Businessman Kibunga Kimani has raised his stake in Centum Investment Company to a new high of 9.7 percent after buying additional shares worth Sh233.6 million in the nine months to December 2024.Â
Regulatory filings show that by the end of December, Mr Kimani held 64.53 million shares in the listed investment company, up from 45.69 million units at the end of March 2024. His stake is now valued at Sh800.2 million, going by the company’s latest closing share price of Sh12.40.Â
The share purchases cemented his position as the third largest shareholder of Centum, behind the estate of the late tycoon Chris Kirubi’s holding of 30.94 percent or 205.91 million shares, and State-owned Kenya Development Corporation Limited’s 22.97 percent stake (152.85 million shares).
Centum is among the major stock market investments for Mr Kimani, who typically invests for the long term, with stakes in companies such as Kakuzi and Safaricom.
His latest share purchases coincided with a period of moderate appreciation in the Centum share price at the Nairobi Securities Exchange (NSE), even though the company remains undervalued relative to its net asset value per share.
In the nine months to December, Centum traded at a low of Sh7.88 and a high of Sh9.88 per share. Since the turn of the year however, the stock has traded in the double digits, closing at a three-year high of Sh12.40 on Thursday.
The company’s latest financial results covering the six months to September 2024 showed that its net asset value per share stood at Sh63, meaning that at the current NSE market price, the stock is trading at a discount of 80.3 percent to the company’s book value.
In a bid to address the undervaluation and unlock value for shareholders, Centum embarked on a share buyback plan in February 2023, looking to claw back 10 percent of its issued shares into a treasury holding.
Share buybacks have the effect of reducing the volume of outstanding stock, potentially boosting the market valuation besides increasing the relative stakes of continuing shareholders. In the first phase of the buyback which ran between February 2023 and September 2024, Centum acquired 9.85 million shares, representing 14.8 percent of the target of 66.54 million shares.
The buyback price was capped at Sh9.03 per share.
In the period the offer was in the market, the Centum share traded in a range of Sh7.88 and Sh9.50, averaging about Sh8.73 per unit. Having failed to hit its target, the buyback was extended into a second phase which opened on October 1, 2024 and will run until March 31, 2026, at an enhanced maximum price of Sh9.51 per share.
This however means that the stock’s appreciation to a price above Sh10 since the beginning of the year has effectively stalled the buyback exercise.
The shareholding filings show that as at December 31, the company’s treasury shares account held 10.84 million shares, meaning that the second phase of the buyback had raised 995,000 shares (1.5 percent of its target) between October and December.
