Centum Investment Extends Share Buyback Programme Amidst Strong Financial Performance
Centum Investment Plc has announced an extension of its share buyback programme, which initially commenced on 6th February 2023. The programme, aimed at purchasing up to 10% of the company’s total issued and paid-up share capital, was originally set to conclude on 2nd August 2024. However, with approval from the Capital Markets Authority (CMA), the buyback programme will now extend until the company’s next Annual General Meeting (AGM), proposed for 20th September 2024.
A Strategic Move to Stabilize Market Value
The share buyback programme, which has so far seen the repurchase of 9.8 million shares, was introduced to stabilize Centum’s market value and stock price. With 66.5 million shares still approved for purchase, Centum has spent KSh600.9 million, with the share price range set between a maximum of KSh9.03 and a minimum of KSh0.50.
Share buybacks are a strategic tool used by companies to reduce the volume of outstanding shares, which can boost market valuation and increase the stakes for remaining shareholders. Centum’s CEO, James Mworia, highlighted in February 2023 that the buyback would reward long-term shareholders by improving the net asset value per share and offering liquidity in a low market environment.
Impressive Financial Performance
The extension of the buyback programme follows Centum’s remarkable financial performance for the year ended 31st March 2024. The company reported a 135.6% increase in profit after tax, reaching KSh2.6 billion, a significant turnaround from the previous year’s loss of KSh7.31 billion. This growth was driven by strong profits in the real estate segment, gains from the Two Rivers Special Economic Zone, and a reduction in losses from investment operations.
In recognition of this performance, Centum has declared a final dividend of KSh0.32 per share, subject to approval by the shareholders.
Looking Ahead: Centum 5.0 Strategy
As Centum transitions into its new strategic period, known as Centum 5.0, the company is focusing on optimizing the value of its current investment portfolio. Mworia emphasized that the company is working towards scaling up its businesses and monetizing them to achieve at least their carrying values.
Centum’s stock, trading under the ticker symbol CTUM on the Nairobi Securities Exchange, closed the previous session at KSh8.52, reflecting a year-to-date gain of 1.43%.
With the extended share buyback programme and a strong financial performance, Centum is well-positioned to continue delivering value to its shareholders and strengthening its market position. The upcoming AGM will be crucial, as shareholders may approve further continuation of the buyback programme, reinforcing Centum’s commitment to enhancing shareholder value.
