These are stocks of companies listed in the Nairobi Securities Exchange (NSE) that are poised to record above average growth over the medium and long term due to strong fundamentals. Growth stocks: Centum, KCB, Equity, COOP, Safaricom, NSE… but let’s start by looking at Centum.
The company has grown tremendously over the last 6 years. Centum announced a stellar 2015 financial year performance, posting a 162% year over year jump in net profit to Sh7 billion. This was primarily driven by the UAP 13.75% stake exit for Sh5.2billion, an amount almost double the balance sheet value. Investment and other income climbed 142.2% y/y to Sh11.8 billion. Currently, Centum has a shareholding in
- Almasi Bottlers (51%),
- Kenya Wines Agencies Ltd (26.43%),
- Genesis Kenya (73.35%)
- and K-Rep Bank (65.7%).
Centum also acquired a 35% shareholding in Platcorp Holdings Ltd — the holding company of Platinum Credit Ltd (Kenya), Platinum Credit (Uganda) and Platinum Credit Ltd (Tanzania). The company is keen on eight key sectors during its five-year (2014-2019) strategic plan. These are financial services, fast moving consumer goods, real estate, power, agriculture, education, healthcare and information and communications technology (ICT).
Centum announced plans to recapitalize K-Rep (as earlier planned to not only launch new products, but also meet the higher capital requirements proposed) and change its name, subject to regulatory approval. It plans to turn K-rep bank into a tier II bank by 2019.
The company and Investbridge Capital (IBC) have partnered with Sabis Holdings (Sabis) to launch a new company that will invest in the education sector in Africa.
Centum will acquire a total of 9,646 acres of land in Vipingo at a price of Sh180,000 per acre as well as take Rea Vipingo’s subsidiary, Vipingo Estates Limited which owns approximately 900 acres of land, at a price of approximately Sh340 million.
On the Two Rivers development, the company attracted Sh7, 672 million (US$ 75m) equity investment and Sh6,138 million (US$ 60m) debt facility during the year end 31st March 2015. The flagship mall that has a lettable area of 670,000 sq. ft is slated to conclude later in 2015. The development will have two hotels, apartments and potentially a high end hospital. Utilities such as water (2m litres of treatment per day), security (800 cameras), main road, solar plant (2MW) and parking (3,000 spots) are slated to be complete in this first phase. The model adopted will be replicate in other areas, specifically Pearl Marina (Uganda) and Vipingo (Industrial park) in Mombasa (100-200 acres of the 10,500 acres).
The company has won a tender to put up a 1,050 MW coal fired power plant in Lamu through a consortium with Gulf Energy. The consortium has set up a special purpose vehicle (SPV) called Amu Power Ltd to deliver the project.
Centum has committed to invest at least Sh10,230 million ($100 million) in Amu Power or 25% of the total equity requirement by the project. It is expected to invest Sh3,785 million ($37 million) in Akiira One Geothermal, the first private sector greenfield geothermal private development in sub-Saharan Africa.
Centum is also part of a consortium prospecting for geothermal energy with plans to add 70MW of clean energy to the national grid in the first phase of the planned total of 140MW. Analysts believe that the company will continue recording high growth rates based on its diversified portfolio and on-going projects. More information about the company and its financials can be obtained from www.centum.co.ke
