Briefing investors on the results on Wednesday, Centum Investment Company Chief Executive Officer James Mworia attributed the slight dip in performance to the bear run at the Nairobi Securities Exchange (NSE) this year.
This saw the company cut its exposure to the Kenyan stock market to nine percent of its total portfolio from 26 percent during the period, in a bid to protect shareholder value in the firm.
“This environment presents a good position for investors and we took a bearish view of the stock markets in April (2011) and we exited a bulk of our listed stocks to mitigate any risk that might have come up,” Mworia said.
According to Mworia, market activity at the bourse declined by 16 percent during the period under review.
Had the company not taken that measure, he feared that they would have made a 20 percent loss in shareholder value. Shareholder capital during the period stood at Sh12.4 billion.
Despite this bleep, Centum’s mix of investments has enabled it to deliver market beating returns in the past five years. Centum has invested in a number of stocks at the NSE, which form the bulk of its quoted equity portfolio, including Safaricom, British American Tobacco, Kenya Airways, Barclays Bank, East African Breweries and CMC Motors.
The CEO said that in line with the reduction in its stake at the stock market, the firm also increased its cash holdings to 11 percent of total assets which gave the company liquidity with which to look out for new investment opportunities.
“We are currently holding more than Sh1.7 billion in cash and cash equivalents and we have several hundred millions available in facilities. Centum is well placed to take advantage of the opportunities that this environment is unearthing,” he said.
The investment firm is keen to exploit its real estate and infrastructure business and has several projects lined up. Last year, the company acquired 100 acres in Runda, Kenya and another 300 acres in Entebbe, Uganda on the shores of Lake Victoria and plan to zone the land for residential and commercial use.
Centum has also completed a master plan for its Kenyan project along Limuru road which is expected to cost Sh10.8 billion.
While acknowledging that these are capital intensive projects, Mworia said they are looking for more funds to finance the initiatives. Centum will borrow Sh6 billion and raise the remaining Sh4.8 billion from its shareholders.
However, due to the current environment of high interest rates, the firm is considering foreign denominated borrowing.
“We are in talks with both local and international banks for dollar financing making the project more reasonable and attractive to investors,” he said.
Going forward, the firm has a target of growing its assets under management to Sh30 billion by 2014 from the current Sh14 billion. In line with its pan African growth strategy, Mworia said they intend to have half of those assets outside Kenya.
Centum is listed on the Ugandan Securities Exchange and is also eyeing both the Dar-es-Salaam and Rwandan bourses.