Centum Investment Company expects to withstand the effects of the COVID-19 pandemic, thanks to its stash of cash and minimal exposure to listed firms, its chief executive said on Friday.
Centum, which invests in real estate, listed firms and private companies, held cash and marketable securities worth 9 billion shillings ($84.63 million) at the end of March, up from 4.1 billion shillings a year earlier.
“We are coming into this with quite a bit of liquidity,” said CEO James Mworia, after unveiling an 85% leap in pretax profit for the year to the end of March.
The 8.2 billion shillings profit included a one-off provision of 2.75 billion shillings for the impairment of an investment in a power project, in line with accounting standards.
Mworia said the company could pounce on any good assets whose price may be driven down by the coronavirus crisis.
“It presents a good buying opportunity for all our businesses,” he said, adding that the private equity business could however see a drop in earnings in the short term due to the crisis.
Sales of new housing units in its various developments had registered a 40% drop due to the COVID-19 pandemic, Mworia said.
Centum held just 5% in listed equities as at the end of March, meaning it had minimal exposure to the drop in share prices caused by the virus, the CEO said.
It also paid off some of its debts, including some corporate bonds, helping to support earnings during the year under review by cutting financing costs.
Investment income rose to 15 billion shillings from 9.55 billion shillings a year earlier.
Centum’s shares are trading 25.00 shillings each, a significant discount to its net asset value of 71.29 shillings.
Centum recommended a dividend per share of 1.20 shillings, unchanged from the previous year, and bucking the trend among other firms where dividends have been pulled due to the crisis.
($1 = 106.3500 Kenyan shillings)