Centum Investment has reported a 66.4 per cent dip in full year net net earnings to Ksh 2.8Bn from Ksh 8.7 Billion psted in 2017. The dip was attributed to lower realized gains on disposal of investments and reduced profitability from the financial and investing segment of its business.
Last month, the company issued a profit warning for the full financial year ended March 31, 2018, citing decrease in revaluation gains, delay in recognizing realized gains on disposal of investments for transactions signed during the year but not yet concluded, political uncertainty and reduced access to credit.
Its top-line rose marginally by 1.0 per cent to Ksh 13.7 Billion on the back of sustained growth in beverage and publishing business as income from interest, fees and commissions dropped by 23 per cent. Investment income fell by 32 per cent to Ksh 5.7 Billion.
Finance costs rose by 68 per cent to Ksh 1.8 Billion while borrowings increased by 17 per cent to Ksh 24.5 Billion. Despite the decline in profitability, cashflow from operating activities grew to Ksh 2.7 Billion.
“We opined that a recovery of market activity at the bourse would eventually bridge the gap between its NAV(net asset value) and the market price. The renewed change in focus by the group targeting this is anticipated to rally the price at the bourse in the long-term. The FY18 earnings are a true test of investors’ confidence in the firm whose business model has proved complex. “ Harrison Gitau Senior Research Analyst Apex Africa Capital.