investor briefing · 2017. 6. 14. · centum 3.0 strategic objectives achievements as at fy2017....

Investor Briefing

Group Results for Full Year

Ended 31st March 2017

13th June 2017

Business ReviewGroup Chief Executive Officer: James Mworia

2

3

Our Mission: To create

real tangible wealth by

providing the channel

through which

investors access and

build extraordinary

enterprises in Africa”

Our Strategy: “To

develop investment

grade opportunities of

scale across 8 key

sectors”

Group’s Vision: “To Be Africa’s Foremost

Investment Channel”

2,500

2,900

3,300

3,700

4,100

Jan 16 Mar 16 May 16 Jul 16 Sep 16 Nov 16 Jan 17 Mar 17

Challenging Operating Environment

• Sources: Central Bank of Kenya; KNBS; Bloomberg

GDP Growth NSE 20 Performance

Interest Rate Trend Private Sector Credit Growth

22% decline

4.9%5.3%

5.6% 5.8%5.5%

0%

2%

4%

6%

2013 2014 2015 2016 2017P

0%

5%

10%

15%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

2016 2017

Interbank Rate 91-Day Tbill 364-days Tbill Central Bank Rate

0.0%

5.0%

10.0%

15.0%

20.0%

Jan 16 Mar 16 May 16 Jul 16 Sep 16 Nov 16 Jan 17

4

Returns Delivered Under Centum 3.0

With an average annualized return of 26% from 2014 to 2017, we have exceeded the

market’s average return of -17% over the same period by 43%

Company NAV Per Share, FY 2014 – FY 2017 Centum ROE v NSE Returns, FY 2014 – FY 2017

34

48

59

67

0

20

40

60

80

2014 2015 2016 2017

KES

42%39%

23%

16%

1%

6%

-24%-22%-25%

0%

25%

50%

2014 2015 2016 2017

Centum NSE

%

5

Performance Highlights

• Maintain costs below 2.0 % of total assets

• Sector specific expertise enhanced in

agribusiness, healthcare, retail and leasing

sectors

• Two Rivers Mall successfully launched in Feb

2017

• Develop sector expertise across key

sectors

• Build a track record of project

development in targeted sectors

• Grow total assets to KES 120 Bn (USD 1.2 Bn)

by end 2019

6

• Develop and scale investments across 8

key sectors

• Optimise portfolio in line with sector

focus

• Generate 35% annualised return between

FY 14 and FY 19

• Consistently outperform the market

RETURN

FOCUS

SCALE

BRAND

COSTS• Cost efficiency of 1.3% achieved

• Total assets of KES 61.6 Bn (USD 598 Mn) as

at end March 2017

• 25% CAGR on NAV between FY 14 and FY 17

• 26% annualised return achieved between FY

14 and FY 17 as compared to NSE average

return of -17% over the same period

• Active in six sectors (Real Estate, Power,

Financial Services, FMCG, Agribusiness and

Education)

• Healthcare project development in advanced

stages

Centum 3.0 Strategic Objectives Achievements as at FY2017

Centum’s Business Model to Drive Value Creation

7

GROWTH BUSINESSES

MATURE BUSINESSES

DEVELOPMENT PROJECTS

• Focus on

development of

bankable projects

across key sectors

• Leverage internal

resources to de-risk

projects

• Focus on

operationalisation

and growth

• Leverage third party

capital and project-

specific debt

• Partial/ full exit to realise gains

16,825

10,852

6,987

4,379

3,234

1,347 1,130 53

Real Estate FMCG

Financial Services Others

Marketable Securities Power

Cash and Receivables Agribusiness

Portfolio Characteristics

Sectoral Overview

8

“D

evelo

pm

ent”

Port

folio

Real Estate

Power

Education

Agribusiness

Healthcare

“G

row

th”

Port

folio

Financial Services

FMCG

Others

Marketable Securities

Portfolio Breakdown by Stage of

Underlying Assets NAV by Sector

Total

KES 44.8 Bn

9

SectorTotal Assets

(KES Mn)

Total Liabilities

(KES Mn)

Total NAV

(KES Mn)

NAV Per Share

(KES)

Real Estate 26,023 9,198 16,825 25.28

FMCG 12,419 1,567 10,852 16.31

Financial Services 8,264 1,277 6,987 10.50

Others 4,759 381 4,379 6.58

Marketable Securities 5,981 1,617 4,364 6.56

Power 3,496 2,150 1,347 2.02

Agribusiness 277 224 53 0.08

Education 295 295 - -

Healthcare 55 55 - -

TOTAL 61,570 16,762 44,808 67.34

Net Asset Value Decomposition FY 2017

Portfolio Characteristics

Breakdown of Net Asset Value Composition

Portfolio Highlights

• Development Portfolio

• Real Estate

• Power

• Agribusiness

• Education

• Healthcare

• Growth Portfolio

• FMCG

• Financial Services

• Others

10

1

2

Development Portfolio

Real Estate Sector Strategy Overview

11

Our real estate strategy seeks to master develop attractive sites across the region and

provide commercial impetus for investors to establish city-shifting developments therein

Acquire land

in strategic

locations

Attract third

party capital

at

development

level

Develop

infrastructure

and select in

fill

developments

Avail

construction

ready sites to

investors in

line with

master plan

Undertake

urban

management

of

developments

Master plan

development

and obtain

approvals

1 2 6543

c

Overview of Centum’s Value Creation Process in Real Estate

• Capabilities within Athena Properties are leveraged to masterplan large scale mixed use

developments that seek to transform the region

• Capital raised is at project level to fund trunk infrastructure and strategic in fill

developments to catalyse locations to attract third party developers

• Monetisation of the significant value uplift is realised through sale of construction ready

sites to third party investors

• Ongoing urban management is a key part of value proposition for third party investors and

a source of annuity income for the Group


Real Estate Sector Contribution

12

Real Estate Sector Contribution, FY 2017

Sector NAV Contribution (KES Mn) 16,825

Sector NAV Contribution (%) 37.6%

Sector NAV Per Share Contribution (KES) 25.28

Real Estate Portfolio

Companies(%) Stake

NAV Per

Share

Contribution

(KES)

NAV Per

Share

Contribution

(%)

Entity Total

Assets

(KES Mn)

Entity

Debt

(KES Mn)

Two Rivers Development

Limited 58% 10.59 15.7% 18,273 -

Vipingo Development Limited 100% 6.64 9.9% 7,408 -

Two Rivers Mall 29% 4.51 6.7% 23,088 7,471

Pearl Marina 100% 1.29 1.9% 5,777 -

Uhuru Heights 100% 0.37 0.6% 615 -

Athena Properties Limited 100% 0.05 0.1% 299 -


Real Estate Progress Overview

13

Two Rivers

101.31 acres, Nairobi

Pearl Marina

389 acres, Garuga

Vipingo

10,000+ acres, Kilifi

Acquire Land

Master Plan and

Obtain Approvals

Attract Investors at

Development LevelDiscussions Underway Discussions Underway

Develop Trunk

Infrastructure

Phase 1 to commence

in FY 2018

Develop Strategic In

fill Developments

Anchor development

to commence in FY

2018

Avail Construction

Ready Sites-

Provide Urban

Management- -

Significant focus on asset monetisation through sales of sites, particularly at Two Rivers

where the next phase of development is expected to be self-funding


Two Rivers Value Creation

14

Land Conversion

(Value Creation)

Two

Rivers

Last

Selling

Price /

Acre

(KES Mn)

Total Gross Acreage 101.31

Parks, roads, reserves, common

area spaces41.72

Developable land 59.59

Fully serviced – co developed or

sold10.96 450

Fully serviced land available for

development28.29

Partially serviced and available

for development20.34

Focus moving forward is to sell or co–develop 28.29 acres of land


Two Rivers Mall Update

15

• 70% of the Gross Lettable Area (GLA) is now let, while 16% under-negotiation

• The target is to close December 2017 at 86% let

• Total number of visitors to end of May 2017

Over 1.2 Million

• Total Number of cars parked to end of May 2017

Over 400,000

Progress Overview


Pearl Marina Phase 1 Plan

Land Conversion

(Value Creation)

Pearl

Marina

Total Gross acreage389.00

Phase 1 Land165.98

Parks, roads, reserves, common area

spaces 50.87

Developable land115.12

Fully serviced - developed or sold2.34

Fully serviced land available for

development 27.58

Partially Serviced land available for

development 85.20


Pearl Marina Progress Update

• Phase 1 infrastructure is complete

• Landscaping works is done

• Access road to the villas is complete

Progress Overview


Vipingo Development Overview

18

Location Size (Acres)

Average Market Value /

Acre

Road Frontage 4,250 KES 5.5 Mn

Beach Frontage 1,245 KES 9 Mn

1.5 KM from Road Frontage 2,500 KES 4 Mn

Over 2.5KM from road frontage 2,259 KES 2.5 Mn

Total Area 10,254


Vipingo Development Phase I Development

19

Commercial center

Size

(Acres)

Retail & Offices 6

Entertainment Park 4

Residential - 4 clusters of 5 acres 20

University 5

Utilities 3

Green Park (acres) 5

Circulation 7

Total Area 50

Centum Vipingo Industrial Park

Project

Size

(Acres)

Industrial land (acres) 150

Tivet on wheel, site office 10

Utilities 5

Green park (acres) 10

Circulation 25

Total Area 200


Power Summary Update

20

Power Sector Contribution, FY 2017




• We have undertaken the development of greenfield power projects with the aim of

attracting third party capital at significant value uplift once the projects are sufficiently

de-risked as evidenced by a successful financial close

• The development process for both Amu Power (1 040 MW coal power) and Akiira (140 MW

geothermal power) has been protracted, nonetheless both projects are steadily

progressing towards financial close

• Investors have shown interest in both Amu Power and Akiira, validating our investment

thesis

Power Portfolio

CompaniesNAV Per Share

Contribution (KES)

NAV Per Share

Contribution (%)

Entity Total

Assets (KES Mn)

Entity Debt

(KES Mn)

Akiira Geothermal 2.02 3.0% 1,347 -

Amu Power - - Not Disclosed Not Disclosed


Agribusiness Summary Update

* This is a post balance sheet development

21

Agribusiness Sector Contribution, FY 2017

Sector NAV Contribution (KES Mn) 53



Valuation Methodology NAV

• Initial investment in 120 acre farm in Ol Kalau continues to gain

traction

− Exporting herbs to EU markets

− Expect to reach full utilisation of arable land by end FY 2018

• Sector strategy is to develop a large scale industrial agriculture

production and processing platform

− Focus on identifying suitable land during FY 2017, which

culminated in the acquisition of 14,000+ acres in Masindi

Uganda in Q1 2018*


Education and Healthcare Summary Update

22

Education Healthcare

• Through a consortium comprising

Centum, Investbridge Capital and

Sabis, a global school operator, we

seek to establish a platform of 10-12

schools across Sub-Saharan Africa to

• We broke ground on the first school to

be developed in East Africa in February

2017

− School to cater for kindergarten

through to grade 12

− Targetting first intake in

September 2018

− Total capacity of ~2 000, to be

developed in two phases

• We continue to explore additional

locations with our partners

• We seek to develop an integrated

healthcare delivery platform targeting

the middle class

• Feasibility assessment has been

completed, and an experienced

operating partner has been identified

• Currently in advanced stages of

project development for our initial

greenfield investments

• Targetting to break ground on our

initial facility in FY 2018

Portfolio Highlights

• Development Portfolio

• Real Estate

• Power

• Agribusiness

• Education

• Healthcare

• Growth Portfolio

• FMCG

• Financial Services

• Others

23

1

2

Growth Portfolio

FMCG Sector Contribution

24

FMCG Sector Contribution, FY 2017




FMCG Portfolio Companies NAV Per Share

Contribution

(KES)

NAV Per Share

Contribution

(%)

Entity Total

Assets

(KES Mn)

Entity Debt

(KES Mn)

Almasi Beverages Limited 9.56 14.2% 9,562 1,918

Nairobi Bottlers 6.27 9.3% Not Disclosed Not Disclosed

King Beverage 0.47 0.7% 174 23

25

Growth Portfolio

Almasi Beverages Update

606

1,109

1,584

2,036

0

500

1,000

1,500

2,000

2,500

2013 2014 2015 2016

Almasi Beverages EBITDA, FY 2013-2016

KES (

Mn)

• Focus has remained on driving growth

through [a] increasing capacity and

[b] enhancing operational efficiency

• KES 1 Bn deployed in Almasi rights

issue, with proceeds applied primarily

to:

− Acquisition of new PET and RGB

lines

− Enhancement of distribution

network

• Investments are yielding results, with

the company showing strong EBITDA

performance year on year

− Year on year EBITDA grew 28% to

KES 2 Bn

Growth Portfolio

Financial Services Sector Contribution

Financial Services Sector Contribution, FY 2017




Financial Services Portfolio

Companies

NAV Per Share

Contribution

(KES)

NAV Per Share

Contribution

(%)

Entity Total

Assets

(KES Mn)

Entity Debt

(KES Mn)

Sidian Bank 3.88 5.8% 21,035 16,776

Platcorp Limited 3.98 5.9% Not Disclosed Not Disclosed

GenAfrica Investment

Management2.09 3.1% 361 -

Nabo Capital 0.59 0.88% 870 -

26

Growth Portfolio

Sidian Bank Update

27

• Introduction of interest rate capping has resulted in a challenging operating

environment for the industry.

• Compression of interest income anticipated in the near term

• Numerous efforts aimed at optimising performance in the face of current market

conditions are ongoing, including:

− Significant focus on refreshing product base to drive conversion of large base

of multi-banked/dormant account holders

− Shift towards non-funded income

− Sustained focus on enhancing operational efficiency

− Capacity investment to grow corporate banking

− Significant investment in technology channels

− Closing on long term and lower priced funding to manage cost of deposits

Growth Portfolio

“Others” Contribution

28

“Others” Contribution, FY 2017

NAV Contribution (KES Mn) 4,379

NAV Contribution (%) 9.8%

NAV Per Share Contribution (KES) 6.55

“Other” Portfolio CompaniesNAV Per Share

Contribution (KES)

NAV Per Share

Contribution (%)

General Motors Limited 4.33 6.4%

Longhorn 1.12 1.7%

NAS Servair 1.10 1.6%

• Control stake of 60.2% acquired in Longhorn during the year.

• Minority stakes of 17% and 15% held in General Motors and NAS Servair respectively

Investment Activity

29

Sector KES (Mn)

Real Estate 2,498

FMCG 1,090

Financial Services 596

Other 510

Power 343

Education 297

Agribusiness 145

TOTAL 5,479

Asset KES (Mn)

Two Rivers 1,931

Almasi 1,004

Longhorn 510

Akiira 343

ACE (Education) 297

Vipingo 297

TOTAL 4,382

Investment Activity by Sector Significant Individual Capital

Deployments

30

Marketable Securities

Portfolio Performance

2%

40%

13%

45%

Cash and receivables Equities

Mutual funds Fixed income

Portfolio Allocation as at 31 March 2017 Portfolio Performance FY 2014 - 2017

Marketable Securities Contribution FY 2017

Total Portfolio KES 3.2 Bn

NAV Contribution (%) 5%

NAV Per Share Contribution (KES) 3.31

31

Portfolio Summary

Real Estate Financial

Services

FMCG Power Agribusiness Others Marketable

Sec. & Cash

Education Healthcare

Green Blade

GrowersLimited

Project

development

in advanced

stages

Centum Investment Company Ltd

Total Assets (31 March 2017) - KES 61.6 Bn

CENTUM

EXOTICS

LTD

26.0 Bn 0.3 Bn 4.8 Bn 6.0 Bn 0.3 Bn 55 Mn8.3 Bn 12.4 Bn 3.5 Bn

Total assets have grown from KES 29.0 Bn in FY 2014 to KES 61.6 Bn in FY 2017 representing a

cumulative growth rate of 29% p.a

Financial Review

Group Finance Director: Samuel Kariuki

FY 2017 Financial Performance Highlights

• Strong EBITDA performance of beverage business

• Strong performance of consumer lending associate

• Depressed performance of banking subsidiary, post rate caps

• Lower finance costs. Prior year finance costs included significant forex

losses on USD denominated bridge facilities

• Portion of finance cost now capitalised as Interest During Construction

Key Drivers

Portfolio

Performance

Finance Costs

• Prior year gains included Two Rivers Mall transaction gain of KES 3.2Bn

• Nominal marketable securities trading in light of market conditionsRealised

Gains

• Consolidation of Longhorn Publisher’s results for the first time,

following acquisition of control in May 2016New

Subsidiary

33

Key Drivers of Performance• 16% drop in Profit After Tax on account of lower realized gains on disposal

• Stripping out realized gains in both years, YoY profit grew 66%

34

Group Financial Performance

KES Million FY 2017 FY 2016 Change

Trading subsidiaries

Sales 9,402 8,141 15%

Direct and other operating costs (8,205) (7,462) -10%

Trading operations 1,197 679 76%

Financial services subsidiaries

Income from financial services 4,075 4,072 0%

Funding and other costs (3,885) (3,488) -11%

Operating profit from financial services 190 584 -67%

Investment operations

Investment and other income 8,379 11,952 -30%

Operating and administrative costs (1,122) (1,435) 22%

Finance costs (1,048) (1,982) 47%

Share of associates profits 1,347 1,074 25%

Profit from investment activities 7,556 9,609 -21%

Profit before tax 8,943 10,873 -18%

Profit after tax 8,310 9,948 -16%

Return on shareholder funds 15% 24% -38%

• 16% drop in Profit After Tax on account of lower realized gains on disposal

• Stripping out realized gains in both years, YoY profit grew 66%

35

Group Financial PerformanceSegmented group performance

36

Kes ‘M’ Performance Carrying value

March ‘17 March ‘16 March ‘15 Y/Y Change March ‘17 March ‘16

Growth portfolio 25,526 24,283

Gross income 13,479 12,190 1,961 11%

Direct and other operating costs (11,818) (10,887) (1,258) 9%

Gross profit 1,662 1,303 703 28%

Dividend income 216 178 488 21%

Share of associates profits 1,347 1,074 448 25%

3,225 2,555 1,638 26%

Realized gains on disposal 948 1,286 5,531 -26%

Profit before tax 4,173 3,841 7,169 9%

Marketable securities and cash 5,681 6,893

Investment income 527 1,040 410 -49%

Realized gains 85 980 962 -91%

Portfolio costs (84) (55) (17) 52%

Profit before tax 528 1,965 1,354 -73%

Real estate 25,998 16,911

Unrealized gains 6,452 5,119 1,737 26%

Realized gains 13 3,318 702 -100%

Portfolio costs (203) (477) (359) -57%

Profit before tax 6,263 7,960 2,080

Development portfolio 4,365 3,456

Income 135 54 37 150%

Portfolio costs (272) (62) (89) 337%

(137) (8) (53) 1540%

Total group operating income 10,826 13,758 10,551 -21%

Group operating and admin costs (835) (903) (1,042) -8%

Group finance cost (1,048) (1,982) (692) -47%

Profit before tax 8,943 10,873 8,817 -18%61,570 51,543

Profit after tax 8,310 9,948 7,942 -16%

Centum Portfolio Valuation Methodology

Total Assets = KES 61.57 Bn

Fair

Valu

e Multiples

Valuation done with reference

to market multiples of

comparable listed companies.

Mostly applied for private

equity investments

Recent

Transaction

Price

Reference is made to recently

transacted assets to assign

values to the remaining

portion.

Market PriceAsset values based on their

prevailing market prices.

Applied on listed securities.

NAVValues based on book value of

investee assets less their

liabilities.

Cost Carried at cost of acquisition

Valuation Methodology

28%

9%

7%

45%

7%

4%

FV: multiples FV: recent transaction

Market price NAV

Cost Cash

Total Assets by Valuation Aapproach

37

Growth Portfolio Assets (Kes Mn) Carrying Value

Valuation Basis for Equity

Component Effective Multiple

Equity Debt Total

Almasi Beverages Limited 7,716 - 7,716 EBITDA Multiple 6.77x

Nairobi Bottlers Limited 4,388 - 4,388 EBITDA Multiple 6.77x

Sidian Bank Limited 3,233 - 3,233 Price to Book multiple 1.06x

Platcorp Holdings Limited 2,117 534 2,651 Recent transaction

GenAfrica Asset Managers Limited Not Disclosed % AUM 0.90%

Nabo Capital Limited 411 354 765 NAV

Longhorn Kenya Limited 743 - 743 Market

Zohari Leasing Limited 203 - 203 NAV

Athena 25 0.5 26 NAV

20,241 888 21,734

Development portfolio

Amu Power Limited 2,144 - 2,144 Cost

Akiira Geothermal Limited 1,347 - 1,347 Cost

King Beverage Limited - 310 310 Cost

ACE Holdings Limited 295 - 295 Cost

Greenblade Growers Limited 207 62 269 NAV

3,993 372 4,365

Segmented Portfolio Valuation (1 of 2)

38

Detailed portfolio asset valuation methodology

Marketable Securities and Equity Investments ( <20% )

(Kes Mn) Carrying Value

Valuation Basis for

Equity Component

Effective

Multiple

Equity Debt Total

Marketable Securities 3,234 - 3,234 Market

Cash 2,447 - 2,447 Cost

General Motors 3,027 - 3,027 Recent transaction

NAS Servair Not Disclosed EBITDA Multiple 3.68x

9,473 - 9,473

Real Estate

Two Rivers Development Limited 9,112 2,774 11,886 Valuation

Two Rivers Lifestyle Centre 4,221 - 4,221 Market transaction

Vipingo Development Limited 5,040 672 5,713 Valuation 10,000+ Acres

Pearl Marina 861 3,317 4,178 Valuation 389 Acres

19,234 6,763 25,998

OTHERS

Centum Business Solutions Limited 18 201 219 NAV

Receivables and other assets 386 - 386 Cost

403 201 604

TOTAL ASSETS 53,345 8,225 61,570

Segmented Portfolio Valuation (2 of 2)

39

Detailed portfolio asset valuation methodology (cont.…)

Group Statement of Financial Position

40

KES (Mn) FY 2017 FY 2016

Property Plant and Equipment 10,072 7,004

Biological Assets 9 -

Investment Property 27,311 16,514

Associates and JVs 13,520 13,048

Unquoted Assets 4,226 5,977

Quoted Assets 1,223 1,369

Loans and Advances 12,633 12,954

Bonds and Government Securities 3,021 3,991

Other Assets 10,731 6,999

Cash and Cash Equivalents 5,639 10,197

Total Assets 88,385 78,054

KES (Mn) FY 2017 FY 2016

Customer Deposits and

Banking Liabilities13,369 15,372

Borrowings 17,416 13,024

Dividends Payable 83 7

Other Liabilities 8,044 6,392

Total Liabilities 38,911 34,795

Shareholder Funds 49,474 43,258

Equity and Liabilities 88,385 78,054

Assets Liabilities and Shareholder Funds

Company Financial Performance

KES (Mn) FY 2017 FY 2016 Variance

Dividend Income 1,765 2,671 -34%

Interest Income 1,326 676 96%

Other Income 146 8 1773%

Realised Gain 1,063 990 7%

Gross Return 4,300 4,343 -1%

Portfolio Costs (798) (877) -9%

Finance Costs (1,754) (1,511) 16%

Tax (178) (87) 105%

Profit After Tax 1,571 1,868 -16%

Unrealised Gains 4,925 5,812 -15%

Deferred Tax (337) (306) 10%

Total Return 6,160 7,375 -16%

Opening NAV 39,314 31,939

Total Return % 16% 23%

41

Company Total Return

NAV Growth Attribution (KES Bn)

39.3

44.8

1.77

1.33

1.06 0.15 4.93

0.80 1.75

0.51 0.67

OpeningNAV

Dividendincome

Interestincome

Realizedgains

Otherincome

Unrealizedgains

Portfoliocosts

Financecost

Taxexpense

Dividendspaid

ClosingNAV

42

1.50%

2.10%

1.70%

1.3%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

FY 2014 FY2015 FY2016 FY2017

Cost efficiency (FY2014-FY2017)

Centum 3.0 strategy cost ceiling

Company Total Return

Preserving value through efficient cost management

Perc

enta

ge

43

Portfolio management costs to total assets ratio remain below 2% and continue declining

Company Statement of Financial Position

KES million FY 2017 FY 2016

Investments Portfolio

Investment in Subsidiaries 35,311 25,411

Related party balances 12,723 8,334

Investment in Associates 4,687 5,655

Investment in Joint Ventures 2,144 2,144

Unquoted Investments 3,797 5,545

Quoted Investments 100 156

58,762 47,246

Other assets

Cash and Cash Equivalents 2,447 3,916

PPE and intangibles 23 1

Current Income Tax

Recoverable - 35

Receivables and Prepayments 338 344

Total Assets 61,570 51,543

KES million FY 2017 FY 2016

Borrowings 14,656 10,475

Trade and Payables 436 383

Due to related parties 10 188

Dividends payable 83 7

Current Income Tax 54 -

Deferred Income Tax 1,523 1,176

Total Liabilities 16,762 12,229

Shareholder Funds 44,808 39,314

Equity and Liabilities 61,570 51,543

44

Assets Liabilities and Shareholder Funds

Company Liquidity

Our current liquidity position allows us to take advantage of rare but good opportunities

whenever they arise

Category KES (Mn)

Marketable Securities (on Company Balance Sheet) 100

Marketable Securities (held through 100% owned SPVs) 3,085

Company Cash and Cash Equivalents 2,447

Total Liquid Assets 5,632

Undrawn Overdraft Facilities 18

Liquidity position 5,650

45

Company Gearing & Debt Capacity

23%

27% Net debt to

equity as at

31 March 2017

50% ceiling on gearing

(D/E) under our

covenants

Company’s Credit Rating was maintained at A1(short term) and A(long term)

KES (Mn) FY 2017 FY 2016

Total borrowings by the Company14,656 10,475

Less: Cash and Cash Equivalents held by

the Company (2,447) (3,916)

Net Company debt12,209 6,559

Total Equity44,808 39,314

Gearing 27% 17%

46

We closed a competitively priced short term USD 30 Mn facility with Rand Merchant Bank

of South Africa during the period

Return to Equity Linked Note Holders

47

ELN March 2016 Bond I (2012 ) Bond II (2015)

Plain Vanilla Notes (Kes Bn) 3.18 2.15

ELN value (Kes Bn) 1.25 3.90

Total Bond (Kes Bn) 4.43 6.05

ELN Coupon 12.75% 12.50%

FRN Coupon 13.5% 13.0%

Centum NAV at debt issue (Kes Bn) 13.69 26.95

NAV at 31 March 2017 (Kes Bn) 44.8 44.8

NAV Growth 227% 66%

Required NAV growth to hit max upside 50% 25%

Maximum Variable ELN upside realized 15% 10%

Effective return to ELN holders 14.88% 13.95%

Centum bond investors have achieved the maximum variable return

Outlook

Group Chief Executive Officer: James Mworia

Outlook

49


• Real Estate:

− Enhancing value of assets through infrastructure development

− Collaborate with national and local governments for development of trunk infrastructure

− Tap into portfolio synergies to develop social infrastructure such as schools and hospitals

− Enhanced marketing strategies to realize plot sales

• Agribusiness: Opening up and roll-out of initial phase of 14,000+ acre farm in Masindi, Uganda

• Healthcare: Significant investment in greenfield hospital development

• Education: Ongoing construction of school in Nairobi

Growth

Portfolio

• Strong EBITDA performance of underlying assets

• Continued focus shall be to strengthen companies in order to enhance profitability

Marketable Securities• Positive outlook

• Increased allocation to take advantage of available opportunities

Gearing• Current gearing at 27%

• In FY 2018 we will seek to deleverage our balance sheet to maintain a maximum gearing of 25%

Dividend

• Board recommended the payment of a dividend of KES 1.20 per share for financial year ended

March 2017

Exits• There are exit opportunities across the portfolio

• Various exits are ongoing, at different stages and are expected to close in FY 2018

Centum Investment Company Ltd.

International House,

5th Flr. Mama Ngina St.

PO Box 10518-00100

Nairobi, Kenya

Tel +254 20 316303

Mobile +254 722 205339

Fax +254 20 223223

Email [email protected]

www.centum.co.ke

investor briefing · 2017. 6. 14. · centum 3.0 strategic objectives achievements as at fy2017....

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