’s chief executive James Mworia said Two Rivers is on course to raising capital for the next phase of the development, comprising residential housing.
“Once successful, the capital raise will see Two Rivers knock off a huge amount of finance costs from its income statement while recording a boost in its profits from the development and sale of the residential housing,” he said.