Centum Hikes Dividend Payout After Debt Repayment

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Centum Investment Company, the NSE-listed private equity firm has announced the approval of increased dividend payouts to its shareholders. The investing firm is on course to make this happen after paying out its medium and long-term debts as per the Monday press release. 

The news release indicates that the investment firm has been able to redeem Sh6.6 billion of its outstanding corporate bond to cut its financial costs. This recaps the debt settlement of Sh7.8 billion dollar-dominated retired back in September last year. As a result, the move sees the extra as cash returns to the shareholders. 

In the Monday statement, CEO James Mworia explained the grounds of the shareholder cash returns. 

“The rationale of the strategic pillar of balance sheet strengthening and liquidity enhancement was to release more than Sh1.8 billion that the company was spending annually on debt interest costs, to re-investment and future dividend enhancement.”

The strategy of buying back shares and increased dividend payouts are part of Centum’s plan to improve on its undervaluation at the bourse. As it stand, the equity firm trades at Sh24 which is a third of the net asset value per share of Sh75.5 as from the Year ended September 2019. 

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The Author of this Article is a registered Financial & Investment Analyst with Institute of Certified Investment and Financial Analyst. If your require more information Email: info@finsolutions.co.ke or +254 780216631

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