Investor Briefing HY 2019/2020 28 th November 2019
Centum 4.0 Underlying Themes for FY20 KShs. 7.7 billion Debt Repaid by HY20 Strong balance sheet with assets • that are not leveraged KShs. 3.5 billion • Deleverage the balance sheet Short term debt subsequently Repaid beyond • On target to retire all debt on the HY20 Centum balance sheet by June 2020 KShs. 990 million Annualized Finance Cost Savings The company closed the half year • Enhance cash and Well positioned with sufficient • cash equivalent period with a liquidity position of liquidity to take advantage of market KShs. 13.6 billion holding opportunities 1,316 • Significant uptake of Units under Construction • Our real estate portfolio is performing units within the RE well with 63% of the units under portfolio 827 construction already pre-sold Pre-sold Units 1.Total Cash and Marketable Securities less short term facilities and current liabilities paid in October 2019 2
Centum 4.0 Performance as at HY 2019/20 against the Strategic Pillars On track having delivered significant returns through exits and investment activity Return & Dividend Pay-out Total debt repayment of KShs. 11.3 billion resulting in interest savings of KShs. 990 million. Capital Structure and Liquidity KShs. 11.9 billion in cash, fixed and call deposits and KShs. 2.8 billion in marketable securities On track to bring operation costs to within 30% of cash annuity income Operating Costs Continued compliance to corporate guidelines and portfolio monitoring resulting in reduced levels of Organizational risk in the current operating environment Effectiveness Portfolio Allocation as a % of Total Assets FY19 51.6% 36.1% 6.2% 7.6% Portfolio Focus HY20 56.1% 36.2% 4.4% 3.4% Real Estate Private Equity Marketable Securities Development 3
Performance Highlights HY 2019/20 Key Events and Performance Drivers Marketable Real Estate Private Equity Development Securities 56.1% 51.6% 36.2% 38.5% 4.4% 5.6% 3.4% 4.3% of Net Asset of Net Asset of Total of Net Asset of Total of Net Asset of Total of Total Value Value Assets Value Assets Value Assets Assets 1,316 KShs. 8.97 billion Shift to Fixed Income IFRS 9 Impact Units under Construction Total PE Assets Enhancement of Cash Income Accounting provisions 63% KShs. 8.4 billion 33% KShs. 2.28 billion 827 Liquidity available for Portfolio Allocated to Provisions recorded in Pre-sold Units of Phase 1 Investment Fixed Income HY20 Units KShs. 6.05 billion KShs. 18.60 billion Sales Value of Pre-sold Units Exit Proceeds from Bottlers Over 22% Deposits Collected 80% Occupancy at Two Rivers Mall 4
Sustainably Investing in Our Communities Aligned to the SDGs 152 scholarships awarded to date in Vipingo • • Shortlisting of candidates for the next academic year ongoing 172 NYS graduates onboarded into Tribus - TSG • • >5,000 successful hires through the Ajiry App • Plan to establish 10 Ajiry Job and Training Centres across ten counties +100 graduates of the Vipingo Vocational training • program 5
Employer of the Year Top 10 in All 7 categories Category Rank Leadership & Legal, governance and compliance audits, gender diversity #1 Governance (women) at Board level Collaborative workplaces, wellness facilities in place, Workplace #1 green Environment agenda Corporate Achievement and surpassing of set business targets and #3 Performance daily monitoring of the same Innovation & Use of robotics, data analytics and high level of employee #4 Productivity involvement and link to reward and recognition High Employee Engagement index and initiatives in place #8 HR Practices to ensure motivation, great employee benefits Inclusiveness 50% Gender balance, recognition of PLWD and diverse #9 & Diversity groups with support systems Learning & Certified coaches and monitoring and evaluation of #9 Development coaching in the workplace Overall #4 6
Performance Highlights HY 2019/20 6-month period ended 30 September 2019 KShs. 6.79 billion Growth in Consolidated Profit after Tax +226% Net profit Group Performance Highlights KShs. 18.60 billion Exit realisations from Almasi and Nairobi Bottlers transaction Proceeds on disposal, net of taxes KShs. 1.48 billion +49% Growth in Operating Profit Operating profit KShs. 2.28 billion Company One-off Impairment Impairment provision Performance Highlights KShs. 50.26 billion -4% Movement in Shareholder Funds Net assets KShs. 6.38 billion -54% Decrease in Long Term Debt Long term debt 7
Portfolio Review 8
Portfolio Review Summary as at 30 September 2019 Real Estate Private Equity Marketable Securities Development 51.6% | KShs. 39. 97 38.5% | KShs. 29.11 5.6% | KShs. 4.22 3.4% | KShs. 3.22 NAV per share NAV per share NAV per share NAV per share KShs. KShs. KShs. KShs. 25.93 19.37 2.81 2.14 billion billion billion billion NAV NAV NAV NAV KShs. 35.57 billion KShs. 22.94 billion KShs. 2.81 billion KShs. 2.14 billion Total Assets Total Assets Total Assets Total Assets Total Assets Net Asset Value Net Asset Value 11.4% 4.0% 4.0% KShs. 63.46 billion KShs. 50.26 billion KShs. 75.5 per share Total Assets Net Asset Value Net Asset Value Per Share 71.60 52.60 79.05 Kshs. Billion Kshs. Billion 50.26 75.42 63.46 Kshs. FY19 HY20 FY19 HY20 FY19 HY20 9
Portfolio Review Market Cap. Attribution Portfolio Assets NAV/Share Significant Value Opportunity for Investors Sidian Bank 3.52 Isuzu East Africa 3.34 Kshs. 13.61 per Longhorn Publishers 1.71 share for PE 31.45 26.58 NAS Servair 1.27 ACE Holdings 1.25 Other Private Equity Assets 1.06 KShs. 12.97 Private Equity 13.61 per share for RE + Dev. Two Rivers Development 12.58 KShs. Per Share Vipingo Development 18.20 Vs. Pearl Marina 7.82 4.87 KShs. 43.00 per Other Real Estate Assets 1.37 share NAV for Real Estate 39.97 RE + Dev. Akiira 2.59 Amu Power 0.00 Share Price Cash + Implied Greenblade Growers 0.42 as at 30 Marketable Valuation of Other Development Assets 0.02 Sept. 2019 Securities less PE + RE + Liabilities Dev. Development 3.03 (OD+Bond) Total Portfolio 56.61 10
Portfolio Review Market Values vs. Transaction Price for Land Banks The underlying land banks are valued below the last transaction price, representative of our conservative approach to valuations Carrying Value per Last Transaction Value of Debt at Acre Price per Acre Asset Level Development Shareholding Acres (KShs. million) (KShs. million) (KShs. million) Vipingo 100% 10,254 1.54 10.0 -------------- Pearl Marina 100% 389 24.74 29.56 -------------- Two Rivers 58% 107 304.93 432.69 9,206 KShs. 4.2b of the Two Rivers debt is guaranteed by Centum the rest is non-recourse to Centum 11
Real Estate Managed by 12
Real Estate Strategic Pillars Under Centum 4.0 (five year strategy from 2019 – 2024), the Centum Group’s focus is cash returns. Centum Real Estate is pursuing a four-pronged real estate strategy Pillar Rationale Objective Shift from a develop and sale model to Sale of infill developments with our Infill 1 a sale and develop model current landbank Projects Focus on monetizing existing land bank Sale of bulk land and development rights by selling bulk land/development rights Land Sales 2 within our current landbank while optimizing the portfolio’s capital structure Management of rental assets such as Two Facilities and portfolio management of Rentals 3 Rivers Lifestyle Center and the Theme Park existing assets Shift from focusing exclusively on 3rd Party Third-party development sites for 4 existing land bank to market-led site Projects affordable housing on a joint venture basis identification 13
Real Estate Infill Projects: Performance as at 30 September 2019 Total Vipingo, KE Pearl Marina, UG Two Rivers, KE 1,321 568 1,407 3,296 Total Units Units Units Units Units 428 484 404 1,316 Phase 1 Units Units Units Units Units 394 827 325 279 201 154 582 Units Pre- 65% 32% 98% 63% 56 Sold of Phase 1 of Phase 1 of Phase 1 of Phase 1 FY19 HY20 FY19 HY20 FY19 HY20 FY19 HY20 Units Units Units Units Sales Value KShs. 2.19 billion KShs. 2.20 billion KShs. 1.67 billion KShs. 6.05 billion of Pre-sold Units Underlying Projects fully funded Debt @ Nil Nil Nil Nil by internally Project Level generated funds 14
Real Estate Infill Projects: Sales Progress as at 30 September 2019 15
Real Estate Land Sales: Progress as at 30 September 2019 Centum Real Estate has a robust sales pipeline and is actively pursuing sales leads to convert into actual sales Sales Pipeline under FY19 Closed Sales Negotiation as at HY20 KShs. millions KShs. millions 412 2,798 30 1,556 - 8,890 Total 442 13,244 16
Real Estate Rentals: Two Rivers Lifestyle Centre as at 30 September 2019 Mall Occupancy on the Gross Lettable Area 47,338 of 149 of 186 +8% on 59,032 sq. units leased 59,032 sq. metres metres 80% 78% GLA leased 76% 75% 72% HY18 FY18 HY19 FY19 HY20 Office Towers Occupancy on the Gross Lettable Area 4,600 of 25,244 45% of South +12% on sq. mtrs Tower 25,244 sq. GLA leased of 10, 249 sq. metres 18% metres 14% 11% 9% 6% HY18 FY18 HY19 FY19 HY20 17
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