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Is it the right time to buy CENTUM?
FUNKY
#1 Posted : Thursday, March 01, 2012 8:20:52 AM
Rank: Veteran


Joined: 4/30/2010
Posts: 1,626
http://www.businessdaily.../-/138yxb9/-/index.html

Based on the above article the current price looks relatively cheap.
mlennyma
#2 Posted : Thursday, March 01, 2012 8:38:20 AM
Rank: Elder


Joined: 7/21/2010
Posts: 6,055
Location: nairobi
Centum was cheaper when i bought it at 12bob
"Don't let the fear of losing be greater than the excitement of winning."
Theuri7
#3 Posted : Wednesday, May 02, 2012 3:34:52 PM
Rank: Hello


Joined: 5/2/2012
Posts: 4
Centum's share price is increasing, but it is still lower than its net asset value.

Anyone with a short term interest could buy it now and sell in early August. This is when the hullaballoo associated with financial results’ announcement increases demand among Kenyans for whatever reason (as happened with Kenya-Re, Crown-Berger and the others).

Based on the blogpost below, I think it is also a worthy buy in the long term.
http://afrikainvestor.bl...investment-company.html
QW25091985
#4 Posted : Wednesday, May 02, 2012 3:44:35 PM
Rank: User


Joined: 1/24/2012
Posts: 1,675
Location: In Da Hood
What its is net asset value
youcan'tstopusnow
#5 Posted : Wednesday, May 02, 2012 4:46:18 PM
Rank: Chief


Joined: 3/24/2010
Posts: 6,779
Location: Black Africa
QW25091985 wrote:
What its is net asset value

18.76/= as at Half Year ended September 2011
GOD BLESS YOUR LIFE
sparkly
#6 Posted : Wednesday, May 02, 2012 5:54:24 PM
Rank: Elder


Joined: 9/23/2009
Posts: 7,905
Location: Enk are Nyirobi
I hope this land business will not turn out as a misadventure like the Uchumi expansion... Its the same management (Directors) we are dealing with here.

My feeling is that the company should have made a capital call/ rights issue, obtained a loan or issued a bond for the land project.

I don't think that it is wise for them to withdraw capital from other business lines that have served the shareholders well over the years, to invest in the land.
Life is short. Live passionately.
sparkly
#7 Posted : Wednesday, May 02, 2012 5:56:14 PM
Rank: Elder


Joined: 9/23/2009
Posts: 7,905
Location: Enk are Nyirobi
FUNKY wrote:
http://www.businessdailyafrica.com/Centum+plans+Sh60bn+homes+project+/-/539552/1356402/-/item/1/-/138yxb9/-/index.html

Based on the above article the current price looks relatively cheap.


How does it look cheap? These are just prospects that could turnout unprofitable!
Life is short. Live passionately.
youcan'tstopusnow
#8 Posted : Wednesday, May 02, 2012 8:12:57 PM
Rank: Chief


Joined: 3/24/2010
Posts: 6,779
Location: Black Africa
sparkly wrote:
FUNKY wrote:
http://www.businessdailyafrica.com/Centum+plans+Sh60bn+homes+project+/-/539552/1356402/-/item/1/-/138yxb9/-/index.html

Based on the above article the current price looks relatively cheap.


How does it look cheap? These are just prospects that could turnout unprofitable!

Of course. But that is the same for every company. No business is assured, there is an element of risk in every venture

On the rights issue, I believe there are plans for one to be done in conjuction with bank loans.
http://www.businessweek....ases-cash-holdings.html
GOD BLESS YOUR LIFE
kiterunner
#9 Posted : Thursday, May 03, 2012 12:16:55 AM
Rank: Member


Joined: 7/9/2011
Posts: 727
Location: Nairobi
To digress a bit, what is the net asset value for TCL.
our goals are best achieved indirectly
guru267
#10 Posted : Thursday, May 03, 2012 7:51:11 AM
Rank: Elder


Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
kiterunner wrote:
To digress a bit, what is the net asset value for TCL.


28.5bob per share...
Mark 12:29
Deuteronomy 4:16
Theuri7
#11 Posted : Thursday, May 03, 2012 9:14:20 AM
Rank: Hello


Joined: 5/2/2012
Posts: 4
sparkly wrote:
I hope this land business will not turn out as a misadventure like the Uchumi expansion... Its the same management (Directors) we are dealing with here.

My feeling is that the company should have made a capital call/ rights issue, obtained a loan or issued a bond for the land project.

I don't think that it is wise for them to withdraw capital from other business lines that have served the shareholders well over the years, to invest in the land.


I would doubt it is a misadventure. Centum now has three business lines, which are Private equity, Quoted equity and Real Estate & Infrastructure. The real estate one (where the land purchase/home construction business lies)is actually is the most profitable of these. With gross returns of 23.0% in the half-year to 2012, compared to 2.1% in unquoted investments and a negative 6.1% in stocks, it’s really helping them cushion their losses in the stock market.

However, your feeling is right. Out of these three segments, Real Estate & Infrastructure is the only one which is financed by borrowing, to a tune of what seems to me as almost KES 2 Billion by the end of FY 2011 (see Segment Information in their half-year to 2012 financials)

By investing in this field, Centum also stands a chance to save on tax through real estate investment trusts (REITS). Finance Act 2011 amendments seek to have income that has been generated by REITS and distributed to unit holders exempt from income tax (presently 30%).


In all, I think it is a wise move.



Read more about incentives on REITS:
http://www.the-star.co.k...to-spur-housing-market-
mwekez@ji
#12 Posted : Thursday, May 03, 2012 10:20:02 AM
Rank: Chief


Joined: 5/31/2011
Posts: 5,117
guru267 wrote:
kiterunner wrote:
To digress a bit, what is the net asset value for TCL.


28.5bob per share...


Shame on you Shame on you Shame on you

41.88bob per share ( 21,742,258,000-10,269,791,000)/ 273,950,284)

Also notice that Euro Bonds worth KES 276,489,000 have already been converted at a conversion price of KES 40 per Underlying Share
youcan'tstopusnow
#13 Posted : Thursday, May 03, 2012 11:20:10 AM
Rank: Chief


Joined: 3/24/2010
Posts: 6,779
Location: Black Africa
mwekez@ji, I thought 144,008,422 are yet to be converted. If you include these, guru's, figure is just about right (27.45) I would imagine that these would come on board sooner rather than later...
GOD BLESS YOUR LIFE
mwekez@ji
#14 Posted : Thursday, May 03, 2012 12:47:32 PM
Rank: Chief


Joined: 5/31/2011
Posts: 5,117
youcan'tstopusnow wrote:
mwekez@ji, I thought 144,008,422 are yet to be converted. If you include these, guru's, figure is just about right (27.45)


this makes good logic. I wish all wazuans were giving their logic like so.
mwekez@ji
#15 Posted : Thursday, May 03, 2012 1:00:09 PM
Rank: Chief


Joined: 5/31/2011
Posts: 5,117
youcan'tstopusnow wrote:
.... I would imagine that these (convertible bond holders) would come on board sooner rather than later...


The conversion price per Underlying Share is:

KES 42.40 in 2012
KES 44.80 in 2013
KES 47.20 in 2014
KES 49.60 in 2015

Will these bond holders really convert if the share prices remain low/continues to decline, plus NAV per share being significantly lower than conversion price, plus considering the dilution that comes with such shares
youcan'tstopusnow
#16 Posted : Thursday, May 03, 2012 2:12:20 PM
Rank: Chief


Joined: 3/24/2010
Posts: 6,779
Location: Black Africa
mwekez@ji wrote:
youcan'tstopusnow wrote:
.... I would imagine that these (convertible bond holders) would come on board sooner rather than later...


The conversion price per Underlying Share is:

KES 42.40 in 2012
KES 44.80 in 2013
KES 47.20 in 2014
KES 49.60 in 2015

Will these bond holders really convert if the share prices remain low/continues to decline, plus NAV per share being significantly lower than conversion price, plus considering the dilution that comes with such shares

Thanks for that breakdown bro. Gives me a whole different perspective...
GOD BLESS YOUR LIFE
Theuri7
#17 Posted : Thursday, May 03, 2012 3:46:38 PM
Rank: Hello


Joined: 5/2/2012
Posts: 4
mwekez@ji wrote:
guru267 wrote:
kiterunner wrote:
To digress a bit, what is the net asset value for TCL.


28.5bob per share...


Shame on you Shame on you Shame on you

41.88bob per share ( 21,742,258,000-10,269,791,000)/ 273,950,284)
...



mwekez@ji, I agree (with your later post) that it will be irrational for the convertible bond investor to exercise his option to convert given the current share price.

I also agree that the numerator in the calculation in the quoted post should be the SFP’s total equity, which is KES 11,472,467,000.
For the denominator, however, the 6,912,194 shares issued shouldn’t be added directly to those outstanding at the end of FY 2010 (which would yield 273,950,284); rather they should be weighted, like they have done in the notes when calculating basic EPS. This gives a total weighted average number of ordinary shares outstanding during FY 2011 of 269,342,155.
There’s not a very big difference though. Net asset value per share is KES 26.06 without the bond (and KES 42.59 with the bond as equity).

For a keener analysis of TCL, see:
http://afrikainvestor.bl...-limited-period-to.html
youcan'tstopusnow
#18 Posted : Thursday, May 03, 2012 5:19:32 PM
Rank: Chief


Joined: 3/24/2010
Posts: 6,779
Location: Black Africa
Theuri7 wrote:
mwekez@ji wrote:
guru267 wrote:
kiterunner wrote:
To digress a bit, what is the net asset value for TCL.


28.5bob per share...


Shame on you Shame on you Shame on you

41.88bob per share ( 21,742,258,000-10,269,791,000)/ 273,950,284)
...



mwekez@ji, I agree (with your later post) that it will be irrational for the convertible bond investor to exercise his option to convert given the current share price.

I also agree that the numerator in the calculation in the quoted post should be the SFP’s total equity, which is KES 11,472,467,000.
For the denominator, however, the 6,912,194 shares issued shouldn’t be added directly to those outstanding at the end of FY 2010 (which would yield 273,950,284); rather they should be weighted, like they have done in the notes when calculating basic EPS. This gives a total weighted average number of ordinary shares outstanding during FY 2011 of 269,342,155.
There’s not a very big difference though. Net asset value per share is KES 26.06 without the bond (and KES 42.59 with the bond as equity).

For a keener analysis of TCL, see:
http://afrikainvestor.bl...-limited-period-to.html

A review of the business:

http://www.kenyainvestin...limited-review.html?m=1

GOD BLESS YOUR LIFE
Simplified
#19 Posted : Saturday, August 04, 2012 11:05:35 AM
Rank: Member


Joined: 11/26/2009
Posts: 67
Location: Pare pare
considering a 5yr low of 8.50/- in 2009 and the dark clouds hovering above it currently. A tumble down is imminent....but then again there is irrational Mr market. Whats your opinion of the current value of 12.40/- ?
Think
Hug the bear....ride the bull.....di$mount!!!
dave.kim
#20 Posted : Sunday, August 05, 2012 8:18:33 PM
Rank: Member


Joined: 6/25/2010
Posts: 175
sparkly wrote:
I hope this land business will not turn out as a misadventure like the Uchumi expansion... Its the same management (Directors) we are dealing with here.

My feeling is that the company should have made a capital call/ rights issue, obtained a loan or issued a bond for the land project.

I don't think that it is wise for them to withdraw capital from other business lines that have served the shareholders well over the years, to invest in the land.

and they shouldn't reduce their holdings in quoted equity further.Even if its decreasing risk exposure, atleast maintain it at 20%
Rule No.1 is never lose money. Rule No.2 is never forget rule number one
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