Centum Investments has marked a significant turnaround, reporting a Sh2.5 billion after-tax profit for the financial year ending March 2024. This rebound from the previous year’s Sh7.3 billion net loss highlights a remarkable recovery driven by improved performance and profitability within its investment portfolio.
The financial year ending March 2024 saw Centum’s investment portfolio grow by Sh6.1 billion, reaching a total of Sh66.5 billion. This growth is attributed to the company’s strategic focus on identifying and capitalizing on promising investment opportunities. Chief Executive Officer James Mworia lauded the performance as a strong start to Centum’s 5.0 growth strategy, which emphasizes value optimization over the next five years.
“The operating environment has been volatile, and while this could persist in the short term, we believe that there exist pockets of opportunities that can be maximized through an active investment strategy to optimize and monetize the portfolio value,” Mworia stated.
The company’s retained earnings—a portion of net income reinvested back into the business rather than distributed as dividends—rose by Sh2.6 billion, reaching Sh39 billion. This substantial increase positions Centum favorably for future investment opportunities, reinforcing its financial stability and growth prospects.
Among its various divisions, Centum Real Estate emerged as a standout performer. The division achieved Sh3.7 billion in sales, saw a Sh3.6 billion increase in property value, and generated a Sh2.5 billion net profit. This robust performance underscores the success of Centum’s real estate investments and strategic focus on this sector.
In line with its policy of distributing 30 percent of total annuity income as dividends, Centum has proposed a dividend payout of Sh210 million, translating to Sh0.32 per share. This is a decrease from the Sh0.60 per share paid out in 2023. Despite the reduction, the company’s decision reflects a balance between rewarding shareholders and reinvesting in growth opportunities.
The firm executed a buyback of 9.7 million shares, accounting for 24 percent of the traded volume as of July 26, 2024. This move aligns with Centum’s strategy to enhance shareholder value and consolidate its market position.
On the financial front, Centum’s investment income surged by 157.6 percent to Sh607.4 million. However, for company-specific financials, investment income fell by 46 percent to Sh1.152 billion. Operating expenses increased by 16.9 percent, reaching Sh556.9 million. Despite this, the company managed to reduce its operating loss significantly, from Sh1.4 billion in 2023 to Sh352.9 million.
The company’s specific financials showed a 13.3 percent rise in operating expenses, amounting to Sh579.7 million. Nonetheless, the operating profit increased by 34 percent to Sh277.6 million. Notably, the net profit soared to Sh5.5 billion, reversing the previous year’s net loss of Sh4.9 billion.
Looking ahead, Centum’s focus remains on optimizing the value of its investment portfolio. Mworia emphasized that the proceeds from these efforts will be used to enhance marketable securities, aiming to significantly boost annuity income and shareholder value.
“As we transition into the new strategy period named Centum 5.0, our focus is on optimization of the value of the current portfolio of investments. We are working towards scaling up the various businesses and monetizing them to realize a minimum of their carrying values,” Mworia concluded.
Centum’s recovery and strategic direction highlight its commitment to value creation and shareholder enhancement, setting a promising course for the future.
