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Is it the right time to buy CENTUM?
watesh
#41 Posted : Thursday, August 27, 2020 9:39:57 AM
Rank: Member


Joined: 8/10/2014
Posts: 843
Location: Kenya
deadpoet wrote:
watesh wrote:
Kibe21 wrote:
Pronounced dead in 2012 while trading @12/=.
8 years later and trading at covid discount of 21.50/= I'd say it's the right time to buy. What say you @Ericsson and the rest of wazua community?

I am piling up this stock. In my opinion it's cheap on a valuation basis. First with the new dividend policy, we essentially have a guaranteed dividend every year that either goes up or stays the same. Their real estate investments are finally coming into the revenue section of the income statement since their first hand overs of the Vipingo Dev were to be in August and others December. They already sold land worth Ksh2.6 billion and it's still hasn't been recognized in the income statement till all the legal steps are done. Two new real estate projects have been announced in ideal locations. They have a sizeable cash pile ready to be deployed, talks are ongoing but I dont see anything being announced any time soon, maybe next year. Two Rivers has added a number of tenants this year and more to come. Ace Holding is close to breaking even. Debt has been fully paid down. Stock is cum dividend and it is trading lower than what it was trading in 2013.

Headwinds: Longhorn (their biggest dividend payer currently) will be in challenges for the next 2 years minimum, Sidian bank is back to losses. Isuzu for sure has recorded decreased sales. Nas Servair hasnt been operational since airport was closed.


Aren't all the above significant chunks of their portfolio? How do you know ACE is breaking even, and what's the likelihood they'll strike a geothermal well?

That said, there is a proposed stock buyback plan, which has worked wonders for companies in the US.


Based on their valuations, ACE is 2% of their assets (they were at 171 students as at March and break even is 210. CEO said in his most recent interview that they have not experienced any churn during the pandemic), Longhorn is 1.8%, Isuzu is 5.1%, Sidian is 5.4% (Had been in losses since interest rate cap, was finally profitable last year but now back into losses) so in total they are not that significant and it’s only Longhorn & Isuzu who have paid dividends to Centum. The geothermal is 3% of their portfolio and it's a 50 - 50 chance to get a well so don’t bank on it. They decided not to sink in more cash, the other investors will provide the funding. The most important asset for the company is its real estate portfolio which takes time to actually bring in money in the bank. Centum has ALOT of assets but the vast majority are not cash generating hence why there is a lag in the share price. They need time to mature first. I don't think the share buyback will not be happening in this financial year, the next one maybe. This is because of the low amount of cash they currently generate and a large number of opportunities available to them. However, Kirubi will mop up shares in the mean time as per the announcement he made.
deadpoet
#42 Posted : Thursday, August 27, 2020 8:04:58 PM
Rank: Member


Joined: 9/27/2006
Posts: 456
I guess you're right. The investments, even though worth billions/hundreds of millions, are still small percentages of the total portfolio. Also not every company can shrug off a Ksh 2 billion investment (lamu coal) and keep moving.
Ericsson
#43 Posted : Friday, August 28, 2020 9:37:23 AM
Rank: Elder


Joined: 12/4/2009
Posts: 8,861
Location: NAIROBI
Longhorn FY results
https://pbs.twimg.com/me...mat=jpg&name=medium

Loss before tax of ksh.295.34mn
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
kichwa_kibov
#44 Posted : Friday, August 28, 2020 10:13:14 AM
Rank: New-farer


Joined: 9/24/2012
Posts: 11
Location: Tatu city
Dividend book closure October 2nd 2020
https://centum.co.ke/ima...docs/53rd_AGM_Notice.pdf
The smart man learns the truth and screams it at others to try to change their mind to his own lifestyle’s detriment. The wise man learns the truth and applies it to his life. Others learn the truth from watching him.
Ericsson
#45 Posted : Monday, August 31, 2020 9:49:30 AM
Rank: Elder


Joined: 12/4/2009
Posts: 8,861
Location: NAIROBI
watesh wrote:
deadpoet wrote:
watesh wrote:
Kibe21 wrote:
Pronounced dead in 2012 while trading @12/=.
8 years later and trading at covid discount of 21.50/= I'd say it's the right time to buy. What say you @Ericsson and the rest of wazua community?

I am piling up this stock. In my opinion it's cheap on a valuation basis. First with the new dividend policy, we essentially have a guaranteed dividend every year that either goes up or stays the same. Their real estate investments are finally coming into the revenue section of the income statement since their first hand overs of the Vipingo Dev were to be in August and others December. They already sold land worth Ksh2.6 billion and it's still hasn't been recognized in the income statement till all the legal steps are done. Two new real estate projects have been announced in ideal locations. They have a sizeable cash pile ready to be deployed, talks are ongoing but I dont see anything being announced any time soon, maybe next year. Two Rivers has added a number of tenants this year and more to come. Ace Holding is close to breaking even. Debt has been fully paid down. Stock is cum dividend and it is trading lower than what it was trading in 2013.

Headwinds: Longhorn (their biggest dividend payer currently) will be in challenges for the next 2 years minimum, Sidian bank is back to losses. Isuzu for sure has recorded decreased sales. Nas Servair hasnt been operational since airport was closed.


Aren't all the above significant chunks of their portfolio? How do you know ACE is breaking even, and what's the likelihood they'll strike a geothermal well?

That said, there is a proposed stock buyback plan, which has worked wonders for companies in the US.


Based on their valuations, ACE is 2% of their assets (they were at 171 students as at March and break even is 210. CEO said in his most recent interview that they have not experienced any churn during the pandemic), Longhorn is 1.8%, Isuzu is 5.1%, Sidian is 5.4% (Had been in losses since interest rate cap, was finally profitable last year but now back into losses) so in total they are not that significant and it’s only Longhorn & Isuzu who have paid dividends to Centum. The geothermal is 3% of their portfolio and it's a 50 - 50 chance to get a well so don’t bank on it. They decided not to sink in more cash, the other investors will provide the funding. The most important asset for the company is its real estate portfolio which takes time to actually bring in money in the bank. Centum has ALOT of assets but the vast majority are not cash generating hence why there is a lag in the share price. They need time to mature first. I don't think the share buyback will not be happening in this financial year, the next one maybe. This is because of the low amount of cash they currently generate and a large number of opportunities available to them. However, Kirubi will mop up shares in the mean time as per the announcement he made.


Two Rivers Mall,
Centum stake is 28.6%.
Old Mutual properties own 50%
AVIC 19.1%
ICDC 2.3%
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
Ericsson
#46 Posted : Tuesday, September 01, 2020 10:11:52 AM
Rank: Elder


Joined: 12/4/2009
Posts: 8,861
Location: NAIROBI
https://www.businessdail...17194-llwsw5z/index.html
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
deadpoet
#47 Posted : Tuesday, September 01, 2020 10:35:19 AM
Rank: Member


Joined: 9/27/2006
Posts: 456
Ericsson wrote:
https://www.businessdailyafrica.com/corporate/companies/Centum-eyes-lower-dividend-over-Covid19/4003102-5617194-llwsw5z/index.html


the best laid plans of mice and men often go awry.
heri
#48 Posted : Friday, September 04, 2020 10:31:08 AM
Rank: Member


Joined: 9/14/2011
Posts: 778
Location: nairobi
https://www.businessdail...618970-17bv3/index.html

Centum Investment Company agreed to compensate the buyer of its Coca-Cola beverage businesses to the tune of $34.4 million (Sh3.7 billion) representing tax demands by the Kenya Revenue Authority (KRA)


The High Court in 2012 allowed the KRA to collect the taxes, a decision that was overturned in July last year by the Court of Appeal. The taxman subsequently appealed the ruling at the Supreme Court of Kenya which will make the final decision.
Ericsson
#49 Posted : Thursday, September 17, 2020 9:40:22 AM
Rank: Elder


Joined: 12/4/2009
Posts: 8,861
Location: NAIROBI
https://www.businessdail...24270-hm7n14/index.html

Fundamentals have changed and kirubi is no longer interested in raising his stake to 50%
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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