Investments firm says it expects profit to decline by at least 25 per cent.
Centum Investments says its shareholders will receive a dividend payout despite the firm’s earnings falling by at least 25 per cent.
The investment company listed on the Nairobi Securities Exchange (NSE) and cross-listed on the Ugandan Securities Exchange (USE) has issued a profit warning about the anticipated drop in profit for the full-year ended March 31, 2018.
The firm has cited lower asset valuations, prolonged electioneering period, interest rate cap regime, sluggish economy in Kenya and delays in concluding disposed investments.
“The combined effect of the lower property valuation gains and deferral of recognition of realised gains on investment disposal to the current year will be a decline in the Group’s consolidated net profit by at least 25 per cent,” Centum's Chief Executive Officer James Mworia said.
“We do not expect that the decline in reported earnings will have an impact on the anticipated dividend declaration for the financial year ending March 31, 2018,” added Mr Mworia.
In the six months to September 30, 2017, the firm posted a 21 per cent drop in net profit.
During the financial year, Centum sold its 26.4 per cent stake in Kenya Wine Agencies Limited (KWAL) for Ksh1.1 billion ($11 million) as well as a 25 per cent stake in Platcorp, the parent firm of Platinum Credit, a non-deposit taking microfinance, gaining Ksh432 million ($4.32 million).
Centum is also seeking to sell its entire 73.4 per cent stake in GenAfrica Asset Managers to Kuramo Capital Management, a New York-based private equity firm, subject to regulatory approvals.
Dividend payout
The company's net profit for the full-year ended March 31, 2017 dropped 16 per cent to Ksh 8.31 billion ($83.1 million) from Ksh9.94 billion ($99.4 million) the previous year. The firm attribute the decline to lower gains on disposals of its stakes in various subsidiaries.
It issued a first and final dividend of Ksh1.20 ($0.01) per share.
Centum investments in real estate, infrastructure, financial services, power, education, ICT, agribusiness and health sectors in East Africa.
Its long term debt is currently estimated at Ksh 11 billion ($110 million).