Bonus years dry up as Centum issues a profit warning

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Between 2013 and 2016 Centum investments profits spiraled threefold from 2.5 billion to Sh9.9 billion with Billionaire owner Chris Kirubi getting accolades for his shrewd investments, deal-making, and profitable exits.

From the Sh5 billion sale of UAP to Old Mutual to the Sh1 billion exit of Kenya Wine Agencies Limited, Centum looked invincible.

The billion shilling company closed big deals like AMU coal power and Akiira Geothermal Limited, rode the acquired taste of the middle class to supply Carlsberg Beer through King Beverage and landed the country its biggest shopping mall two rivers.

However, over the last two years, things have not been rosy for the company that is on record for paying its 90 employees Sh1 billion in bonuses.

Profits dipped to Sh8.3 billion in 2016 and in 2017 the company expects profits to come 25 percent lower.

Centum did not close a single deal to dispose of an asset this year which historically has been a key earner for the company saying instead that all the deals on the table will be concluded in the current financial year.

In its half-year presentation, Centum noted that it will relinquish 42 percent equity stake of the 58 percent it holds in Two Rivers Development limited to AVIC and ICDC and sell 50 percent of the iconic mall to Old Mutual Properties.

It plans to complete luxury villas in Pearl Marina and develop Rea Vipingo with a residential and commercial lifestyle center.

In 2019 it plans to complete Phase 1 of Industrial Park currently under development at Vipingo and is offering 2,515 acres for sale.

Real estate, Centum says has struggled in 2017 dragging down its performance despite a modest gain.

Its associated companies have also done poorly including Sidian Bank which made a Sh421 million loss for the year 2017 from a Sh28 million profit in 2016 and book publisher Longhorn whose profits dipped from Sh43 million to Sh36 million.

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